thinking and the headspace they were in. They had the courage and audacity to think they could tackle some huge social issues, and in some cases you knew they would.
So if you're in business looking to make a profit, working in the for-purpose space wanting to make a difference or you're a socialpreneur who wants to do both, fast, then together we can explore what works, what doesn't and what your best approach might be to doing good by doing good.
Chapter 1
IS THERE A BETTER WAY?
Do you need to change your current approach to corporate social responsibility (CSR)? Before we can answer the question we need to define CSR and some of the typical approaches to it we see.
All organisations have their own interpretation of their programs and have the discretion to attach a definition that works best for them. But what is at the core of corporate social responsibility? Well, if you suggested it is about ‘how companies undertake their activities to optimise a positive impact on society’ you would not be too far off the mark.
Or you might choose a rather more robust definition such as the one formulated by the World Business Council for Sustainable Development in its publication Making Good Business Sense by Lord Holme and Richard Watts: ‘Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large’.
Business for Social Responsibility (BSR) has adopted the following definition: ‘Operating a business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business’. Finally, the European Commission prefers: ‘A concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment. A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis’.
We could fill the chapter with such definitions but that would get tedious very quickly. The common thread is that it is about businesses conducting themselves in ways that benefit the community. It might be as simple as donating a sum of money once a year to a charitable organisation. Or it might be much more complex and include integration throughout the company, including indexing remuneration to sustainability measures, as is the case at Unilever Global. The proposition that CSR can be so much more than corporate philanthropy leads us towards the concepts of shared value and conscious capitalism. Both of these ideas sit outside the common model of CSR and offer a new view on how business can be done.
A paradigm shift
If you ask most employees what their company's CSR strategy is, they would typically answer along the lines of ‘our company supports charity XYZ and they give me one day off a year to volunteer with a charity of my choice’. What many would identify as the sum total of their CSR strategy most likely accounts for less than 50 per cent of the commitment made by businesses towards the community as part of their CSR model. As we will see, in 2014 Optus made a commitment of $9.7 million to its community programs, with $300 000 or just over 3.2 per cent in cash.
The proposition that CSR can be so much more than corporate philanthropy leads us towards the concepts of shared value and conscious capitalism. Both of these ideas sit outside the common model of CSR and offer a new view on how business can be done.
The concept of shared value by its very name points to a value exchange between business and the community. Business creates economic value and at the same time creates social value by addressing the needs and challenges that exist in the community. Shared value is not about cause marketing or programs such as employee giving, employee volunteering or matched giving programs. It looks for opportunities within new markets that address a community need, incorporating the entire value chain into the process and the concept of local cluster development.
Conscious capitalism is another spin on how business can work with the community to create benefits on both sides of the ledger. The term is attributed to Muhammad Yunus, who in 2006 was awarded the Nobel Peace Prize for his 1983 creation of the microlending institution the Grameen Bank. John Mackey and Raj Sisodia, the authors of the 2013 book Conscious Capitalism, argue that there are four specific tenets at play: higher purpose, integration of stakeholders, conscious leadership, and conscious culture and management.
Mackey and Sisodia's view is that ‘business is inherently good because it creates value, it is ethical because it is based on voluntary exchange, it is noble because it can elevate our existence, and it is heroic because it lifts people out of poverty and creates prosperity’. They argue that companies who embrace conscious capitalism create positive impacts for customers and their employees, and also suppliers, communities and the environment. The authors argue that this results in better experiences for the customer, and lower costs and more growth for companies.
They suggest that CSR is a part of conscious capitalism, which sits above the concept of CSR. It seems fair to conclude, however, that many of the advantages and benefits they see as accruing from the concept of conscious capitalism are embraced by the more mature CSR programs. Conscious capitalism certainly embraces a concept of deeper integration with all stakeholders, which is not necessarily part of your typical CSR program.
Drawing a clear distinction between conscious capitalism and shared value is more difficult and potentially a matter of semantics. Both conscious capitalism and shared value are based on the idea of businesses working more closely with their community partners and improving their profitability by doing so. Advocates of both propositions nominate companies who integrate the fundamentals throughout the company. Shared value looks to create new lines of business through addressing a community need, while conscious capitalism focuses less on new markets than on improving the mode of operation.
In an article for the Ivey Business Journal, ‘A Case for Conscious Capitalism: Conscious Leadership through the Lens of Brain Science’, authors Srinivasan S. Pillay and Rajendra S. Sisodia distinguish conscious capitalism from CSR, shared value and other models as a way of ‘doing business that goes beyond the ideas of philanthropic thinking or virtue in that it is meant to create an entirely new structure for businesses whose financial integrity rests upon the following: the thought processes inherent in purpose-driven leaders; creating multifaceted value for all stakeholders; leading through mentoring, motivating and developing people rather than through diktat or simple reward and punishment incentives; aligning leadership style with organizational purpose, and creating a culture of trust, authenticity, caring, transparency, integrity, learning and empowerment’.
Shared value looks to create new lines of business through addressing a community need, while conscious capitalism focuses less on new markets than on improving the mode of operation.
While Pillay and Sisodia may suggest that the match of values, leadership and going beyond philanthropic thinking is what sets it apart, advocates of shared value would suggest these components are of equal importance in their model.
Shared value, conscious capitalism, triple bottom line, blended value – call it what you will – what is clear is there is a different way of doing CSR. An opportunity exists to move on from the thinking that simply giving money to charity will bring meaningful returns. At the core of the various models that seek to operate above traditional CSR is the need for external engagement with their operations and strategies.
The traditional approach
The
