What it takes to be a good corporate citizen

It's easy for big companies to inspire by producing social impact, write Stephen Bediako and Lord Victor Adebowale.

Who do you trust more – your hairdresser, doctor or boss? This year’s Mori Veracity Poll again shows the public’s trust in business leaders lagging far behind that of other professions.

It’s perhaps not surprising. In the decade since the banking crisis, the British public have seen their own wages stagnate, while CEO’s pay packets continue to swell; big business names like Sir Philip Green dragged down by scandal; and the gap between the richest of our society and everyone else get bigger and bigger.

It’s not the whole story of course, but you can see a lot of that anger being expressed in the Brexit vote and last year’s election of President Trump. It’s fuelling resentment and division – North versus South, Remainers versus Leavers, Them and Us.

As a result, business leaders are increasingly being seen as not ‘one of us’, divorced from the experiences of the men and women who buy their products and services.

It’s a worrying, self-defeating precedent, particularly when there are a growing number of successful and enlightened UK businesses and business leaders to celebrate and, dare we say it, export. John Lewis springs to mind – collectively owned by its staff, recognised for quality and customer satisfaction, and driving a deep rooted approach to being a corporate citizen.

So, what should business do to dig itself out of its ever deepening public relations hole? It’s probably easier to start with what businesses shouldn’t do, which is ignore the trend and carry on as before expecting a different result – Einstein’s very definition of insanity.

Neither should it defend itself by banging on about wealth creation, when the real issue is wealth accumulation. Similarly, attempting to avoid blame and bury bad news at a time when public exposure is only a screen swipe or click away would be foolish.

It’s time for something new. Businesses need to become the corporate citizens their consumers want and need them to be. The steps you take to do that aren’t difficult, but they do require commitment, and a recognition of the bigger picture beyond huge profits and happy shareholders.

 

Think long and hard

First, plan for the long term and think hard about why you are here. As the great leadership expert Jim Rohn said: “Face the direction you want to go”.

In recent months, we’ve seen the public in the US, and elsewhere, challenge high-profile companies about their role in society, and how they brand and position themselves against a fast-changing social backdrop.

The Co-op is another example of an organisation which has created more space for social impact alongside its pursuit of shareholder value. Co-op has eight million members, and anyone who joins gets 5% off their shopping and 1% goes to a charity or good cause of their choice.

Despite recent challenges, with over 70,000 staff and a £10.5 billion turnover, they are a truly cooperative social enterprise business. Current data indicates that they will be distributing as much as the National Lottery in less than five years time (the lottery spends over £500m a year).

Nike is also a great case study of how to respond to social pressure from consumers. The brand started out selling trainers, and recruiting successful athletes to make their products the must have shoe – even for those who never shot hoops or ran laps.

But in the 1990s, the company faced unrelenting criticism for labour abuses across its global supply chain. Initial efforts to change what had gone wrong were judged as ineffective, and it was only when Phil Knight, Nike’s founder, publically apologised and took concrete action to improve working conditions, boost environmental protections and enforce more transparent monitoring of the company’s approach and processes that it turned a corner in the public and campaigners’ minds.

Today, Nike is just as committed to being ahead of pack on these kinds of ethical business issues. More locally, Nike stores organise running workshops and sell trainers tailored to a diverse range of interests – not just reflecting, but also reaching out to support the different communities that buy their products. This is in stark contrast to some well-known UK sports retailers who continue to treat their staff in challenging ways.

 

Profit and social impact

Secondly, find the right balance between making a profit and the social impact of what you do. The goal here is to understand the impact you have, measuring it in the first place and then being smart about how you communicate it externally.

A number of corporates are starting to take this work more seriously than just producing a glossy report on corporate social responsibility once a year. In 2007, Marks and Spencer launched Plan A, its strategy to source responsibly, reduce waste and help communities – supporting the bigger business objective to be the world’s most sustainable retail supplier.

Plan A touches, and is intrinsic to every area of Marks and Spencer’s business, from stores right through to supply chain, and includes the M&S Community Energy Fund. This invests in renewable energy entrepreneurs up and down the country, and promotes community validation by using crowdfunding as a way of matching its investment.

 

Build a community of communities

Thirdly, remember that, outside of work, your employees and customers are all part of communities, contributing, engaging, learning, growing and enriching their lives and nurturing their families.

Making an active choice to help these diverse communities to thrive means you are not only building trust with existing employees/communities but you are building trust with their friends, family, and children (very likely the corporate’s talent pipeline of the future).

That could be helping them to think about how they acquire assets, social capital and community design experience – so they can be active citizens. Civic Hall in New York is pioneering this trend for New York, working with citizens and local businesses to shape solutions to community problems, and such civic-facing activity is growing around the world. The UK needs to embrace this trend.

 

Don't do this alone

Fourthly, involve your stakeholders in defining what it means for you to be a corporate citizen.

The Crowd (a leading networking, events, and thought leadership movement in the CSR sector) has been at the forefront of thinking about the concept of corporate citizenship for years. They recently facilitated a successful exercise for Sainsbury’s to engage stakeholders in how they develop their sustainability strategy, which has helped Sainsbury’s to strengthen these internal and external relationships.

The work of Crowdfunder UK and other funding platforms is also creating space and routes for corporates to involve their partners, consumers and others more closely in how they shape their positive social impact.

For example, organisations like Santander are spending hundreds of thousands of pounds via Crowdfunder UK to support new projects that help learning, social innovation and the like. The opportunity for corporates or government to match this crowdsourcing activity is immense.

Spacehive – another funding platform – has been working with the Greater London Authority (GLA) for the last few years renovating spaces in London, and the site CrowdJustice has helped raise funds for court cases including the recent Article 50 case.

 

Do good through good business

Finally, find ways and mechanisms to do good business. Even if you just allocate 1-2% of your budget every year to charitable courses, it could be worthwhile.

The work of RockCorps really speaks to how alignment between purpose and profit can be found. This exciting music and community volunteer outfit uses the simple concept of Give Get Given to create one-off concert events in cities with huge stars such as Rhianna or Lady Gaga.

Concertgoers secure a ticket to the event, through volunteering. The events are funded by corporates buying advertising and branding rights to the concert. The hook is that RockCorps sell this access as a form of pro-social marketing – traditional marketing, but via social means. This powerful principle could be amplified in multiple ways to realise the alignment of profit and purpose.

UK PLC might well be growing again, but very few are feeling the benefits. As we face tougher, more uncertain times ahead, this needs to change. Business needs to look beyond its initial needs and concerns, to embrace and help the communities on which its success relies.

It’s a big ask, but also your best bet of a brighter, more profitable future for all.

Stephen Bediako is founder and executive chairman of The Social Innovation Partnership, vice chairman of Chance UK, and a trustee of Project Oracle and Centre for London. Lord Victor Adebowale is CEO of Turning Point, and chair of Collaborate and Social Enterprise UK

This article was first published in Pioneers Post Quarterly #8. To see more of what was inside or to subscribe, click here.

Photo credit: Guido van Nispen