The Biggest Mistakes Companies Make With Corporate Social Responsibility

Consider the pharmaceutical company leaders who saw themselves as improving public health, but instead have faced disapproval and litigation over products, pricing and marketing. Or the company that tries to bring digital health systems to underserved rural areas, only to be greeted with suspicion by residents and bad-mouthed by traditional providers.

That’s why many companies revert to uncontroversial tried-and-true priorities in their corporate social responsibility thinking, avoiding the risk of innovation and, thus, the chance for major change. It’s easier to install recycling bins or hold a holiday clothing drive than to tackle big social and environmental issues. But unless companies up their CSR game, it will be just another audit check-box rather than a positive force for the world, and trust in business will remain low.

Here are some common mistakes companies make that limit the potential for CSR efforts to reach their potential for positive impact.

1) Ignoring your own house. Companies can’t green-wash their way to respectability–for example, by making donations to environmental causes while failing to improve toxic daily working conditions. Impact starts at home, with whether products and processes meet high standards driven by values, and whether they can become role models of innovation. Before trying to change the world, change oneself.

2) Operating in silos. CSR often falls prey to internal organizational turf skirmishes. In one company full of silos, a marketing manager mounted an effective social media campaign to enlist users in solving an environmental problem that her company’s product could help with, but she was hamstrung when financial executives, who often battled with marketing, shot it down.

Even CEO-level involvement might not be enough to stop CSR efforts from getting derailed by departmental managers who don’t see what CSR has to do with meeting their business targets. Such as when a CEO agreed in principle for his company to work with a community nonprofit, but regional managers refused to budge, putting the proposal so far back on the burner that it was clear that nothing would get cooking.

3) Spare change, not real change. Many companies don’t treat CSR as strategic–as a way to innovate, learn and develop high-impact solutions. Instead they think small, focus on input (not impact), and prefer the photo op at an announcement ceremony to the hard grind of solving big external problems. A company, for instance, may claim to seek improvement in disadvantaged schools and start a program to donate used books and leftover computers–hardly a way to reduce educational disparities.

4) Arms-length approaches. A consumer goods company with a product that could improve general health wanted to contribute it to low-income areas in developing nations. It announced it as a CSR initiative with photos of the government officials who supported this, only to find that there were few users, and the initiative flopped due to suspicion of outsiders. The company had assumed that elites speak for the people. They had failed to have direct, personal relationships with community members.

5) Going it alone. Some companies want CSR to be just as proprietary as their product patents, or they want to own the brand, as though they could be the only green company or the only one bringing science to schools. But lack of cooperation and a failure to partner means dramatically limiting impact. If it takes a village to raise a child, it takes a coalition to address environmental problems or change the education system.

In one failed case, a company whose manufacturing process consumed a high proportion of a region’s water supply couldn’t fix the supply problem by itself, but instead of finding common cause with other companies and community stakeholders for joint problem-solving action, executives lobbied politicians for exemptions from water use limits. In contrast, a tech giant interested in accelerating education reform to find more talent convened its rivals to create joint commitments, with each contributing unique capabilities to cross-sector partnerships for change.

Smart companies drive social and environmental responsibility throughout the whole organization through mission consistency and a long-term focus on outcomes rather than immediate costs. They foster shared goals that unite and engage diverse parties.

They seek real change by sticking with difficult challenges and regularly engaging with the constituencies and communities that are stakeholders in the change. And they see themselves as part of an ecosystem, working collaboratively with partners who can combine efforts to ensure that business has a positive impact on solving the world’s most intractable problems.

Source: Wall Street Journal