Is it Time to Do Away with Corporate Social Responsibility?
Maybe it's time to do away with corporate social responsibility (CSR).
Not merely the words and the idea but the infrastructure: CSR departments, CSR reports, CSR conferences and CSR executives.
And, as long as we're at it, let's think about ditching the triple bottom line, the pursuit of shared value, corporate citizenship and especially, yuk, the idea that stakeholders deserve a say in how to run a business.
All of these are, at best, distractions and, at worst, ways of thinking about business that create a separation between a company's core business and its impact on the world. Both ought to be life-enhancing. No more and no less.
I've been thinking about CSR and how to talk about it for years. I wrote my first article on corporate responsibility for FORTUNE in 2003. It ran under an odd headline — Tree Huggers, Soy Lovers and Profits — because my editors knew that words like corporate social responsibility turn off readers. I grappled with the meaning and terminology of CSR again in my 2004 book, Faith and Fortune, which explored connections between religion, faith, values, spirituality and business.
The language of faith and values, I subsequently decided, wasn't the best one to use when speaking to corporate executives about business and its impact. I'm now inclined to talk about sustainability. For all its vagueness, corporate sustainability is an idea that is both practical -- no one wants to kill their company -- and radical, because no company is truly sustainable, at least as defined by the Bruntland Commission as promoting development in a way that "meets the needs of the present without compromising the ability of future generations to meet their needs."
But the here goes beyond language. I was reminded of that when reading an excellent new book by Carol Sanford called The Responsible Business: Reimagining Sustainability and Success (Jossey-Bass, 2011). No, I don't love the title or even her terminology. (One chapter is called, yikes, "Stakeholders as Systemic Collaborators.") But Carol's arguments and insights (and the title wasn't her idea). Carol argues that the most successful and profitable businesses, over time, will not be those that "practice CSR" but instead those that rethink their purpose, reorganize themselves to draw upon the creativity and passion of all, and integrate responsible behavior into the way they do everything they do.
As Carol writes:
Responsibility isn't a set of metrics to be tracked or behaviors to be modified. It is central to both the purpose and prosperity of a business and must be pervasive in its practices.
This may sound obvious but it leads her (and her readers) to new ways of thinking about business. Businesses, she says, should strive not just to minimize the harm they do, but to do good, to become restorative, to "improve and evolve healthy systems." She explains:
Ecological and biological systems not only adapt to their surroundings, they also transform them. They create contexts in which increasingly sophisticated networks of relationships emerge...
Corporations, and the businesses within them, work more or less the same way. If they are to live and prosper, they find ways to remain connected to their origins while cultivating and then adapting to changes in the world around them. Their long-term viability has as much to do with how well they create networks of relationships [emphasis added] with consumers and other companies and industries that advance the health of all.
Yes! Here's how I think about this:
The old/traditional/assembly-line way of doing business was fundamentally transactional. Business was seen as a set of discrete win-lose transactions with customers, employees and suppliers. Companies created value by paying their employees as little as possible, paying their suppliers as little as possible, charging their customers as much as possible and externalizing their costs.
The new/progressive/responsible/sustainable business is fundamentally about relationships. This company sees itself as the center of a network of long-term, win-win relationships with workers, customers, suppliers and communities. The company's value lies in its ability to strengthen and enhance all of those relationships.
This new way of thinking and behaving can't be left to the CSR department, the chief sustainability officer or anyone else. It's the job of the CEO, the CFO, the COO, the CMO, the head of sales, the factory foreman, product designers, everyone.
With a focus on CSR, "you get officers, you get programs, you get incentives," Carol told me when we spoke by phone. "If you are given a target that you are to achieve, people focus on the target and the processes." Instead, people need to feel free to express their highest values and beliefs at work. "Humans are most alive, and most creative and innovative when something comes out of them as a person," she says. A company should be "more like a jazz quartet and less like a conducted symphony."
Nor does "embedding sustainability" into the business do the trick, Carol told me. Sustainability to what end? Recently, I had an opportunity to give a paid speech about sustainability to suppliers of a big tobacco company. Uh, no.
Carol has corporate experience to back up her thinking. She's been a business consultant since 1980, working for such companies as DuPont, Colgate, Seventh Generation and several units of Clorox, including Kingford Charcoal and Britta.
She tells revealing stories in the book.
A Kingsford Charcoal executive leads a transformation of the company by developing the skills of the company's workers and encouraging them to think like business owners; he dissolved departmental boundaries, invited everyone to put themselves in the shoes of a customer, and to see the contribution that their work makes to other people's lives. He helped them connect their work to a bigger purpose.
In South Africa during the turbulent 1990s, a Colgate leader shook up the workforce by persuading whites to work for blacks, and getting everyone to come together to address issues in both the business and the community.
At DuPont, a middle manager looking for an alternative to Freon, which was contributing to ozone destruction, gets help from throughout the company, from customers and, unexpectedly, from Greenpeace.
None of that could have been accomplished by a CSR executive or department -- or any department. "The biggest challenge for a company that aspires to be a responsibility business," Carol says, "is to stop working on parts and start recognizing and working on whole systems."
CSR "can't be bolted on but must be built in," she says.
Business is too important to be left to CSR departments. It's also too important to be left to business alone.
Pressures on business to become life-enhancing must come from without as well as from within -- from customers, from rank-and-file workers, from engaged shareholders, from activist groups and, gently, from governments. If we find ways to hold businesses accountable for what they do, smart businesses will adapt and meet our rising expectations. Others will die.
It's not a lot more complicated than that.
Business managers should focus on generating long-term value for their shareholders.
They should lead their companies in ways that enable human flourishing.
That's the purpose of business in a phrase, a wise man once told me, and he wasn't a CSR officer.
As Carol writes: "I can hardly wait for the corporate responsibility movement to run its course so that businesses can get back to being responsible by nature."