"Quick Wins" vs. "Thought Leadership"

Several years ago, I started out with the explicit goal of learning as much about the CSR field as I can, in order to figure out the greatest point of leverage - then jump in somewhere specific, where I can make a difference. This has been a great strategy, because I've learned a lot and I'm narrowing in on some things as having more potential than others, but at the same time it's been some years and what have I done?

Not a whole lot. I didn't actually bring anyone out of poverty. I didn't plant any trees. I didn't clean up any waste sites. I've started being more meticulous about my own recycling, buying fair trade products, and supporting local businesses - but those things are more along the lines of reducing my own negative impact rather than creating any real positive value. Everything is abstract, far-off in the future, intangible... and potentially an illusion.

So I've recently decided that while I do need to learn, to advocate, and to think of the big picture, I also need to devote at least a sufficient minimum of time do doing tangible things to make private enterprise more sustainable, in both the environmental and social sense of the word. I need some "quick wins."

Others need the same thing, I believe. A former colleague told me that in her new job, no longer a "CSR job," she isn't engaged in "thought leadership" like she used to be - but she found she just wasn't getting anywhere before. Recently, she succeeded in convincing her organization to budget for carbon offsets of staff travel - and that, she feels, may be the most valuable thing she's done in her career. What a statement.

Next month I'm going to organize a workshop via Boston Net Impact for people with whom this idea resonates, and who want to work on quick wins of their own - we'll brainstorm, share advice, create a plan and some personal accountability, and hopefully come up with a system to support each other over the weeks or months that follow. If you're in Boston and you'd like to join, please send me an email and I'll loop you into it.

Or just skip the talking, and do something. ;)

News: global water crisis, climate change, the UK companies bill, CSR malaise, and more

So much interesting news going on... here's a quick round-up:

• It is rare to find a good article that is both thoughtfully critical of the CSR movement and supportive of the overall cause; read "Business as Usual is Not the Answer to Society’s Problems" (10/20/06, Financial Times) or go to the authors' report ("CSR at a crossroads") at www.iied.org.

• I'm always intrigued but what non-CSR folks seem to think of first when I tell them what field I work in, because it varies pretty widely. Most recently, someone immediately thought of the global water crisis - and indeed, it's a cause that's picking up steam, partly because it's becoming clear we're even worse off than we thought. This past week, there was a great New Yorker feature called "The Last Drop" and also an online follow-up interview called “Not a Drop to Drink.”

• In the UK, the “companies bill” had a last-minute amendment requiring that listed firm sreport no only on their own CSR but also up the supply chain; predictably, anti-poverty and environmental groups applauded while businesses balked at the increased burden. In the larger scheme of things, it's interesting to see how much legislative activity there is in the UK.

• Climate change came up frequently in the news, though not centered around any single news-making event. One indication of the groundswell of attention: in a press release, the Conference Board announcing its finding that about 75% of companies are actively measuring their “Carbon Footprint.”

• Finally, lots of companies with CSR-relevant news this week: Google will install a huge solar array on the roof of its headquarters, to supply 30% of that facilities energy needs; Disney is pulling junk food from its parks and disassociating its characters with it; British Airlines is being sued after insisting that a worker conceal her crucifix necklace under her uniform, and a study of IBM’s employee mortality figures shows an increased risk of cancer.

Studying GE's Ecomagination

It's been a long day at work, since Harvard Business School is running its second annual Executive Education program in Corporate Social Responsibility. We premiered a video interview of Jeffrey Immelt (CEO of General Electric) in which he talks about the Ecomagination campaign.

Basically, Ecomagination is both a marketing campaign and a growth strategy. Back in 2004 the company identified a half-dozen businesses that could support rapid growth, and noticed a theme among them - many were addressing environmental challenges such as scarce water, energy shortages, and climate change. So, to make a long story short, Immelt decided to tie them all together into the Ecomagination campaign.

Some might object (and some did) to a CEO who is embracing environmentalism on the basis of business opportunity. They could point out (and they did) that when and if the wind changes, GE would be unlikely to stand by its "green" commitment. So Immelt didn't win many points for personal dedication.

But I see Ecomagination as a great example of how CSR is supposed to work - pressure from employees, customers and regulators is exerting itself up into the company, incentivizing GE to adopt behaviors that are more socially- and environmentally- oriented.

And so, if the wind does change, and environmental solutions are no longer a profit opportunity for GE, then who's fault is that? Is it the company's fault for not wanting to lose money? Or is it our own faults, for being so fickle as to not continue to ask for better?

WorldChanging: the book

From the amazing website of WorldChanging, please welcome what promises to be a fantastic new User's Guide to the 21st Century. Coincidentally, the book tour kicks off in Seattle, where I'll be visiting at the time - so I'll report more from there.

Selling out

When I think of how Corporate Social Responsiblity got started, I start with the history my generation inherited from the 1960s - which is essentially a history of ineffectual activism. Sure, some protests accomplished their goals. Apartheid ended, civil rights for racial minorities improved, and women became much more equally represented in various esteemed professions. We also developed new problems - HIV/AIDS, increasing inequality and climate change, to name a few. Overall, the world doesn't seem to be significantly better off than it was, or to have benefitted very substantially from the hippie/free-love/activist mantras. "Don't trust anyone over 30" was a common expression then, but of course everyone who said it is either over 30 or dead now.

So when I was in college, in the late-1990s, my cohort was accused of being apathetic. I don't think we really *were* apathetic, but rather we didn't want to waste our time on ineffectual strategies. We were jaded, discouraged, and occasionally in denial - but we still cared. For many of us, myself included, the obvious step was to begin working within the "system" (business, government, etc.) to improve it, rather than fighting it blindly. This is the kernel at the center of CSR - the desire to co-opt businesses for the public good, rather than fighting them or wishing them gone. The latter strategy goes against forces that are bigger than all of us - forces like economics and human nature, and is therefore ineffectual.

But over the years, I've come to appreciate a strong activist challenge - because occasionally it does get noticed by the corporation or the government, and it becomes part of the calculus of what consumers, investors, and voters want. Then the system changes itself; cynically speaking, it changes to better exploit customers and voters based on a new understanding of what they want.

I've been thinking about these issues lately, because a theme is coming out in my various jobs. Each of them, in some way, has me wondering about the idea of "selling out."

• At Harvard, I am writing about a company that doesn't want to approve the final product, and I'm certain this is because we haven't portrayed the company exactly as it wants to be portrayed. (All interview-based cases at Harvard Business School must be approved by the subject company, so this is always an issue to some extent - but in this case more than others.)

• At BC's Center for Corporate Citizenship, I learned that my internal newsbrief serves a different function than the news summaries on the website; because the latter are public, and the Center is a membership-based organization, it would be inappropriate to put negative news and analysis there. I've also learned that another site with CSR news is not featured because it is seen as a competitor (whereas I'd naively assumed we were all tackling these problems together).
  

• In my project for the World Bank, a group of people within a certain company has tried hard to promote a socially-beneficial product, but the overall corporate strategy has not been as supportive as it could have been; nevertheless, the group does not want to invite criticism or instigate outside pressure on its management.

In the end, each of these situations seems in its own way to be inevitable. So my questions to myself are: Am I paranoid, and all these things are actually OK? Or am I selling out by continuing to preserve anonymity on my blog, and not fighting for greater transparency? Finally, and perhaps most relevantly, do these stories tell me that I'm not tackling the issues through the right mechanisms, and that I'll need a career change in order to adopt the honesty and transparency needed for my own integrity and for the advancement of the CSR field?

The only conclusion I've come to so far: writing this blog may not be much, but it's the one place I can be satisfied that I'm sharing information and opinions without selling out.

At least for this year.
Next year I turn 30.

In last week's CSR news....

For those who wondered whether the UN Global Compact had any “teeth,” last week it de-listed several hundred members for failing to file their COP (Communication on Progress) reports. SocialFunds.com featured two interviews with Georg Kell, executive director of Global Compact, about the de-listings and about new alliances to facilitate better COP reporting in the future.

BusinessWeek ran a cover story on The Organic Myth, claiming that “pastoral ideals are getting trampled as organic food goes mass market”; an article in The Independent likewise reports rapid growth in the organic food industry, as the Ethical Foods Boom Tops £2bn a Year in the UK.

And this year's Nobel Peace prize went to Muhammed Yunus and the microfinance bank he started, Grameen Bank, which led the surge in microfinance lending since the 1970s. He helped show that lending to the poor was not only a sustainable strategy for helping many would-be entrepreneurs out of poverty, but also that repayment rates were much higher than many had assumed - and so microfinance wasn't such a bad business after all.

Standards and the GRI

Last week, the Global Reporting Initiative (GRI) met in Amsterdam and released its "G3" guidelines. The Financial Times reported on October 6th that the major news was the simplification of reporting requirements. Previously, many people were concerned that GRI guidelines were too complex, and therefore were not being adopted by new companies quickly enough. They were especially difficult for small- and medium-sized businesses .

And of course, "standards" that are narrowly adopted are a contradiction in terms.

Now, companies can now choose to report on a limited array of issues instead of being required to report on every issue GRI has defined. To distinguish companies with comprehensive resporting from those who are only able or willing to engage in limited reporting, the GRI assigns five levels. The organizations expects that companies can start at Level 1 and move up to Level 5 within three-to-five years. Ernst Ligteringen, chief executive of GRI, said that the new guidelines were based on 4000 suggested improvements from firms, NGOs, and unions.

The event itself was huge. According to GRI's website: "1150 participants came from 65 countries (including 37 developing countries and emerging markets) to hear from 161 leading speakers."

Taking a larger view, in an analysis preceding the GRI event, the Corporate Citizenship Briefing ("Whither Reporting?") predicted that next year's reporting issues will revolve around the twin challenges of stricter adherence to growing standardizaion, and the greater need for creativity in order to stand out from the crowd.

By the way, I'm a huge fan of voluntary standards. No one can research every company's ethical strengths and weaknesses, but a group like GRI makes it easier to see who is up-to-speed in a certain area, such as sustainability reporting. To me, it's similar to having a Fair Trade certification or an Energy Star label, but for a different issue - namely, transparency.

For-profit, non-profit, and everything between

I've noticed a trend in the last few years: organizations can no longer be cleanly divided into "for-profit" and "non-profit" entities. Instead, this is becoming more of a spectrum, with many creative business models occupying the space between those classic formats.

For example, last year's winner of the HBS business-plan contest (social enterprise track) was Yashmere, a project that of Ventures in Development aims to bring better incomes to Western China by connecting yak farmers with exporting opportunities; the group defines itself as a social enterprise with a double bottom line, and aims to be "profit-making but not profit-maximizing." Technically, it's a non-profit.

In the news recently (9/17), a New York Times story described the new for-profit philanthropy set up by the founders of Google. No, that wasn't a typo. It's a for-profit charity. Without the restrictions placed on non-profits, this new organization will be able to finance start-ups, partner with venture capitalists, and even lobby Congress. It will have to pay taxes, but maybe that's part of social responsibility too. The founders are starting the charity off with $1 billion in seed money - not exactly stingy.

Last week, my chapter of Net Impact (the Boston Professional Chapter) held a panel discussion on "Leading a Values-Based Business" with several chapter members as participants. I found that entrepreneurs are defining their ventures in all kinds of ways. For example, Cornelia Hoskin's Well Well Well is basically a business for high-income consumers, but it's committed to healthy organic food for busy people who might otherwise eat junk, to hiring and training disadvantaged women, and even to creative fuel-saving mechanisms for the delivery truck.

At the same time, organizations that were set up as non-profits (and retain a social mission) are rethinking their approach to financial sustainability. I'm working on a case study about a microfinance organization that is currently transitioning many of its affiliates from non-profit to for-profit, while still keeping its mission of poverty reduction front-and-center.

There are so many more examples - but hopefully these four will show you that it's not all in my head. Mark my words, organizations that are a hybrid of profits and values will be the wave of the future.

Size Matters - But is Bigger Always Better?

My apologies for the long pause - I was in Texas for a few days. Where everything is bigger. Sky, hair, portions, people, etc. Maybe that's one reason I've become preoccupied with size - though as usual, I'm also writing about a theme that's emerged from different parts of my work.

Last week I was in a meeting for my Harvard Business School job, and one of the professors was discussing possible themes for an upcoming conference. He doesn't seem the type to embrace liberal/hippie theories of the corporation (if you knew him, you'd find that funny) but he did say this: "How can we expect companies to grow at fifteen percent in markets that are growing at five?" It's practically a truism: on average, they can't. And yet they'll lose investors if they don't.

Also, over the weekend I was reading about Wal-Mart (see The Wall Street Journal, 9/25, "Boxed In"), and found out that the world's biggest company reported sales growth of only 9.5% - a disappointment considering that double-digit growth has become the norm over its 34-year history as a public company. But never fear - this year the big-box retailer does plan to expand its stores by about 8%, as ususal. And I thought: that's CRAZY. Can't a company stop when it becomes the biggest in the world? Or does it always have to balloon until it pops?

The article describes how Wal-Mart's "best" untapped markets, in particular Boston, don't seem to like it very much (there are some great quotes by Mayor Menino, who is pretty blunt about not wanting a Wal-Mart). So why not leave Boston and other "tough" markets alone, and continue excelling in the markets that do want and need Wal-Mart? Personally, as the company has come out with so many social and environmental changes recently, I've realized that I'm no longer boycotting Wal-Mart - but I still don't particularly like Wal-Mart. That has a lot to do with its size, and I doubt I'm the only Bostonian to think so.

Recently, I bought a book that I hoped would enlighten this train of thought. It's Bo Burmingham's Small Giants: Companies that Choose to be Great Instead of Big. Unfortunately, I don't find the book itself very compelling - just a collection of mediocre case studies. But the idea has so much potential. I've also had an article lying around called Small is Beautiful, that I keep meaning to read.

The idea that bigger isn't always better seems to have some currency, and to make sense to a wide variety of people, but is still not compatible with the way our capital markets currently work.