Good practice: minimising risk, maximising opportunity
October 01, 2001
How both business and society can come up trumps – David Grayson and Adrian Hodges explain their goals in writing Everybody’s business.
Seasoned corporate social responsibility campaigners can only marvel at the growing interest from many different directions in how businesses run their own core operations and help resolve societal problems.
• Britain is one of several European countries with a Minister for CSR (Douglas Alexander).
• The European Commission publishes a CSR green paper with the express aim of creating a framework for action across Europe.
• The UN General Assembly in September 2001 debates Kofi Annan’s Global Compact and UN co-operation with business, using a report drafted by Jane Nelson of the Prince of Wales International Business Leaders Forum.
• A new survey from change-management consultants Stanton Marris suggests that the most talented employees say: “you would be surprised how much the corporate reputation, the face the organisation presents to the outside world, matters to us…call this the ‘dinner party effect’ When we meet someone and tell them where we work, what does the label say about us? It’s an important part of our self-image.”
• A 2001 update of the Environics Global Millennium Poll on CSR confirms a powerful minority of consumers are asking questions of the behaviour of the companies behind the brands.
But still too few companies are involved
It is all a far cry from 1991 when Community Affairs Briefing was launched, and leading-edge CSR was ‘third-wave community involvement’ – ie integrating CCI into mainstream business practice.
And yet and yet! CSR remains a spectator sport even for most of the world’s 60,000 multinationals – let alone for the mass of SMEs. As last year’s New Economics Foundation survey of social reporting showed, less than one per cent of all companies listed on the London or New York stock exchanges produce social reports.
It is still only a small minority of businesses that have incorporated environmental and social issues into mainstream management thinking; or have consciously adopted a strategy of maximising positive impacts for business and society into corporate DNA – and thereby made ‘win-win’ an integral part of a company’s culture.
A global backlash to business threatens
Yet the ‘global forces for change’ – revolutions of technology, markets, demographics and development – and of values – mean that businesses are now highly vulnerable if they do not proactively adapt themselves to the new realities of heightened expectations and less automatic belief in the worth of profits and globalisation.
As management guru Rosabeth Moss-Kanter said this summer:
“Back in the 1990s when there were newspaper headlines announcing that capitalism had won, I warned that if the business community wasn’t attentive, the headlines would soon be announcing that socialism is back. Now there is a huge backlash….” – The Times (London) – August 23, 2001.
Issues regarded by many in business as ‘soft’ issues like environment, work-life balance, human rights and community are now hard – hard to predict, hard to ignore and very hard to manage when they go wrong.
Take a roll-count of businesses that have recently had to count the costs when these ’emerging management issues’ have gone wrong for them: Texaco’s settlement of racial discrimination suits; Bridgestone-Firestone’s product recall; Danone’s factory closures.
Yet conversely, emerging management issues can be a source of competitive advantage – as Unilever, for example, has found in creating new markets in countries like Tanzania and Brazil. It has organised new distribution systems and been prepared to sell products in individual units.
Making CSR a reality
We have had the privilege of working with a number of leading companies and some of the world’s top business leaders as they grapple with the consequences of the dramatic changes of the past decade since CAB began. One of their biggest challenges is to get their own understanding of the issues amongst their busy line-managers around the world.
In Everybody’s Business – Managing Risks and Opportunities in Today’s Global Society, we try to make sense of the big picture changes which intelligent managers and citizens observe daily. Also to suggest implications for business and the way business interacts with a society that is simultaneously more connected, more cosmopolitan and conversely more assertive of its distinctive differences and local identities. We suggest how busy, bottom-line driven managers can incorporate these issues into their day to day decision-making.
We argue for a win-win strategy – minimising risks and maximising opportunities for both business and society – and suggest a seven step model for how to manage for sustainable business excellence. We emphasise sustainable business excellence because the most socially irresponsible business is the business that goes bust.
The win-win seven steps
The book suggests a practical model for action.
• The first step is a trigger for action. We suggest thirteen common triggers. This may be an externally generated event: a media exposé of conditions in the company’s Third World factories or a threatened NGO campaign against the business. The trick is to get ahead of the wave – and generate your own trigger for action.
• Step 2 then involves articulating a compelling business case for action appropriate to the specific business. We suggest some possible frameworks.
• In Step 3, a business needs to scope the critical emerging management issues it faces. Tools includes stakeholder dialogue, benchmarking, assessing business impacts and using scenarios.
• Step 4 is about committing to action – which may involve changes to a company’s vision and mission; new governance arrangements, and perhaps making a public commitment through signing up for something like the Global Compact or joining a business coalition promoting socially responsible business.
• In Step 5, a business needs to integrate strategies – by stretching existing policies and processes. For example, where there is a strong risk management culture or an existing commitment to Total Quality Management, these can be extended to incorporate the emerging management issues. Almost certainly, however, there will also need to be some new strategies developed.
• Step 6 is about implementation – engaging with stakeholders. For example, incorporating these issues into job specifications, appraisals, management training and rewards systems; and addressing community needs.
• And finally Step 7 – measuring and reporting on impacts that the business has – and using these as a trigger to start the process again.
Like the mission of our respective organisations – BITC and PWIBLF – which are partners in Everybody’s Business, our aim is to inspire rather than to bludgeon companies to incorporate environmental and social dimensions alongside economic performance.
We were particularly keen to work with a publisher like Dorling Kindersley with its design expertise – and produce a visually attractive book which helps managers to understand these issues.
Since business is today the principal motor of economic development around the world, the prize – if a critical mass of businesses can be motivated to adopt this approach – is worth fighting for. That is why we argue that today the business of business is everybody’s business. n
Everybody’s Business: Managing Risks and Opportunities in today’s global society is published by Dorling Kindersley and The Financial Times – with Business in the Community and The Prince of Wales International Business Leaders Forum.
David Grayson is a member of the editorial advisory panel board of Community Affairs Briefing. He is a director of BITC, an advisor to the pan-European public affairs consultancy, EPPA, and co-founder/ director of Project North East.
(drg@drfg. demon.co.uk)
Adrian Hodges directs the Americas operation of The Prince of Wales International Business Leaders Forum. With managerial experience in business, local government and NGOs, he was world-wide head of corporate communications for The Body Shop International.
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