Long Live Corporate Social Responsibility

Posted by Tim Sanders on 09.17.09 @ 02:04 PM

Tim Sanders

Tim Sanders, author of the book "Saving the World at Work," argues that social responsibility should be viewed as a corporate opportunity. Here's why.

Corporate social responsibility is a hybrid PR/branding program that attempts to convert compliance into goodwill. Often CSR lives outside the marketing function, somewhere deep in the bowels of legal or operations. Once a year, the company's varied social achievements are collected by the investor relations department for the now-compulsory CSR addendum to the annual report.

CSR attempts to align corporate needs (profits, revenue, growth) with social needs (people, community, planet). Themes such as "we're being less bad" or "we're trying to give back" dominate the subtext and water down the potential marketing value of the exercise. In the end, CSR is a compulsory exercise designed to limit liability, boost morale and add to the branding story of the company.

From 2003 to 2008, CSR grew along with other nice-to-haves such as corporate meetings, green buildings and skunkworks programs. When the recession slammed the economy last fall, only the profit center programs survived. As a movement, CSR is either dead or on life support.

This is sad, actually. Companies can partner with nonprofits and government groups to help solve many of society's problems today -- and into the future. For the short term, however, we need to rethink how this can be as good for the bottom line as it is for corporate karma.

Picking the right walk, then talking about it (strategy plus marketing) is the key. Long live CSO: corporate social opportunities. CSO should be a marketing function, designed to seek out the cutting edge of brand innovation -- where a company's assets intersect with the greater community's needs. When you find this match, you can produce a sustainable program that inspires sales while it makes a difference.

Aveda Corp.'s joint venture with the Yawanawa tribe in Brazil is one example. The company's founder, Horst Rechelbacher, heard a speech by a tribesman from Yawanawa at the 1992 Earth Summit in Rio de Janeiro about the group's struggle to resist clear-cutting of their forests. Meanwhile, Aveda's chemists in Minnesota discovered that uruku, a rain forest plant grown by the Yawanawa, provided a rich red-brown pigment for Aveda's growing makeup product line. Inspired by the social opportunity, Mr. Rechelbacher fast-tracked an alliance with the Yawanawa and invested in a new city in Brazil called Nova Esperanca (New Hope) that would focus on producing a sustainable supply of uruku.

The venture produced revenue for both parties and had marketing power in the advertising, labeling and merchandise areas. Customers responded, often buying more products than they actually needed at the time (called by buycott).

At Office Depot, the social opportunity came in a different arena: small-business development. The company has a practice of seeking out product suppliers that are historically underutilized businesses, or HUBs, for its customers. The company operates in tandem with the National Minority Supplier Development Council in picking HUBs to buy from and feature in the company's product catalogs.

Cleveland inner-city office chair parts manufacturer Master Manufacturing is one of Office Depot's HUBS, and another example of a corporate social opportunity. Master Manufacturing is run by Iris Rubinfield, who founded the company with her husband in 1951. She has her own CSO program, hiring underemployed people, such as single mothers. Her workers are loyal to the opportunity and make some of the finest chair casters in the country.

Office Depot was inspired by Master Manufacturing's hiring practices, so it features the company prominently in its product catalogs and in promotions. Customers have responded to those placements, giving high share to Master Manufacturing over much larger (and cheaper) competitors. Over the last decade, the company's business has grown exponentially, helping the company delve into new areas such as chair cushions and door stoppers.

In both situations CSR objectives (community, supplier development) are met but with a different frame of reference: Do some good. As long as marketing is involved on the back end, a positive feedback loop can be created where the company connects with cause, which inspires customers to connect with company. This is likely the future of corporate social opportunity, from taking care of employees (think health care coverage as a CSO) to boosting local communities (think sharing education resources as a CSO) to helping save the planet (think recycling as a CSO). In the end, the business value aligns with the do-gooder in people -- helping to create a new breed of sustainability that won't be canceled or cut to the bone the next time the economy swoons.

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