Some years back, Deborah Doane wrote a hard-hitting article about the “myth of CSR”. In it, she argued that CSR was a reaction rather than an action; that it was essentially a collective response to uprisings against the behaviours and morals of corporate institutions and that it had been encouraged by an historically weak NGO sector as a way to bring about change.
Her concerns mirror many that I have independently raised.
Trade-offs made between profit and ethics in CSR programmes seem often to err in favour of the finances, betraying what has seemed an irreconcilable gap between what’s good for the world and what’s good for business. (I was quite taken with an idea quoted from Marjorie Kelly that “It is inaccurate to speak of stockholders as investors, for more truthfully they are extractors.”)
While stated concern by consumers over ethical matters is high, actual commitment remains low.
I don’t see any evidence that that has changed since the Stanford article was published. Ethical behaviour is now very much an expectation on the part of consumers. There is little moral high ground (in the sense that such behaviours are consistently and abundantly rewarded), only the status of non-low ground if you like – that a company’s social responsibility behaviours are acceptable and therefore the brand is not financially punished. Consumers want companies to be good but are not prepared to pay more for them to be so. They are however prepared to use ethics as a filter for their choice set – to rule a particular brand in or out.
No surprise either that far from encouraging competition to demonstrate best ethical practice, there has been an unhealthy emphasis on compliance. As Doane observes, “companies often fail to uphold voluntary standards of behavior in developing countries, arguing instead that they operate within the law of the countries in which they are working.” In other words, the behaviour dials have been set to minimum rather than maximum.
Doane continues, “At some point, we should be asking ourselves whether or not we’ve in fact been spending our efforts promoting a strategy that is more likely to lead to business as usual, rather than tackling the fundamental problems. Other strategies — from direct regulation of corporate behavior, to a more radical overhaul of the corporate institution, may be more likely to deliver the outcomes we seek.”
Should you regulate responsibility?
That I struggle with – because to me, such strategies risk replacing one form of compliance that hasn’t worked with another form of even more heavy-handed compliance that could be equally ineffectual. Regulation encourages discipline – absolutely – but I’m not sure it fosters innovation. Equally, I’m unconvinced that changes in governance are the answer (although they could prove an important incentive, but only if and when the “extractors” are prepared to stop demanding short term gains.)
I do agree though that CSR has promoted business as usual, or perhaps more to the point, compliance as usual. But I also think CSR has proven a non-answer partly because we’ve been asking the wrong question. The question that continues to be asked of brands is “what are you doing to do good in the world?”, which naturally prompts the response “this much” and/or “as much as the next guy”.
Changing the returns
What would happen, I wonder, if we linked responsibility and creativity? What if we made it a way for the world’s biggest brands to tackle, solve and profit from the world’s biggest problems? I don’t mean that at all in an exploitative sense. In other words, what if we tied responsibility not to “do-good” compliance but rather to big-bang competitive difference? And what if the responsibility element of that wasn’t about inventing an answer that was monopolistically priced, but, on the contrary, was about an insistence on globally scaled, volume-focused answers that everyone could afford?
In other words, what if we took Chris Trimble and Vijay Govindarajan’s wonderful concept of “reverse innovation” and made that the focus of the next era of responsibility? Then companies wouldn’t boast to their investors about what something cost, but rather what their expertise, innovative prowess and commitment to responsibility meant the innovation didn’t cost. And the global uptake that resulted would ensure investors got the returns they were looking for.
That would also generate a very different and quite disruptive question for responsibility going forward – one based on responsible leadership rather than a fading corporate social responsibility model: What is the biggest problem in the world that your brand is in the best position to (affordably) solve?
Now that really would be something worth reporting on.
