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Archive for the ‘engagement’ Category

I wasn’t planning on writing a blog today but this piece in my favorite newspaper, The Guardian (yes, I am the typical lefty reader), made me roll my eyes. The piece is very well intended and generally pretty good advice for charities – Charity funding: How to approach business for help.

I agree that charities or NGOs should be more strategic in their approach to businesses for help. But when I read about the need for NGOs to have more “business realism” in their approach I couldn’t but help think of the need for business to have some “activist realism” in their thinking. It’s easy to ask the other side to be more like you but how about you being a little bit more like the other side too? Like any relationship, it’s about give and take – not just take.

Too often business think that charities should support them more and be more of their “voice”. Sorry, that’s not how it works. It’s a partnership. If you want NGOs to be more of a voice  then you need to be more of a voice as well. No more hiding behind industry associations to do your dirty work or hide you from criticism on key challenges. If you want Greenpeace to slap you on the back instead of on the head then you need to speak up against other businesses who don’t act responsibly. You can’t expect a progressive NGO to support you if you also back regressive policies via another NGO or a business association or lobby group. Or if you keep quiet while other businesses lobby and push for, and argue against, positions held dearly by NGOs – climate change, clean energy, waste, pollution, labour conditions, conflict etc. NGOs expect you to share their world view and not only on one specific issue. This is the “activist realism” they live and work in. This is their “business”.

And how about business in general showing more social conscious? It’s fine to ask NGOs to be more business like but for some reason too many businesses argue that their focus is on the “business bottom line” only and that their only responsibility is towards shareholders. Bah to other stakeholders and society in general. Sounds like double standards to me.

Business needs “activist realism” to realise that their responsibility lies not only with shareholder but to this world they live and operate in. If you see your value as purely making more money for shareholders then you should expect flack from those who are not shareholders. They receive no benefit in their relationship with you except for some products they might or might not really need – so why should they care about your “realism”? Your “realism” might be in direct conflict with their real world. You pollute and they breathe it in. You accelerate climate change and they fry or freeze. You waste and they drown in the plastic bags. You pay peanuts to farmers and they get products that are second rated. You get the picture.

Some “activist realism” will hopefully make companies realize that they have a role to play as citizens of this world. That they have a responsibility towards others through their actions and words. That this responsibility is directly tied to their own long-term sustainability. You kill this world and you kill your business. Easy economics. “Activism realism” will make you sit up and say “no more”. Say it and do it because it is good for your business. Be an “activist” because your company needs to stand up for its own future – one that is tied to the well-being of society. Don’t huddle with those businesses and associations who do not share your world view. Do not care about shareholders who do not care about your business. Shareholder who only care about the next quarter and maximum profits come hell or high water do not care about your business. Only about how your business can line their pockets. They’ll drop you like a hot potato if a better offer comes up.

They are like a bad relationship. They promise you the world but they’ll drop you if someone with more money shows them some shiny object and promise them a better date. Would you take that from a date? Sucker if you will…

Show some “activist realism” by caring about your company’s future. Show some “activist realism” by speaking out against those who threaten your business in hard and soft ways. Show some “activism realist” by being serious about serious investors. Show some “activism realist” when you engage with your stakeholders. Show some “activist realism” when you give us a reason to believe in your worth to society.

Until then – you really don’t have much of a leg to stand on by asking NGOs to show more “business realism”. As my mom used to say, “What’s good for the goose is good for the gander.”

That’s my “activist realism”. A world where business care about business as part of society and contributing to society. That’s the “business realism” I want to live in.

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Can you remember the first time the two of you got together. The stolen looks, the uncomfortable moments of silence, the tripping over your sentences, the sweaty palms, the he-likes-me-he-likes-me-not thoughts, the private meetings when no one was looking, the uncomfortable first meal together. Yes, I am talking about stakeholder engagement. Just as with any relationship in the early wooing and courting stage, stakeholder engagement is never easy at the start.

Most companies just don’t know how to talk to activists and campaigners. Hey, make no mistake, activist hardly knows how to talk to companies either. But they don’t need companies to like them as much as what companies need them to like them. Or at least leave them alone and not target them.

Don’t feel bad when they target you. It happens to the best of companies. Sometimes it makes sense and sometimes not. I remember seeing an anarchist kicking a Nike sign at the battle of Seattle in ’99 – while wearing his Nike shoes and top…

But there are a few tips you should follow if you decide to engage and start courting. This is not an exhaustive list. Just a few tips to get you through those first uncomfortable early stages of stakeholder dating.

Firstly, do your homework and find out a bit more about the NGO and what it regards as its ‘bottom line’ – it is unlikely to be financial! I was invited to speak to the global affairs team of a very large pharmaceutical while I was at Oxfam (I headed up the Access to Medicine Campaign for a while). I was shocked to hear that the majority of people at the company thought that Oxfam only worked on health issues. And this happened when Oxfam was in the middle of their Coffee Campaign! Dig around a bit first and find out what the NGO does and what is their mandate. Most of them are registered with a constitution that states what they should focus on and how they should work. This will help you understand whether there is any potential for a longer term constructive relationship – or just a one night stand. Also a good tip when you start dating – know who you are dating. Except if you like blind dates.

Secondly, respect the differences between NGOs by not lumping them all together in the same room for a consultation exercise – NGOs are proud and competitive too. You wouldn’t want them to call a whole bunch of companies together and still expect special treatment just aimed at you. You should respect their differences and treat each one differently. Rather meet each one separately in an environment that works best to put them at ease. Meet them where they feel most comfortable – maybe at their place. Especially if you want to build the foundation for a long-term relationship. And even this should work best for real dates – don’t bring all your prospective dates together in the same room. They might just start sizing each other and you will be left with no date at all.

Thirdly, don’t make the mistake of thinking that you are the only company that is the target of the NGOs campaigning efforts, or that the NGO hasn’t other programs and projects that may have nothing to do with business. Just as with the large pharmaceutical company I mentioned, most NGOs have numerous focus areas and different programs and projects to try and achieve their overall goals. And most large campaigning NGOs have various campaigns going at the same time. They might have one single broad focus, but it plays out in different campaigns and programs. For instance, Greenpeace might be about the environment, but they focus on climate change, oceans, forests, genetic engineering and nuclear issues. So your company might only be a small part of their focus and interest. Same with real life dating. A friendly smile does not mean they want to date. It might just be a friendly smile.

Fourthly, start by talking, learning about each other and building trust rather than starting by expecting ground-breaking strategic partnerships. There might be a few obstacles to overcome – perceptions of what ‘big business’ is all about and a feeling that you want to ‘clean’ yourself by associating with them. Take it easy and just talk. Let them get to know you. Don’t create expectations. Just listen and learn and see where this might take you. Again a good tip for real life dating as well. Don’t ask them to marry you or expect ‘the commitment’ on the first date – it might just scare them off.

Lastly, remember that cash does not necessarily have the same currency as it does when buying products or services from other companies. First and foremost NGOs want to affect change. But they don’t always see money as the way to achieve change. Yes, some of them have huge budgets and operate like multinationals. But they generally have strict guidelines on receiving money from companies. For instance, Oxfam will not accept money from companies that fall within an industry they target in their campaigning. They might not even accept money for travel – never mind for a program. They would rather see you ‘do the right thing’ than pay them to do something. Okay, this one is less relevant for real life dating. Money generally impress prospective dates!

Okay, one more tip. Don’t expect them to agree with you on everything. And don’t make this a prerequisite for your potential relationship. I love my wife to bits. But we only agree 80% of the time. But we don’t let the 20% of the time we disagree define our relationship. No. Focus the relationship on what you have in common and don’t get stuck on the differences. It’s part of being human – we are all different. And the same for companies and NGOs – we are all different. And I learned that I am wrong 20% of the time in any case. Just ask my wife.

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It feels like 1990 all over again. How many times do we go through these arguments that CSR is dead or CSR isn’t a very good description or that CSR is so yesterday. It seems as if we are back at the drawing board again. First we had Aneel Karnani make his Case Against Corporate Social Responsibility in the WSJ last year. Then we had Michael Porter and Mark Kramer argue in the Harvard Business Review that CSR is an old concept and that the new way forward is CSV – Creating Shared Value. And now we have Alberto Andreau arguing that Shifting From CSR To CSV Isn’t The Solution and that the truth and future lies in Corporate Sustainability. Oh boy, here we go again…

I won’t go into detail into Dr Karnani’s argument. It has been dealt with from all angles and most agree that he missed the point a bit. What he perceives to be CSR isn’t CSR but only what some companies claim to be CSR. He was working with the concept of CSR as practiced maybe 20 odd years ago but CSR and CSR practices today have changed dramatically. His definition and understanding of CSR was wrong and his argument therefore based on the wrong assumption. But what about Porter and Kramer, and Andreau? I would argue that they are making the exact same mistake as Dr Karnani. They are using a definition of CSR that is outdated and their understanding of CSR is based on what CSR was 20 years ago – or maybe even closer to 5 or so years ago.

Let me first say that it is an excellent piece. They capture the latest thinking and practices of CSR very well. Unfortunately they then argue that this is CSV and not CSR. It’s not, it’s still CSR. And what they propose isn’t completely new either. Those of us who have been working at the sharp end of CSR have been working on a similar concept and approach for a few years already but we didn’t call it shared value – we coined mutual or co-responsibility. The idea of mutual or co-responsibility is that (leading) companies should focus their CSR on those areas where they share an impact and opportunity with key stakeholders. Starbucks can focus on the cup when they deal with consumers and on sourcing when they work with farmers – helping consumer have a better impact and helping farmers increase yields, get better prices, be more sustainable etc. Levi’s helping consumer limit the impact of their jeans and working with farmers in farming cotton. Best Buy recycling or even buying back older technology. And many more leading companies share this approach to CSR.

Furthermore, we’ve focused more specifically on key stakeholders and not society as whole. There is a reason why – society is too broad a concept for a company to focus on. Break society into the various stakeholder groups and be specific in who you target – key stakeholders such as consumers or suppliers or investors or regulators or your local communities or even distant communities. The more targeted you are the better the chance of success. Of course you should always target more than one stakeholder but try to be as targeted as possible to know exactly where the shared value or mutual responsibility/opportunity might be. CSR works best when it is targeted.

Back to the meaning of CSR…

CSR has changed it’s meaning and how it is used substantially since the 1970s. It started off as all about compliance and pressure from activists for expand on their philanthropic commitments. But today it is as diverse as the concept of business. Business isn’t a singular description anymore. It describes anything from a large multinational company with a diverse set of products to an informal trader working in the streets of a township in Africa. It’s a bit like pornography – we know it when we see it.

Let’s define CSR quickly to provide some clarity. This isn’t a perfect science as we don’t have a single agreed definition. Mine is simple and I don’t claim this to be the final definition of CSR: CSR is the way an organization manages and communicates its impact on society and the environment. Simple. But it is this simplicity that hides the complexity and diversity of how we practice and implement CSR.

Porter and Kramer make the same mistake that Dr Karnani did by not recognizing the diversity within the CSR field. Some practice CSR in the risk management, compliance and/or philanthropy way they explain it and other practice CSR in the shared value way they explain CSV. It’s the nature of the beast – CSR is not a single discipline that covers every single company in the same way. Each company and industry focus on it in a different way. For example, for pharma it makes sense to focus on philanthropy because it is in the nature of the product(s) they offer. It makes sense to donate products to people who can’t afford it – or else they die. As simple as that. It doesn’t mean they don’t focus on other areas but their priority focus will most likely be around philanthropy – and at the core of their business: finding new drugs to help us deal with our health challenges. For companies such as Starbucks it is very different because they focus on consumers and farmers. They help farmers improve their practices and pay a premium price and help consumers improve their impact by offering recycling and encouraging them to use tumblers. Companies and industries are diverse in how they practice CSR. At best it focuses on those areas where their products or service intersects with society – and where the greatest societal needs intersects with business opportunities (or responsibilities).

(Of course we learn from different practices and improve on it but it is always unique for each company – or should be – as it should focus on the specific value the company offers through it’s unique products and/or services and brand and corporate identity.)

Some companies just do not have a shared value with society – or they have a very difficult case to make. For example, tobacco companies can build a solid case of shared value in their sourcing practices (and some do) but they will have a difficult case to make for shared value with the broader society. And the same goes for arms dealers/manufacturers, some military contractors etc.

Shared value is also limited by the timeframe and current knowledge. If we look at societal needs and shared value today then it makes perfect sense to provide a society suffering economically the cheapest fuel and energy. But we know that this will have a negative long-term impact. Shared value shifts and moves with time. What might be a shared value today is another issue to deal with tomorrow.

The idea of renaming CSR to CSV because of the perceived new way is futile. The debate continues each and every day and was at a height 5-7 years ago when some CSR practitioners (like me) argued that CSR has changed from compliance to differentiator and should therefore be renamed because it is now about business opportunities and not compliance-led responsibility. I was wrong back then. I confused the definition of CSR with the practice of CSR. And this is the fundamental mistake of Porter and Kramer. And Karnani and Andreau. They confuse the definition of CSR with the practice of CSR. The practice of CSR is complex and diverse – adapted to the needs of the complexity of business and flexible enough to continue to adapt and change with time and knowledge.

CSV isn’t the new CSR. It is a way of practicing CSR. I would even go so far as to say that it is the ideal way of practicing CSR – finding the shared value with society (or specific stakeholder groups). But it isn’t something different from CSR. It is how some practice CSR. And a damn good way to implement CSR if it makes sense for a company to do so.

As for Andreau – the same argument holds. Corporate Sustainability is just another way of practicing CSR.

Of course a major flaw of Anfreau’s argument is his argument that we need to widen the meaning of sustainability to ensure it covers everything he wants sustainability to stand for. Why is it acceptable to adapt the meaning of sustainability but somehow not acceptable to do the same with CSR? Actually, I am not asking for a change in the meaning of CSR but only a recognition of its complexity. I agree with his call for simplicity but I don’t think that changing the name will help. The simplicity lies in the earlier definition of CSR I gave and the complexity in the execution.

All the points made by Andreau is as true of CSR as of Corporate Sustainability: It’s a business approach; it seeks to create long-term value; it embraces opportunity; and it helps manage risk. Thank you Alberto, you described CSR very well – it’s all of the above. Simple but complex at the same time.

To quote Alberto and change it just a little: “This is where the future lies: A unified return to CSR. Not CSR only in terms of philanthropy or compliance only but a sense of CSR related to value, opportunities and risk management.”

In conclusion, what is described as CSV and Corporate Sustainability are not new but captures some of the latest developments of how we practice CSR. And they do an excellent job of expanding the thinking of how we (should) practice CSR. But there is a limit to their contribution. Let’s not get distracted by shiny objects and new names – let’s stop this arguing about what we call it as it doesn’t help us do the work we are doing and distract us with discussions about terminology. The value of Porter and Kramer, and Andreau, gets lost in the discussion of terminology. We argue about what we should call it instead of expanding the discipline and practice of CSR. The value of Porter and Kramer lies not in calling it CSV but in strengthening the practice of CSR – shared value, co-responsibility, mutual responsibility etc. I think their description of mutual responsibility is a much better description of my own – shared value describes it better than my idea of mutual or co-responsibility.

By focusing on what we call it we lose the value of Porter and Kramer’s work when they describe the roots of shared value – taking on Friedman, showing how shared value is a traditional part of the best companies, show how reconceiving products and markets can bring new value to business and society, highlight local cluster development as a driver to create shared value, and so much more. None of this is new – Starbucks have been sourcing this way for over 10 years; cluster development is a natural phenomenon and the modern version was started by a history prof and a garage owner in Chihuahua, Mexico; most companies started with a shared value offer – from Walmart bringing cheap food to the poorest Americans as close to their homes as possible to the mom-and-pop shops offering locally produced good. The beauty does not lie in the fact that they create the concept of CSV but rather in their ability bring the latest thinking and practices of CSR into one single place – and drive us further forward in the implementation and practice of CSR. It is a powerful piece and one that should be used to defend CSR and show how CSR has grown instead of using it to divide us even more because of a debate on terminology. Let’s stop arguing what we call it and focus on what we practice and do each and every single day. Let’s advance the discipline of CSR instead of creating more divisions through renaming it. Let’s focus on improving the impact of business on society and identify mutually beneficial opportunities instead of looking at the impact of what we call it. Let’s just do it instead of calling it…

CSR is dead! Long live CSR!

(Disclosure: As promised, I think it is only ethical and right for me to mention when I have worked or work with a company I mention in my post. It’s called transparency. All of the companies mentioned above – Starbucks, Levi’s and Best Buy are clients.)

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Partnership anyone?

 

The oil spill seems to have more than just an environmental and political impact. It’s starting to impact how partnerships are formed between companies and NGOs. Some environmental NGOs are being tarnished – thanks to their relationship with BP. The Washington Post wrote an article about how the Nature Conservancy (and Conservation International and EDF) is facing a potential backlash because of their ties to BP. It has sparked a lively debate amongst Nature Conservancy members as the Nature Conservancy defended it’s position in a piece called “Why We Engage With the Energy Industry: It’s For Nature“. I’m less interested whether environmental NGOs should partner with energy companies as that is for each one to decide according to their principles and what they are trying to achieve in their own unique way. What I am interested in are the lessons we can take from the controversy – for NGOs and companies. 

Of course NGOs will have to be more discriminating when it comes to their partnerships. Or maybe a bit more transparent and proactive with their members on how they partner and who they partner with. The complaints from the Nature Conservancy members are legitimate but it is mostly because they just did not know about the Nature Conservancy and BP relationship. They based their support for the Nature Conservancy on what they thought the Nature Conservancy should do when it comes to partnering and not what the Nature Conservancy actually does. We live in an increasingly transparent world where no information is hidden anymore. That’s not to say that the Nature Conservancy (or any of the other NGOs) hid what they did. It was just not seen as a priority communication to members. Their argument will be that the information has always been there for anyone looking – or asking. 

However, the information overload in the world we live in also means that people can’t research all the facts – there are just too much information. What we’ve seen more and more is that people rely on their friends, blogs and other social media to get their information. They trust these sources – why would my friend lie? The problem is that none of these new sources of trusted information tend to have all the facts. Your friend tells you that the Nature Conservancy is cool because they have always supported them or they’ve read something that they liked etc. But the detail tend to be missing. The sources people trust do not always have all the details – just soundbites. It works most of the time as most things tend not to be such a huge issue. Until a major oil spill hits you… 

NGOs need to be more transparent on who they partner with, how they partner and why they partners. More importantly, they need to get to those places where people find their information – friends, blogs and social networks. It’s not enough to have a Facebook page or a nice blog telling people what you think and why they should support you. You should use these tools to engage not only new and potential members but also your existing members. Engage them and inform them of those areas you (and them) would see as potential risk areas – your corporate partnerships… Be open and transparent about who you are, what you do and who you work with. We ask companies to be transparent and proactive about these issues – and so should those who defend the rights of civil society and the environment. Go out and engage in a transparent and open way. The more people know the more likely you will have members who know what they are getting into and the more loyal they will be. It’s like any relationship – you want to know everything before making a commitment. Don’t be like so many who marry based on a gut feeling instead of digging deeper to see if you will really stick together in “sickness and in health.” 

People also make assumptions based on names. The Nature Conservancy. It’s about conserving nature, right? And the elevator speech tells me that. Most people don’t read further than that because the name and soundbites gave them what they think they were looking for. However, the devil is in the details – the fine print. Encourage supporters to be diligent in doing their research before the time. Give them a “Term & Conditions” document to “agree to” before they can become a member. Spell out what you do and who you do it with. The same way we want companies to tell us who they partner with. Don’t assume people will know what you do – they don’t. 

Don’t try to be everything for everyone. There are so many causes nowadays – I’ve written about this here. Competition amongst NGOs are growing as each one tries to carve out a bigger part of the “market share”. The number of NGOs are exploding because each individual is trying to match their “unique” view with a charity to match. It becomes increasingly difficult for large NGOs to attract new members. One way they try to address this is by becoming everything. You care about turtles? We’ve got just the right program for you. Oh, you like trees a bit more? Step right this way for your own huggable tree. 

You can’t be everything. Pick what you want to address and be the best at that. Less of a Jock of all trades – more a master of one. This way you know what you are and, more importantly, your members know exactly what you are and it’s easier for them to see what you do and how you do it – and who you do it with. Starbucks sells coffee not cars. Microsoft doesn’t sell houses. Timberland doesn’t drill for oil. They know who they are and what they are good at. I don’t have to guess what they do when I go and buy my coffee, software or boots. Furthermore, knowing who they are and what they offer makes it so much easier for me to dig around to see how they do what they do – the CSR and sustainability bits. And, of course, who they partner with. 

Lastly, some NGOs like Oxfam GB, WWF and Greenpeace have very strict rules that govern their behaviour and partnerships. I’ve worked for Oxfam GB and they don’t rule out partnerships with companies but have very strict guidelines. For example, they will not accept any funding from companies remotely linked to any issue or campaign they work on. It hasn’t always been a popular position but it made it easy and very clear on how you manage relationships and expectation – and engagement with supporters and companies. Oxfam GB can work with a company to help them on the ground as long as it helps them achieve their primary goals – addressing poverty – but no money can be exchanged. NGOs should be clear on this – when do or don’t you accept corporate cash or goods. I’m not saying that those being targeted because of the oil spill and their partnership with BP don’t, but it is clear from the concerns by members that the members did not know the rules. During my days at Oxfam we used to make that a key part of all communications – large public meetings with supporters or closed meetings with companies. Everyone knew the rules and had to live by those rules. Make it, know it and talk about it. 

Last point on how the oil spill could be redefining partnership… This time on the corporate side. 

Companies should also become more discriminating about their partnerships. The partner of your partner now becomes your partner. True progressive companies, or at least those who claim CSR and sustainability leadership, will have to become more careful who they pick as their NGO partner. Do you really want to partner with an organization that might be perceived as “sleeping with the enemy” because of other relationships they have? Their reputation is your reputation. It works beautifully when they can help tell your story but it can come back to haunt you if they become tainted. Pick your NGO partner carefully – using the same rules I mentioned above for NGOs. 

But progressive partnerships go further than your partnerships with NGOs. Who are you partnering with on the corporate side? It is becoming increasingly unacceptable to have a “lager” mentality where you can keep quiet about what other businesses are doing. Not every business out there is your friend just because they are a business. Think about it this way… 

Say you are dependent on milk from a very specific area for that unique cheese you have to offer. And then they find oil there. This could mean the end of your business or at least your competitive edge. Do you keep quiet or do you tackle the business that threatens your business? 

Let’s try another example… 

Let’s say that as a company you stand for the environment. Your brand is something that stands out in its advocacy for the environment. You might even be in the line of making clothes or boots for outdoor use. You champion this and you build your brand on your environmental credentials and progressive advocacy. What do you do when a mining company mines off the top of a mountain? Do you keep quiet because it is another business or do you speak out because it threatens your business or at least devalues your brand. 

The same goes for Climate Change. Why keep quiet if you truly believe that it can have a material impact on your business? Should you not defend your business interests and long-term survival? Should you not tackle those who threaten your business or who advocates against your interest? Why even closely associate yourself with businesses whose practices threatens your business? Just because they are a business? We don’t even do that as humans… 

Your partnerships and allies will be a key way to communicate what you stand for. Traditional business associations are becoming more irrelevant by the day – new broader stakeholder partnerships based on shared values are increasing. Why? Because people see who you are through the relationships that you have. Associate with businesses that are against what they believe in will make them question you. And threaten your business. The question for you – what does this mean for your business and how can you stay ahead of the pack? Redefine your partnerships with NGOs and other businesses. Find the right match and build on that. 

Partnerships are being redefined and you will either fall behind or you can be part of defining the new way of partnering. You decide.

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