Value vs. Cost; Why CSR is more important now then ever before

Two weeks ago I was let go from a company I have worked at for the past several years. In and of itself, this is not newsworthy; in fact, it is barely a footnote in the context of the large economic turmoil facing many across the country and around the world. So, other then my own personal reasons, why blog about it? Well, my job at said company was to direct its corporate social responsibility and communications function, a role that was deemed expendable when the economic conditions worsened. This is the issue at hand, and the one that I wish to discuss. When did company’s lose site of value in their attempts to reduce costs, and is this a short term problem destined to rebound with the economy, or is it more indicative of the work yet to be done by those of us who ply their trade in the areas of value creation as opposed to revenue creation?

It is my humble opinion that the decision to reduce costs by cutting positions that produce value but not revenue is misguided and short term in its thinking and will only lead to problems in the future. Corporate Responsibility, Corporate Citizenship, Sustainability, Environmental Compliance, these are not areas that should be seen as expendable; the first to be cut when times get bad, these are the roles that should be seen as vital, untouchable and of even greater importance in tough times because of their ability to ensure the longevity of the business and protect not only license to operate, but more importantly corporate reputation and employee morale. What happens when you have eliminated the person who manages community engagement when you then have a problem with a local community? How do you address the cost benefit of the reduction in costs when you lay off an environmental manager versus the costs of an environmental violation? The value of these positions becomes most apparent when they are no longer there.

Today’s corporate leaders have to begin to understand that their greatest asset is their reputation, at the corporate level, at the brand level and just as importantly, at the local, community or stakeholder level. Those of us who protect that reputation or more importantly play a role in building it, should be seen as being just as important to the success of a company as those who produce product, move product or sell product. This is the essential debate; as one set of jobs is based on value creation, something intangible and difficult to measure and the other produces revenue, something visible, easily quantified and directly related to the bottom line. However, both are important and both have a substantial impact on that company’s ultimate success.

The essential challenge in today’s economic climate is for business leaders to see past their spreadsheets and develop an understanding of the intangibles associated with those who build long-term and lasting value for that company. These roles should be celebrated and supported, especially in downtimes, because of their ability to ensure the longevity of a business or a brand.

I hope that the work being done to integrate CSR, Sustainability and other roles like these into the corporate ethos will lead to a better understanding of their value and greater support for those who manage those roles in the future.

 

The Evolution and Importance of Engagement

Facebook, Twitter, Linkedin, Digg, Delicious, My Space… 

Blogs, Posts, Tweets…

Are you confused? If you are then you need to catch up, because the world has changed and the driver is the emergence of real time communications tools that allow individuals, and yes, company’s, to rapidly engage both employees and stakeholders in a way that has never existed before.

In today’s face paced world, where the smart phone is not an oxymoron and text messages are more popular then emails (yes, that is true), smart company’s must find way to harness the tools at their disposal and use them to communicate both internally and externally. This means that in addition to working with traditional media and using the more basic communication tools of the past, new Social Media strategies should be introduced and combined with direct engagement efforts to increase the effectiveness of your engagement efforts, both with employees and stakeholders.

Let’s start with employees. Today’s employee spends a great deal of time in front of a computer or working on a blackberry, pda or cell phone. These employees are your most important voices, and they now have the ability to post, on a wide range of websites, comments, tweets, or blogs about your company. Nothing can be more impactful, in either a positive or negative way, as the ongoing dialogue driven by your own employees when talking about their views of their employer. Believe it because people are not just posting, they are also reading and making decisions about how they feel, and who they trust based on what is being said. For company’s that rely on maintaining a positive corporate reputation or who require a social license to operate, this flow of information can prove to be a deciding factor in when pursuing permit approvals or gaining the trust of a local community.

Smart company’s can harness this energy and make the most of the opportunity by first, doing good, and second, by having a smart strategy that both encourages employee use of these tools while providing the employees with reasons to say the right things. This means supporting your employees and engaging them, giving them chance to volunteer in the community, providing employee giving programs, and yes, supporting those efforts by, as the company, putting both your money and your executive muscle where you mouth is.

As for stakeholders, the day of the print newspaper being the primary source of news is past. Today news is transmitted in real-time via the internet, email, and text message and readers are looking for different kinds of news stories. They are hungry for local media and will seek it out using the interactive and incredibly effective tools at their disposal Googleing has become an art and as stated by Monte Lutz, SVP for Digital Media at Edelman Public affairs, the site is more then just a search agent it is a reputation agent. What comes up when your business is searched is as important what you put out. Consequently, smart company’s now need to be watching local blogs, tracking posts and engaging and using online media (both paid and unpaid) to ensure that they are registering in the right way when searched and effectively getting the messages they want out in real time to the audiences who the company is trying reach. No longer does simply drafting and sending press release out effectively achieve your corporate communications goals. In today’s electronic world, it is more about headlines, taglines and placement.

Yes, the world has changed and effective engagement now depends on the development and deployment of smart and effective strategies that harness the online and social media tools that are becoming the keys to message development and communication. Get on board before the ship leaves port without you!

 

The Value of Corporate Responsibility

Over the course of the past few weeks I have had to confront differing views over the value of CSR and who the proper audience should be for community engagement.  This caused me to really review my own thinking and to look for the best way to communicate a clear and concise viewpoint on this issue, particularly in the building materials and construction industry.  Here is what I came up with…

 

The construction materials industry is dependent on the consent of the public to do business. When that consent breaks down companies seldom survive.  Opposition can come in many forms, ranging from individual citizens lobbying local politicians to campaigns waged by civic or non-governmental organizations whose purpose is to make the business environment impossible for a company or an industry.  When a company has engendered such opposition, and is reliant on local support to maintain license to operate, it is often too late to effectively fight back and the results can linger for many years.

 

It is therefore essential for smart companies to engage the public, to provide transparency in their business operations, and to be conscience of the concerns, complaints or perceptions of local residents and communities. The evolution of Corporate Social Responsibility and Corporate Citizenship has taken this into account by suggesting that it is vital to business success to look past the regulatory and work on issues such and corporate reputation and community engagement. These efforts can take many forms, including corporate giving, stakeholder dialogue, providing access to facilities, local, regional or national partnerships and encouraging your employees to volunteer time in the community.

 

The challenge of CSR is in its lack of a standard set of metrics enabling hard evaluation of the resulting outcomes.  Suffice it to say, it is easier to measure the failure or lack of a successful program that to draw conclusive and quantifiable measurements of their success. 

 

It is important that CSR be married to a strong, and well structured regulatory, environmental and safety compliance program that focuses on the securing of the requisite permits allowing for continued operations. In a beneficial partnership, the CSR program can often provide the additional tools needed to push a permit application over the edge, while further establishing the company in a community and securing the license to operate for years to come. 

 

The company of the 21st Century is smart enough to realize that new methods are needed and that the introduction of the intranet, social media and an interactive press allow consumers and communities to drive business outcomes in ways that previously were impossible. The companies of this century will look to partner with the community, to integrate the hard and measurable functions such as regulatory relations with the softer less quantifiable efforts and in doing so will create a means of both securing that precious license to operate while improving customer and vendor relations, enhancing corporate reputation, establishing a strong brand identity and even increasing revenue.

 

In the end, I believe that the lesson to be learned is that CSR is still an under defined and often misunderstood concept and those of us working in this field need to be prepared to spend as much time providing validation of our efforts internally, as we do on solving problems or developing programs and initiatives externally.

 

Can Concrete Really Be Green?

I am often confronted with the same question when traveling in the Green Building Community, can concrete really be green, how can you claim you are selling Green Building Materials?

Well, while the point is actually well taken – as an employee of a producer of building materials, the answer to those questions may actually surprise people.

Concrete, which consists of sand, stone, water and cement, is by definition a material manufactured from the raw resources extracted from the earth. However, while much is made about the carbon intensity of cement, the grey powder only makes up about 10% of traditional concrete by volume. The majority of the “ingredients” in making concrete are basic and producing the concrete does not require a great deal of energy or power. Additionally, because concrete has a rapid setting time of 90 minutes before it is no longer usable, concrete is by definition a local material.

But is it green? That answer is best found in the evolutions in concrete manufacturing and in its fundamental uses. As stated earlier, 10% of concrete is cement, which is an extremely carbon intensive product. However, it is possible to significantly reduce cement content and replace it with recycled post industrial products like Fly Ash (produced from burning coal) and Slag (produced from manufacturing steel). Both of these products are recycled into concrete thus offsetting the amount of cement that is needed in the mix, and thus the amount of cement manufactured, which reduces both the carbon content of concrete and the overall C02 released from cement production.

Additionally, concrete can help secure a wide range of points in the Leadership in Energy and Environmental Design (LEED) Rating System produced by the US Green Building Council.

Because of its lighter color, concrete helps reduce heat island effects and can also improve insulation reducing heating and cooling costs. It can help to secure points associated with the use of recycled content and, as stated earlier, is a locally produced material.

The production of pervious concrete, or concrete that allows water to pass through it, enables the product be particularly useful in reducing storm water runoff and mitigating the effects of pollutants getting into water resources. New evolutions in pervious concrete have also provided a means of capturing water as it drains which can then be recycled as grey water reducing the burdens on potable water supplies. All of these uses also can help secure LEED points as well.

Finally, concrete is a durable and lasting material and when used in construction is likely to outlast other materials used for similar purposes meaning that buildings, homes or other edifices will last longer and reduce the need for demolition and new construction.

So in conclusion, is concrete green? The answer is that while it will never be a revolutionary green product, it has numerous green attributes and can significantly aid in the construction of green or sustainable structures.

 

How do we define Corproate Responsibility

This question was raised as part of a discussion on Linkedin. I find it to be an extremely relevant and timely question and wanted to post my answer as I have been thinking quite a bit about this of late…

I think that this should prove an interesting discussion. The challenge is that CSR is still an evolving concept and therefore does not really have a static definition beyond that it refers to a corporation acting responsibly. At our company we have defined it as; “our commitment to work as partners with all our stakeholders to effectively improve the quality of life of the members of our workforce, their families, and the communities around our operations.”

Additionally we have classified certain areas as falling within that definition to provide greater clarity in implementation, those areas include community and stakeholder engagement, sustainable development, green building and ethical employment and operations (i.e. sustainable supply chains, employee well being, etc).

The interesting thing is that I believe the definition of CSR (In the United States) is going through another evolution as we speak. Historically it has been something that was pro-active in nature, the result of companies actively seeking to set themselves apart from competitors and in a few cases the result of truly altruistic minded management (Patagonia, SC Johnson…).

Today I am seeing a shift to a more reactive brand of CSR that is based more on corporate  citizenship and the fact that consumers and stakeholders have lost faith in the corporation as an agent of change and thus are demanding that business be more responsible as a precursor to purchasing goods from them or doing business with them.

This could push more companies into the CSR arena as a matter of necessity while still allowing for those businesses who have been operating in the CSR space for some time to establish some separation by virtue of their corporate reputation and their experience. It also may suggest that businesses who wish to be seen as leaders in CSR need to identify new programs or projects to keep that at the forefront.

This becomes the challenge of those of us who are directing or leading CSR for companies and, in my opinion, will be the dominant force in CSR over the next several years.