A Critique of Pure Reason – Business forgot how to listen

Immanuel Kant Deutsch: Immanuel Kant

Immanuel Kant Deutsch: Immanuel Kant (Photo credit: Wikipedia)

Kant said; “Enlightenment is man’s leaving his self-caused immaturity. Immaturity is the incapacity to use one’s intelligence without the guidance of another. Such immaturity is self-caused if it is not caused by lack of intelligence, but by lack of determination and courage to use one’s intelligence without being guided by another. Sapere Aude! Have the courage to use your own intelligence! is therefore the motto of the enlightenment…” (Critique of Pure Reason)

But it would seem that Business did not learn that listening meant one had to listen to somebody else than the ones that represent the status quo.

What happened when it became common sense and a taken for granted thinking, that any business venture claiming to be socially responsible had to have a direct link to the bottom-line? As a keen follower of CSR and developments within business ethics it seems that the discourse of Corporate Social Responsibility have steered of course and to some extend have fall down a cliff.

CSR was about (I thought) making a difference to society not because it made good business sense, but because it was the right thing to do. Now it seems to be the other way around. Even though I to a large extend blame Porter and Kramer for their so-called “shared value” they only tap into a discourse, which already existed in the mainstream business culture. That “there is one and only one social responsibility of business – to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud “(Thanks, Friedman for making it clear). That in order to be a legitimate in business one had first of all to think of the bottom-line, that even though business might disclaim Freidman’s claim they continue to follow his credo. CSR have become a business opportunity rather than change in they way that business relate to the society and communities that they are a integrated part of.

It seems to me that companies that pursue profit in the name of CSR are trying to stand on both sides of the river. Claiming that they have not left their liberal roots, while at the same time trying desperately to convince their more critical stakeholders that they are continuing down the path of rightness.

However, at the core of CSR is the ability to see beyond narrow self-interest looking beyond profit seeking and towards doing the right thing rather than doing things right. I do not claim that any business will be any more successful, or that they will even have a better brand or see an increase in dedicated employees. What my argument is that in order to really and I do mean really, know ones business environment one have to be open, open in a way that puts aside narrow interests of division leaders and executive managers and beyond one owns business raison d’etre. Individual business leaders have to realise that their actions cannot only be guided by the search of “the business case” they will have to use their intelligence to incorporate the guidance of the people who is affected by their decisions.

Social media CSR myths – Crap in Crap out

Image representing Facebook as depicted in Cru...

Image via CrunchBase

It would seem that there should be a natural match between social media like Facebook, Twitter, Digg, etc. and the voluntary engagement with stakeholders that is subscribed by most CSR professionals and academics. However, there might be a natural match but between the two in theory it seems that there is a long way to go when it comes to practice.

In my mind there are several things that goes wrong for social media practitioners when it comes to CSR communication.

First, practitioners fall in two categories. One is what I call old school communication people who looks at Social media as a channel that brings new possibilities to get the message through. They properly have a good understanding of the ins and outs of the CSR practiced in the organisation but they are limited by a marketing mind-set. The second category relative young people who understands the media and have been brought up with social media as a natural way to stay in touch with friends and family. However, they might not understand the organisations CSR in depth, its nuances and the challenges that come with having a much broader stakeholder outlook.

Second, social media driven by the users are a myth. Until this date I have not heard of a social media effort from a private or public organisations have a significant proportion of its contents provided by the organisation itself. Think about it, even though you are a member of a really great and interesting organisation would you spend all your time there? Properly not. But amazingly a lot of companies think that if they set up a social media platform and feed it with commercial, lobbyism briefs and sneak previews of their products people will happily engage and provide contents for their sites.

In reality most “successful” social media campaigns have been planned, driven and controlled by the organisations that benefited from the exposure, and users have been invited to participate only to support the already constructed message. There is no negotiation or co-construction of contents. There is no possibility to let the better argument win or possibility to provide alternative messages. The organisation or a professional communication bureau controls everything in the effort from A to Z and users are only puppets that can be played from a string.

When it comes to CSR communication this provides a real dilemma as transparency and engagement is central to our understanding of a truly socially responsible company. So what “normally” happens is that in order not to be perceived as manipulative organisations leave it the users to provide information and debate, which in the end make the whole social media effort a failure because people just don’t provide contents by themselves. Basically organisations are planning to fail in their social media CSR communication.

Third myth is that Social media is cheap. Who is your social media resource? If you are lucky you have half a person who is in charge of all the platforms available a daunting task of he or she is to provide a large proportion of the contents for the sites. However, organisations think that the majority of work is going to be done by the users and therefor do not provide any resources. Just like having a newspaper and only employing the editor, so to speak. If you want to do something serious about your online stakeholder engagement you need to allocate the resources needed in order to make it work. I have heard many business people who complain that that their social media activities are a failure, but when I ask what kind of resources has put into it, it is no surprise that they are not able to harvest the benefits. “Crap in Crap out” seem to be the prevailing model as with everything else in life.

People can be ethical organizations can’t

From time to time the discussion of ethics arises in the CSR debate. We would like to think that CSR is a way for organisations to conform to the norms of society and what is expected from companies in terms of behaviour. But can you really directly link ethics with CSR ?

First of all, I would like to make my position clear on what I think of ethics and its relation to organisational behaviour. People can be ethical in the way that they can distinguish between what is good and what is bad or at least most people can do so. That can make a fairly good decision on the consequences of their actions in most cultures around the world even though they have never been there before. There will of cause be differences from region to region based on cultural norms, religion, politics etc. but it would be fair to say that all cultures would not accept murder, theft, or other forms of harmful behaviour towards people.

Secondly, organisations are made up of people but this does not mean that the sum of their ethics can describe the decision making process that it goes through. Rather an organisation lets say a company, will develop it own rational for make decisions. In this case it can be profits as the raison d’etre is to make a profit for its owners, it is what one could call a fundamental condition of being a firm. So even though people might bring ethics in to their workplace it will be overruled by the condition that they have to make a profit.

This it where it becomes interesting because what CSR is trying to do is to make the organisation receptive to other conditions or the ethics of other stakeholders. Remember that stakeholders can be other organisations as well as individuals that have a stake in the actions of the firm. These stakeholders might have other raison d’etre than the firm such as reduction pollution or creating better work conditions. They might not regard profit as a very noble goal at all or they might even think that the whole concept of profit before people is an unethical condition. But with CSR the two create a platform from which that can communicate in a meaning full way. As one can not talk to an organisation like wit people so what is needed is the creation of a language that both parties can think of as meaningful and as a way that it can express its ethics through. In terms of CSR this language have become expressed through the use of systems.

CSR systems are in my mind the codification of ethics that enable organisations and stakeholders to communicate with each other in a meaningful way. With my almost 15 years around different management systems I have come to believe that the only way an organisation is effectively able to communicate with it self or with its surroundings is though the use of systems. Mind you I have used the word effectively as individual are able to communicate outside the management system but it will always less effective in relation to reaching organisational goals. Codification means that the organisation negotiate and in some cases just accept the norms which a stakeholder present. F.eks. is the ten principle in the Global Compact a codification which a large proportion of firms are willing to accept and subscribe to. Or a firm can subscribe to the code in SA8000 that communicate to stakeholders that this organisation is upholding the Human Rights, Rights of Children and ILO declarations and conventions. This does not mean that individuals can make mistakes and break the rules or that decisions can be made which are poor or bad, but like “people” this is what is to be expected.

So back to the question if you can directly link ethics to CSR. If one accept the sentence that; “people can be ethical but organisations can’t”. Then one needs to invent some form of bridge between the two that gives meaning, but at the same time accept the conditions that each must function under. For people this means the ability to distinguish between good and bad, and for organisations their raison d’etre eg. Profit (firm), knowledge (education), helping the poor (NGO?), survival (the poor), etc. Bringing these two together is done through the use of systems that enable toe codes from one stakeholder to be understood and acted upon by the other. This bridge or translation systems is continuously negotiated between the parties involved based on their individual understanding of what is good. So can you directly link ethics and CSR? Well yes if you accept that CSR is a coding system for effective communication between stakeholders that would otherwise not understand each other.

CSR and Development Corporation meets

Can development and CSR really meet or are they at odds no matter what you do? I have met many people from the development world who are really aggressive towards CSR and just about everything it stands for. And while I will be the first to admit that CSR is far from a perfect approach for business towards its social responsibilities it is just about the best guess out there on how its done.

So why all this hostility and aggressiveness towards business having a social responsibility, is it not what we all want that business take on more of the social burden that governments cant handle by their own?

Here are some common denominators on what people in development think is wrong with CSR.

  1. It is a branding and communication exercise that has nothing to do with social responsibility.

Well it is true that a lot of companies are actively communicating their CSR activities and that for some of the major companies CSR has become part of the image that we have of the company. For one I think the Abraham Lincoln (attributed) quote “You can fool all the people some of the time and some of the people all the time but you cannot fool all the people all the time” rings true. All communication people know that you can’t lie forever and the same goes for corporate communication. If there were no hint of truth to in the brand it would at some point be exposed as a fake.

  1. It is only exercised to reduce the risk of bad PR.

There is a strong risk element in CSR because it is the only business approach that has some success in confronting social risk. Actually risk management have been one of the primary “business cases” for CSR. But risk is not limited to PR alone it can be many different things that has nothing to do with creating a good or bad image of the organisation. Proper risk management take a holistic approach to the organisation and so does CSR. With this approach on gets an insight into operations of the state, which under normal circumstances would be left out or marginalised.

  1. It is seen as a neoliberal project that is out to exploit the developing world

There seem to be the perception that business somehow has feelings that guide them to do evil. But as far as I know there is no evidence that companies in themselves are either good or evil, they are as far as I know just companies working in a market. But with the market there are structures and mechanisms that can be harmful. The companies might or might not be aware that their actions have a counterproductive result or even harm people who are in contact with its operations. CSR is an effort to confront some of theses impacts in a constructive and systematic way rather than tackling them one by one as they arise.

  1. It will be gone in three years.

The same thing was said three years ago and CSR is still around. In the years I have been involved in CSR there have been shifts in focus from reporting, to communication to governance. At some point either one have been the prevailing issues that have been talked about. I’m convinced that CSR will be around for many years to come because it works from the basic principle that organisations have a responsibility towards its stakeholders. This basic premise have been true always and that we call it CSR is more a construction of the time we live in rather than a shift in basic assumptions about business and society.

I hope and think that CSR professionals and development people can meet on common ground and that the two have something to learn from each other. But there is a strong need to confront some of the stereotypical assumptions about how business operates and how development people think.

Where there is smoke there must be fire – EU CSR policy measurement for success.

In my short series n the new EU CSR regulation I have come to the subject of EU CSR performance. Within the document there are a list of success stories highlighting what have been achieved since the last revision in 2006. The focus is on the normative institutions, which have been established and that companies have started to adhered to (on a voluntary basis of cause).

According to the CSR policy there have been significant progress in the commitment to sustainability issues from companies in the EU.

“The number of EU enterprises that have signed up to the ten CSR principles of the United Nations Global Compact has risen from 600 in 2006 to over 1900 in 2011.”

While it is nice that the number of companies and organisations who are participating the UN global compact is rising it is hardly to be a considered a success factor in itself. Of cause it depends on your perspective and what you believe that CSR should be about but basically the commitment to UN Global compact is not a set of actions it is rather a communication about a future action that you might or might not take.

Last year around 2000 organisations were thrown out of the GC because they were unable to produce a communication on progress (COP) whish is the document that you commit yourself to produce when signing up. It is a common mistake that one screen for signing up for the GC rather than to look for the COP, which at least give some basic verifiable data to look at.

The EU regards the “promise to commit” tangible proof that companies are committing themselves to the CSR cause on a bigger scale. And to the true believer this might be enough proof that CSR is really working, that organisations and companies are participating whole heartily in the movement. While this would be nice there are also some who suggest that companies participate not for the good of the world but because it reduces the risks it is subjected to and that CSR is a novel way to market your brand and your products.

So when the EU promotes the signing of different normative standards as a success indicator for CSR it is only one side of the truth. It would seem that the EU uses the criteria “where there is smoke there is fire” as a measurement for success.

Getting to the early adaptor using IMC – Strategies for implementing CSR

When trying to implement any kind of new innovation within an organisation or in a social context it is not without importance how and with what tools this is done. With CSR or Business ethics it is even more important because it is hard if not impossible to remove or erase what has already been done. What is important is that you get the ethics of your business into the DNA of your organisation, as Wayne Visser would put it. While this might not seem a like an enormous task it is not as complicated as it might seem. It might take a while for it to sink in but if you keep it simple and stay close to your strategy at hand you will get there eventually.

First of all one needs a holistic but structured approach. What you need to do is to answer the What, Why and How and When of your organisational CSR. This is not to say that this is a simple four step model or the only way of finding out what is important but it makes sense to establish a clear platform from were your business ethics can be expressed.

You need to define what is important to your organisation. If you are consulting company it might make much sense for your organisations members to talk about carbon footprint even though it is a very ‘hot’-subject in the CSR community. What might make more sense is to talk about how you see your relationship with the customer, how far will you go in coaching them, and at what point will it be important to say stop or escalate a issue to your management. If you are a designer it might be important to look into the people who produce your cloth. Are their any child labour and what about women’s rights in the factories that produce your unique designs? It is the ‘What’ is important to my company, and to me that should be in focus not what is the hot issue in the news or what the marketing department tells you will sell.

When you have made it clear what you stand for you need to investigate why these issues are important to You and not somebody else. It might seem trivial but if you can’t answer why something is important it will be really hard to persuade your employees, management, customers and suppliers why change is such a great idea. There is no one-size-fits-all on the Why of CSR and Business ethics. You might have personal reasons why this issue is important or it might be part of the collective memory of your organisation the central issue is that it is an ethical issue that you feel strongly about. This dos not mean that you should be blind for other would be subjects out there, but if you are going to build you business on ethical grounds than it should at least have a strong foundation and answering the Why will help you do just that.

What you have looked at the What and Why you turn to How. You have gathered some thought on how you are going to interpret the issues, which are important to you into some kind of guideline for the whole organisation. The How can have many forms it can be codes of conduct or code or ethics or it can be less visible as part of the standard operating procedures that you ask everybody to follow. In my experience the later is the better because it directly influences human behaviour, but one as an organisation you might have to make a clear statement both inside and outside its boundaries and then a code could be a good option. Both because it create a clear statement to your employees and management on what is acceptable behaviour but also because it tells your external stakeholders and not least your customers what you stand for.

Last one in the initial exercise is to plan the When and this is where you need to think about your early adaptors. You now know your What, Why and How of your organisational ethics now you need to let your invention grow. You know that your idea about the ethics of your organisation is founded in its DNA and the idea behind and know that it is rooted in your product and cultural heritage.  This means that you need to identify who you want to communicate with and find an appropriate channel that will enable you to reach these people.

However, you need to communicate the same message to all stakeholders not only the ones that you want to adopt your innovation. As you only have one opportunity to communicate your message and reach the people who will act as agents for change you have to use all the channels at your disposal. Integrated Marketing Communication is concept that is designed to make all aspects of marketing and internal communication such as advertising, publications, sales promotion, public relations, issues management, media relations, direct marketing and not least CSR to work together as one unified and powerful force, rather than permitting each to work in isolation. The combination of marketing and public relations tools lets an organisation influence for instance the image, public reputation and employee attitudes through the consistence and persistence of a few powerful messages.

“[IMC] is a process which involves the management and organization of all ”agents” in the analysis, planning, implementation and control of all marketing communication contacts, media, messages and promotional tools focused at selected target audiences in such a way as to derive the greatest enhancement and coherence of marketing communication effort in achieving predetermined product and marketing communication objectives.” (joep Cornelissen, 2008 among others)

The selected audience in this case is your agents of change. So even though all members of your audience will have the information at hand about what you are communicating it is the agent who is in your mind when you design your message. He or she properly already known to you or at least your vision of such a person, he is competent both as a person but also as a technician. It is a respected person who has their own values but is loyal giving the person credibility among his peers. It is a person who lives for the future and is willing to take a limited risk in trying something new her or his fuel is passion and the willingness and ability to transform a vision into something more tangible (such as your vision for a ethical business platform). It is a self-starter and motivator that do need fuel to run but ones started will interpret your vision and make it his or her own.

One of the main features about the change agent is that it does not have to be a employee it can be a customer who likes your product and buys in to your corporate culture and want to be evolved. It can be a supplier who sees the long-term benefit of a close relationship with your organisation or a junior member of your staff who buys into your idea. The innovation can get hold anywhere where there is a change agent present who displays the features that you are looking for.

Next week I will try to have a go at how you can use different types of communication channels including social media to get your change agent motivated and not least engaged in your strategic CSR efforts.

7 Issues that CSR needs to address if it is to be accepted by the mainstream business community

There are some hard questions that CSR needs to give real answers to in the coming years. As time goes it is become harder and harder to change any poor practices which are already becoming embedded in governance processes around the world.

  1. There is a lack of definition of CSR. We can’t measure what we cant define and CSR is not a exception in the past I have touched upon this issue as every year seem to come up with a new way of defining CSR normally because some new interest group have tried to make their mark.
  2. CSR have rapidly become another part of the ever-growing Public Relations industry. As CSR is a none-definable concept is has become the task of the communication specialists to come up with answers to questions raised be the corporate stakeholders. If we are to develop CSR in any meaningful context both in the terms of business development and in relation to sustainability in a wider context we need to focus on the activities of CSR rather than the branding of an organisation or product to a very narrow stakeholder group.
  3. Thanks to Porter and Kramer CSR is by many business people being synonymous with strategic philanthropy. Basically giving money away in the belief that in the long term they will return to the company in the form of customers and increased sales. With this very narrow view of the concept is it of cause to activate the whole Business-to-Business part of business. Because there is no real incentive for engagement in strategic philanthropy when you do not have any involvement with “real” customers.
  4. CSR needs to address the neoliberal argument that CSR is “giving the owners money away” if it is to gain any real footing in a broader sense. In many ways this is already happening as the concept have teamed up with ethics and corporate governance, strongly supported by several high-profile corporate scandals, which have highlighted the need for better governance. If CSR is to succeed it need to outlive it-self. This might seem an odd thing to say but if companies and organisations are going to be truly socially responsible they need not to think about whether a decision is good or bad in the context of social or ethical ground but it as to be part of how the organisations DNA. How it thinks, believe and communicate about and to all its stakeholders.
  5. CSR needs to be though in a global context and not just something for that is part of the developing world. In more and more cases CSR is being used as means to keep developing countries out of developed countries economies. As trade-barriers are being lowered on a global scale new forms of barriers are being raised in the form of standards and systems, which companies and not the countries have to abide by. This forms a second semi-legal layer, which is hard to enforce by any objective party and even harder to efficiently to govern. This is a form of governmentality, which is outside the normal control of individual governments, but is superimposed on countries economics by multinational corporations in the effort to live up to some ethical guidelines they themselves have invented. While e might argue that in part of the world there are weak governments were corporations needs to impose rules, which are above local law it is a dangerous path which the professionals and academics of working in the field needs to address.
  6. The issue ever elusive Business case for CSR also needs to be confronted. In my experience and I believe that this is also shown in scientific surveys is something profitable because business wants it to be so. Just having a webpage and a annual report that describes a series of activities is just not good enough. If managers want to make a profit of their CSR activities they need to focus on the things that matter. How do one think that telecommunication for bottom of the pyramid customers became a reality or the widespread acceptance of the business model of microfinance came to be? It is because it was directly linked to a clear need and ability of the company to do well by doing good and not some philanthropic endeavour which was more or less linked to the core business. If a company wants to make CSR profitable it need to use it resources to make it so and not leave it to the Marketing, Human Resource or Communication department to construct a more or less proven business case.
  7. Law or self-regulation? Is rapidly becoming a concern that both companies and the governments need to address. Should be let companies become so powerful that they can dictate democratic governments way of governing their countries or should we let intergovernmental institutions like the UN, EU or OECD decide? And can these institutions even enforce any legislation they might come up with? These are central issues, which will require some careful thinking. On one side we are unable to effectively govern social, environmental and governance issues on a global scale on the other side we are reluctant to just leave it to capitalism and a neoliberal dogma to solve things out. Some institutional proponents argue that we should have interstate regulations on these central issues of corporate governance. Maybe even a global tax system, but it would seem to be just another layer of inefficiency, which is both bureaucracy and unmanageable.