I have on several occasions discussed the shortcoming of having a systems only approach to CSR. There is no doubt that systems are one of the major ways that companies and organizations alike tries to navigate the troubled waters of CSR and to some extent they have been successful in their endeavor. However, only relying on systems will not make your organization more ethical or create new markets that you can explore. I have been working with organizational management systems for the past 15 years and I have never seen innovation or improved reputation, because I had a better management system then all the others in my field of business. So what do systems do?
- Systems are for management not for leadership. Systems will give you a good idea about what is going on in your organization. For many big companies it can be quite a problem to find out what is really going on, a well designed system will give you the data you need to manage your business in an effective way. It will not, however, lead your business in the direction you want it to go, this is a task you will have to do yourself.
- Data is God. One of the best things about systems is that they provide you will massive amounts of data. When I started in the systems world we just wanted as much data as possible about all the different processes we were engaged in. Today the main purpose seems to be to limit the flow of information and figuring out what is really important in order for management to take some form of well founded decisions.
- Managers are rational. One of the miss perceptions is that top management will rely on what the system tells them and take decision based on the factual information received. The fact is that most systems will not give you one or just two options to choose from. Rather they will give you more options than you had when you started out. So when managers take decision they do so based on what the systems tell them, in what direction they think the company should go, Company politics and their gut feeling. 2 +2 or not necessarily equal to 4 in the world of business rather it will be the exception.
- Systems are different. I have done both internal and external systems, and believe me there are big difference in how they are used. If one uses a management system like ISO9000 one will soon discover that it does not provide the detail needed in order to micro manage all your business requirements. While ISO is a very good system it works best on the strategic and tactical level (they will most certainly disagree with me on this point) but when it comes to looking at what people actually do do it becomes to general and difficult to work with. So what most organization do is to invent their own system that can be used to micro manage and improve all the sub-processes. This does not mean that one have several independent systems working out of sync. It just means that every organization is different and when applying a system approach one will find that in order to make things work one need a multi-level approach.
- Systems can be a requirement. Some systems are used for actually managing the business while other is more for show. Some will be formulated as requirements from your suppliers or the customers that your business deals with. A lot of companies screen their suppliers in order to find out who to deal with. Most commonly one will screen for systems that will ensure supplier quality such as ISO9000 or equivalent. A requirement may also come from investors so that you need to live up to UN PRI or FTSE4Good screen criteria in order to be eligible for investments.
- Systems can reduce risk. As I have outlined are systems really good a providing data. Recently have systems also been used to provide data that supports the business CSR efforts. As systems tell you what is “really” going on you can use that data to find out if there are thing going on, that could be labeled as unethical (if you have a good system it should keep you out of illegal activities). So if you know what is going on, you can also react upon the information and do the “right thing”. Many companies get in trouble because they do not use the information that their system provides them with.
There is a tendency within the group of CSR professionals to rely to heavily on systems because that is what they think management understands. Also, in most cases systems is a way of managing the scares resources in the CSR department which might be one or half a person. However, systems are only half the story about business driven CSR and the idea about “doing well by doing good”. Leadership and strategic thinking, not systems in themselves, needs to be the motors in any business endeavor and not least the organization CRS effort.