Having the responsibility of these monthly columns for the Carlsbad Business Journal has given me the impetus and motivation to more deeply ponder many business and organizational issues that are important to me. Several people have commented to me that they appreciate these reflections, and they encourage me to continue to share my thoughts.
Most of my chamber board colleagues are aware that the majority of my career has been spent in the nonprofit sector. Even during my brief stint as the executive director of the Callaway Golf Company Foundation, I was primarily responsible for managing their nonprofit foundation.
While there, and even years before that experience, I began to recognize the extremely important “social impact” role that business plays in a healthy community. For the past decade, I have tried to read all the books and articles about corporate social responsibility I could get my hands on.
I have consulted with companies interested in improving their roles as corporate citizens. I am encouraged greatly when I see or read about companies that are successfully implementing the elements found within the following fictional scenario:
The chief executive officer sits back to reflect on the briefing material she has just been shown in advance of her next institutional investors meeting. In addition to the very positive financial performance numbers, it is the key stakeholder feedback metrics that give her the greatest confidence her business is on track.
Sales numbers and margins have increased, with data indicating that customers recognize and value the steps taken by the business to reduce the environmental and social impact of both the product and its supply chain. The company continues to be the most successful in its sector in attracting the best graduates, with the business focus on promoting more sustainable development cited by 80 percent of graduates as a major factor in their decision to join.
This is backed up by employee opinion survey results that show 95 percent of all employees are very proud to be associated with the company and would recommend it as an employer to their friends and family. These statistics are matched by feedback obtained from other key stakeholder groups, government and regulators, major suppliers and local communities, and wider surveys of opinion formers, including non-governmental organizations and media searches.
All of the evidence points to a company that is trusted, not just by investors, but by those affected by its activities. A company that is acting responsibly in pursuing more sustainable development.
The idea that responsible business is good business is not new. Some of the world's leading companies were founded many years ago by leaders who recognized that long-term financial success would be more sustainable if the company focused on creating real value for all of its stakeholders.
However, the observations from chief executive officers in a recent PricewaterhouseCoopers survey on the need to reorient their businesses around this principle reflects the fact that globalization, coupled with continuing distrust of the business community in many parts of the world, makes responsible business even more of a priority. PricewaterhouseCoopers is working in this area with many of the world's leading companies. It also is acting as co-chair of the World Business Council for Sustainable Development's “Business Role in Society” focus area.
The PricewaterhouseCoopers survey and the comments from the CEOs who participated in it indicate that many business leaders increasingly see the need for a new business model that firmly positions the company around delivering products and services and operating in ways that recognize both financial and wider societal issues. However, the practical challenges for business leaders to create the platform for change are significant.
It seems to me they need to better understand the risks and opportunities created by the relevant sustainable development issues and change their business strategies to accommodate them. Further, they need to redefine how success is managed and measured so they can begin to define business success in the long-term.
Finally, underlying all of this, business leaders need to create a set of values and a culture that promotes responsible business. The businesses that are able to deliver these changes will be best equipped for success in tomorrow's business world.
Most of my chamber board colleagues are aware that the majority of my career has been spent in the nonprofit sector. Even during my brief stint as the executive director of the Callaway Golf Company Foundation, I was primarily responsible for managing their nonprofit foundation.
While there, and even years before that experience, I began to recognize the extremely important “social impact” role that business plays in a healthy community. For the past decade, I have tried to read all the books and articles about corporate social responsibility I could get my hands on.
I have consulted with companies interested in improving their roles as corporate citizens. I am encouraged greatly when I see or read about companies that are successfully implementing the elements found within the following fictional scenario:
The chief executive officer sits back to reflect on the briefing material she has just been shown in advance of her next institutional investors meeting. In addition to the very positive financial performance numbers, it is the key stakeholder feedback metrics that give her the greatest confidence her business is on track.
Sales numbers and margins have increased, with data indicating that customers recognize and value the steps taken by the business to reduce the environmental and social impact of both the product and its supply chain. The company continues to be the most successful in its sector in attracting the best graduates, with the business focus on promoting more sustainable development cited by 80 percent of graduates as a major factor in their decision to join.
This is backed up by employee opinion survey results that show 95 percent of all employees are very proud to be associated with the company and would recommend it as an employer to their friends and family. These statistics are matched by feedback obtained from other key stakeholder groups, government and regulators, major suppliers and local communities, and wider surveys of opinion formers, including non-governmental organizations and media searches.
All of the evidence points to a company that is trusted, not just by investors, but by those affected by its activities. A company that is acting responsibly in pursuing more sustainable development.
The idea that responsible business is good business is not new. Some of the world's leading companies were founded many years ago by leaders who recognized that long-term financial success would be more sustainable if the company focused on creating real value for all of its stakeholders.
However, the observations from chief executive officers in a recent PricewaterhouseCoopers survey on the need to reorient their businesses around this principle reflects the fact that globalization, coupled with continuing distrust of the business community in many parts of the world, makes responsible business even more of a priority. PricewaterhouseCoopers is working in this area with many of the world's leading companies. It also is acting as co-chair of the World Business Council for Sustainable Development's “Business Role in Society” focus area.
The PricewaterhouseCoopers survey and the comments from the CEOs who participated in it indicate that many business leaders increasingly see the need for a new business model that firmly positions the company around delivering products and services and operating in ways that recognize both financial and wider societal issues. However, the practical challenges for business leaders to create the platform for change are significant.
It seems to me they need to better understand the risks and opportunities created by the relevant sustainable development issues and change their business strategies to accommodate them. Further, they need to redefine how success is managed and measured so they can begin to define business success in the long-term.
Finally, underlying all of this, business leaders need to create a set of values and a culture that promotes responsible business. The businesses that are able to deliver these changes will be best equipped for success in tomorrow's business world.