In past posts, I have discussed the importance of entrepreneurs and businesses giving back to their communities through their time, talent or treasure. These socially minded activities work not only to serve your stakeholders, improve the lives of others and allow you to focus on causes near to your heart, but also provide opportunities for networking and even marketing your business.
I thought more about this issue after coming across an old piece from Bloomberg Businessweek, in which Steve McKee – president of McKee Wallwork Cleveland – questions whether it is more socially responsible for a business to serve its stakeholders and create more jobs than it is to develop a widely recognized corporate social responsibility (CSR) program. He warns that there is a limited amount of resources to be spread among an organization’s various activities, and focusing too heavily on one pursuit could be detrimental to the others.
“It’s possible for corporate social responsibility initiatives to lead to the unintentional neglect of the responsibilities to which company leaders have already committed by virtue of their roles: advancing the interests of the organization,” he says. While some companies have built up their operations around their social missions, others began with a more commercial goal and have pursued the socially conscious aspect in a way that has taken away from their profit-making ability, McKee argues. He encourages businesses to draw a clear line between their responsibilities to stakeholders (clients, employees, investors) and their desire to serve society in some other way. McKee contends that contributing to the economy through spending and creating jobs is “the most socially responsible thing [a company] can do.”
Responsible for profits and society
Of course a business should always focus on its founding principles, but I do not believe that this goal and pursuing external community engagement strategies should be seen as mutually exclusive. In fact, if they cannot be aligned there may be something wrong with the founding principles of an organization. Essentially, I would encourage more entrepreneurs to think about how they can apply their current systems and resources in a way that benefits the bottom line as well as society, rather than diverting energy and funding away from core operations. I struggle to believe that Pepsi’s decision to pursue a unique CSR campaign is the cause for its loss of market share. McKee failed to include case studies of the numerous organizations who have aligned a strong commitment to corporate social responsibility with their existing values without impacting their bottom line. Some have even discovered new opportunities for growth. Interface and Patagonia completely changed their business strategy to address the social and environmental impact of their respective products. Other organizations, such as, RBC, PwC, Timberland and Walmart have been identified as leaders in CSR for either their creative community engagement strategies or efforts to drive environmental responsibility down their supply chain.
Think about what you and your employees currently focus on in the organization. Are there ways that external parties could also benefit from those activities? For example, can your team of accountants help a local nonprofit review its books during a slow week in the office? Not every socially responsible program takes the form of a donation check. Identify the internal and external stakeholders in your business – employees, clients, children of clients, broader community – to help you better understand where you can make an impact, By being in tune with the needs of underserved groups, while also understanding your own business’ capabilities and limitations, you can come up with creative ways to help without detracting from the company’s bottom line.