I enjoy following Reason & its Editor in Chief, Nick Gillespie. I often agree with and appreciate their takes and observations.
Reason’s Slogan: “Free Minds & Free Markets”
And while it hammers the obvious point that an unprofitable business can serve no one in the long run, a recent Gillespie piece published by Time misses a critical aspect of CSR (corporate social responsibility).
Editorial’s Title: “Dear Apple and Chipotle: It’s Hard To Be Socially Responsible When You’re Dead” (story here)
Apple, Chipotle, Virgin, Whole Foods, Starbucks, Patagonia, Cisco, and thousands of other companies regularly make public statements and operational decisions based on CSR, which is based on the idea that a company should not exclusively serve the interests of its shareholders, but rather consider the interests of all its stakeholders – those affected by its operations. Here are some recent CSR reports.
What Gillespie Misses: CSR is neither charity nor philanthropy.
There are no convincing arguments against Gillespie’s primary point – a company that fails to produce profit can serve no mission and no person because it will die. What’s missed, though, is that CSR is marketing. CSR is smart operations. CSR is good business when aligned with overall corporate strategy.
Policies and practices that consider and mitigate harmful effects on people and places are attractive. Like a person, a company that’s basically decent, good, fair, reasonable, and perhaps even empathetic is more attractive than one that’s selfish, myopic, boorish, and bullying.
When given a choice, decent people will choose to connect with what’s right, what’s good, what’s inspired, and what’s inspiring (and sometimes what’s greenwashed). Customers and employees can be recruited and retained in part by behavior that can be described as responsible. This is especially true of Gen Y / Millenials, who are more motivated by “making meaning, not just making money” (more).
Such policies and practices also reduce exposure to lawsuits (think: Dow Chemical), negative press (think: Nike sweatshops and Apple suicides), and regulatory change (think Bisphenol A elimination).
Corporate social responsibility is not about giving in to unreasonable demands and rolling over in the face of objection. It’s not about giveaways that are at odds with your strategic interests. It’s about listening, considering, and improving. It’s about producing outcomes in a way that is more sustainable.
CSR can enhance profitability by both increasing revenues and decreasing costs, especially in the long term.
I recognize that this post is relatively anecdotal in that I didn’t exhaustively research it and dropped in just a few examples along the way. The point, though, still holds. Yes?
Related: The Service Profit Chain (You Can’t Downsize Your Way To Success)
You May Also Like: Michael Porter’s Social Progress Index
