I support these student-sponsored initiatives and also have a practical suggestion for ensuring that employees of corporations, governments, and non-profits act more responsibly: get HR onside.

HR executives and managers have control over six opportunities to really entrench CSR at an operational level: job descriptions, recruitment, on-boarding, training, performance evaluation and compensation, exit interviews.

If corporate responsibility was integrated in each of these areas it would go a long way to ensuring that people who take MBA oaths actually live up to what they’ve promised,

Plus, because these are all ongoing initiatives, integrating CSR could be done for viryually no incremental cost!

Seven teams of MBA students presented their ideas about the best ways for a company operating in the oil sands area to improve their CSR initiatives. Needless to say this is very difficult territory – it’s clear that the impacts of oil sands operations are under scrutiny from advocacy groups around the world, the situation is extremely complex, and that there are no easy answers.

However, the judges were very impressed by the degree to which the teams understood the still-emerging discipline of corporate social responsibility, recognized the challenges for corporations with oil sands operations, and had developed creative approaches to help mitigate environmental impact and maximize business value.

The presentations also made me think about a simple framework for effective CSR planning:

1. Establish clear business and social/environmental objectives

2. Identify and prioritize the stakeholders that matter most (often very difficult to do due because of the many key groups that are involved including: employees, regulators, media, suppliers, customers, local communities, advocacy groups, etc.)

3.  Establish internal credibility at an executive level by focusing on areas where success can be demonstrated early and where the risks are lowest.

4.  Develop a communications plan to reach and influence the stakeholders that have been selected as priorities in a way that seen as authentic/genuine.

5. Make sure that you have built in an effective evaluation process. This is essential for internal credibility and continuous improvement

I think all the judges would agree with me that the students understood the situation extremely well and that each team’s presentation was remarkable.

I left feeling really inspired to know that the next generation of business leader will be placing such a high priority on doing the right thing.

Congratulations to Prof. Tina Dacin, Mandy Daniel, and especially to the Queen’s MBA students who did such a great job.

- On Making Ethical Choices in Business: The recession lowered the ethical water mark so that people and business who weren’t doing the right thing became more conspicuous. The danger may be that with an improving economy inappropriate behavior may be become more difficult to discern.

- On Young Business Students Today: Boy these people are smart! Perhaps more important than this, the people I spoke with also know a lot about social issues and are deeply interested in what it means to be responsible. What will business look like when these folks become executives?

Finally, my colleague Andrea O’Reilly at Impakt sent me a great quotation this morning: “Pain nourishes courage. You can’t be brave if you’ve only had wonderful things happen to you.” Mary Tyler Moore

Over and out.

The report contains some remarkable findings. Here are a few highlights:

71% think brands and companies spend too much on advertising and marketing and should put more into good causes – up almost 10 percentage points

64% would recommend a brand that supports a good cause – up from 52% last year globally

In Canada, 62% would switch brands if another brand of similar or equal quality supported a good cause , 56% would help a brand promote its products if there was a good cause behind it,  and 55% expect brands to support a good cause.

It’s become very clear that the landscape for consumers and marketers has fundamentally changed. As recently as 5 years ago, cause marketing programs were seen as sidelines to core business. Today, the business case for investing in cause is  unassailable. (In fact, the Edelman research revealed that 55% of consumers surveyed have a better opinion of corporations that integrate good causes into their business – regardless of why they do so).

As per recent posts, it’s important to remember that consumers are looking very closely at what corporations are doing in this area. That means corporate commitment to the cause must be authentic and non-profit partners must be of the highest calibre.

Since 2007 Self magazine has been conducting research to explore women’s emotions resulting from the good a consumer perceives she does by purchasing socially responsible products and brands. As reported in Advertising Age,  skepticism was the area most questioned by those who saw the study and the top reason companies gave for not talking about the good they were doing.

Here are some key findings from the study:

• I feel like the company is only doing good things to get me to buy its product: 39%
• I feel like the company is trying to distract me from the bad things it’s doing: 32%
• I feel like the company is trying to make me feel guilty: 11%
• I don’t trust the company is doing what it says it is doing: 33%

These four questions identified true skeptics. To qualify as a true skeptic, women had to agree with at least three of the four statements. Importantly, only 16% of those sampled did so. So, although skeptics are a small segment of the consumer population, fear of skepticism is still holding companies back from talking about their cause programs.

Here is a profile of the skeptical consumer:

• She’s more inclined than the average person to focus on the negative.
• While she is more likely than non-skeptics to pay a lot of attention to the good things companies are doing (51% vs. 42%), she is even more likely to pay a lot of attention to the bad things companies do (66% vs. 48%).
• The skeptic is also more likely to frequently purchase products from companies doing good things — but by a wide margin (53% vs. 41%).

It turns out that skeptics may be a group that should be targeted not feared. In order to “declaw” and engage the skeptical consumer, Ad Age recommends applying two key approaches to communications:

1. Transparency:

• Always show where detailed information can be found, whether in ads, collateral, etc. And provide as much detail as possible about where the money is going. Even go a step further if you can and include third-party sources who endorse what you’re doing.
• Explain the fit between your company and your cause. Don’t assume consumers understand. For example, show your consumer how your involvement has made a difference in your culture and workplace, and she’ll be better able to appreciate how genuine your efforts are.

2. Consistency:

• Prove that the initiative is not a “one-off.” Provide a time line of your commitment. Even better, extend it into the future and help consumers look ahead with you.
• Include adherence to a code of behavior that applies to all aspects of your business. It’s not about doing good on one side to hide the bad you are doing on the other.
• Be sure to respond proactively to any negative press, comments or buzz. Don’t wait for it to become a huge issue. And “respond” doesn’t necessarily mean “refute.” Explain the situation as best you can and what you plan to do moving forward.

On the last point, I commend The Bay for responding to a recent post called Time to Re-Think
Think Pink? where I raised some questions about the company’s current Think Pink cause marketing promotion. Here’s what they said:

While we strive to have as many Think Pink™ products as we can, some of these products are not exclusive to Hudson’s Bay Company so while we can contribute to the messaging and positioning  when the product has an independent partnership with the Foundation, the  packaging/hang tags will be distinctive to that partnership. With respect to your specific questions:

• The annual contribution of $430,000 is a combination of a portion of sales of Think Pink™ products, and our customers donating their Hbc Rewards points
• While we encourage a consistent health message on all of the  Think Pink™ products, some items are from previous years programs and do have an older hang tag on them, or are items not exclusive to the Hudson’s Bay Company
• It is inappropriate for us to suggest one product over another…we hope that you will find the right Think Pink™ product that fits your budget and participate in this worthy promotion’
• We would be delighted to offer a wider selection of products throughout the store and each year we encourage our wide range of vendor partners to offer exclusive Think Pink™ products for all of our customers.

People I know in the corporate and non-profit sectors were shocked to find out how much Mr. O’Mahoney received wondered how the board of directors at SickKids could have agreed to such as high salary (reported as being more that the president of SickKids Hospital) and severance.

While the lens of corporate social responsibility is clearly focused on the actions of the private sector, organizations in all sectors are being held to a higher standard than ever. In my experience, most large corporations have endorsed the principles of CSR and have put checks and balances in place to ensure that their operations are as responsible as is possible. CSR standards such as the Global Reporting Initiative (GRI) have been adopted by virtually all global corporations. And, business are doing everything they can to better understand the social and environmental outcomes of their actions.

It’s clear that non-profit organizations are not inherently responsible. I think that inappropriate behavior by third sector organizations is a violation of the public’s investment (though taxes and donations) and trust. While guidelines exist for charitable organizations (in Canada through the Canada Revenue Agency) I don’t believe that there is anything as nearly as comprehensive as GRI. (If there is, I be happy to hear about it).

To quote Mr. Obama, this is the “age of responsibility”.  Today, the public has a higher expectation than ever of organizations in all sectors and non-profits should consider reviewing and adopting the principles and practices of CSR.

At one level, cause related marketing programs like this are a positive way to create awareness of important issues and to motivate behaviour change. However, in addition to featuring products that re-enforce gender stereotypes of women (without a sense of irony which would temper this effect), the Think Pink program raises more concern for me because of a lack consistency and clarity. For example, by purchasing a set of Think Pink Port-Style Flexible Nylon Spatula “a 10% contribution will be made to the Canadian Breast Cancer Foundation”.  I saw a Think Pink dish towel with a tag that states “With a purchase of this Think Pink product, a minimum of 10% (before taxes) will be contributed to the Foundation in support of ongoing research projects”. If you purchase a Pink Ribbon “Bling” Tote, “10% of the net proceeds will be contributed to the Canadian Breast Cancer Foundation. In other cases a specific amount (e.g. $5.00) is directed to the foundation. All the tags that I saw say that “In 2008, Hudson’s Bay Co. contributed $430,000 to the Foundation through the Think Pick program. Finally, some product tags also have this health promotion message “Be Breast Aware. Know your breasts. Look and feel for lumps, changes in skin texture, appearance and shape.”

Here are some of the questions I have for The Bay:

- How much of the $430,000 that is contributed to the CBCF is in donations from consumers and how much is from the company? If this revenue comes from consumers, the tags should state this instead of leaving it ambiguous.

- Why do some product have the health message and some not? Isn’t this the whole idea?

- If I really wanted to support the CBCF, which products have the biggest net contribution to the organization?

- Couldn’t they also help to reduce gender stereotyping by including products other than dish towels and jewelery? (If they did this, perhaps they’d sell more and contribute more because men would buy things too).

When planning cause programs, don’t forget that we’re in “the age of transparency”. Make sure that your programs are clear in their intent, consistent in their messaging, and that your company is also committed at a corporate level in addition to driving donations from consumers.

I welcome your thoughts…

I agree that reputation should be a key driver of corporate citizenship and that CSR can have a very positive impact on how corporations are seen in the minds of employees and external stakeholders. However, in spite the findings in the report, I don’t think that many corporations are actually known for what they do in this area. (There’s also an irony here because there’s now much more emphasis on communicating CSR-related initiatives.) And, if stakeholders aren’t of what corporations do to be good corporate citizens, the impact of these activities on reputation must not be significant.

Yesterday, I met with a large Canadian corporation that has a long history of corporate citizenship and for whom this area is very important at a cultural level. They also communicate what they do in this area in a way that is both conspicuous and appropriate.  However, their reputation has been suffering – perhaps due to the recession’s impact on many public companies (see Edelman Trust Barometer).

What’s the best way to improve your company’s reputation by leveraging it’s commitment to being a good corporate citizen? Here are three ideas:

1. Start Inside: Employees are the best citizenship ambassadors and very often they aren’t familiar enough with or engaged in what their own companies are doing.

2. Operationalize: Develop products or services that reflect your company’s CSR strategy.

3. Leverage Partners: Communicate with and through non-profit partners. This adds credibility and creates interest among people who might not otherwise pay attention.

These approaches work best when they’re integrated. For example, while it’s clear that Starbucks’ commitment to CSR is reflected in its selection of fair trade coffee, it isn’t clear who it’s non-profit partners are or in what ways its employees are involved. Would the company’s reputation be positively influenced if more people knew about these these things? I think so.

More on this topic tomorrow. (Also, as always examples of best practices and of others that need to be impr0ved).

Impakt’s experience supports these findings. Over the last year, we’ve seen very few clients reduce their program in this area. Today, I believe the key value drivers for corporations are: reputation, risk management, employee engagement, and external stakeholder engagement. In terms of improving performance, the questions that I’m are asked most often are: How can we better operationalize our CSR programs? How can we measure the ROI of our community investment partnerships? and What are the most cost-effective ways to increase internal and external awareness of our programs?

Highlights of the Center’s 2009 State of Corporate Citizenship in the United States report include:

• Despite upheaval in the economy, a majority of U.S. companies are not making major changes in their corporate citizenship practices. Of those who made changes 38% reduced philanthropy/giving, 27% increased layoffs, and 19% reduced R&D for sustainable products.
• Most U.S. senior executives believe business should be more involved than it is today in addressing major public issues including health care, product safety, education, and climate change. Surveyed in June, just as the national debate on health care began to intensify, some 65 percent said business should increase its involvement in this issue.
• Reputation was cited by 70% as a driver for corporate citizenship, tied for the top spot with “it fits our company traditions and values.”
• The citizenship response during the recession differed between larger and smaller companies. Large companies significantly increased their investments and involvement in citizenship activities, but were more likely to impose layoffs. Small firms stayed committed to their emphasis on treating employees well by minimizing layoffs. But they significantly decreased attention to other aspects of citizenship.
• Based on current economic conditions, 15% of companies are increasing R&D for new sustainable products; 11% are increasing corporate citizenship marketing and communications; and 10% are increasing local and/or domestic sourcing or manufacturing.
• Half of the businesses are supporting skill development for employees making less than $40,000 annually and see these efforts as boosting productivity.
• Only 34 percent of executives who responded to the survey say greater regulatory oversight by the federal government is an important part of solving the current economic crisis and creating a more stable economy.

Recognizing the growing importance of partnerships, Queen’s School of Business has introduced a new executive learning program called Building Strategic Partnerships for Social Responsibility. This 2-day interactive workshop is intended to help participants make a strong business case for non-profit partnerships in their companies, understand what it takes to foster an authentic non-profit partnership, and leverage and execute non-profit partnerships with better business outcomes.

I’ll be helping to lead this session with two professors from Queen’s who are internationally-recognized authorities on CSR, Dr Jay Handelman and Dr. Tina Dacin.

People interested in this workshop can contact Queen’s at 1-888-393-2338 or click on the link above for more information.

Sander believes that “as a movement, CSR is either dead or on life support” – largely due to the recession killing “nice-to-haves” in favor of an exclusive focus on profit centre programs. While there’s lots of solid evidence to refute this claim (in addition to my own experience as a consultant in this area), I agree with Sanders that CSR has largely become a compulsory exercise designed to limit liability, boost morale and add to the branding story of the company. Examples of CSR actually delivering sales are harder to find.

Here’s where corporate social opportunities (CSO) comes in. Sanders believes that CSO “should be a marketing function, designed to seek out the cutting edge of brand innovation — where a company’s assets intersect with the greater community’s needs. When you find this match, you can produce a sustainable program that inspires sales while it makes a difference.”

I agree. The CSO’s frame of reference is:  do some good but be sure that there’s a marketing tie in that connects the company with the cause and inspires customers to connect with the company.

“Captures the growing importance of ‘generosity’ as a leading societal and business mindset. As consumers are disgusted with greed and its current dire consequences for the economy—and while that same upheaval has them longing more than ever for institutions that care—the need for more generosity beautifully coincides with the ongoing (and pre-recession) emergence of an online-fueled culture of individuals who share, give, engage, create and collaborate in large numbers. In fact, for many, sharing a passion and receiving recognition have replaced ‘taking’ as the new status symbol. Businesses should follow this societal/behavioral shift, however much it may oppose their decades-old devotion to me, myself and I.”

I highly recommend reading the entire article but for the time challenged, here are a few themes and highlights:

1. Consumer Disgust: The current financial meltdown has led consumers to be more disgusted than ever (if that’s even possible) with greedy corporate execs who just don’t care. The financial crisis was the straw that broke the camel’s back: consumers’ negative and raw emotions stem from too many brands who decided to stop caring a long time ago. In most cases, this starts at the top, with share-price-obsessed execs not generous to (or caring for) their employees, who in turn stop giving a damn about actual customers*.

2. Longing for Institutions that Care: And yet…the need for the opposite of greed (that would be generosity!) is never greater than in challenging times. Challenging times see people craving care, empathy, sympathy and generosity.

3. For individuals, giving is already the new taking, and sharing this the new giving: GENERATION G isn’t about anger and recessions: the larger and more lasting trend is passionate, empowered individuals (if not entire generations) being more willing and able to give, to share, to collaborate; to be more ‘generous’ in many ways.

The first episode features a conversation with James Temple, Manager of Corporate Donations at Direct Energy. James provides a wealth of information about how and why Direct Energy invests in the community. The next episode will feature Jim Johnston, Director of Environmental Sustainability at BMO Financial Group.

I welcome your comments and feedback for future topics.

In re-reading the questions I had for James it struck me that these might be helpful to others as baseline program planning considerations. Direct Energy has done its homework and is able to answer these key questions. Many other corporations I speak with are still grappling with these fundamentals.

How did your company decide on its community investment strategy? To what degree does the program reflect the social and business priorities of employees and of external stakeholders?

In what ways do your company’s partnerships with non-profit organizations address business objectives? How did you come to partner with these particular non-profits?

How do you balance the need for consistency at a corporate level with the priorities of employees and stakeholders at a local level?

Community investments are largely qualitative and difficult to measure. How does your company benchmark and assess the performance of its community programs as needed to determine the ROI?

Ultimately, it’s my hope that public input here will help re-define how corporations should invest in the community.

Here are some some simple and inexpensive ways to increase employee engagement adopted from David Coethica’s excellent CSR blog:

1.    Understand what’s important and meaningful:  Right now among your staff you may have an eco-warrior, a Twitter or blogging expert, a charity fundraiser extraordinaire or a fitness guru, who could all potentially add further value to your organization at little additional expense. Talk to your employees, tap into their true passions and look for ways to leverage complimentary skills.

2. Leverage CSR In Recruitment: More than ever potential employees are placing a very high priority on issues outside of salary and traditional benefits such as work-life balance, corporate values, commitment to CSR, and volunteering opportunities. Make sure that your company has established programs and policies in these areas and that they have been integrated into the recruitment process.

3. Provide Opportunities for Volunteering:  Offering your employees the chance to volunteer for a charity that’s relevant and meaningful to them is an inexpensive way of adding value to employee packages. No matter how small your business you can spare at least a couple of employee hours (especially at low periods) to paint a fence, read to a child, clean a river bank etc.  energised workforce, not to mention the new skills, change of scenery and feeling of satisfaction. 

4.    Support a Charity: Charitable giving can be done through payroll at very little cost which effectively reinforces the company’s ethos of being a good citizen. Each employee can select their own charity or you could suggest a good cause that the company supports formally. 

5. Provide Flexible Work Options: There are numerous options including staggered hours, compressed hours, shift swapping, job sharing, flexi time and home working. Larger companies report productivity improvements of 20 – 30% using these techniques. 

6. Make Employee Health a Top Priority: Here are a few suggestions to help your employees perform to their best of their ability: set up a company running/walking/sports team or club, promote cycling to work, encourage, pay for or subsidise yoga, Pilates or aerobics, provide fresh fruit and drinking water, or a fridge for employees own food, have regular health topic awareness days, promote Fairtrade or organic products, have a quite room for reading and relaxing.

Partnerships with non-profit organizations are a key aspect of community investment and I’m looking for people to interview who can speak to the business value of partnerships.

I welcome anyone who’d like to share their experience in this area to contact me.

However, in my experience, most are not able to answer the most fundamental questions including: To what degree are the most high profile (and most costly) community partnerships seen to be of value by executives? To what degree do investments in non-profit organizations support corporate business priorities? In what ways are non-profit partners able to help engage and influence employees and key external stakeholders? In what ways could partnerships be leveraged improve their performance and value?

Without having the answers to these questions, accountability simply isn’t possible.

The days of using program summaries and press clippings from non-profits to justify large community investments are over. The difficulty is that putting values on outcomes that are largely qualitative isn’t easy.

So, what’s the best (and most cost effective) approach to establishing accountability for community investments?  The first step is to ensure that both the corporation and its non-profit partner have a common understanding of the business and social criteria against which the program is to be evaluated. Next, I recommend holding conversations/consultations with internal and external stakeholders to gauge their perceptions of the partnership against the criteria that have been established. It’s not bullet-proof approach but it’s a lot better than what’s usually done.

As always, I welcome your feedback and ideas.

On May 26, Impakt will be hosting a practical and interactive half-day workshop that’s been designed specifically to help community investment managers improve the business impact of their partnerships with non-profit organizations. I’ll be facilitating the workshop along with my colleague Jon Packer, President of the Idea Workshop.

One of the key benefits of this session is how the Impact Valuation Tool can be used to improve reputation, increase differentiation and lift sales

All the details are available on the Impakt Learning Page.

On May 26, Impakt will be hosting a practical and interactive half-day workshop that’s been designed specifically to help community investment managers improve the business impact of their partnerships with non-profit organizations. I’ll be facilitating the workshop along with my colleague Jon Packer, President of the Idea Workshop.

One of the key benefits of this session is how the Impact Valuation Tool can be used to improve reputation, increase differentiation and lift sales

All the details are available on the Impakt Learning Page.