CRISIS? WHAT CRISIS? Monetizing and Measuring CR Programmes
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Loading ...by Robert Barnard-Weston, 2008
So, once again, we’re in an economic downturn. After almost twenty years in Corporate Responsibility (CR), I’ve seen several of these already and they always seem to trigger the same response among corporate leaders. Those who are not doing anything decisive in CR tend to defer any plans they may have had while they wait for the economic climate to improve. Those who are already doing something have a habit of curtailing their CR activities or cancelling them altogether.
What this clearly demonstrates is that CR is seen by most as a luxury, a ‘nice to have’ element of their corporate tactics. It is a cost that cannot be justified when the economic going gets tough, since it doesn’t yield a worthwhile return on investment (ROI).
There are two very important issues here that corporate leaders ignore at their peril:
1. Under company law in most industrialised countries, a prime requirement of senior executives is that they provide maximum returns for their investors. Therefore, those who have been operating CR programmes while knowing ROI was shaky or non-existent have been breaking the law.
2. CR programmes, appropriately designed, implemented and managed, can be extremely powerful and reliable profit and shareholder value boosters. Astonishingly, very few business leaders seem to realise this.
So, the conclusions from these facts, particularly in an economic downturn, are clear: if your CR programme is not commercially successful, end it now or make changes so that it becomes commercially successful. If you don’t have a CR programme, now is a very good time to launch one if it can add profits and shareholder value.
There are three essential, inter-related disciplines required to make CR improve your financial numbers:
a. appropriate CR strategy
b. integrated communication
c. dedicated measurement systems
An Appropriate CR Strategy is one that is aligned completely with the overarching corporate strategy. It does not require (indeed, it should avoid) trite vision statements and homilies from the Chairman at the front of the Annual Report. It requires a clear understanding of precisely what the organisation exists to achieve and careful articulation for all stakeholders of what CR can contribute to that achievement.
Integrated CR Communication differs from most communication programmes that we have seen in that it combines several core characteristics:
· It brings to bear both interpersonal and artefact-based communications
· It makes full use of both internal and external communications
· It is dialogue-based, not monologue-based
· It is iterative – building over time to achieve metamorphic performances
All four of these criteria must be met for integrated CR communications systems to deliver their benefits. When they do, the results can be staggering in their potency.
A Dedicated CR Measurement System provides a means of bringing together tangible and intangible benefits, quantitative and qualitative analysis, into a cohesive, easily understood picture which shows clearly the financial benefits that a CR programme has activated.
For the system to deliver optimal results, all three of the above disciplines need to be deployed simultaneously in a ‘tuned whole’. CR strategy alone tends to be seen as empty promises, lacking substance; CR communications without strategy and measurement is meaningless; and the best measurement systems are of no use if there’s nothing to measure.
The ‘tuned whole’ that results from appropriate design and delivery of an integrated CR strategy, communication and measurement system can be likened to a highly trained athlete. The athlete needs to be laser-focused on the goal in mind: no amount of fitness wins the gold medal if you veer away from the racetrack. All the body’s organs need to be in the best of health – if any one of them fails, the whole system goes down – and dialogue between the heart, the lungs and the other organs needs to fast, accurate and complete. Finally, we need to know when we’ve achieved our goals – for every event, there’s a finishing line at a carefully measured distance from the starting blocks.
Pass that finishing line first and you win gold for everyone concerned.
The author, Robert Weston lives with in Bath, England. He has been a CSR consultant, writer, speaker and facilitator for fifteen years. He holds degrees in Philosophy and in Responsibility and Business Practice; he has also co-launched the UK farmers’ markets movement, Bath’s first eco-hotel and five children. His clients include a wide range of high-profile corporations, along with numerous NGOs, government departments, national governments and supragovernmental organisations.
You can e-mail him at: robert@organismics.org or call him on +44 7074 661166
You can write to him at the following address:
Bloomfield House,
146, Bloomfield Road,
Bath. BA2 2AS, UK
I take issue with the contention: “Under company law in most industrialised countries, a prime requirement of senior executives is that they provide maximum returns for their investors. Therefore, those who have been operating CR programmes while knowing ROI was shaky or non-existent have been breaking the law.”
The first statement is indisputable, if sometimes qualified by local circumstances. But the conclusion given does not follow.
If in the face of shaky ROI we’ve maintained our marketing program, or training program, have we broken the law? If not, then why would continuing our CR activities be doing so?
The missing modifier is “inappropriate (or unjustifiable?)” programs, which could indeed be seen to be in violation of the law — not because they are CR-related, but because they are cutting into shareholder returns.
My concern is that the original argument can contribute to a misunderstanding of CR’s role. That role is decidedly bottom-line driven by virtue of its elusive objective: sustainability.
For isn’t it a given that any project will return more over fifty years than over five?
Dear Alex, your thoughts are appreciated (it’s good to know we’re not speaking into a vacuum!). I think we’re actually in agreement in more ways than are immediately apparent, however. As you rightly say, most worthwhile iniatives pay back far more in fifty years than in five. However, as I say in my opening paragraphs, the hold of corporate leaders on CSR is generally a rather limp grip - if it doesn’t fly in five minutes, it’s dropped. The root of the problem is short-term thinking. And of course, the definition of ‘appropriate’ or ‘worthwhile’ would tend, in our book, to include a long-term thinking element. Am I right in thinking that longer-term thinking is more prevalent in Asian cultures genrally than in the West? I’d be fascinated to see a comparison. I did a lot of work on global CSR benchmarking some time back and this characteristic did seem to be more evident in the East. If so, I hope you guys can take a lead and demonstrate the value of grasping CSR firmly and for the long-haul, in order to demonstrate some real, sustained, ROI performance. Best wishes, Robert