There is more and more interest in ethics in business.
It is an important subject and well worthy of the attention it gets. There are any number of unethical practises that impact poorly on the community and ultimately the perpetrators.
Corporate Social Responsibility (CSR) is seen by many as an important component of ethical business practise. For some businesses it is an important component of ethical business practise.
With this in mind many businesses invest heavily in CSR. Indeed research suggests growing investment in this CSR by businesses of all shapes and sizes.
This is perhaps why so many senior business people ask me if CSR is a sound investment and if so how much should they invest.
Unfortunately my answer is all too often – NO.
Having said that, before we can determine the value of CSR we must answer two critical questions:
• What return are you looking for?
• How do you measure that return?
Unfortunately most businesses are not clear on either. Certainly they are not as clear as they should be on their objectives, they ideal strategy to address those objectives or the metrics for measuring progress.
Indeed, if they had quantifiable objectives, a clear strategy and a means of measuring progress towards those objectives, they would not be asking me if CSR is worth investing in.
Certainly measuring the effectiveness of CSR is difficult, but it is made even more difficult when there are no clear objectives or understanding of how the strategy will lead to the achievement of those objectives.
And if these things were in place these businesses would find two things:
• Most CSR programmes are window dressing
• Most CSR programmes do not maximize the ROI
The fact is donations, sponsorships and even community partnerships are often no more than window dressing. This is particularly where the behaviour of the organisation in its day to day activities are not consistent with good corporate citizenship or the values being promoted in the sponsorship.
This clip is very relevant to this point – https://www.youtube.com/watch?v=k8GhPtS_fmY
Many organisations fail to maximise the return on their investment because they do not live as they preach. The behaviour of the organisation and its staff on a day to day basis will always be more important and will always have more impact on corporate image than sponsorships and the like.
Indeed the best CSR investments and organisation can make related to:
• Understanding the views of stakeholders in terms of their community obligations
• Creating within the organization a culture that will deliver good corporate citizenship
Developing the optimal image will always begin with an understanding of community perceptions and expectations. Understanding these can also provide a baseline for setting objectives for and measuring the impact of CSR strategies.
Creating a culture that reflects the organisations brand and in particular its values lies at the heart of good branding and creating within the community the optimal corporate image. It can also work to reduce the need for investment in traditional CSR activities.
In closing I would offer two other suggestions for consideration:
• The community is increasingly skeptical about the sincerity of businesses engaged in sponsorship and other traditional CSR activities
• The community is responding more and more positively to businesses that display good corporate citizenship and sound ethics in their day to day activities
Just a thought.
This issue will be discussed in detail on THE D. JOHN CARLSON NETWORK –www.djohncarlsonesq.com/publishing
John Carlson is a behavioural scientist, strategic planner and lateral thinker focusing on branding, marketing, communication, personal advancement, business development and behaviour management.