CalBusiness

 

Winter 2009

Power of Ideas

Aligning Corporate Social Responsibility with Business Objectives

Kellie McElhaney's new book shares lessons from her work with the world's largest companies

 

By Pamela Tom


After helping more than 150 companies develop corporate social responsibility (CSR) strategies, Kellie McElhaney, founder of the Haas Center for Responsible Business, decided to encapsulate her advice in a new book, Just Good Business: The Strategic Guide To Aligning Corporate Responsibility and Brand (Berrett-Koehler Publishers, November 2008).


In a recent interview with CalBusiness, McElhaney shared some highlights from her book.


You believed writing this book was important. Why?


It was time for a book not just about developing effective strategies, but about teaching companies how to talk about their CSR story.


Fifteen years ago we never heard of “corporate responsibility.” What does it mean today?


A strategy that is aligned with companies’ core competencies and helps solve some of the world’s most intractable problems.


How does a company strategically implement CSR?


An example in the book is the partnership between eBay and World of Good, started by Priya Haji, a Haas graduate (MBA 03). World of Good brings artwork from Haiti or necklaces from Africa to buyers in the developed world, paying a fair wage to the product’s producer. eBay decided to sell the products after realizing one of its objectives is to create new markets. We tend to think the person in Africa should benefit first and eBay shouldn’t benefit at all. My premise is the company has to benefit because that’s how the company exists.


You talk about seven principles for developing an effective CSR strategy.


First, know your company. Take eBay. What are its objectives besides growth or increasing sales? eBay was experiencing over 80 percent employee turnover. Their CSR strategy needed to address the fact they’re only going to grow so much if they didn’t solve the problem of retaining employees. Creating new markets answered both objectives.


The second rule is determining core competencies. eBay was focused on climate change but is not a heavy environmental carbon user or emitter. They needed a better fit. Pick a cause for which you actually own part of the solution.


The third principle is be consistent. Stick with a strategy for multiple years. Communicate consistently. One example of a company that didn’t follow that strategy is Nike. Nike’s advertising is fierce and edgy. However, around their supply chain or corporate responsibility, they use a different set of brand attributes: soft, smiling people.


The fourth principle is “simplify.” Nobody reads 90-page CSR reports. Pedigree has a partnership with the SPCA around pet adoption, and their message is brilliantly simple: “Help us help dogs.”


Working from the inside out is the fifth rule. Companies tend to communicate externally first. Dow employees had no idea about a water purification system created by their company for the developing world. Dow could have 156,000 brand ambassadors by talking about it internally first.


The sixth rule is know your customer. For most companies, women control upwards of 80 percent of the purse strings, and they are much more likely to purchase a product if they know that a percentage of that profit is earmarked toward a cause they care about. Customers between the age of 8 and 28 are also incredibly cause-focused.


The last CSR rule comes back to telling a story. I begin each chapter with a company story. We work in a business school around numbers and facts. Research suggests stories trump facts ten times out of ten.


How do you measure success?


Pick three good metrics: measure the company, the society, and the employees. For example, eBay measured growth, employee satisfaction, and the economic development of the artists.


Can you give us another example?


HP (Hewlett-Packard) was in India, where crop blight could destroy an entire food source. HP developed a solar-powered digital camera. Farmers could take a picture of the blighted leaf, go to a village kiosk set up by HP, and send a picture of the leaf to the UC Davis Botany Lab. Scientists could look at the leaf and say, “Too much alkaline in your soil. Here’s how you treat it.” The farmer could treat the crop and save people’s lives.


How do you think your book will influence your students?


This generation is going to carry us ahead in a much more sustainable fashion. They understand the power companies have on creating a better world.

 

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