Asking if there is business value to a corporate responsibility or sustainability strategy is the wrong question. No one would ask if marketing strategy has business value; sometimes it does, sometimes it doesn’t, depending on its quality. The more relevant question is: What does your company need to do to ensure its CR strategy creates business value? That's tougher to answer for CR because compared to marketing, CR is new and people have a poorer understanding of the issues.
Our 15 years’ experience working in three multinationals have suggested how to develop a profitable CR strategy. We believe these lessons are broadly applicable and would help any company think clearly about CR and how to make it a contributing part of the business. In this article we discuss some of the keystones; the full framework can be read here.
1. Insist on profitability. Top management should require a focus on business value, not philanthropy, NGO management, or cause marketing. A company needs to think carefully about how CR can save or make money for its business, meet the challenge of a specific societal need, and create shared value by acting in its own best interests.
Companies struggle with “intangibles,” and the traditional business case is often short-sighted and poorly applied to issues such as CR. Regardless of the technical flaws of financial analysis, the effort should be profitable in the judgment of senior leadership. The guiding principle is that a good corporate responsibility strategy is about how to make money, not give it away.
Following this logic will allow companies to do far more social good than a traditional approach.
2. Link to the company’s core purpose. The core purpose of the enterprise is the beacon for finding a valuable CR strategy. As Drucker showed many years ago, successful companies have a reason-for-being beyond making money-- and the strategy must connect to it.
Autodesk created a database of sustainable building materials and incorporated it in their products. It’s such a simple way to have a great impact -- by putting sustainable choices at the fingertips of everyone who buys their software. Cisco uses virtualization for meetings traditionally held face-to-face, lowering the cost and carbon footprint of doing business. The travel industry now has a competitor they never expected.
Next page: There's no substitute for a great product