Would it be so impossible to hear some good news about business for once?
People aren’t able to live on a minimum wage, corporations are being negligent about the environment, factory workers are committing suicide in grim conditions, corruption is running rampant, and on each side of debate of all these topics, people are labeled as either greedy, heartless one-percenters or left-wing Commies.
It’s not a pretty picture, and yet we recently aired a show that defied all expectations. “Leading the Charge on a New Tomorrow” gathered Kellie McElhaney, a faculty fellow of Corporate Responsibility with the University of California-Berkeley, and Tim Mohin, the CSR Director for Advanced Micro Devices (AMD), to speak about corporate social responsibility and how corporations could do right by the country, help it grow and why in the grand scheme of things it makes perfect sense to do so.
The amazing part? It was civil, it was positive, it wasn’t trolling, and it was still topical, insightful and deep. Can all the raging talking heads in the world compete with that?
CSR is a long-term initiative with ROI that isn’t strictly tangible, but right now we’re doing little more than paying it lip service. Our show highlighted how a CSR role could mean so much more than “sustainability,” but it mainly proved why businesses should care about caring. Here are five key takeaways.
This is “The Reputation Era”
The reality of CSR in business is that although the phrase “business is in business to make money” doesn’t always sit well with the liberally minded, we’re talking about for-profit institutions, and companies will inevitably need to seek a return on their investments in whatever they pursue.
In response to that reality, Mohin says that organizations are now forming “The Reputation Era” in finding competitive advantage in CSR endeavors.
“You’re seeing companies investing in areas that are germane to their particular businesses, and those areas also have a strong social responsibility context,” Mohin said. “That’s where this movement is going: integrating social and environmental needs into business.”
Doing good is no longer just about looking good in the eyes of your customers; it’s about looking good in the eyes of your competitors. Those who overlook socially responsible areas could be losing out to opponents in key areas of growth, and Mohin says that socially responsible investing now amounts to $3.7 trillion.
Don’t Lose the War for Young Talent
Say what you will about millenials, but they’re entering into the work force, they’re here to stay, and they’re using the web to influence change and protest within and outside your organization. What’s more, they have socially responsible interests, and there’s a good reason to be invested in the,
“The people under 30 – they care deeply about these issues, and they are self-selecting about for whom they choose to work and from whom they choose to buy,” McElhaney says.
Millenials want more from their employers than a big paycheck, and as companies continue the war to find fresh, intelligent talent in the workforce, those companies that are the most socially conscious are the ones who will win that talent.
“A study showed that workers are more interested in having a job where they can make an impact than having children, which is just a mind blowing result,” Mohin said.
Reduce Operating Costs, Add Value, Plain and Simple
One of the biggest oversights about CSR initiatives is that it’s a cost center. But if leaders can link social responsibility programs to shareholder value, these efforts are that much more likely to be successful.
“When you’re reducing energy consumption, water usage and packaging, you’re also adding value because you’re reducing operating costs of a company,” McElhaney said.
This logic applies beyond environmental sustainability. “Rather than the question of what does it take to get a critical mass of employees, it should be how does a corporate social responsibility program really engage employees,” Mohin says. “Engagement is defined as applying discretionary effort to work, where you get innovation, creativity and new products.” Thinking in the long term and drawing the correlation between employee engagement and CSR has shown to lead to improved creativity, engagement and loyalty, he adds.
“If people feel empowered to change the world, they’ll be empowered to change the product,” McElhaney said.
Your Brand is the Biggest Thing on the Balance Sheet
“60 percent of your brand reputation relates directly to your corporate responsibility, and your brand and reputation are some of the biggest intangible assets on the balance sheet,” Mohin said. “Executives are waking up to this fact.”
But being socially responsible is not just about acting like a charity or doing it for PR reasons. “We’re moving from an era to doing less bad to an era where we’re doing well by doing good,” Mohin said.
Corporations should view the world as a place of needs that can be solved, and focusing on the shared value between business and society and how organizations can help, “that’s where the power of business can really start to move the needle.”
The World Has Changed
CSR is an art. It’s something that isn’t always consciously acted upon or mechanically adopted because business leaders are all humans with heads and hearts that don’t always speak with one another.
As a result, bad things happen.
“Like everything, there is a dark side, there is no company that completely gets it, and CSR is a journey, not an end point,” McElhaney said. “Business is run by real human beings, and humans don’t like to get a call in the middle of the night and find out that one of their suppliers crashed and burned.”
But as the global economy becomes more complex, the world itself is changing.
“Companies are starting to look not just at the price and quality and delivery of their suppliers, but they’re looking at their behavior as well,” Mohin said, because as businesses have outsourced, the world has caught up to the fact that not everyone shares the same values for the workplace.
But this too is evolving. Developing countries industrializing with speed and growth will be demanding the same rights, higher wages and social needs that are being demanded in this country.
The world is changing, from the business goals to the public opinion to the people at the helm and to the conditions across the planet. Businesses have to change too, and it starts with introducing some good news into this vicious cycle.
Listen to “Leading the Charge on a New Tomorrow” to hear more thoughts from McElhaney and Mohin.