When company strategists scratch their heads over what new products would appeal to which target markets, the 1.2 billion people around the world who lack access to clean water are, in all probability, seldom top of mind.
But they are the primary market for new branded product from major household/personal care manufacturer Procter & Gamble. It’s small sachet capable of transforming bucket of contaminated water into something clean and drinkable. UK visitor David Grayson has several of these sachets in his pocket, not because he’s worried about New Zealand’s water supply but because it’s good example of what he was recently here to talk about – corporate social opportunity (CSO).
Co-author of recently published book on the topic (*Corporate Social Opportunity: 7 steps to make corporate social responsibility work for your business), Grayson wants more exciting, entrepreneurial frame around the “socially responsible” side of business. And he’s touched nerve.
“Many people like the emphasis on opportunity – which isn’t really surprising,” he says. “Those who go into business want to make difference and they are, by and large, entrepreneurial. The more you can link social responsibility back to creativity, innovation and can-do attitude, the greater the chance of embedding it inside the business purpose and strategy and not simply as bolt-on to business operations.”
His book’s promotion material suggests: “Don’t be misled by the word social – this is book about how to improve corporate performance and gain competitive example.” It is stacked with examples of how the CSO approach can “fuel the engine of business growth” and contributes to social, environmental and sustainable development.
P&G’s water purifying venture was, says the company, built on an “economic business model” rather than philanthropy because it is more sustainable that way. There is an incentive for everyone in the value chain to distribute it widely.
Grayson thinks achieving that has some implications for management training. In Brazil, for instance, P&G sends its bright young brand managers to work in street markets for couple of weeks to become familiar with how distribution systems work in less-developed communities.
And Avis Rentals in the United States has tapped into an $8 billion market by modifying vehicles to cater for the disabled, while delivery company FedEx worked with Environment Defence on hybrid electric delivery truck that reduces pollution and halves fuel costs.
ABN Amro’s Brazilian operation has invited Friends of the Earth to train its loan managers in social and environment risk, raising their motivation and productivity while attracting new customers.
Grayson believes mutually beneficial liaisons with non-government organisations (NGOs) will increase as companies explore innovative new ways to succeed financially and as socially responsible corporate. The option should be factored into general scenario planning when interpreting how trends will impact business, its markets, customers and employees, he says.
“I don’t think corporate social reponsibility (CSR) should be separate thing – it’s very much part of the horizon scanning that’s done in relation to customers or employees. What kinds of employees do we want, what sort of business will they be attracted to? What do our business customers care about? What are far-sighted investors asking about CO2 emissions? These are trends that sensible managers ought to be talking about as part of their job.”
Grayson’s book suggests that while CSR has become more mainstream preoccupation, its adoption is still largely driven by the fear factor and need to minimise risks rather than embrace new possibilities. This may be perfectly valid and sensible approach, but it tends to make CSR “must-do” rather than “want-to-do” option which can limit its potential, put focus on cost rather than value and prompt companies to see it more as an add-on activity rather than an integral part of business operation.
“The point we make is that risk minimisation is not the sort of base on which businesses are built. Risks are only one trigger for adopting CSR. The danger of overemphasising that approach is that it doesn’t encourage mindset focused on finding new opportunities,” says Grayson.
The book details seven-step analytical process for how CSR implications can be considered and factored into business strategy. Identifying ‘triggers’ that could impact business is the first step. These include global forces for change or changing stakeholder (customers, employees, investors) expectations and reflect shifts in areas such as values, demography or communications technology.
Step two involves “scoping what matters” (identifying and ranking potential business strategies).
Step three makes the “business case”, step four is “committing to action” and step five is about “integration and resources” – the procedures that help turn ideas and aspirations into operational reality. The last two steps involve “engaging stakeholders” and “measuring and reporting”.
Each chapter is generously illustrated and the second part of the book provides worked example of how the seven steps can be actioned. It is detailed, practical and reflects Grayson’s long-term involvement with business development. He is director of Business in the Community, chairs the UK Small Business Consortium and is founder principal of the world’s first virtual “corporate university” for small business development professionals.
He believes most innovation springs from small business and predicts an entrepreneurial approach to CSO will flourish in the next few years. “I passionately believe that the creativity of business at its best will be one of the important routes to solving some of the really difficult issues we face. That’s why I’m keen to get this mindset going.”
*Corporate Social Opportunity: 7 steps to make corporate responsibility work for your business; authors David Grayson and Adrian Hodges, Greenleaf Publishing 2004 www.greenleaf-publishing.com
