May 30, 2012 2 Comments
In the 1987 film “The Secret of My Success”, Michael J Fox (MJF) plays a recent business graduate who, as a result of a plot conceit, has to work in the mail room of the company where his uncle is the CEO (a position attained only by marrying the founder’s daughter). Realising from the mail room that many decisions being made by the executives are not in the company’s best interests, MJF decides to infiltrate the business, masquerading as a newly hired junior executive in order steer the company back towards good health. This not only requires him to change between blue collar and white collar outfits several times per day, but also leads to him being seduced by his aunt (not blood related), as well as falling in love with a colleague who, it turns out, is also his uncle’s mistress. Hilarity ensues and eventually, with the help of the aunt, control of the company is wrested from the naughty philandering uncle and his band of self-serving executives, with MJF and the uncle’s mistress living happily ever after together.
I tell this story because I believe it to be amusingly analogous of the way in which CSR initiatives work within big corporations today. The CSR function is often put in place by the executive in order to placate an irritating relative (such as government, regulations, or public opinion), and is seen as a non-essential inconvenience that should be kept out of sight in the back office. In order to make any impact from the back office, the CSR function must infiltrate the business’s core in as many guises as it can manage, building relationships with units that do not understand the value of CSR, often by demonstrating avenues for efficiency or competitive advantage delivered through CSR initiatives. At the same time, it must fulfill its obligations to “deliver mail” (comply with regulation). Any love affairs that CSR does enjoy within the business (for instance in securing corporate time being made available to employees wishing to help with company-supported causes) are always at risk of being broken off if someone gets jealous of the liaison (such as an executive tasked with increasing productivity or lowering costs of production).
Life in the CSR department is tough: companies do not hand over decision-making to those responsible for environmental or social governance and sustainability. Plenty of companies follow Milton Friedman’s view on the role of CSR (as in, it doesn’t have one). But there are some companies that entrench sustainability into their core values and allow these to direct the business from day to day, month to month and year to year. In such companies, love affairs between many different partners are encouraged and, more often than not, profit flows from them.
The interesting question is, why do companies still succeed from a business perspective (profit creation) when they take decisions that are not based on business cases? In the interests of clarity, by this I mean to ask why a company such as Patagonia, for instance, that insisted on moving to use only organic cotton (and actually created an organic cotton market by doing so) finds that its sales of organic cotton products increase over old traditional cotton products, even though the reason for the switch was solely one of water conservation and fertilser use reduction? Is it that the pursuit of solutions to problems arising from a company’s values results in more risky, innovative but ultimately competitive products and services? Or perhaps these decisions are being taken prima facie in the name of values, but behind the corporate facade they remain firmly rooted in the bottom line?
I’m new to the 6Heads blog – a current MSc student at Imperial College having recently embarked on my research project. For the time being (every piece of literature read infuriatingly reveals a new potential angle from which to approach the project) the research is aimed at discovering whether placing sustainability values at the core of the business can deliver “happily ever after”, where a business is able to deliver beneficial products and services to society whilst not causing environmental damage, delivering real social value, and remaining profitable.
Is the secret of sustainable success to ground sustainability in values rather than profits?
I’ll let you know whether or not that 1987 film is ready for an update!