Many aspire to but few accomplish a genuinely consistent global approach to corporate citizenship, getting business buy-in beyond a single generation of committed senior managers. SmithKline Beecham, an Anglo-American company trading in 130 countries, has totally overhauled its community programme in the last two years to tackle this issue.
The company as it is today was formed from the merger in 1989 of the Beecham Group in the UK with the US-based SmithKline Beckman; the roots on both sides of the Atlantic go back 150 years. Headquartered in the UK, half the sales and three quarters of the profits are generated in the USA where the corporate centre is in Philadelphia. Prescription medicines, such as antibiotics, Augmentin and Amoxil, and anti-depressants like Seroxat, form about half the worldwide business, while one third is consumer healthcare products, with brands including Aquafresh, Panadol, Lucozade and Horlicks. A small but growing business in healthcare management and clinical services forms the rest.
Fundamental review
With a history of philanthropic support over the years, SB faced many of the same dilemmas as other companies: with pressure to say yes to many requests, activities were becoming fragmented; the clear need was to target for more effective use of available resources. So in 1995 a comprehensive review began and by mid-1996 the new Community Partnership programme was launched. Now giving is aligned to strategic intent; opportunities are explored which go beyond cash to cover in-kind contributions of products and employees. In short, a “more aggressive, business-like and results orientated approach” was adopted, aligned to the business but not driven by it.
At the end of 1996, Doug Bauer joined to become director of the worldwide programme, based in Philadelphia. Previously at the Pew Charitable Trusts and before that the Scott Paper Company, Doug also has responsibility for programme delivery in the US, while UK-based Margaret Bailey manages Europe and wider international activities.
Themes and activities
The Community Partnership programme’s mission is to help the world’s disadvantaged to lead healthier lives. The rationale is straightforward – the interdependence of the company with the communities where it operates, aiming for “positive, productive partnerships” which reach the same high standards of excellence as is achieved in other parts of the business. The annual community contribution budget is around £5 million, allocated to three geographic areas as set out below, with a further ?2 million at the corporate centres. Product donations, other in-kind contributions and donations made by local operating companies are additional.
In North America, the focus is on “Better Access to Healthcare” for people who otherwise would not have it. Roughly half the total community budget is allocated here, where lack of health insurance, poverty, poor education and language differences mean many fail to access basic healthcare.
In Europe, the theme is “Children’s Health”, with roughly 30% of the total budget. Projects tend to start in one country, with the aim of becoming pan-European.
In the wider international arena, “Health Education and Mobilisation” is the focus, particularly sanitation, personal hygiene and malnutrition. Given the scale of the task, both the physical geography and the lack of infrastructure, SB usually tries to work with other partners, gaining leveraged funding. Given the overwhelming need, priorities were chosen only after extensive local consultation with opinion leaders in public, private and NGO sectors.
Recent ‘flagship’ commitments include:
a 62.9 million commitment to ‘Healthy Start’ initiatives in the USA, launched as part of the recent President’s Summit for America’s Future – 140 local communities receive funding to match their own efforts, with employee involvement too, for a range of basic healthcare projects to help children;
6900,000 over two years to assist homeless children to get appropriate specialist care in New York City through the Children’s Health Fund;
£150,000 to Project Hope in Bosnia for paediatric rehabilitation of children affected by the war;
£330,000 for the Barretstown Gang Camp in Ireland, a project helping seriously ill children from across Europe.
One of the consequences of the review has been a switch of contributions away from reacting to unsolicited requests to projects fitting clear criteria, often initiated by the company. One example is the new SB Community Health Impact Awards scheme, launched in September 1997. Up to 20 grants of ?25,000 / 640,000 each are available, half in the UK and half in the greater Philadelphia area, to promote health and well-being in local communities. Managed in the UK with the King’s Fund, the focus is on small to medium-sized community-based organisations that are innovative and successful. Applicants are selected against six criteria, related to their effectiveness, not benefit to SB’s business.
Management
Focusing the programme on clear consistent world-wide policy headings is just the start; the real achievement is getting the mainstream business genuinely committed. SB’s secret weapon is the four Community Partnership Management Teams (CPMTs), covering the three geographic areas plus activities at the corporate centres in London and Philadelphia. Each has a senior ‘sponsor’, an ‘owner’ to drive things forward and a team drawn directly from the business. For example, the Europe CPMT sponsor is the head of the consumer healthcare business in Europe, the owner is a director and vice president for research and development, while a team of nine is drawn from across the business units, supported by Margaret Bailey.
The CPMTs meet three or four times a year, to implement the group policy and decide on projects. This team-based approach ensures momentum is maintained even if key personnel change. While cash budgets are held centrally, it is the business executives who must mobilise non-cash input. For the whole Group, the sponsor is chief executive, Jan Leschly, while the owner is Dr James Hill, director and senior vice president for corporate affairs.
In-kind contributions
In the past, SB responded to ad hoc requests for products, often following an emergency, giving what product was available. But this did not match actual need in the field and SB’s healthcare commitments:. So in 1997 a new Product Outreach Programme was devised. The manufacture-to-give programme allows SB through its partnership with two leading development agencies, Project HOPE and AmeriCares, to respond to actual needs on the ground by making SB’s product listing available products and helps ensure products are not out-of-date before use nor labelled in foreign languages. SB also liaises with local country managers, to ensure the product entering the country is appropriate. Around 615 million of drugs will be supplied in 1997, valued at wholesale price, not sales price.
Employee time and skills is the other main type of in-kind contribution – at present, such involvement is not a managed part of the Community Partnership programme but ‘episodic’, responding to individual employee motivation and the needs of specific projects. A benchmark study of emerging best practice in other companies on both sides of the Atlantic is now underway. Once assessed, the plan is to launch a formal scheme early in the 1998.
Future developments
It is clear that following the review, SmithKline Beecham’s programme is rapidly catching up with and in areas exceeding leading edge practice in other companies. The ‘work-in-progress’ on employee involvement is acknowledged. The achievement of global implementation of a consistent, coherent and thought-out policy is still too often the exception among similar companies; equally commendable is the degree of business ‘buy-in’, engendered by a management structure that would be the envy of many community affairs sections.
Having devised and implemented a changed programme, the next step must be to assess impact, starting with a comprehensive valuation of inputs, with a special effort to encourage the whole industry to adopt a consist evaluation technique for product donations.
Deepening the newly formed partnerships with community organisations is another logical next step. But the challenge in corporate citizenship goes wider – beyond simply helping people, albeit those suffering disadvantage, to get access to healthcare. The company can also engage at a higher level than the grass roots alone, participating in public policy debates with governments, NGOs and other companies, influencing whole healthcare strategies. Effective action on clean water and good nutrition, for example, is prevention, not belated cure. SmithKline Beecham is already helping through its projects to tackle these primary issues; influencing others too will achieve the leverage we all talk so much about.
BENCHMARKS:
SmithKline Beecham
Chairman: Sir Peter Walters
Chief Executive: Jan Leschly
Turnover: £7.9 billion (612.4 billion)
Pre-tax profit: £1.5 billion (62.4 billion)
Employees: 52,900; in UK: 8,300
Year end: December 31, 1996
Community contribution: £7.4 million (611.5 million) plus 615m donated product and other unquantified in-kind support; in UK: ?900,000 charitable donations
Percentage of profit: 0.5%
Per head of staff: £140 (6217); in UK: £108
Policy focus: helping the world’s disadvantaged to lead healthier lives
Flagship projects:
1. Donated products specially manufactured for Project HOPE and AmeriCares, especially in Africa, India, Caribbean and Asia.
2. Children’s Health Fund in the USA for poor and homeless children.
3. Befrienders International in Europe for children in distress.
Employee involvement: at present ad hoc to specific projects and individuals; formal strategy under development
Management: lead by four broadly-based Community Partnership Management Teams of company managers; programme director based in Philadelphia
Contact: Margaret Bailey, Community Partnership programme advisor
Address: One New Horizon Court, Brentford, Middlesex TW8 9EP
Phone: 0181 975 2293
Web site: www.sb.com
Johnson & Johnson
Chairman and CEO: Ralph Larsen
Turnover: 621.6 billion
Pre-tax profit: 64.0 billion
Employees: 89,500; in UK: 4,500
Year end: December 31, 1996
Community contribution: 680 million
Percentage of profit: 2%
Per head of staff: 6894
Policy focus: the health and welfare of children
Flagship projects:
1. Head Start, a pre-school education programme in the USA.
2. Nurse Leadership Programme with the King’s Fund in the UK to train nurses for strategic management positions
3. Worldwide Child Survival Program with UNICEF to combat under-five mortality.
Employee involvement: support for volunteering, including some grants; linked to staff appraisal; matched fundraising.
Management: coordinated worldwide through Corporate Affairs in New Jersey; led in Europe by a 12 strong Philanthropy Committee of managing directors of business units.
Contact: Willard Nielson, vice president corporate affairs
Address: One Johnson & Johnson Plaza, New Brunswick, NJ 08933
Phone: 00 1 908 524 0400
Web site: www.johnson-and-johnson.com
Glaxo Wellcome
Chairman and chief executive: Sir Richard Sykes
Turnover: £8.3 billion (613 billion)
Pre-tax profit: £3.0 billion (64.6 billion)
Employees: 54,000; in UK: 14,000
Year end: December 31, 1996
Community contribution: £18 million (628m) plus product donations; in UK: £7 million
Percentage of profit: 0.6%
Per head of staff: £333 (6520); in UK: £500
Policy focus: healthcare, education, the environment and the arts
Flagship projects:
1. Major donations for UK national health services, such as £750,000 for new cardio-thoracic unit at Central Middlesex Hospital.
2. Endowed chairs at leading universities, such as two Glaxo Wellcome fellowships at the universities of Manchester and Cambridge, encouraging graduates to undertake research.
3. Emergency disaster relief, working with MERLIN and MSF.
Employee involvement: in the US, GlaxoWellcome Investment in Volunteer Excellence (GIVE) offers 6500 to projects for 50 or more hours volunteered each year; elsewhere, general support for involvement and fundraising.
Management: main board sub-committee runs Group and UK activities; operating companies responsible for own national programmes.
Contact in the UK: Ruth Seabrook, manager charitable contributions
Address: Lansdowne House, Berkeley Square, London W1X 6BQ
Phone: 0171 493 4060
Web site: www.glaxowellcome.co.uk
Merck & Co
Chairman, President and CEO: Raymond Gilmartin
Turnover: 619.8 billion
Pre-tax profit: 65.5 billion
Employees: 49,100; in UK: 1,300
Year end: December 31, 1996
Community contribution: 628m (inc. 619m through Merck Foundation) plus 6125 m product donations;
Percentage of profit: 0.51%
Per head of staff: 6570
Policy focus: science education, local communities, environment, medical outreach for natural disasters
Flagship projects:
1. Merck Institute for Science Education for professional development of teachers
2. 10 year program of fellowship awards to African American science students
3. 61m for a new Gulf Center for Excellence in Ethics
Employee involvement: employee matching fundraising to designated causes, upper limit 65,000; decentralised volunteering, including Dollars for Doers.
Management: majority of corporate giving handled at center through Foundation, on advice of local and regional management
Contact: Brenda Colatrella, manager product donations
Address: Merck & Co, One Merck Drive, PO Box 100, Whitehouse Station, NJ 08889-0100
Phone: 00 1 908 423 2047
Web site: www.merck.com
Corporate Citizenship Briefing, issue no: 36 – October, 1997