Responsible learning
Corporate social responsibility and sustainability programs are usually among the first initiatives to be sacrificed when businesses start cutting costs. As a result, many executives approach such efforts with a less than authentic "when it's convenient" attitude that doesn't sit well with savvy consumers. But if companies are serious about differentiating their offerings from the competition, enhancing brand equity and even gaining better access to some markets, experts say they should think twice about pushing these programs aside.
"If you do not design these programs with good finance and accounting to quantify the benefits for the CEO and top management team, of course they are pulled when times are tough," says Marie-Josée Roy, professor of Strategic Management at Quebec's Université Laval, where most MBA students are part-time working professionals. "One can easily say the company has a good reputation and employee retention, but what impact that has on the bottom line is hard to evaluate."
Though Roy identifies clearly defining objectives and quantifying the benefits of sustainability initiatives as the biggest challenges for companies, she says they are essential for an effective program. "Using the environment as an issue, for example, the first thing I'd suggest is examining what the regulations are, what competitors are doing, looking at the potential benefits of changes and assessing what we are doing right now as a company," Roy says. "What is our current emissions level and how much do we pollute? You have to define metrics around this as a starting point to formulate goals, instead of just saying you want to do better."
Once these measurables are established, Roy says it's easier to develop a clear strategy and track progress from year to year. And after showing some improvement, she encourages firms to build brand equity by "bragging" about and communicating these successes to all stakeholders. "Another challenge is that these programs are done in an ad hoc fashion instead of being well integrated in the entire organization," Roy says. "Often we find that one department is working on environmental initiatives and it isn't well integrated with other departments. But these values and goals should be present in the marketing and production departments as well."
While sincere commitment at the leadership level is crucial for success, Steve Maguire, director of the Marcel Desautels Institute for Integrated Management at McGill University in Montreal, adds that widespread participation within an organization is also important. He suggests including statements about CSR and sustainability values in the corporate mission statement. "Creating a position such as the VP of sustainability and staffing it with someone who is a respected leader, capable and well-networked in the organization is another way [of improving the chances for success]," Maguire says.
Maguire says management can motivate people to commit to CSR initiatives by involving employees at every level in discussions about values and defining areas for improvement. "The challenge then becomes maintaining this culture and ensuring those values are transmitted to new employees and enacted," Maguire says. "Younger people have internalized sustainability to a greater extent than people of my generation, so as new firms are brought into existence by this generation, protecting these values while making money will likely come easier. For them, it will just become business as usual."
Read full article: Financial Post, March 13, 2012