In a recent issue of BusinessWeek, I stumbled upon an opinion piece where a reader from Bulgaria wrote into Suzy and Jack Welch (former CEO of GE) with this question, “What do you think about companies being ‘socially responsible’ during these difficult competitive times? Is it a necessity or a luxury?”
There were aspects of their answer that I found pleasantly surprising. The couple stated, “In this enlightened day and age, whether times are good or bad, companies must be socially responsible.” They then go onto say, “But tough economic conditions underscore a blunt reality. A company’s foremost responsibility is to do well. That may sound politically incorrect, but the reason is inexorable. Winning companies create jobs, pay taxes, and strengthen the economy. Winning companies, in other words, enable social responsibility, not the other way around.”
I don’t find anything “politically incorrect” about their answer. If you read their whole response, it is obvious they believe social responsibility is important. However, from their response it appears I have a very different opinion on what it means to “do well” or be one of the “winning companies.” It is obvious we have different opinions on what it means to be socially responsible.
To illustrate this point, let’s consider an alternative situation. What if, instead of the question going to BusinessWeek, it went to a general news publication like Newsweek, Time, or even the New York Times? And what if the question asked was, “What do you think about people being ‘socially responsible’ during these difficult competitive times? Is it a necessity or a luxury?” That situation seems a tad ridiculous, right?
When it comes to someone’s personal social responsibility, it is viewed as an intrinsic value, i.e. it is part of who they are as a person. During tough times, people don’t become less socially responsible; they just express the commitment in a different way. For me personally, I am passionate about a lot of environmental causes. However, given the fact I am an entrepreneur in a tough economy, I do not have the money to donate to the environmental groups I typically do. However, I find other ways to express my commitment. For example, when I walk to work I pick up trash along the mile and a half route. Does this make me less socially responsible?
I think most companies view corporate social responsibility (CSR) as external to what they are and what they do. It is something they are told is important and therefore they do it. It is does not come from their core, their heart, their purpose; it is a strategy. The problem with this thinking is during tough times, strategies change and some even are abandoned. I would go out on a limb and say that the CSR strategy is one of the first to go under the microscope.
I view social responsibility as a manifestation of a set of values. It is not a strategy with tactics; it starts with the organization’s purpose and ultimately should be expressed in everything the organization does. When you look at it this way, it becomes much more than donating and volunteering. While this list is far from exhaustive, socially responsibility is also about:
- Providing high quality, planet and people safe products or services
- Creating high quality, inspiring, and good paying jobs (and by the converse, not exploiting cheap labor)
- Listening and continually learning from fellow employees, customers, investors, your local community, and others
If you do those things, you will “do well” and be one of the “winning companies.” That is just my humble opinion; I would love to hear yours.