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Many companies striving to be good corporate citizens today face an internal tug of war between giving attention to community initiatives that address social problems and the growing demand to make environmental issues paramount.
The price and promise of citizenship: Obama’s challenge to corporate America
By Brad Googins
In last week’s Inaugural Address, President Obama left no doubt that citizenship was going to form the bedrock of his philosophy on rebuilding America. “What is required of us now is a new era of responsibility – recognition on the part of every American, that we have duties to ourselves, our nation and the world. Duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining to our character, than giving our all to a difficult task. This is the price and promise of citizenship.”
This call to the nation is also a call to American business. The price and promise of citizenship is at the heart of the reconfiguration of business that is currently playing itself out in the midst of the most critical economic crisis in several generations.
The concept of business having responsibilities to society has been going through its own transformation for the past 10 years. Indeed, a great deal of rethinking and recalibrating corporate responsibility has been taking place, positioning citizenship at the heart of the enterprise. As Lee Scott, the chief of Walmart, said this month speaking to the National Retail Federation: “Let me be clear about this point. There is no conflict between delivering value to shareholders and helping solve bigger societal problems.”
But just as President Obama is challenging all of us as citizens, the private sector has to take this challenge seriously both as a key component of business success in the 21st century and as a citizen responsible for doing its part creating a sustainable society. As Lee Scott emphasizes, the two are not mutually exclusive and in fact are intricately entwined with each other.
So what are the implications of the price and the promise of citizenship?
For too long we have been aware of the price that business has paid by not taking citizenship seriously, and especially by not seeing it as a critical component of sustainable business. The plummeting loss of trust in business – sparked by obsessive attention to profits and short-term gains, disregard of environmental standards and excessive executive compensation – built a reputation that dispelled any notion of meaningful citizenship. The attempt to use charitable contributions and visible community involvement in the midst of core misbehavior and callousness was laid bare by Enron, among others. So the price for ignoring citizenship has become quite clear in recent times.
Today’s price for companies will mean a more significant engagement and involvement that will clearly manifest to all stakeholders that business contributions to society will be deeds and not words, leadership and not follower-ship, and active and visible engagement, not simply checks and boosterism.
It will require a significantly deeper engagement of the tough social problems that Mr. Scott referenced, from education to health care; from creating an energy independent and sustainable country, to insuring affordable health care for all. It will require putting brands aside and holding hands together in a new spirit of collective leadership and citizenship.
The price of citizenship will be to create a new capitalism that values business and social sustainability in the same breath. The hardcore measure of profits will have to be tempered by progress in citizenship, and a new belief that one feeds the other.
The price of citizenship will be to create new measures of business success, to find new ways to use the total assets of a company to address social problems. The price of citizenship will be to reinvent citizenship within the firm, embed it throughout the business in its relationships with stakeholders, its products and services, and in the very processes of conducting business.
While paying the price will involve more than the cost of a simple makeover, the value of citizenship’s promise will far outweigh its price.
Just start with your employees. It is clear that most employees are looking to be part of an enterprise that has meaning beyond its profits. The Cone Millennial Cause Study found that about 75 percent of those entering and moving up into today’s work force want to work for a company “that cares about how it impacts and contributes to society.”
Growing evidence from the consumer movement and the green revolution clearly point to a new set of expectations of a company’s citizenship that not only cares about social and environmental issues, but walks the talk in terms of its practices and its products. Companies are judged less by how they minimize any harm from their footprint of their operations, and more by the lasting handprint they leave through positive contributions to communities and society.
Indeed, the promise of corporate citizenship is bright. Despite the current doldrums resulting from our collapsing economic system, there is little doubt that whatever the way out is, and whenever it is, the role of business will have to look quite different than that of the previous decade.
The spectacle of Bernie Madoff can no longer be the prevailing face of business, and the aspirations of Lee Scott and others will find a much more promising set of results for both business and society. The vision and voices of a new capitalism will find a much more engaged business and a greatly energized employee base. Luckily we have had a beginning base forming over the past decade with new innovations in social entrepreneurship, collaborative business partnerships, and many examples of companies using their innovation to spark breakthroughs and major contributions to the larger society.
Sometimes it takes a crisis such as the one in which we are deeply mired to find and articulate the promise of the new day. But the seeds of change are spread across a wide spectrum, and the desire to create a new society is no less real for President Obama than it is for our corporate leaders.
Now is the time to lead, innovate, commit and create. This is the promise of America and American capitalism.
Let citizenship thrive!
January 28th, 2009 at 8:30 AM
Brad’s blog has gotten some interest from other bloggers, including this entry by Nathaniel Whittemore on on change.org’s blog, “Social Entrepreneurship.”
Whittemore writes: “The post is a clear and important voice for the corporate responsiblty question. Indeed, I love that the name of the center is ‘Corporate Citizenship,’ rather than ‘Corporate Responsibility.’ Rather than the knee-jerk minimize harm CSR, it suggests a much more forward-looking, value-focused approach to the corporation’s role in society. I think this is right on. In the 21st century, marketing will not be enough and companies that create real value – for their clients, their shareholders, and the ecosystems in which they operate – will win.”
View the rest of the entry and the discussion taking place.
January 28th, 2009 at 9:29 PM
Nathanial Whittmore, who writes a great blog at Change.org, posted yesterday about Brad Googins’ response to Barack Obama’s inauguration speech (Brad runs the Center for Corporate Citizenship at Boston College). Nathanial was very enthusiastic about Brad’s call for corporations to step up to their citizenship responsibilities in the midst of the current crisis.
Brad’s post makes some sweeping claims, including, “Indeed, a great deal of rethinking and recalibrating corporate responsibility has been taking place, positioning citizenship at the heart of the enterprise.”
Reflecting on the years I worked in CSR (some of them collaborating closely with Brad and his colleagues at the BCCC), I have to disagree. Outside of a very few organizations that were founded around a mission (like the Body Shop before it was bought by L’Oreal), I do not agree that citizenship is at the heart of the enterprise for 99.9% of enterprises.
So while I applaud Brad’s exhortation, I worry that now is the time when we’ll see less, not more, progress by corporations in CSR… View the rest of this entry.
[...] Jump to The Corporate Social Responsibility 2-by-2 « Sasha Dichter’s Blog [...]
January 30th, 2009 at 8:46 AM
I loved Sasha Dichter’s blog on Corporate Social Responsibility 2.2 and his reaction to my comments on the Obama era in CSR. As someone who has been wrestling with these issues and observing what has been going on, I can honestly say some days I wake up and the glass seems half full and other days it seems half empty. So I guess it always comes down to perspective.
I remember visiting the Apartheid Museum in Johannesburg a few years ago after not having visited South Africa for 10 years since it was in the last throes of the old regime. I kept finding myself relating things back to the United States and our history of the Civil Rights movement. By some standards the progress in South Africa and in the United States in civil rights has been nothing short of miraculous. The change in one generation – 20 years – is truly remarkable. But I was also reminded of how much things really have not changed in some fundamental ways and could be quite discouraged. So half full – half empty
So with corporate citizenship or responsibility I feel exactly the same way. We spent a few years developing a framework – the Stages of Corporate Citizenship – that we thought reflected what we were seeing in companies around the globe from very old and traditional models to game changing. We purposely built Stage 5 around game changing in a fashion that we believed no company could claim they were there. In running this framework by more than 300 companies by now, I can say that about 80 percent rate themselves at about a Stage 2 trying to get to Stage 3. It reflects that we are still in the early stages of this journey with a long way to go before all of us would see the glass as half full. That being said, I am reminded of the many incredible innovations that exist in companies around the globe, and I view these as the seedlings that hopefully will grow into a movement toward Stage 5. I am also encouraged by the data from our State of Corporate Citizenship survey that indicated CEOs from across the spectrum of 800 small, medium and large companies reported a significant movement toward seeing corporate citizenship as strategic. This was mirrored a few months later by the previously skeptical Economist, whose own survey reflected a major change from two years previously.
Of course, all of this is tempered by the fact that we are still in such early stages. The short-term shareholder return has stood firm but the footing is less secure during this economic crisis. While the business case seems to be less of an issue and there is an acknowledgment of the strategic importance of citizenship, the reflection of this inside the company, in its products and services, and its processes is very weak.
Nonetheless, I am by nature a half-full guy, and in this case buoyed by some pretty good data and trends that are emerging.