Sharing ten lessons learned
I have been working in corporate citizenship for two decades, so I have seen the good, the bad the ugly – and learned a lot on the way. Here’s my top ten list of observations to pass on based on McDonald’s own journey thus far:
1. Create a CSR strategic framework
Society was much simpler, from 1955, when McDonald’s was first established, to the late 1980s. We built the “trust bank” by being community leaders, giving back, and having programs that were fun and engaging for our customers.
Then came the late 1980s and 1990s. Society changed and the Internet became a force of nature. McDonald’s was under attack by activists who thought we created too much garbage, hurt the planet, and exemplified the perceived evils of globalization.
By 2000, we learned we couldn’t be reactive anymore. We needed to play offense and get strategic with our CSR efforts. We created several governance bodies and structured processes to help us identify, manage and progress on a variety of social and environmental issues in a strategic manner.
Currently, we have six areas of focus. We are a food business, so nutrition and sustainable supply chain are important. People fuel our business, so people and community are also priorities. Then there is our responsibility to the environment. And at the core of everything we do is a commitment to sound governance and ethics.
2. Sustainability isn’t an initiative
CSR is not a program, initiative or function, but a mindset that is incorporated into every aspect of business planning and operations. At McDonald’s, this comes quite naturally because our values are at the core of everything we do and from the beginning we’ve been committed to doing the right thing. Our founder, Ray Kroc, said, “If we treat our customers right, take care of our franchisees, and always do the right thing—then we will make money and profit.” To me, this statement is equitable to a definition of CSR. If you live and put your values into practice every day, you will end up being a sustainable organization.
3. CSR starts at the top
CSR has to be driven by the top boss and senior management. Otherwise, CSR is peripheral and subject to measures of convenience. Management needs to integrate, allocate the necessary resources, and have it placed in strategic plans. Jim Skinner is our current CEO. He has led a tremendous turnaround over the past seven years. And his leadership on CSR is strong and unwavering. He put CSR right into our business plan. We call it our Plan to Win. Smack dab in the middle it says, “We are going to be a socially responsible company.”
4. Aim for the Smart Zone
It is a real stereotype to think that being socially responsible is a high cost. If you control your own strategies, most CSR efforts bring forth efficiencies, measures that use less resources, or bring a connection or relevance to consumers.
So aim for the Smart Zone. Merely following the law and regulations will merely make you a follower. The sweet spot is staying ahead, but staying smart at the same time.
For example, we have our big suppliers report their environmental performance – the amount of energy, water, and waste produced per pound of product sold to us on an annual basis. We do this so that we can work with them on continuous improvement, but we also initiated this for cost saving reasons. Less energy, water and waste should equals lower cost of production – and we are seeing that in the results.
5. Anticipate and manage emerging issues
No one likes to manage a crisis, so the idea is to stay to ahead of the curve and identify the issue when it is just starting to emerge, in academic studies or from NGO initiatives. This is easier said than done. My experience in business tells me that most business leaders are focused on the here and now or the very near future. However, waiting is a mistake. When you do, you lose control and end up being pushed into a reactive position, and that is never a good thing in business.
6. Manage the open and transparent society
With the power of the Internet, there is now a very radical transparency. People can get information and use this publicly in a matter of seconds. Take this seriously and dedicate resources to providing good and accurate information to as many stakeholders as you can.
7. Manage your planet footprint
We see managing our footprint as a business necessity to ensure we will have the resources we need to be in business well into the future. Good science tells us that we are straining our natural resources. Some estimates say that it will take ten more Earths to supply the needs of the population in just 40 years. We only have one Earth, and we all need to remember that.
8. Get engaged; don’t operate in an island
Smart companies develop a sophisticated stakeholder engagement plan that includes experts, NGOs, customers, media and others who can provide expertise and credibility. At McDonald’s, we’ve worked with a range of outside stakeholders over the years – Environmental Defense Fund, Conservation International, Greenpeace and others – to develop policies and programs that can improve our social, environmental AND business performance.
9. Manage CSR globally
CSR is not the same in every country. What is important to the U.S. is different from Australia, China is different than Brazil. So CSR efforts need to be decentralized in a global enterprise. The values come from the top, but the strategies and tactics will vary in the various geographic operations.
10. Tell your story, but humbly
Lastly, and a lesson we are still learning at McDonald’s, is to tell your story, but do so in a humble way. People want to know two aspects of your business when it comes to telling your story:
The first is obvious: What are you doing? What programs and progress are you making to be a responsible company?
The second is not obvious, and most often ignored by companies. It is all about HOW you are trying to be a responsible and sustainable organization. How are you engaging with society? How are you overcoming barriers and challenges? How are you testing new ideas?
Communicate in equal doses, both the WHAT and the HOW.