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Monday, November 30, 2009

5 Ways To Solve The Crisis Of Corporate Social Responsibility

It may have been easy to miss if you don't work in the world of corporate led cause related marketing, but Corporate Social Responsibility (or CSR) programs are in the midst of a crisis. The subject of the debate mainly centers around two big issues: brand value and authenticity. On the one hand, CSR programs are attacked by shareholder groups and business investors who argue that they are a needless distraction and remove money (and value) from the investors of a business. CSR programs are also attacked by industry watchdogs and groups who argue that businesses only engage in CSR programs to create an artificial connection with consumers and claim allegiance to causes they don't really care about.

On the other side, those who work on these programs make a more idealist argument - that companies can do well and do good at the same time. That doing something positive for a community or for the planet at large is not mutually exclusive with making money. And even if it were, that the duty of organizations to do this should be seen as a necessary cost of doing business. This is not a debate that is likely to be resolved anytime in the near future, but my position is that I am a big believer in the benefits of Corporate Social Responsibility. I teach a marketing course at Georgetown University's Center for Social Impact and have worked on dozens of CSR programs in my time managing marketing campaigns for clients.

Unfortunately, CSR is in a state of crisis today. To a large degree, this crisis is self inflicted - with many brands simply jumping on the bandwagon of popular causes such as the Pink Ribbon campaign for breast cancer simply because they were fashionable. Other brands have been exposed for "greenwashing" as a way to simply tell a story of being better or more ethical without actually living up to it.

The point of this article, though, is not to focus on the negatives of CSR or to lead anyone to the conclusion that it cannot work well. Instead, my aim is to try and offer a vision for how brands and the nonprofits they work with may be able to get past some of these barriers to collaborate on some real groundbreaking CSR programs that not only deliver results in terms of a positive impact on the world, but also can be viewed within a marketing team as having a value, effectiveness and ROI worth maintianing an ongoing investment in.

To that end, here are five fundamental keys to creating successful and believable CSR programs:

  1. Forge a real strategic connection. By far the biggest mistake that brands and nonprofits make is creating partnerships of convenience rather than strategy. An airline supports feeding the hungry, A clothing retailer supports more technology in schools. A bank supports breast cancer. This is not to say these aren't worthwhile causes, but the strategic link to a brand can often be missing - and without it, realizing real marketing value from a CSR program is difficult. Before committing to an effort, a brand needs to honestly assess whether the cause is the right fit ... or not.
  2. More upfront involvement and ownership from causes. Though it is tempting to blame this lack of strategic vision solely on the brand, there is an element of blame for nonprofits as well. When it comes to crafting a CSR program, a nonprofit cause often takes a subordinate role because of the perception that they are getting "a favor" from the brand working with them. This is a mistake for several reasons, but most importantly because often the nonprofit is in an ideal position to advise on what people truly care about in relation to their issue and what is likely to influence their opinions. For any nonprofit that simply agrees to a do an ill-conceived campaign from a brand - not only will it not generate strong results, it may also impact your ability to get future funding and support from that brand. So if you're part of a nonprofit, get involved and be a vocal partner to the brands you work with. In the long run, they will appreciate working with you much more - and the results of your collaboration will be much stronger.
  3. Shift to long term focus versus short term. It is certainly no surprise that the inclination of most marketers is to think in terms of campaigns rather than longer term partnerships. This is particularly true when you consider the average CMO's tenure is about 18 months. With all these barriers, it can be tough to do something that lasts for a long time, but when you switch causes and allegiances every year or two then it is very difficult to build a perception in the consumers mind about what you stand for. The most successful CSR programs that are held in high regard and have returned enormous value for both the brand and an associated nonprofit (if there is one) are more longstanding efforts.
  4. Commit more than just financial resources. Giving money to someone is actually the easiest thing to do when it comes to CSR programs. Writing a check takes relatively little effort - what requires more effort (and belief) is TIME from the people that work for a brand. Yet this time is what makes a commitment real. Having real people working on a cause from your organization is what can inspire your people with a sense of purpose. It is also the real proof point that any customers or critics can point to as a demonstration of your real commitment to a particular cause and the fact that your commitment is real and not just greenwashing.
  5. Integrate programs instead of operating in silos. In many large organizations, CSR remains its own branch on the tree - which means opportunities for integration are often missed. Yet the stories that come from a well defined and executed CSR program can help to reinforce marketing messages, offer useful talking points for customer service, and great fodder for content creation for social media groups. The point is, CSR is best utilized if it is treated as a resource that is available to the entire company to help spread the story about. This can also help to combat the perception within many organizations that CSR efforts should not be actively talked about because this would mean "patting yourself on the back." While too much self congratulation can backfire, this should not prevent brands from talking authentically about the things they are doing.

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Comments

Excellent post my friend! I think there is more here than what meets the eye. If people would really let these ideas sink in, some good things could happen.

I rally like number 3 because it is the relationships that you build with people that last the lifetime. Campaigns run out, but those memories do not. It is crucial to keep the big picture in mind.

Thanks again!

Justin Glover
Small Business Marketing Tips

Dear Rohit,

Thanks for the post. You made very interesting points above, i.e. developing business-relevant initiatives that are tied to the organization's strategy, integrating programs rather than operating in silos.

However, I would add that embedding CSR/Sustainability in the company values, vision and culture is highly critical. It is the only way to achieve credibility, not only in the eyes of consumers, but also in the eyes of other stakeholders such as NGOs, media, etc.. who show increasing greenwashing-induced skepticism to any new CSR initiative. This is even more true with the increased transparency fueled by social media and other internet-based tools - stakeholders can now see what's truly happening behind the advertising curtain.

In addition to this, it is also extremely important for companies to implement CSR initiatives that are locally-relevant, which means that the priority is to understand local stakeholders' expectations (consumers, but not only) and tailor global CSR polices / strategies accordingly.

Finally, the recession (and subsequent budget cuts in the CSR / green marketing fields) helped sorting out the good from the bad. The recession forced many companies to drop the pet projects that were not adding much value to rather focus their efforts(and money)on business-aligned initiatives.

Cheers,
Perrine

Dear Rohit,

Thanks for the post. You made very interesting points above, i.e. developing business-relevant initiatives that are tied to the organization's strategy, integrating programs rather than operating in silos.

However, I would add that embedding CSR/Sustainability in the company values, vision and culture is highly critical. It is the only way to achieve credibility, not only in the eyes of consumers, but also in the eyes of other stakeholders such as NGOs, media, etc.. who show increasing greenwashing-induced skepticism to any new CSR initiative. This is even more true with the increased transparency fueled by social media and other internet-based tools - stakeholders can now see what's truly happening behind the advertising curtain.

In addition to this, it is also extremely important for companies to implement CSR initiatives that are locally-relevant, which means that the priority is to understand local stakeholders' expectations (consumers, but not only) and tailor global CSR polices / strategies accordingly.

Finally, the recession (and subsequent budget cuts in the CSR / green marketing fields) helped sorting out the good from the bad. The recession forced many companies to drop the pet projects that were not adding much value to rather focus their efforts(and money)on business-aligned initiatives.

Cheers,
Perrine

Rohit,

I think you make some very important points about cause marketing however your post implies that cause marketing/nonprofit partnerships is what CSR is all about and that is far from the case. CSR goes way beyond cause marketing - supply chain, design, innovation, employee relations, community engagement, environmental policies...all of this falls under a comprehensive CSR program. This is an important point to make because as marketing communication professionals - the ones tasked with communicating corporate citizenship efforts - we can make or break a brand by not fully understanding what CSR is and how to authentically develop CSR communication campaigns.

I think your fifth point comes closest to hitting the mark about CSR communications as a whole. It is about integration - finding the stories within a company that authentically illustrate the brand as a corporate citizen - stories about the products, employees, communities, partners or causes that make up the organization. CSR is a whole of many parts which is what makes it complicated.

Perrine’s comments above reflect the current business trends in CSR - developing a strong business case for triple bottom line principles and integrating these throughout the company. In my view CSR is not in crisis if anything it is becoming more robust.

All good points, in comments as well.

If the average tenure of a CMO is 18 months, so is the average tenure of a nonprofit development director (chief fundraising officer). The strategic nature of business-nonprofit partnerships means these must be driven by boards and CEOs, not lower-level staff.

One way to incorporate CSR into a company's core, as Perrine suggests, is to think beyond partnerships with causes and nonprofits. Such partnerships, as strategic and long-term as they may be, assume CSR is indeed a "program" instead of a core strategy and that the social-good function is performed by an outside entity. If a company's whole business model is socially responsible (triple bottom line), partnerships with causes become an extension of CSR, not its entirety.

Hi guys - I've been on the road and away from the computer so my apologies for not being able to respond to some of these great comments earlier!

@Justin - You're right that the relationships are often the most lasting part of these types of efforts. Thanks for commenting.

@Perrine - There are so many great points in your comment that I hope you even consider turning them into a blog post of your own! The importance of integrating these efforts to "walk the walk" is crucial, as is doing them on a local and regional level - and your point about the recession forcing companies to optimize their efforts is a great new direction on my point about how the current climate may effect CSR efforts. I really enjoyed your thinking and will definitely add your blog to my RSS reader. Thanks for that comment.

@Jen - I'm glad you came to comment here, as you know I'm a big fan of your work and thinking! And you're totally right about CSR being about more than just the one element I portrayed in this post from my point of view as a marketing person. On the other point about whether CSR is in a crisis, I also love that we disagree here, as too much agreement is never any fun. My reason for taking the intentionally extreme tone of CSR being in "crisis" is based on the revaluation I see many brands making in the market about their current CSR efforts. It's an introspection on a scale that has the potential to become a big crisis for CSR because it could be a tipping point. A moment when a significant number of brands are making the decision whether to believe in CSR or not. I happen to think that the tone is shifting TOWARDS the benefits of CSR. More people are talking about companies acting in a socially responsible way. There is more attention to companies who don't. As has been the case with many pioneering companies in social media (Dell, Comcast, and others) - this crisis can be the moment when CSR really starts to take off. When it becomes mainstream for all corporations to have some kind of CSR. This is what I imagine you mean when you talk of it being more robust. And I hope it does. But it will take marketing people to keep talking about it, and how to do it right in order for that to happen. Maybe what we need to really get CSR on the map for EVERY company is a bit of crisis (and the urgency that goes with that) ...

@Peter - Excellent extension point on the comments here about partnerships only being one part of a comprehensive CSR program. I agree and appreciate your comment.

Thanks Rohit & everyone.

All good points, in the post as well as comments.

IMHO, CSR can be much more successful as well as effective, if it gets highlest level executives to sponsor (as well take keen interest in).

It should never be a 'facade' but a philosophy driven right from the core values ...

I know a big corporate house who have changed their perspective and they call it 'Corporate Sustainability' instead (which shows they understand that their 'long term existence' itself depends on involving community at large as one of the stakeholders)

Regards,
Harsh

Thanks to Rohit and those who posted comments for fueling this interesting discussion.

At last night’s Corporate Citizenship Awards ceremony at the U.S. Chamber of Commerce, there were abundant examples of how companies differently manifest CSR. Some clearly build coherent brand equity better than others (although there are equally valuable CSR outcomes that have nothing to do with external communications). Office Depot donates 300,000 backpacks containing essential school supplies to primary school students. Wegmans provides 16 million pounds of food for hunger relief and raises millions of dollars through customer point of sale cash donations to aid food banks. And UPS teaches safe driving techniques to teens based on defensive driving best practices used by their drivers. These companies leverage core capabilities to create positive social change, and that association in the general consumer’s mind has undeniable branding value.

Moreover, there can be long-term marketing/sales impacts on the beneficiaries of CSR programs. It is not hard to imagine that as students become adults, or as people in need see their situation improve they will choose to become customers of the companies that provided them assistance as good corporate citizens.

These are clear examples to study if “forging a strategic connection” is the stated goal of your company's CSR activities.

@belldaragh I think CRS is almost making the cut. It goes on at lower level in small companies, that can set themselves apart with. It helps you stand out.

It makes you stand out to be ethical. The longterm is always better than the short and CRS fits this Guy Kawasaki is right about your posts neat with the numbering and structure.

well if you ask me i think the csr should not only relate to the human it should and it does consider environmental problems also.i think ethical grounds are set up by moral judgements of people at mass so sometimes doing wrong is also right.

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