Corporate social responsibility is by no means a new concept. It was debated back in the mid 1700s when Adam Smith authored The Wealth of Nations. The idea that a merchant could “trade for the public good" was a foreign concept to the father of modern economics and capitalism.
The debate lingered on, and in 1970 Milton Friedman wrote an article for The New York Times Magazine titled “The Social Responsibility of Business Is to Increase Its Profits.” His stern belief was that any executive who believed “business is not concerned 'merely' with profit but also with promoting desirable 'social' ends…[was] preaching pure and unadulterated socialism.”
In today's turbulent global economic environment, it would be easy for CEOs to buy into the beliefs of economic purists and focus solely on maximizing profits. But with all due respect to these great minds and countless others, they overlooked the value of CSR as an intangible asset and its impact on a company's corporate brand – ultimately affecting the bottom line. It's really not their fault. The proliferation of corporate information online and stakeholders' ability to compare and contrast companies, products, politicians, and virtually anything else was something they simply could not fathom in their time. However, today it is rare that an individual will make a large purchase without doing extensive research. And when all things are equal, it is the intangibles that can most dramatically impact purchasing and investing decisions.
There was a time not too long ago when corporate reputation and management credibility were an afterthought to corporate communications and investor relations programs. Today it has become a key differentiator in highly competitive markets. It has also become more of an imperative for companies to communicate the benefits of intangible asset to all stakeholders, including partners, customers, and employees. And on that note, it is important for employees to not only understand the value but want to participate as agents of social responsibility. Employees aligned with executive strategy relating to CSR will be more committed and engaged in the process.
Communications and internal marketing can drive increased participation if managed and executed effectively. It is important, particularly in a down market, to apply these four basic principles to increase engagement and ensure success: 1) Develop clear and concise messages that demonstrate the benefit to the philanthropic cause, the value it brings to the company's corporate reputation, and the impact on the employee as an individual; 2) Deliver the message consistently year-round and not just once a year during a charitably campaign (it has to become part of the company's DNA); 3) Create a means to measure the campaign's impact and communicate results to all stakeholders; and 4) encourage feedback from employees to ensure a sense of ownership and a deeper connection to the overall CSR strategy.
The collective group of agents within an organization can be socially responsible and together bring tremendous value to the brand and shareholder equity.
Ryan Barr is managing director of the IGB Group.