Tuesday, July 28, 2009

Why interest in Coorporate Social Responsibily (CSR) is growing.

In the early 1970s, I was a founding member of The Center for Quality of Working Life at UCLA. Our belief was that work that didn't develop people's potential and use their full capabilities was bad for the people involved, was bad for the performance of the business, and bad for society at large. We got a mixed reception at the time as these were new ideas to most executives. I remember making a presentation to the executives who were running Frito Lay in the late 1970s when I was working to improve how work was done at a plant of theirs in Casa Grande, Arizona. As I started to make a case for CSR, a group of vice presidents got up and left the room - which I took as not a particularly positive signal! Interviewed later on, it was clear they viewed any focus on social agendas as distractions from their main business goal which was making as much money as was legally possible.

However, much has changed in the intervening 30-years. Here are some factors that are driving widespread consideration of CSR today:

• Consumers & employees worldwide are demanding more corporate social responsibility.

- 92% of consumers have a more positive feeling for companies that visibly support good causes

- 87% say they would switch brands (price and quality being nearly equal) to ones associated with good causes.

- 80% of employees want to work for companies that directly contribute to society - but aren’t sure how to find them.

- 83% of employees say they’ll only trust companies that are environmentally / socially responsible.

Research from the Human Performance Institute shows that more than 50% of the workforce, including professional management, is presently not fully engaged. The most important source of disengagement is the lack of connection between people's work and their values; what they do and what they feel isn't properly aligned. Surveys of employees at major companies report that almost 80% don't believe in their company's brand promise.

This is why Corporate Social Responsibility has become a strategic imperative for organizations who seek to attract top talent. As a key employee commented to a colleague in a recent interview, "I want a job where I can save the world and still be home in time for dinner."

Baby Boomers (ages 50+) and Generation Y (ages 20-32) employees are substantially in agreement on the following issues:

- They want work that has meaning (86% - Y, 85% - Boomers)

- They want flexible working arrangements (89% - Y, 87% - Boomers)

- They want work that provides personal growth (88% - Y, 81% - Boomers)

- They want work that has a social connection (48% - Y, 45% - Boomers)

They also want employers that provide autonomy and opportunity, act in an environmentally responsible way, and in general, do well by doing good. In other words, the most attractive employees are attracted to companies like Nestle, who publish a yearly report on their progress toward Creating Shared Value. In the 2007 report, it states, "This is based on the simple truth that business and society are interdependent. As a profitable, responsible business, Nestlé respects people and the environment. We put long-term business development before short-term profit, with our investments bringing sustainable value for our business, our shareholders and society."

No comments: