Corporate Social Responsibility – a perspective

As the weather is still so cold, I was thinking about lloydmasters projects in sunnier locations such Brazil where we helped the United Nations run a series of stakeholder dialogues focused on sustainable development and Corporate Social Responsibility (CSR).

In the UN, as in other client companies we often see much hand wringing and confusion on the vexing question of sustainability and CSR and and what to do about it.The subject can appear daunting as there is much ‘expert opinion’ and a cottage industry of ‘triple-bottom-line’ reporting endless conferences and seminars searching for the definitive ‘business case’ for CSR can also prevent clarity.

So, lets get back to basics.

When we talk about CSR, all we are really talking about is leadership and due diligence. By leadership, we mean adopting a more thoughtful, businesslike and having an understanding ambitious approach to ethical, social and environmental issues – and of the commercial opportunities arising from tackling them. Due diligence means managing the risks arising from evolving expectations in society, the values of the demand-side of the economy, requirements of law, industry standards as well as professional and codes of practice.

So, what is the 'business case'? Putting aside for one moment moral philosophy, we know that issues that are of significant interest to customers, employees, suppliers and to general society will also be of concern to shareholders. We also know that public and consumer trust are essential for a sustainable business; but more often we operate in a low trust environment and in an increasingly transparent and connected world.

In short we are constantly under scrutiny. The business case is therefore quite simple; companies showing leadership and exercising due diligence will do well and be rewarded. Those that don't, will tend to suffer in terms of brand devaluation and will eventually have to change or could go out of business.

So, what should you do?

• Don't let the tail wag the dog! Don't let ‘reporting’ be the driver. Understand what societal issues are out there, what values are driving them, explore, and understand what they mean for the ongoing success of your business
• Show leadership by acknowledging issues relevant to your business and discuss these with relevant stakeholder groups to gain insights, identify boundaries and discover win-win business opportunities. Understand what due diligence means for these issues and put in place appropriate risk management processes
• Translate these opportunities into the ‘day-to-day’ job. Set targets and measure performance taking care that things are done in a joined-up fashion and that performance is cast in win-win terms. For the business this means impact on brand equity, license to operate, customer and supplier relationships, staff motivation, carbon risk, market share, etc. For society, this means impact on the environmental, social, ethical and economic issues that you have acknowledged as something relevant to your business
• Decide what you need to communicate, and to who, and put in place appropriate communications, feedback mechanisms, partnerships and performance reporting procedures

lloydmasters, Red Arrows and change management

Thursday's lloydmasters winter networking event was a great success; attended by over 30 clients and friends, there was plenty of wine and plenty of canapes but fortunately no songs. The event focused on organisational agility in change and was headlined by Justin Hughes, a former Red Arrows Team Leader and MD of organisational performance consultancy Mission Excellence. From his three years in the Red Arrows and six years flying the Tornado F3 in combat missions, Justin has plenty of experience in managing change and understands the need for agility to the exploit the oppportunity of change. Using examples drawn from the military, including the United States Air Force and the 'Six-day war' (1967 Arab-Israeli War) Justin explained how organisational agility depends on great leadership, clear communication and being reactive.

Below are just a few key points. If you would like to attend our next networking event and get the whole picture or if you would like to know more about our approach to change, get in touch.

• Good leaders gain authority by giving it away. They delegate the what, where, when (making sure their team understands why) but give ownership of the how. Leadership is a two-way relationship that requires trust and support so if you tell people what you want and not how you want them to achieve it, they will surprise you with the results
• What must be established is clarity in purpose. Does every member of your team understand precisely what you are trying to achieve throught the change? The stated mission of the USAF is to 'fly, fight, and win in air, space, and cyberspace.' You cannot be effective at responding to change unless you have absolute clarity. If you’re going to react to change, you need to understand the bigger picture. Having this clear in everyone’s mind should lead to absolute precision
• Colonel John Boyd, a United States Air Force fighter pilot and military strategist (as consultant to the Pentagon), developed a concept referred to as the OODA loop, the process by which an entity (either an individual or an organisation) reacts to an event: observe, orient, decide, act. According to this idea, the key to victory is to be able to create situations wherein one can make appropriate decisions more quickly than one's opponent – the side that goes round the loop faster will win – they might make mistakes, but they can correct them because of the speed at which they are ‘revolving’. Time is a powerful weapon
• Once people are empowered, they should constantly be assessing their situation in order to best respond to it. 'To be' shows only external success; 'To do' really adds value

A blog inspired by me having too much to do...

I’m a working mother, as are many of my colleagues; and I don’t know about them, but I dread Sunday evenings. Exhausted from a weekend of chores, ferrying the children around (town, sports grounds, friends) and socialising, I then have to get ready for the week ahead – organising the children’s kit for school, packing if I'm travelling and the list goes on, so generally Sunday evenings become a tedious routine of a late dinner (so we can fit in more chores during the day and perhaps a bit of work), a mad scurry of finding things needed for the week ahead, a look at a screen (DVD, television or the internet) and a few glasses of wine (to stop the stress). And it’s dull, dull, dull... the same manic running around; a feeling of something precious lost (my own time), and a dread of what I have to manage in the week ahead, and don’t get me wrong, I love my work.

So I was wondering, what do other working mothers do on a Sunday evening?

Working mothers, by the way, make up 68% of the population, 38% of which are in part-time jobs. There is lots of research out there telling us all sorts of different (often contradictory) things about mothers who work: it increases self-esteem, their children are 20% less likely to get an 'A' level but it can have a positive affect on daughters academic achivement; it has also been suggested that the children of working mothers are likely to be fatter! (note – small sample  research). I’m sure there’s lots more enlightening studies out there, some of which will make us feel relieved we are working and some of which will make us question what we are doing but what I would really like to know is what other working mothers are doing on a Sunday evening.

Let me know your experience by posting a comment below – perhaps I may personally be encouraged by the replies and develop a new way of doing things, perhaps we all could learn from one another, watch this space...

Does money motivate?

Many clients worry that they can’t give their staff pay rises and how that will affect their motivation. Well the good news is that despite what many businesses continue to do, pay rises don’t motivate, well certainly not in anything but the short term. It’s not quite as simple as that, as money can be a demotivator. So what exactly does that mean in practice?

If you remember back to your last pay rise or bonus, how did you feel? Probably great, that day, maybe that week. But the chances are that you then got used to it and your level of motivation at work went back to the same as it was before. So does that mean that you’d be the same whether you got a pay rise or not? Well it all depends on fairness. Humans need to feel that they’re being treated fairly – are they getting a comparable deal to others doing the same role and is there a fair pay split across the organisation.

So are there any instances where rewards can motivate and increase performance? Normally it’s only for very routine or rule based activities where no creativity or brain power is required. Even then it’s normally better to give the reward afterwards as a surprise.

Daniel Pink has done some extensive research in this area, building on the hypothesis that if a task involves some level of rudimentary cognitive skill, i.e., there’s some thinking involved, then a larger reward leads to poorer performance – interesting stuff!

Our recent article in The Sunday Times gives some more insights into this tricky topic.

The simple answer is, most of the time no. A couple of my clients have recently been asking for help on how they can keep their staff motivated – January and February are typically known as some of the most depressing months of the year, Christmas long gone, still feeling poor and seems like ages before the sun will come out again.

If business strategy is the answer, what is the question?

The writings of Sun Zhu and Alexander the Great on military strategy provided metaphors for business strategy which, extended by modern studies, yield essentially three different perspectives.

The first is one of ‘position’. This is popularised by the work of Michael Porter on competitive forces. It is based on the insight that business strategy should address the opportunities and threats of the external environment. In particular, competitive strategy should be based on an understanding of industry and market structures, barriers to entry and the way they change.

The second emphasises capabilities. This has been made popular through the ‘core competence’ approach of C K Prahalad and Gary Hamel. Here strategy is about accumulating and combining resources to create a set of ‘capabilities’ that will set a company apart from its competitors. Top management adds value by delivering a strategic architecture that guides capabilities acquisition in such a way that competitors will not be able to copy them.

The third perspective concerns the flow of know-how to sustain the business – ‘perhaps the only competitive advantage is the ability to learn faster than your competitors’. Organisations need to be good at ‘knowledge generation, appropriation and exploitation’. In this context Peter Senge (The Fifth Discipline 1990) explored ‘The art and practice of the learning organisation’. A defining contribution was made by Donald Schon, who explored the extent to which companies, social movements and governments were learning systems – and how those systems could be enhanced.

So there you have it: a potted overview of business strategy. Although there are significant differences between the three perspectives, they do converge and complement one another to good effect – especially when lloydmasters work with you in the ‘real’ world.

So, now you are in a position to answer...

'... If business strategy is the answer, what is the question?'

If not, give us a call!