A New Concept of CSR is Needed

The term Corporate Social Responsibility (CSR) is a catch phrase that means different things to different people. To some, it suggests philanthropy, to others is means getting involved in the community, to others it means sustainability (e.g., triple bottom line measurement of a company on its impact on society, economy and environment).

There are several things I dislike about the concept of CSR. First, it suggests that a company do something, anything to "benefit" society. This leads to all kinds of investments by companies in things that have little ROI to them or to the larger community. There is no strategy; it is purely a tactical attempt to be nice to someone in hopes that it will pay dividends or because the CEO has a special pet project. Second, it makes companies think that they can boost their reputation purely by doing something for the community. No company that I know of has built a reputation purely through CSR.

Now, let's understand that companies that want to be considered leaders are expected to be leaders in the larger society. They will be conspicuous by their absence. One cannot hide if one wants to be a leader. In fact, the concept of leadership mitigates against wanting to hide--one wants to lead, to be seen, to inspire and engage others.

I believe that CSR should be redefined as corporate social engagement (CSE). CSE is active; CSR can be passive. CSE is broader also. To become engaged, one needs to understand and respect the larger society and the pushes and pulls of various stakeholders. One negotiates and builds relationships rather than acting like a wealthy donor. Companies have adopted the concept of "noblesse oblige"; that those with wealth and social standing owe something to society. I believe that those who have been blessed with such good fortune should want to help society improve, but it depends how it is done.

CSE is a different concept. It means thinking about the issues of society that also involve the company and engaging in dialog and relationships to create something better "together". It means taking a systems approach and seeing the company as part of the larger social system.

Let's take an example. GM has given away a lot of money. Now, it is nearly broke and is cutting out both its CSR programs as well as some marketing activities like car shows and NASCAR sponsorships. If GM had a sense of CSE, it would never have allowed its CEO to travel to Washington to beg for money by flying in a private jet which was met on the tarmac by a private limo. The company would have understood that its relationship with society had changed and that it needed a new way of behaving. Some have suggested that this was a PR failure--they should not have allowed themselves to be seen as being this callous. I disagree. It was not a PR failure. It was a GM cultural failure. It is just one of the signs of what has gotten them into trouble in the first place. The management gets rich so they have to make the workers rich and they end up making cars that are too expensive for the market. They don't really engage in the outside world--they only study it through marketing research, so they continue to make Hummer's even though they know that oil prices will at some time go through the roof. Some people don't get it (read my blog about AIG, another company that cannot be educated.

Under the old concept, I'm sure that the folks at GM would say: "let us get rich again and we will give away large amounts of money like we used to". That's the wrong way to think. That's akin to steel companies making millions in Pittsburgh yet suffering through riots because of their poor employee treatment, yet getting praise for building libraries, museums and schools. That is the feudal prince approach, not an engagement.

Don't get me wrong, there are a lot of "little people" and their ranks are growing everyday in our current financial meltdown. Lots of people need help. It is times like this when companies say that they would love to do something but do not have the money for CSR. They may not, but they certainly have and have had the "sweat equity" of their expertise to help the larger community through engagement. There are many financial experts in large companies who could help non-profits and city government manage through difficult times--that kind of investment would be true engagement, would help tremendously, and be valued. It might not be as visible and it might be a longer-term activity, but it would start to get the company out of its insulated perspective and help it to become part of the larger society.

That's the point between CSR and CSE that is important. The concept I would like to see is for companies to consider themselves as part of the larger society--part of a system--rather than defining themselves as "us" and the rest of society as "them". A boss of mine early in my career cautioned me to not allow myself to get caught up in what he called the "convent mentality" of most companies. Within the convent, everyone has the same religion and the same spirit of love for "the one true God". Outside of the convent are all those who need to be saved because they do not have the "right religion". Too many companies have behaved this way. I believe in the Unitarian principles, that we are all seeking the same spritual path but in different ways that need to be respected, even if not understood. We have to find ways to engage if we are going to move along the path together, while still allowing each company to follow it own "spiritual path".