Welcome to my blog. My intent is to help technology companies maximize the business value they derive from their corporate social responsibility and philanthropy initiatives.
Corporate social responsibility (CSR) and corporate philanthropy (CP) used to be managed separate from the business. They consisted largely of cash contributions that companies viewed, at best, as an effort to give back to the communities in which they operated and their employees lived. At worst, it was seen as a subtle form as extortion that companies had to pay to appease and demonstrate their “commitments” to their communities.
This is changing. A growing number of companies now recognize that:
- Their organizations can obtain big business benefits from CSR and CP initiatives; and that
- They can often deliver much greater value to society by contributing technology and expertise than they can by contributing just money.
Many companies, for example, now recognize that reputations for social responsibility can burnish the company’s brand, attract new customers, aid in recruiting employees and improve employee commitment to the organization. Some even claim that their CSR and CP activities have increased their share prices by attracting incremental new investments from the growing number of Social Investment Funds.
This, however, is only the tip of a value proposition that can go much deeper—a value proposition that can directly help corporations enter new markets, improve economies in existing markets and create totally new business opportunities. As Michael Porter and Mark Kramer argue in their January 2011 Harvard Business Review article, companies must recast narrowly defined CSR and CP programs around a proposition for creating shared value—an approach designed to deliver as much value to the company as to society.
A growing number of leading companies already recognize that a structured approach to Shared Value Creation (the latest non-intuitive buzzword for efforts intended to deliver both business and societal value) can, for example, yield important business benefits, such as by producing:
- Big cost savings, as in the $250 million savings (a $2.71 return on every dollar it spent on these programs from 2002 through 2008) that Johnson & Johnson attributed to its employee wellness programs (not to speak of demonstrated improvements in employee attendance and productivity);
- Big revenue gains, as in the $18 billion that General Electric derived from the sale of Ecomagination products in 2009, a category of offerings that is expected to grow at twice the rate of total company revenues over the next five years; and
- Big improvements to employee leadership development and retention, as with IBM’s Corporate Service Corps which deploys teams of high-potential employees on 30-day projects to help emerging countries address some of their most pressing societal needs.
Porter and Kramer, in fact, go further, much further. Not only do they view Shared Value Creation as the next evolution of CSR and CP, they also view it as the next evolution of capitalism—a more sophisticated form of capitalism that “arises not out of charity but of a deeper understanding of competition and economic value creation.” A form of “self-interested behavior” that creates economic value to the company, by the very process of creating societal value. A form of behavior that will also help mend badly frayed corporate and capitalist reputations and facilitate a more productive relationship between business and governments.
But whatever you choose to call these programs, one thing is clear. A rapidly growing number of very large, and very influential corporations (including virtually all of the largest technology companies) have instituted large CSR and CP programs and most have conceived and are managing these programs in way that are intended to create shared value. And this does not include the hundreds of small companies that have built their entire business models around addressing societal needs or the growing number of social entrepreneurs who are creating hybrid organizations that blur the line between for-profit and non-profit organizations.
In other words, regardless of whether you consider social value creation to be a new generation of capitalism, or just a new generation of corporate social responsibility, one thing is clear. More and more companies—and especially technology companies—are becoming convinced that they can, do quote another well-known economic philosopher, Benjamin Franklin, “do well by doing good.”
Helping Technology Companies Deliver Shared Value
My blog, combined with the reports that I will write throughout the year, is dedicated to helping technology companies identify the most effective routes to creating shared value, as by explaining emerging best practices for:
- Migrating from traditional, passive and tactical forms of “Checkbook Philanthropy” toward a more proactive model, in which companies contribute their technology and especially the skills and expertise of their people to delivering solutions to clearly identified societal needs;
- Leveraging the value of social investments by strategically partnering with synergistic third-parties, such as governments, NGOs and other companies; and
- Demanding accountability, both of the social value provided by the organizations they are attempting to help, and of the business value generated by their corporate social responsibility (CSR) and philanthropic investments.
This year, my work builds on my blog’s two-year history of examining the most effective practices of and the business value that technology companies derive from their work in helping schools prepare students for sustainable, high-value careers in today’s global knowledge economy. While I will continue to highlight the critical shared value contributions associated with helping schools, I am expanding my focus to a number of additional ways in which technology companies are creating and an create shared value in a number of other areas, such as by partnering with:
- Governments to design, build and manage smart cities;
- Utilities to create smart grids;
- Car and mass transit manufacturers to build smart transportation systems; and
- Hospitals and HMOs to create smart healthcare systems.
My blog will help technology companies achieve these objectives by identifying and explaining:
- The types of societal needs that best align with technology companies’ strategic interests;
- Areas and ways in which technology companies can most effectively apply their products, services and skills to deliver the greatest value, both to the recipient and to the corporation;
- The most effective programs, practices and emerging best practices for integrating corporate business and citizenship strategies; and
- New models for apportioning investments and analyzing spending, returns and social results.
As always, I welcome your comments and thoughts.