Kingfisher: from charity towards social responsibility

November 03, 2005

An assessment of Kingfisher, one of Britain’s leading retailers and the company behind such famous names as Woolworths, B&Q, Comet and Superdrug.

Some would say retailers have it easy – an outlet on most high streets, their products in many homes, their company identities are household names: surely they have no difficulties in relating directly to communities and in getting their message across? If so, the Kingfisher group is well placed. But in this exposed position, retailers have to get the message right. Indeed if community affairs issues really do matter to the public, then retailers feel the effect straight to the bottom line, in a way business-to-business companies do not.

Evolution

Concern for the bottom line – or put less crudely, the business benefit – is reflected in the evolution of Kingfisher’s thinking over recent years. Initially community affairs was run by a Charity Committee at board level. That became Community Involvement. Now it has become Social Responsibility and the change has gone beyond language or mere labelling. According to Kingfisher, “charity” and “community involvement” imply the company is not part of society, and so needs to go out “to get involved”. In contrast, their “social responsibility” approach implies being fully part of society and operating in a way that reflects that reality. So Kingfisher say community affairs is a mainstream business issue, all about achieving competitive edge. This profile examines that proposition.

Organisation

Certainly at the level of organisation, this thinking is reflected in how community affairs is managed. Policy is set by the Board, and reviewed annually. There are no dedicated community affairs staff to implement it, either at group head office or in operating divisions. Rather each function deals with its own element, whether personnel, purchasing, marketing, line management, etc. While some staff do end up spending a significant proportion of their time on activities other companies would call community involvement, this arrangement does prevent community affairs being marginalised.

Business benefit

If the aim is competitive edge, then Kingfisher’s choice of activities on which to concentrate should be issues of concern to a retailer. Most major retailers have recruitment and retention difficulties; they suffer from shrinkage (a euphemism for shoplifting); customers are increasingly concerned about environment issues like tropical hardwoods and packaging.

Kingfisher’s operating companies have chosen as their main activities:

– crime prevention: Crime Concern (chaired by Kingfisher Company

Secretary Tim Clement-Jones) and in particular the Crucial Crew child safety scheme;

– women: the Opportunity 2000 campaign to improve the place of women at work, led by Kingfisher director Lady Howe;

– homeless: customised training through LEAP and support for housing over shops through LOTS;

– education: full participation in the education business partnership agenda, following a review of company policy recently conducted by a secondee head teacher;

– environment: phasing out damaging products and methods, and researching alternative supplies and processes.This range shows a clear linkage to issues that affect the bottom

line.

Communication

In seeking business benefit and competitive edge, most companies at least look for an improved corporate image from their community affairs programmes. For Kingfisher, what matters most is the reputation of the individual store names – Woolworths, B&Q, Comet and Superdrug. So most communication is conducted within those companies. The concern with group identity – the Kingfisher name – exists only at two levels: externally, among national opinion formers, and internally, among staff.

Externally, Kingfisher has been assiduous in taking exhibition stands featuring the community affairs programme round to party political conferences and other high profile events. It has published a book Working with the Community – a guide to corporate social responsibility which is intended to help other businesses to get more involved. (A second edition is planned for publication in autumn 1992.) These efforts are showing signs of success, with an increased rating in MORI’s opinion former survey over the last three years.

Internally, the effort to build group identity through community affairs has only just started. All group staff have been issued with a brochure setting out activities in all the operating companies. An award scheme “Helping Hands” has just been launched, to recognise employee community involvement effort. The aim is to raise the profile of community activity and stress the importance which the group attaches to it. It will also serve the useful management function of discovering at group head office the range and scale of activity in the diversified group.

So is Kingfisher achieving the business benefit in communications? The fair answer is that the elements are in place, but full success is still some way off.

Budgets

Only a limited number of major projects with national significance is supported with donations by the head offices at group or operating company level. At individual store level, many small community donations are made. The result is that few middle-ranked donations are offered.A common question for many companies is how to fix the right budget level. Kingfisher is not a member of the Per Cent Club, arguing again that the cost of community affairs needs to be justified by its business benefits, not by the need to meet some artificial target. Why is 0.5% the correct minimum level? In fact the group currently exceeds this Per Cent Club target, but the question remains to find the right level. Kingfisher’s logic would be incontrovertible, if it were possible to quantify the benefit to the business in terms of £ X million community

affairs spending yielding £Y million profit. Of course, as many companies find, it is not that simple! The theory may be right, but the proof in facts and figures is more elusive.

Challenges

This lack of hard facts and figures is the weakness in the business benefit/mainstreaming argument – right in theory, hard to prove. So the first challenge for Kingfisher is to sustain the business case , internally as much as externally.

Second it has a long way to go on staff involvement. Comic Relief style fundraising is widespread, but business volunteering to community groups, still less the release of staff on short term assignment to a community group for training and development purposes, is much more limited. So staff involvement needs to move away from ad hoc action and be put on an organised footing. Its third challenge is to extend the pioneering work on equal opportunities for women to the minority ethnic communities. Kingfisher was recently among many other leading companies criticised by a church commission on racism as being unable to provide basic statistics about the ethnic breakdown of staff. The fourth challenge is to extend the commitment and enthusiasm for community affairs shown by senior executives into the ranks of middle management. If that can be done, the business case for social responsibility will have been convincingly made.

Conclusion

Kingfisher has an excellent programme, indeed almost a model. If it can meet the challenges outlined above over the next few years, a future profile will not be able to distinguish between what is community affairs and what is ordinary business activity. That’s a goal worth striving for.

Corporate Citizenship Briefing, issue no: 4 – June, 1992

Mike Tuffrey is founding editor of Corporate Citizenship Briefing and director of The Corporate Citizenship Company.

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