It's the value, stupid: 11 tools to boost the business case for CSR
Value for shareholders, value for local communities, value for stakeholders: these are the considerations that should underpin corporate social responsibility program and budget decisions and actions.
If value is not central, what is?
Too often, the issue of CSR and value is looked at only peripherally — if at all. It's almost as if somehow CSR should be above or beyond value considerations.
Why else would industry, communities, development partners and others engage if not to create, preserve or maintain value?
CSR is truly a self-interested activity. It has a much better chance of success when the value interests of industry and stakeholders can be aligned and maximized.
Over the last couple of decades of working on and analyzing CSR projects and activities across many industries and on all continents, I’ve picked up on several effective strategies to maximize value from CSR that work across industries, sectors and geographies:
1. Find strategic partners
CSR is tough and expensive to do alone. Strategic partnerships can bring incremental resources (financial and otherwise), along with execution synergies, an expanded network and enhanced sustainability.
But be careful; partnerships take work and planning, and can go off the rails if not developed and managed properly.
Two steps are critical to developing partnerships that add value.
The first is to ensure a meaningful alignment of interests — that all parties can share at least some common objectives and approaches, even if their core businesses span sectors. The second is to get to know your partners well to at least help gauge the likelihood and desirability of a long-term working relationship.
2. Communicate, but don't overshare
CSR seldom should be a stealth operation. Neither should it be the focus of a "shout from the rooftop" type of indiscriminate communication strategy.
Communicating the right messages to the right audiences at the right times — and doing so in a way where outsiders can hear and absorb the message — can add a lot of value to most CSR projects. Doing it wrong can destroy a lot of value.
Key audiences to keep in mind include partners, stakeholders, influencers and (often missed, or misunderstood) internal stakeholders.
3. Unlock internal potential
Often you need to look no further than the next desk to find strategic opportunities to add value. Engaging your internal colleagues can unlock value for shareholders and stakeholders and often enhance the long-term sustainability of CSR projects.
Some of the most efficient and effective ways to create community and stakeholder value may be through integrating corporate CSR objectives across corporate operations. Local procurement, local hiring, enhanced training for locally engaged staff, employee volunteerism and other strategies and tactics can create value.
In addition to the obvious synergies for companies, there is often an enhanced camaraderie amongst staff as a result of this sort of internal collaboration — and this can translate into value in other arenas.
4. Find fresh eyes
Familiarity creates blindness, or at least vision problems. Sometimes a fresh set of experienced eyes can see opportunities (and challenges) that are easy to miss if you have been involved in a project day after day after day.
Fresh eyes take less for granted and ask dumber questions. Sometimes the dumbest questions can unearth the most amazing insights.
Don’t hesitate to bring someone in who knows nothing about your project (but a lot about value) and have them take a look at where new or enhanced value may be found.
5. Forget do-gooderism
If you are doing CSR because you want to save the world, or even just to save the adjoining village, do everyone a favor and resign.
CSR is not about do-gooderism. It is about hard-headed value creation, value optimization, risk management and other core business needs.
If done well, CSR can and does do a lot of good work and value creation for communities, stakeholders and society at large (and for shareholders, too).
But always remember: if you set out on a CSR journey with a plan to only do good works, you are likely to stumble and do damage. That is not a strategy that will produce much value for society, for shareholders or for you.
6. Make sure your metrics measure up
You can’t measure temperature with a speedometer. The key to using metrics to unlock value is having project-appropriate measurements.
Metrics should derive from the "why" and the "how" of the project itself. They should not be derived from some preconceived corporate or external framework.
We’ve all heard that you can’t manage what you can’t measure. In CSR there is another saying every bit as true: You can’t measure what you can’t measure.
Metrics need to fit the project and be as simple as possible. If they don’t, they cost money, cause frustration and accomplish little. Sometimes corporate reporting frameworks, or directives to adhere to this or that global norm, standard or protocol end up with the CSR frontline teams trying to measure the wrong things in the wrong ways.
At the beginning of every project, or right now for those that started without this, there should be a thorough analysis of why the company is investing time and money into this particular project. And how can it track progress toward the why?
Once you have settled on metrics, you need to set up a systematic process for gathering them on a regular basis. You also need to regularly review the metrics themselves.
It is not uncommon that a few months into a project it becomes evident that some new metrics need to be tracked and/or that some of the existing ones aren’t helpful to track. What is key is to find the metrics and the data collection and analysis protocols that allow the project to efficiently track progress and use that information to constantly improve project management and implementation.
This isn’t to say that all corporate CSR frameworks should be ignored or abandoned, or that compliance with global norms and protocols is unimportant. Far from it. It is to say that project specific metrics that help you do a better job of managing and implementing a particular project are as important. Sometimes even more important.
7. Focus, focus, focus
How strategic and how sharp is your focus? Some CSR programs end up looking as if they are trying to be everything to everybody.
Most of these end up accomplishing very little except burning through budget and goodwill — both internal and external goodwill.
8. Systematically review the status quo
Like most things in business and in life, CSR programs can get off track and out of focus. They can drift this way or that, and the conditions that spurred them no longer may exist.
Periodic reviews should be carried out on all CSR programs, and it's always important to keep a careful eye on how CSR programs affect budgets. Questions used to review ongoing projects don't have to be complex, but they should answer some basic questions:
- Why did this program start? What was the original value proposition?
- Is the original need still valid? Is it still as important as it was?
- Is the program meeting that need effectively?
- Does meeting that need produce value for society AND shareholders?
- If the program were being launched now, would you organize or do anything differently?
- Are you engaged with the right partners? Are there new ones? Are the old ones still the right partners?
9. Get interests in line
This is all about aligning what’s in it for you and what’s in it for me. The essence of CSR is about aligning shareholder and societal interests in a way that produces value for both.
An interest alignment analysis examines CSR programs to ensure that value is produced for both society and shareholders. It also explores opportunities for additional value and alignment, which can help to identify and develop strategic partnership opportunities.
10. Stay consistent
Don’t expect value to emerge spontaneously, even if you are doing good work. Meandering through CSR projects waiting for value to show up may produce some results, but not many and not consistently.
Value happens when you plan for it and work for it. It helps to have a framework or frameworks that help you to better understand value and how to optimize it so you are maximizing value for shareholders and stakeholders.
I often use a series of related frameworks based on a CSR Value Continuum. What is important is to find a way that allows you to quickly and consistently analyze and understand the value dimensions of your CSR projects.
11. Make the most of your timeline
How long does value from a CSR program last? Is it like OpEx or CapEx?
CSR programs and investments produce value. You often can find ways to generate and capture more value if you look at it in terms of time.
Does the value that your program produces last beyond the current period? Will it continue to produce value over time?
It can help to think of it in terms of operating expenses vs. capital expenses. One produces value that is basically used up in the current period and the other produces value that lasts beyond the current period.
Don’t make the mistake of thinking that CapEx type of CSR programs are necessarily better. They aren’t.
What is important is to understand what type of CSR investment you are making and use that knowledge along with other insights and analysis as you seek to maximize value for shareholders and stakeholders.