Quanta Corporate Citizenship Icebergs and Hippos 18/05/2010
Whilst in Europe and other countries close to the poles the expression ‘tip of the iceberg’ is well understood, in rural Africa, icebergs don’t come along very often, so you are more likely to find reference to the ‘hippo’s ears’ that peep out giving little indication of the size of the animal below the surface of the water.
Failing to understand cultural context means we often risk making rather costly mistakes.
There are examples across all sectors of how important it is to understand the world around us, and CSR is no exception. As Carrigan and De Pelsmacker pointed out in Will ethical consumers sustain their values in the global credit crunch?, different consumers around the world care about different issues. "Their moral values are socially and culturally constructed, and culture filters our perceptions of what is ethical or unethical consumption". In the same way, cultural context impacts on each of our key stakeholders, be it our staff, shareholders, suppliers, society at large or government.
The German foundation Bertelsmann-Stiftung recently published The CSR Navigator, reviewing CSR from a public policy perspective, and looking at how sharing of responsibility and co-operation with public and private sectors has been organised and institutionalised across different nations. Just by looking at the factors they selected for classification – global standards, customer expectations, human rights and domestic institutions and norms – we can begin to appreciate the diversity across many cultures.
Their findings showed that France, China and Poland, which all demonstrated little experience or success with informal approaches to co-operation, usually require more structure and direction when it came to CSR. The UK, Sweden and Germany, all countries that regard transparency as important and that are more prone to be egalitarian and good at managing change, clearly preferred partnering opportunities between business, NGOs and government. The likes of South Africa and Vietnam, both countries undergoing political and social transformation, seemed to prefer addressing one specific rationale and then adjust their entire CSR policy accordingly, using the full range of instruments available to them. Developing countries like Mozambique, made the most of CSR to closely address the key obstacles they were facing, namely building of trust in its governance.
The economic, political and social context each of these countries finds themselves in is shaped by their own unique histories and as such their approach to CSR will be different. Understanding this difference is what will be key to a global adoption of collective and collaborative responsibility, particularly as the ISO26000 standard creeps ever closer.
- Kim
Failing to understand cultural context means we often risk making rather costly mistakes.
There are examples across all sectors of how important it is to understand the world around us, and CSR is no exception. As Carrigan and De Pelsmacker pointed out in Will ethical consumers sustain their values in the global credit crunch?, different consumers around the world care about different issues. "Their moral values are socially and culturally constructed, and culture filters our perceptions of what is ethical or unethical consumption". In the same way, cultural context impacts on each of our key stakeholders, be it our staff, shareholders, suppliers, society at large or government.
The German foundation Bertelsmann-Stiftung recently published The CSR Navigator, reviewing CSR from a public policy perspective, and looking at how sharing of responsibility and co-operation with public and private sectors has been organised and institutionalised across different nations. Just by looking at the factors they selected for classification – global standards, customer expectations, human rights and domestic institutions and norms – we can begin to appreciate the diversity across many cultures.
Their findings showed that France, China and Poland, which all demonstrated little experience or success with informal approaches to co-operation, usually require more structure and direction when it came to CSR. The UK, Sweden and Germany, all countries that regard transparency as important and that are more prone to be egalitarian and good at managing change, clearly preferred partnering opportunities between business, NGOs and government. The likes of South Africa and Vietnam, both countries undergoing political and social transformation, seemed to prefer addressing one specific rationale and then adjust their entire CSR policy accordingly, using the full range of instruments available to them. Developing countries like Mozambique, made the most of CSR to closely address the key obstacles they were facing, namely building of trust in its governance.
The economic, political and social context each of these countries finds themselves in is shaped by their own unique histories and as such their approach to CSR will be different. Understanding this difference is what will be key to a global adoption of collective and collaborative responsibility, particularly as the ISO26000 standard creeps ever closer.
- Kim
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Jenna Jordan, from the University of Chicago, has written a very interesting paper called When Heads Roll: Assessing the Effectiveness of Leadership Decapitation.
She analysed 298 cases of leadership decapitation around the world from 1945 to 2004 in order to understand whether eliminating a leader results in the dissolution of their organisation. She also analysed whether eliminating the leader increases the likelihood of organisational collapse over time, and if it does not result in the group collapse, if it hinders its future progress.
According to her findings, “the data indicates that as an organisation becomes larger and older, decapitation is less likely to result in organisational collapse”. Furthermore, “it does not increase the likelihood of organisational collapse (…). The marginal utility for decapitation is actually negative. Groups that have not had their leaders targeted have a higher rate of decline than groups whose leaders have been removed”. To her third question, where she qualitatively analysed only three cases, the results are mixed.
Does it sound familiar? How many times have you seen an organisation – formal or informal – having its leader removed and the organisation getting stronger? How many times have you heard about stories where union leaders were fired, whistleblowers were put aside, environmental activists were put under pressure, and consumer groups were ignored and their causes only grew stronger? How many times have you read articles about a company where terrible or great CEOs were removed and their companies still carried on with dodgy or outstanding practices? How many religions do you know where the leader is prosecuted and the belief only grows stronger? Sounds like the common Hollywood movie script where the leader is removed but the cause – for better or for worse – is carried on by the followers.
By the way, I should have said before, her brilliant paper is not about firing CEOs. Her paper is about killing terrorists and other non-friendly leaders.
Accordingly to her findings, killing someone is simply not a good tactic. If anything, it generally makes the cause even stronger. Larger and older groups are particularly more resilient to the loss of their leaders. Furthermore, accordingly to her findings, religious groups are more resilient than ideological ones in terms of losing their leader. Contrary to the belief that “religious organisations are (…) more likely to have charismatic leaders who are essential to setting and maintaining organisational goals [and] according to theories of charismatic leadership these groups should be weakened by decapitation”, actually, removing leaders of religious groups often makes attacks fiercer and the group stronger.
If we link her results with our own quantitative analyses about the motivation driver behind people’s actions, we can infer that the major difference between ideological and religious groups is that, in the first, the followers are driven by the need to be accepted by a group while, in the second, they are driven by reward & punishment (in the case of religious terrorists, from their god).
The reason why I’m writing about a paper on terrorism in a CSR blog is that we see very similar patterns in the way organisations deal with their ‘enemies’ and some very relevant lessons they can learn from Jordan’s paper.
First, once you have a problem, deal with it. The sooner you solve it, the lower its impact on your bottom line. If you are faced with whistleblowers, intransigent union leaders or dissatisfied consumers, it is better to address the issue earlier on and try to bridge the relationship before things escalate. You don’t want a consumer writing a blockbusting song about how your company broke his guitar. Even if a compromise hits the profits now, it is likely to be much worse if you wait to deal with it later. Think about it as a decision making tree. Although you will certainly incur a cost now, it is much lower than the likely (although less certain) cost you will incur in the future not only to fix the relationship, but also to rebuild your damaged brand.
Second, do not transform your opponent into a martyr. Firing, sidestepping, muting or taking off the gloves will only increase the likelihood that your opponent will get greater attention and sympathy, and therefore create a more institutionalised cause that is much more difficult to change.
And, finally, if the situation has already escalated, understand what drives the followers. If it is a desire to be accepted by a peer group (often the case with staff), than removing a few key people is more likely to result in positive results than if it is a more external set of incentives and the followers actually have something to lose (or gain) if they pursue their cause (often the case with consumer and environmental groups).
- Gus
She analysed 298 cases of leadership decapitation around the world from 1945 to 2004 in order to understand whether eliminating a leader results in the dissolution of their organisation. She also analysed whether eliminating the leader increases the likelihood of organisational collapse over time, and if it does not result in the group collapse, if it hinders its future progress.
According to her findings, “the data indicates that as an organisation becomes larger and older, decapitation is less likely to result in organisational collapse”. Furthermore, “it does not increase the likelihood of organisational collapse (…). The marginal utility for decapitation is actually negative. Groups that have not had their leaders targeted have a higher rate of decline than groups whose leaders have been removed”. To her third question, where she qualitatively analysed only three cases, the results are mixed.
Does it sound familiar? How many times have you seen an organisation – formal or informal – having its leader removed and the organisation getting stronger? How many times have you heard about stories where union leaders were fired, whistleblowers were put aside, environmental activists were put under pressure, and consumer groups were ignored and their causes only grew stronger? How many times have you read articles about a company where terrible or great CEOs were removed and their companies still carried on with dodgy or outstanding practices? How many religions do you know where the leader is prosecuted and the belief only grows stronger? Sounds like the common Hollywood movie script where the leader is removed but the cause – for better or for worse – is carried on by the followers.
By the way, I should have said before, her brilliant paper is not about firing CEOs. Her paper is about killing terrorists and other non-friendly leaders.
Accordingly to her findings, killing someone is simply not a good tactic. If anything, it generally makes the cause even stronger. Larger and older groups are particularly more resilient to the loss of their leaders. Furthermore, accordingly to her findings, religious groups are more resilient than ideological ones in terms of losing their leader. Contrary to the belief that “religious organisations are (…) more likely to have charismatic leaders who are essential to setting and maintaining organisational goals [and] according to theories of charismatic leadership these groups should be weakened by decapitation”, actually, removing leaders of religious groups often makes attacks fiercer and the group stronger.
If we link her results with our own quantitative analyses about the motivation driver behind people’s actions, we can infer that the major difference between ideological and religious groups is that, in the first, the followers are driven by the need to be accepted by a group while, in the second, they are driven by reward & punishment (in the case of religious terrorists, from their god).
The reason why I’m writing about a paper on terrorism in a CSR blog is that we see very similar patterns in the way organisations deal with their ‘enemies’ and some very relevant lessons they can learn from Jordan’s paper.
First, once you have a problem, deal with it. The sooner you solve it, the lower its impact on your bottom line. If you are faced with whistleblowers, intransigent union leaders or dissatisfied consumers, it is better to address the issue earlier on and try to bridge the relationship before things escalate. You don’t want a consumer writing a blockbusting song about how your company broke his guitar. Even if a compromise hits the profits now, it is likely to be much worse if you wait to deal with it later. Think about it as a decision making tree. Although you will certainly incur a cost now, it is much lower than the likely (although less certain) cost you will incur in the future not only to fix the relationship, but also to rebuild your damaged brand.
Second, do not transform your opponent into a martyr. Firing, sidestepping, muting or taking off the gloves will only increase the likelihood that your opponent will get greater attention and sympathy, and therefore create a more institutionalised cause that is much more difficult to change.
And, finally, if the situation has already escalated, understand what drives the followers. If it is a desire to be accepted by a peer group (often the case with staff), than removing a few key people is more likely to result in positive results than if it is a more external set of incentives and the followers actually have something to lose (or gain) if they pursue their cause (often the case with consumer and environmental groups).
- Gus
Defining CSR Output, outcome and impact 11/05/2010
For companies, one of the most difficult (and frustrating) aspects of contributing to positive social, environmental and economic impact is finding realistic ways of measuring the difference their commitment make. To make things more difficult for them, in the midst of so many reporting procedures, there is often confusion and misuse of terminology when talking about the specifics of measurement.
Thankfully there are some simple ways to prevent getting lost in the myriad of terms, and our experience has shown us that the one companies find easier is to approach everything in a chronological way.
A programme that a company runs as part of its CSR will begin with aims and objectives. The aims of the work should clearly outline a change that is sought. From a strategic perspective, this is the most crucial step often skipped by companies. That usually takes between 5% and 15% of the whole project time, but without doing it, the whole project is aimless.
All too often aims run something along the lines of ‘our aim is to work with the local community’ or ‘improve employee engagement’ or ‘become a sustainable organisation’. Whilst the intention is well meaning, it misses out on the key aspect of an aim, which is about why the company is doing it and what kind of change the project intends to have.
We will often have an overarching aim that is backed up by one or a series of goals to contribute to the bigger picture. To set the objectives to these specific goals, a company needs to make sure there is a clear set of detailed activities.
A tip is to start by paying close attention to the language being used and combining it with specific changes and activities that will be delivered will make it easy for both internal and external stakeholders to understand.
When it comes to the measurement process itself, having clearly defined the aims, goals and specific objectives means the activity of the project should be clear. For example:
Thankfully there are some simple ways to prevent getting lost in the myriad of terms, and our experience has shown us that the one companies find easier is to approach everything in a chronological way.
A programme that a company runs as part of its CSR will begin with aims and objectives. The aims of the work should clearly outline a change that is sought. From a strategic perspective, this is the most crucial step often skipped by companies. That usually takes between 5% and 15% of the whole project time, but without doing it, the whole project is aimless.
All too often aims run something along the lines of ‘our aim is to work with the local community’ or ‘improve employee engagement’ or ‘become a sustainable organisation’. Whilst the intention is well meaning, it misses out on the key aspect of an aim, which is about why the company is doing it and what kind of change the project intends to have.
We will often have an overarching aim that is backed up by one or a series of goals to contribute to the bigger picture. To set the objectives to these specific goals, a company needs to make sure there is a clear set of detailed activities.
A tip is to start by paying close attention to the language being used and combining it with specific changes and activities that will be delivered will make it easy for both internal and external stakeholders to understand.
When it comes to the measurement process itself, having clearly defined the aims, goals and specific objectives means the activity of the project should be clear. For example:
- Aim: To reduce the spread of HIV in young people in Gauteng, South Africa so that we increase our employee engagement in the local factories by reducing turnover of staff as we increase their level of satisfaction for being associated with our brand and lower the infection rate in our future staff;
- A goal: To increase the acceptance of HIV as a disease by young people in Gauteng, educate them about methods of infection and the implications of being HIV positive;
- A specific objective: To perform plays in front of 5 thousand young people in Gauteng by December 2010 to educate them about the risks and consequences of infection.
The activity then quickly becomes about the delivery of enough plays to reach 5 thousand young people. The resource and action that needs to be taken becomes the ‘input’ of our measurement process: £20k to fund a co-ordinator, actors and materials to stage performances in 10 schools across the Gauteng district.
Once this work has been done, the output should, if the programme has gone according to plan, be the objective of the project expressed in the past tense. For example, ’Twenty plays performed by the students themselves were performed, educating the audience about the risks and consequences of HIV infection, were performed across 9 schools in the Gauteng district of South Africa reaching 5,500 students within three months at a cost of Rand 50k’.
At the output stage there is room for clarification around what was over or underachieved with the resources that were made available as the input directly affects the quality and level of output.
Where it begins to get interesting however, is beyond the stage of input and output.
Documenting these early stages amounts to reporting the activity that was planned and what actually happened, but the vast majority of CSR investments take place because companies are looking for a change. And this change is what is documented at the final two stages of outcome and impact.
Outcome and impact are often the most misused of all of the terms because they are difficult to get right.
The outcomes of our project are the changes or benefits that take place as a result of the project activities and relate to the goals we set. Our specific goal in our example was to increase the acceptance of HIV as a disease, improve knowledge about infection and living with HIV. This means our outcome indicators would demonstrate the change that has taken place in the number of young people as a result of this work. For example:
Before the performance of the play 4 in 10 young people did not believe HIV existed, 5 in 10 did not know how it was transmitted and 3 in 10 did not know what the implications were for living with HIV. The outcome of this project is that 9 in 10 young people now believe HIV to exist, 100% know how it can be transmitted and 100% understand the implications for living with HIV.
The importance of measuring the change in attitude is crucial to understanding the project’s outcomes.
Having said that, this change in attitude, whilst a goal of the project, was not the overall aim, which was to reduce the spread of HIV infection in young people, and it is when we measure against this overall aim that we find the impact of the project.
The measurement process for the project impact is entirely different, and generally takes place over a much longer timeframe and is much broader (in our example above, the analysis of outcomes can be done the same day as the play, or shortly afterwards).
Achieving an impact from this project would amount to being able to say that the number of young people in Gauteng who were infected with HIV fell from 30% in 2009 to 15% in 2010. A great impact assessment for this project would be to be able to say that it fell from 30% to 15%, out of which the statistical analysis (or any other sort of reliable evidence) showed that half of the fall was due to this specific project. Although daunting, this can be done through many different scientific methods (e.g., control groups, regression analysis etc), and normally is less difficult than most people think.
When you work backwards through the process, it becomes clear as to why it is so important to set clear, specific aims, goals and objectives right at the beginning of a programme and to make sure you have selected the best indicators (and only the best) for your project and have a system in place to monitor the input, output, outcomes and the impact. Unless you know the details of your projects you will never truly know the extent of your impact, let alone your outcomes or outputs.
- Kim
Once this work has been done, the output should, if the programme has gone according to plan, be the objective of the project expressed in the past tense. For example, ’Twenty plays performed by the students themselves were performed, educating the audience about the risks and consequences of HIV infection, were performed across 9 schools in the Gauteng district of South Africa reaching 5,500 students within three months at a cost of Rand 50k’.
At the output stage there is room for clarification around what was over or underachieved with the resources that were made available as the input directly affects the quality and level of output.
Where it begins to get interesting however, is beyond the stage of input and output.
Documenting these early stages amounts to reporting the activity that was planned and what actually happened, but the vast majority of CSR investments take place because companies are looking for a change. And this change is what is documented at the final two stages of outcome and impact.
Outcome and impact are often the most misused of all of the terms because they are difficult to get right.
The outcomes of our project are the changes or benefits that take place as a result of the project activities and relate to the goals we set. Our specific goal in our example was to increase the acceptance of HIV as a disease, improve knowledge about infection and living with HIV. This means our outcome indicators would demonstrate the change that has taken place in the number of young people as a result of this work. For example:
Before the performance of the play 4 in 10 young people did not believe HIV existed, 5 in 10 did not know how it was transmitted and 3 in 10 did not know what the implications were for living with HIV. The outcome of this project is that 9 in 10 young people now believe HIV to exist, 100% know how it can be transmitted and 100% understand the implications for living with HIV.
The importance of measuring the change in attitude is crucial to understanding the project’s outcomes.
Having said that, this change in attitude, whilst a goal of the project, was not the overall aim, which was to reduce the spread of HIV infection in young people, and it is when we measure against this overall aim that we find the impact of the project.
The measurement process for the project impact is entirely different, and generally takes place over a much longer timeframe and is much broader (in our example above, the analysis of outcomes can be done the same day as the play, or shortly afterwards).
Achieving an impact from this project would amount to being able to say that the number of young people in Gauteng who were infected with HIV fell from 30% in 2009 to 15% in 2010. A great impact assessment for this project would be to be able to say that it fell from 30% to 15%, out of which the statistical analysis (or any other sort of reliable evidence) showed that half of the fall was due to this specific project. Although daunting, this can be done through many different scientific methods (e.g., control groups, regression analysis etc), and normally is less difficult than most people think.
When you work backwards through the process, it becomes clear as to why it is so important to set clear, specific aims, goals and objectives right at the beginning of a programme and to make sure you have selected the best indicators (and only the best) for your project and have a system in place to monitor the input, output, outcomes and the impact. Unless you know the details of your projects you will never truly know the extent of your impact, let alone your outcomes or outputs.
- Kim
Measuring by legislation alone 07/05/2010
The Corporate Responsibility Coalition (CRC) published its findings last week on the impact the Companies Act has had on CSR reporting standards in the FTSE100, and some of their findings beg some reflection from all those involved in corporate citizenship. As we all know, the Companies Act (2006) requires all large publicly-listed companies to produce a business review to help inform shareholders how directors have performed their new statutory duty to promote the success of the company, having regard to a range of environmental and social factors, as well as on their supply chain impacts.
The CRC’s findings point towards a lack of consistency among some FTSE100 companies in their reporting. Accordingly to the CRC, 8% did not have an identifiable business review, 17% failed to reference environmental issues in their reviews and 8% failed to reference social issues.
While the CRC are now calling for change in legislation to clarify the way in which companies are expected to adhere to the law, it begs the question of where the responsibility should lie in measurement of corporate responsibility and whether legislation alone limits us to expectations of what we should achieve over what we could achieve.
The very nature of the term ‘corporate responsibility’ implies it is indeed the responsibility of companies to ensure they are keeping up standards and reporting processes to satisfy their stakeholders, which includes, among many others, the government and the civil society. The problem for many companies is that they are largely, if not completely, in the dark as to what their stakeholders expect in the arena of CSR. If that is a problem for several FSE100 companies this is an even greater problem for the 2.6 million companies in the UK alone who fall outside the scrutiny of the FTSE100 index.
Whilst the legislation that is in place acts as a set of minimum standards companies do have to comply with, the other expectation from the government is that ‘companies raise their performance beyond the minimum’ and that government itself encourages ‘the voluntary actions that business can take, over and above compliance with minimum legal requirements, to address both its own competitive interests and the interests of wider society’.
The difficulty with both of these quotes taken from the Department of Business, Innovation and Skills, is that they are vastly undefined and difficult to address without specifics.
So begins the age old debate about how strong the guidelines from the Government should be and how much should be left up to the company. Clarity from Government allows businesses to meet pass the legal threshold, but really knowing what is expected of you as a company is only possible if you ask the right questions and refuse to accept a vague response from all stakeholders. Government alone cannot guide a business to deliver on its social, environmental and economic ambitions. To do so would be to underutilise the sector and its potential for significant positive impact alongside its business success.
Listening to and understanding staff, customers and local communities begin to play just a few of the important roles in shaping the full CSR picture. Furthermore, clever CSR investment is a relevant competitive advantage. Our experience has been showing us that companies can use their CSR to engage their employees at lower costs, increase productivity at no further costs, gain spontaneous customer loyalty and word-of-mouth, attract investors and boost share values, attract positive media and high-calibre board members at lower costs, optimize their supply chain management, drastically reduce legal exposure and legal fees, etc. Companies that are simply ticking the legal boxes are wasting the opportunity to build their competitive advantage. Competitive advantage is, by definition, something that a company is doing or has that others don’t have or are not doing. And all companies, to remain in business, are already complying with the legal requirements. Competitive advantage is what lies beyond the legal requirements.
- Kim
The CRC’s findings point towards a lack of consistency among some FTSE100 companies in their reporting. Accordingly to the CRC, 8% did not have an identifiable business review, 17% failed to reference environmental issues in their reviews and 8% failed to reference social issues.
While the CRC are now calling for change in legislation to clarify the way in which companies are expected to adhere to the law, it begs the question of where the responsibility should lie in measurement of corporate responsibility and whether legislation alone limits us to expectations of what we should achieve over what we could achieve.
The very nature of the term ‘corporate responsibility’ implies it is indeed the responsibility of companies to ensure they are keeping up standards and reporting processes to satisfy their stakeholders, which includes, among many others, the government and the civil society. The problem for many companies is that they are largely, if not completely, in the dark as to what their stakeholders expect in the arena of CSR. If that is a problem for several FSE100 companies this is an even greater problem for the 2.6 million companies in the UK alone who fall outside the scrutiny of the FTSE100 index.
Whilst the legislation that is in place acts as a set of minimum standards companies do have to comply with, the other expectation from the government is that ‘companies raise their performance beyond the minimum’ and that government itself encourages ‘the voluntary actions that business can take, over and above compliance with minimum legal requirements, to address both its own competitive interests and the interests of wider society’.
The difficulty with both of these quotes taken from the Department of Business, Innovation and Skills, is that they are vastly undefined and difficult to address without specifics.
So begins the age old debate about how strong the guidelines from the Government should be and how much should be left up to the company. Clarity from Government allows businesses to meet pass the legal threshold, but really knowing what is expected of you as a company is only possible if you ask the right questions and refuse to accept a vague response from all stakeholders. Government alone cannot guide a business to deliver on its social, environmental and economic ambitions. To do so would be to underutilise the sector and its potential for significant positive impact alongside its business success.
Listening to and understanding staff, customers and local communities begin to play just a few of the important roles in shaping the full CSR picture. Furthermore, clever CSR investment is a relevant competitive advantage. Our experience has been showing us that companies can use their CSR to engage their employees at lower costs, increase productivity at no further costs, gain spontaneous customer loyalty and word-of-mouth, attract investors and boost share values, attract positive media and high-calibre board members at lower costs, optimize their supply chain management, drastically reduce legal exposure and legal fees, etc. Companies that are simply ticking the legal boxes are wasting the opportunity to build their competitive advantage. Competitive advantage is, by definition, something that a company is doing or has that others don’t have or are not doing. And all companies, to remain in business, are already complying with the legal requirements. Competitive advantage is what lies beyond the legal requirements.
- Kim
Scepticism, the elephant in the room 03/05/2010
The sceptic. We all know one. A friend of mine refuses to believe anything anyone says until he has had the chance to Google it. Another loves to taunt people with regular challenges of ‘where did you hear that?’. They are the friends and acquaintances that usually frustrate us to pieces. We all have these friends. Just when you get to the punch line in your story, so they pipe up with ‘prove it!’
Scepticism is rooted deep within the history of our civilisation and its proponents have been widely spread since the ancient Greeks formed philosophical groups, including the Pyrrhonists in the first century BC.
The great value in a sceptic, particularly from a scientific point of view, is that their role can be to suspend judgment until sufficient evidence demonstrates the validity of a claim. They are those who avoid what organisation sociologists call ‘group thinking’. This systematic approach leads you to work hard at producing enough evidence to back up your claims. So if the sceptic role is to doubt, then it becomes your job to clearly present enough evidence to overcome any objections they may have.
It is an important lesson for those companies investing in CSR. When we don’t demonstrate clearly enough the amount of work we are doing in and around social, environmental, health or economic impact through our businesses, we leave ourselves open to the criticisms of the sceptics. It is why the measurement and testing of a company's work are so important. Objectivity overcomes objections. But how many of us can really say we know everything we should about the good impact we have as businesses? How many of us are taking the time to really measure our work?
And there is a challenge for the sceptics too, though. This comes in making sure they are not taking the role of the pseudo-sceptic. In 1987, Marcello Truzzi, then a professor of sociology in the the New Florida College, wrote about pseudo-scepticism:
“In science, the burden of proof falls upon the claimant; and the more extraordinary a claim, the heavier is the burden of proof demanded. The true sceptic takes an agnostic position, one that says the claim is not proved rather than disproved. He asserts that the claimant has not borne the burden of proof and that science must continue to build its cognitive map of reality without incorporating the extraordinary claim as a new ‘fact’. Since the true sceptic does not assert a claim, he has no burden to prove anything. He just goes on using the established theories of ‘conventional science’ as usual. But if a critic asserts that there is evidence for disproof, that he has a negative hypothesis—saying, for instance, that a seeming psi result was actually due to an artifact—he is making a claim and therefore also has to bear a burden of proof”.
The sceptics in and around corporate social responsibility abound. Companies face challenges from within and from external stakeholders. There are the individuals and organisations who will always refuse to believe a company is ever capable of more than greenwashing or investing in cause-related marketing. But, at Truzzi put it, these sceptics need to be aware that their claims, in their own right, also need backing up with evidence.
But, equally important for both companies claiming, and individuals and organisations counterclaiming impacts of CSR commitments, is to understand what the relevance of their claims and counterclaims are. Often organisations are dragged into debates that are not relevant to them. Trying to prove something that is not relevant just for the sake of winning an argument is simply a waste of time and resources. But because no one enjoys losing arguments, they get dragged into a battle that distracts them from other battles that are much more relevant.
In our experience, engaging in endless debates with sceptics only makes sense when it affects the core of what you are trying to prove or when it affects your reputation as a reliable source of information. Furthermore, an organisation needs to take two other facts into account before deciding whether it makes sense engaging in a battle of claims and counter claims. First, whether the escalation will do more damage than good, especially in terms of engaging other stakeholders, and, second, what is the probability that your counterpart will admit defeat. For some pseudo-sceptics, the scepticism is their own lifeline. Their existence is justified only if they are right. Admitting to be wrong might be their own end.
- Kim
Scepticism is rooted deep within the history of our civilisation and its proponents have been widely spread since the ancient Greeks formed philosophical groups, including the Pyrrhonists in the first century BC.
The great value in a sceptic, particularly from a scientific point of view, is that their role can be to suspend judgment until sufficient evidence demonstrates the validity of a claim. They are those who avoid what organisation sociologists call ‘group thinking’. This systematic approach leads you to work hard at producing enough evidence to back up your claims. So if the sceptic role is to doubt, then it becomes your job to clearly present enough evidence to overcome any objections they may have.
It is an important lesson for those companies investing in CSR. When we don’t demonstrate clearly enough the amount of work we are doing in and around social, environmental, health or economic impact through our businesses, we leave ourselves open to the criticisms of the sceptics. It is why the measurement and testing of a company's work are so important. Objectivity overcomes objections. But how many of us can really say we know everything we should about the good impact we have as businesses? How many of us are taking the time to really measure our work?
And there is a challenge for the sceptics too, though. This comes in making sure they are not taking the role of the pseudo-sceptic. In 1987, Marcello Truzzi, then a professor of sociology in the the New Florida College, wrote about pseudo-scepticism:
“In science, the burden of proof falls upon the claimant; and the more extraordinary a claim, the heavier is the burden of proof demanded. The true sceptic takes an agnostic position, one that says the claim is not proved rather than disproved. He asserts that the claimant has not borne the burden of proof and that science must continue to build its cognitive map of reality without incorporating the extraordinary claim as a new ‘fact’. Since the true sceptic does not assert a claim, he has no burden to prove anything. He just goes on using the established theories of ‘conventional science’ as usual. But if a critic asserts that there is evidence for disproof, that he has a negative hypothesis—saying, for instance, that a seeming psi result was actually due to an artifact—he is making a claim and therefore also has to bear a burden of proof”.
The sceptics in and around corporate social responsibility abound. Companies face challenges from within and from external stakeholders. There are the individuals and organisations who will always refuse to believe a company is ever capable of more than greenwashing or investing in cause-related marketing. But, at Truzzi put it, these sceptics need to be aware that their claims, in their own right, also need backing up with evidence.
But, equally important for both companies claiming, and individuals and organisations counterclaiming impacts of CSR commitments, is to understand what the relevance of their claims and counterclaims are. Often organisations are dragged into debates that are not relevant to them. Trying to prove something that is not relevant just for the sake of winning an argument is simply a waste of time and resources. But because no one enjoys losing arguments, they get dragged into a battle that distracts them from other battles that are much more relevant.
In our experience, engaging in endless debates with sceptics only makes sense when it affects the core of what you are trying to prove or when it affects your reputation as a reliable source of information. Furthermore, an organisation needs to take two other facts into account before deciding whether it makes sense engaging in a battle of claims and counter claims. First, whether the escalation will do more damage than good, especially in terms of engaging other stakeholders, and, second, what is the probability that your counterpart will admit defeat. For some pseudo-sceptics, the scepticism is their own lifeline. Their existence is justified only if they are right. Admitting to be wrong might be their own end.
- Kim
Do you look too trustworthy to be a CEO? 27/04/2010
Have you ever wondered why successful people look good? An ever increasing pile of scientific literature is finding that actually, there is a cause-consequence: good-looking people tend to be more successful. Not because they are necessarily more intelligent, talented or any other attribute, but simply because our primitive brains are wired to accept the prominence of better genes, which, for millions of years, were expressed primarily by physical attributes. As Harvard professor Nancy Etcoff, author of Survival of the Prettiest put it, “beautiful ornaments develop not just to charm the opposite sex with bright colors and lovely songs, but to intimidate rivals and win the intrasex competition”.
Needless to say that, although our primitive brains tend to default to judgments made on the 'blink of an eye', as Malcolm Gladwell famously named his book, that does not mean that better looking people are better people. For instance, Mary Collins and Leslie Zebrowitz have found that, although baby-faced individuals are deemed less intelligent by our primitive brains, they are actually, on average, more intelligent. As a matter of fact, they are not just more intelligent, but also more assertive, brave and aggressive, which are all elements that one would not expect from a docile-looking person.
Other researches, such as Daniel Hamermesh and Jeff Biddle, have found that physical beauty is also closely related to wages and career progression.
Now, research entitled A Corporate Beauty Contest, by John Graham and Manju Puri, from Duke University, has turned its attention to the faces of CEOs, their paychecks and performances.
They looked at four different facial attributes of CEOs – attractiveness, competence, trustworthiness, and likability - and found that CEOs tend to have facial characteristics linked to the perception of competency and beauty and, at the same time, generally have faces considered to be less likable or trustworthy. Among these four characteristics, the two that standout most are likability and competency, both directly opposite attributes displayed by baby-faced individuals. In other words, boards tend to select individuals who ‘look mature’, i.e., with facial traits that give them an aggressive look. As they put it, “individuals who appear more competent and less likable are more likely to be CEOs. We similarly find these two traits are also significantly related to the CEO heading a larger company.”
Furthermore, CEOs looking mature simply make more money for themselves than those looking less mature. “We find that CEOs who are judged to be more competent-looking tend to also earn higher wages”, “Our evidence supports the idea that in the market for CEOs there is a ‘competent looks’ wage premium”.
But could the higher wages be linked to the fact that the ‘mature looking’ CEOs produce better results for their companies?
Not really. Graham and Puri also tested for that, and concluded that they do not produce above-average results. “We examined the performance of the firms run by CEOs to see if facial attributes are related to performance, by running regressions similar to the ones for CEO compensation. We find no evidence that competent looking CEOs demonstrate better firm performance.”
And what does this have to do with CSR? Simply put, if strategic social responsibility involves taking rational rather than emotional decisions in order to generate higher impact and above-average outcomes, leaders need to be self-aware about the frames they are using to take their decisions. As Graham and Puri put it, “inferences from facial appearances can be misleading, i.e., having the appearance of a facial trait does not mean one will actually display that trait”. And promoting and paying higher salaries based on facial appearances (and not on outcome) is not the best way to be socially responsible towards employees and shareholders.
- Gus
Needless to say that, although our primitive brains tend to default to judgments made on the 'blink of an eye', as Malcolm Gladwell famously named his book, that does not mean that better looking people are better people. For instance, Mary Collins and Leslie Zebrowitz have found that, although baby-faced individuals are deemed less intelligent by our primitive brains, they are actually, on average, more intelligent. As a matter of fact, they are not just more intelligent, but also more assertive, brave and aggressive, which are all elements that one would not expect from a docile-looking person.
Other researches, such as Daniel Hamermesh and Jeff Biddle, have found that physical beauty is also closely related to wages and career progression.
Now, research entitled A Corporate Beauty Contest, by John Graham and Manju Puri, from Duke University, has turned its attention to the faces of CEOs, their paychecks and performances.
They looked at four different facial attributes of CEOs – attractiveness, competence, trustworthiness, and likability - and found that CEOs tend to have facial characteristics linked to the perception of competency and beauty and, at the same time, generally have faces considered to be less likable or trustworthy. Among these four characteristics, the two that standout most are likability and competency, both directly opposite attributes displayed by baby-faced individuals. In other words, boards tend to select individuals who ‘look mature’, i.e., with facial traits that give them an aggressive look. As they put it, “individuals who appear more competent and less likable are more likely to be CEOs. We similarly find these two traits are also significantly related to the CEO heading a larger company.”
Furthermore, CEOs looking mature simply make more money for themselves than those looking less mature. “We find that CEOs who are judged to be more competent-looking tend to also earn higher wages”, “Our evidence supports the idea that in the market for CEOs there is a ‘competent looks’ wage premium”.
But could the higher wages be linked to the fact that the ‘mature looking’ CEOs produce better results for their companies?
Not really. Graham and Puri also tested for that, and concluded that they do not produce above-average results. “We examined the performance of the firms run by CEOs to see if facial attributes are related to performance, by running regressions similar to the ones for CEO compensation. We find no evidence that competent looking CEOs demonstrate better firm performance.”
And what does this have to do with CSR? Simply put, if strategic social responsibility involves taking rational rather than emotional decisions in order to generate higher impact and above-average outcomes, leaders need to be self-aware about the frames they are using to take their decisions. As Graham and Puri put it, “inferences from facial appearances can be misleading, i.e., having the appearance of a facial trait does not mean one will actually display that trait”. And promoting and paying higher salaries based on facial appearances (and not on outcome) is not the best way to be socially responsible towards employees and shareholders.
- Gus
Who do you trust? 22/04/2010
Have you ever heard stories of someone who wouldn’t leave their job even when offered a significantly higher salary? Or people who would switch jobs for much lower packages? Have you ever heard about friends considering leaving the corporate sector to work for charities? Have you ever wonder why?
A purpose in life certainly plays a big role on it, but have you ever considered what ‘purpose in life’ really means? The methodology we developed at Quanta divides it in 3-dimensions: an utilitarian one (‘what makes me happy?’), an ideological one (‘what the world needs?’) and a pragmatic one (‘what can I do about it?’).
A recent research called Trust and Well-being, by professors John Helliwell and Shun Wang, from the University of British Columbia, in Canada, have revealed some very interesting facts about the first dimension. They were able to establish strong statistical links between trust and human well-being.
Accordingly to their findings, individuals living in what they believe to be a trustworthy environment have much higher levels of subjective well-being. For instance, worldwide data shows that living in a society where you believe a stranger will return your wallet if you lose it represents “the same increase in subjective well-being that would be associated with an increase of household income of about two-thirds”. Let me repeat it again: living in a place where you trust strangers represents in terms of your overall well-being the same as almost doubling your whole family income.
If this is not a striking enough fact, this one certainly is: using Canadian data, they found out that “having high trust in co-workers, which we find to be the largest of all the specific directional trust measures, is associated with 7.6% higher life satisfaction. This is followed by trust in neighbours (5%), confidence in police (3%), and a belief that a stranger would return your lost wallet (2.5%)”. In other words, trusting those you work with represents an increment on well-being more than 3 times larger than trusting that your wallet will be returned by a stranger.
That means that working with people you trust could generate, in terms of wellbeing, the same positive impact as an increase of 200% on your whole household income. Now, imagine two companies: one paying an average salary of US$100k per year and another one paying an average salary of $300k per year, both generating exactly the same well-being to their employees. Or, as they put it, “these effects are all very large when measured in terms of the income changes that would produce the same consequences for life satisfaction.”
And how you build trust? In the words of Helliwell and Wang, “trust is built on a base of shared positive experience, and is nurtured by continued connections”. Improvements on education, membership to social groups, personal background, time working for the organisation and how easy it is to meet and interact with peers in a friendly way are all paramount to building the sense of belonging, which is directly correlated and a trigger for trust. Or as they put it “more attention [should] be paid to creating the time and spaces for social connections to flower. Since more and more people are living in large urban areas with mobile and sometimes rootless populations, it is ever more important to design and manage urban areas in ways that foster levels of engagement that support mutual trust and hence well-being”.
We can easily apply their recommendations to the corporate reality, where companies are becoming larger and more multi-cultural, and where employee tenure is reducing drastically, and physical fragmentation hinders daily contacts.
We often hear that CSR is an add-on, a ‘fluffy’ subject, a PR exercise. Except if an organisation is prepared to live with payrolls that are three times larger than their competitors to generate the same level of employee engagement, it is not. And trust is just another jigsaw piece in a very large CSR puzzle. The numbers above show very clearly how simple aspects of social responsibility can completely change the competitive advantage of an organisation.
- Gus
A purpose in life certainly plays a big role on it, but have you ever considered what ‘purpose in life’ really means? The methodology we developed at Quanta divides it in 3-dimensions: an utilitarian one (‘what makes me happy?’), an ideological one (‘what the world needs?’) and a pragmatic one (‘what can I do about it?’).
A recent research called Trust and Well-being, by professors John Helliwell and Shun Wang, from the University of British Columbia, in Canada, have revealed some very interesting facts about the first dimension. They were able to establish strong statistical links between trust and human well-being.
Accordingly to their findings, individuals living in what they believe to be a trustworthy environment have much higher levels of subjective well-being. For instance, worldwide data shows that living in a society where you believe a stranger will return your wallet if you lose it represents “the same increase in subjective well-being that would be associated with an increase of household income of about two-thirds”. Let me repeat it again: living in a place where you trust strangers represents in terms of your overall well-being the same as almost doubling your whole family income.
If this is not a striking enough fact, this one certainly is: using Canadian data, they found out that “having high trust in co-workers, which we find to be the largest of all the specific directional trust measures, is associated with 7.6% higher life satisfaction. This is followed by trust in neighbours (5%), confidence in police (3%), and a belief that a stranger would return your lost wallet (2.5%)”. In other words, trusting those you work with represents an increment on well-being more than 3 times larger than trusting that your wallet will be returned by a stranger.
That means that working with people you trust could generate, in terms of wellbeing, the same positive impact as an increase of 200% on your whole household income. Now, imagine two companies: one paying an average salary of US$100k per year and another one paying an average salary of $300k per year, both generating exactly the same well-being to their employees. Or, as they put it, “these effects are all very large when measured in terms of the income changes that would produce the same consequences for life satisfaction.”
And how you build trust? In the words of Helliwell and Wang, “trust is built on a base of shared positive experience, and is nurtured by continued connections”. Improvements on education, membership to social groups, personal background, time working for the organisation and how easy it is to meet and interact with peers in a friendly way are all paramount to building the sense of belonging, which is directly correlated and a trigger for trust. Or as they put it “more attention [should] be paid to creating the time and spaces for social connections to flower. Since more and more people are living in large urban areas with mobile and sometimes rootless populations, it is ever more important to design and manage urban areas in ways that foster levels of engagement that support mutual trust and hence well-being”.
We can easily apply their recommendations to the corporate reality, where companies are becoming larger and more multi-cultural, and where employee tenure is reducing drastically, and physical fragmentation hinders daily contacts.
We often hear that CSR is an add-on, a ‘fluffy’ subject, a PR exercise. Except if an organisation is prepared to live with payrolls that are three times larger than their competitors to generate the same level of employee engagement, it is not. And trust is just another jigsaw piece in a very large CSR puzzle. The numbers above show very clearly how simple aspects of social responsibility can completely change the competitive advantage of an organisation.
- Gus
The dangers of lazy lip service 20/04/2010
We all know at least one person who says they go to the gym. They are the ones that are healthy, active and responsible about looking after their health. They are usually the ones that make others a little bit jealous. The reality for a lot of gym members, though, is they talk a lot about going to the gym, but just as the time comes to pull on their trainers an episode of the latest TV drama comes on that cannot be missed, or a long lost friend is in town for one day, or they need to catch up on emails, or they’re worried about that old injury returning, or they are just too tired.
Most of us can probably recognise a few excuses in there ourselves, but as wannabe fitness people we pay lip service to ‘going to the gym tonight’, time and time again, until one day a friend makes a joke about us not knowing what the inside of a gym looks like. The ridicule you can probably live with, after all its true, but we lose two significant types of advantage once our cover is broken.
The first is the perceived advantage. When you look after your health, and balance seeing friends and doing well at work, you’re the person who has it all. You’re the rounded individual who can handle anything thrown at them. You’re not lazy, distracted or complacent to the important things: you take the lead, the one in charge. You’re interesting, multi-faceted, and this is an attractive quality to have. After all, ‘hobbies and other activities” is the section we always have to add to our CV’s for fear of being just a standard human being.
The second is the real advantage. When you actually get to the gym you improve your cardiovascular fitness, you decrease the risk of heart attacks and strokes, keep your weight to an optimum level and reduce the risk of diabetes and increase your mobility in the later stages of your life. You really are the person who is set to have it all.
Both of these advantages are the ones you risk when you leave yourself vulnerable to whistle blowers of your inactivity. Our lazy, but ‘want to be part of the cool group’ approach increases the stakes we have to lose. And so it is with CSR. When companies fall victim of great criticism about the inactivity of their CSR commitments, not only do they undermine the perceived advantages of their CSR programmes – good PR and reputation –, but their inactivity means a longer term damage to their business, to the health of their company not 5 years down the line but 50 years down the line. With global online and off line communications becoming more and more advanced, it takes just minutes to hear reports of shareholders opposing environmentally harmful activity or of supply chains being riddled with human rights abuses.
CSR is not easy work. It requires commitment and hard effort, and businesses need to learn how to protect the perceived and real advantages of their efforts with solid strategies. Strategy is the foundation stone, the key to knowing where to start and what effort to put in. It is the coaching your gym instructor gives you after you’ve discussed your goals that makes the most of your time, gives you the best rewards for your efforts, and makes you keep coming back for more.
- Kim
Most of us can probably recognise a few excuses in there ourselves, but as wannabe fitness people we pay lip service to ‘going to the gym tonight’, time and time again, until one day a friend makes a joke about us not knowing what the inside of a gym looks like. The ridicule you can probably live with, after all its true, but we lose two significant types of advantage once our cover is broken.
The first is the perceived advantage. When you look after your health, and balance seeing friends and doing well at work, you’re the person who has it all. You’re the rounded individual who can handle anything thrown at them. You’re not lazy, distracted or complacent to the important things: you take the lead, the one in charge. You’re interesting, multi-faceted, and this is an attractive quality to have. After all, ‘hobbies and other activities” is the section we always have to add to our CV’s for fear of being just a standard human being.
The second is the real advantage. When you actually get to the gym you improve your cardiovascular fitness, you decrease the risk of heart attacks and strokes, keep your weight to an optimum level and reduce the risk of diabetes and increase your mobility in the later stages of your life. You really are the person who is set to have it all.
Both of these advantages are the ones you risk when you leave yourself vulnerable to whistle blowers of your inactivity. Our lazy, but ‘want to be part of the cool group’ approach increases the stakes we have to lose. And so it is with CSR. When companies fall victim of great criticism about the inactivity of their CSR commitments, not only do they undermine the perceived advantages of their CSR programmes – good PR and reputation –, but their inactivity means a longer term damage to their business, to the health of their company not 5 years down the line but 50 years down the line. With global online and off line communications becoming more and more advanced, it takes just minutes to hear reports of shareholders opposing environmentally harmful activity or of supply chains being riddled with human rights abuses.
CSR is not easy work. It requires commitment and hard effort, and businesses need to learn how to protect the perceived and real advantages of their efforts with solid strategies. Strategy is the foundation stone, the key to knowing where to start and what effort to put in. It is the coaching your gym instructor gives you after you’ve discussed your goals that makes the most of your time, gives you the best rewards for your efforts, and makes you keep coming back for more.
- Kim
Corporate social responsibility is this season’s fashionable word, probably second only to sustainability. And as it happens to every buzzword, there is a substantial amount of noise mixed up with reality. When it comes to CSR investment, there are things we know will work and things we know won't work. But, the vast majority are still things we suspect work and things we wish worked because it makes us feel good. But, frankly, this is just wishful thinking and a sure fire recipe for corporate disappointment.
There is still very limited academic research around CSR that is really relevant for companies. There are a lot of reviews of reviews, a lot of good-looking academic frameworks, but when it comes to really hard evidence, very few pieces of work – such as the one by Ioannis Ioannou and George Serafeim, we’ve discussed here not long ago – pass the tests of reliability and relevance.
And then there is the dangerous territory: things we want to believe, but are not necessarily true, let alone proven. We’ve recently spoken in this same space about how a survey found out that, contrary to our long held belief, people who invest on green products do not act more socially responsibly. Actually, they tend to act less socially responsibly once they’ve made that green commitment. And the more we research this area, the more we will find evidences against our wishful thinking.
And, finally, there are the things that we suspect based on observations, but where there is still no academic research to prove it.
In this group of things we suspect but can’t prove, probably the most relevant is that great CSR does not create great culture. This is because the concept of great culture is a subjective one . Suffice to see how the recent financial crisis left many company corpses along the road, many of whom used to be regarded as bastions of great cultures.
If anything, our anecdotal evidence points in the opposite direction: great cultures (or, to be specific, great leadership cultures) create great CSR. But, frankly, there is no scientific evidence to prove it. What we know is based on our experience, but that does not make it scientifically proven.
And this is also connected to the biggest problem middle managers – especially CSR managers – have in advocating CSR commitments within their companies: there is no proof that those commitments will work, and those very limited commitments that are scientifically proven to work (or not) are things that everybody else is already doing (and often have already been forced on them in form of laws and regulations by national governments). So, in one hand they have line managers demanding innovative approaches and reassurance that their investments will generated the expected results, but they can’t give that reassurance without first committing to invest on them. On the other hand, they have a very limited portfolio of potential commitments that they know will work because academic research has proven that they work; but the only reason why academics have been able to prove they work is because there is a wide enough pool of evidence constituted by the investments done by thousands of companies, and, in that case, the innovation element is no longer there: the organisation, at best, will play a me-too strategy.
And that is why great leadership cultures generate great CSR investments: because they are open to the risk involved in trying to innovate, and they know the risks are worth taking because they understand their own strategic objectives, the potential rewards and the underlying challenges.
- Gus
There is still very limited academic research around CSR that is really relevant for companies. There are a lot of reviews of reviews, a lot of good-looking academic frameworks, but when it comes to really hard evidence, very few pieces of work – such as the one by Ioannis Ioannou and George Serafeim, we’ve discussed here not long ago – pass the tests of reliability and relevance.
And then there is the dangerous territory: things we want to believe, but are not necessarily true, let alone proven. We’ve recently spoken in this same space about how a survey found out that, contrary to our long held belief, people who invest on green products do not act more socially responsibly. Actually, they tend to act less socially responsibly once they’ve made that green commitment. And the more we research this area, the more we will find evidences against our wishful thinking.
And, finally, there are the things that we suspect based on observations, but where there is still no academic research to prove it.
In this group of things we suspect but can’t prove, probably the most relevant is that great CSR does not create great culture. This is because the concept of great culture is a subjective one . Suffice to see how the recent financial crisis left many company corpses along the road, many of whom used to be regarded as bastions of great cultures.
If anything, our anecdotal evidence points in the opposite direction: great cultures (or, to be specific, great leadership cultures) create great CSR. But, frankly, there is no scientific evidence to prove it. What we know is based on our experience, but that does not make it scientifically proven.
And this is also connected to the biggest problem middle managers – especially CSR managers – have in advocating CSR commitments within their companies: there is no proof that those commitments will work, and those very limited commitments that are scientifically proven to work (or not) are things that everybody else is already doing (and often have already been forced on them in form of laws and regulations by national governments). So, in one hand they have line managers demanding innovative approaches and reassurance that their investments will generated the expected results, but they can’t give that reassurance without first committing to invest on them. On the other hand, they have a very limited portfolio of potential commitments that they know will work because academic research has proven that they work; but the only reason why academics have been able to prove they work is because there is a wide enough pool of evidence constituted by the investments done by thousands of companies, and, in that case, the innovation element is no longer there: the organisation, at best, will play a me-too strategy.
And that is why great leadership cultures generate great CSR investments: because they are open to the risk involved in trying to innovate, and they know the risks are worth taking because they understand their own strategic objectives, the potential rewards and the underlying challenges.
- Gus
Reaching all the drivers 13/04/2010
The charity sector has a mixed reputation depending on who you talk to, but the one thing no one can fault is the space to feel like you are contributing, taking on a social challenge, being a part of a meaningful battle. During my career I’ve been seen many highly experienced people moving from the corporate to the charity sector – often at great personal cost – to experience a different kind of reward to the financial one they were used to. Using this emotional reward as a motivator is a remarkable motivator, and one Daniel Pink, former chief speechwriter for the former US Vice President, Al Gore, discusses in his work, ‘The surprising truth about what motivates us’.
Pink talks about drive and motivation on two different levels. The first are our biological motivations, to eat when we are hungry, drink when we are thirsty, etc. The second drive, well rehearsed in sectors across the board and in many styles of parenting, is of reward and punishment. Promise us a pay rise or pocket money, and we will work harder or clean Dad’s car after school; should we fail in our roles, we won’t be expecting a promotion but may expect to be grounded. Nothing unacceptable or unusual there.
These drivers ring a tune not too dissimilar to Maslow’s hierarchy of need or Herzberg’s motivation-hygiene theory. Herzberg, in particular, identified motivations of recognition, advancement and competency as crucial factors in keeping us satisfied in our roles, and then looked at the environment we work in as being crucial to providing a ‘hygiene’ level that keep us from being dissatisfied.
Pink innovates by suggesting that our approach to motivating factors in management need to move beyond employee compliance and competency in doing the job, and engage our staff in a third dimension: it’s the drive that leads us to take on a challenge, do something meaningful, the drive that engages employee creativity and innovation, that stretches us to do more than just what is expected. In other words, employee engagement is not only aligning brains and needs, but also co-opting souls.
This is a challenge many of our clients are looking to overcome as our societies become increasingly risk averse, especially in the difficult economic climate.
The question we work on with our clients then becomes, how do we use CSR to shape the company environment? What will encourage individual engagement, and improve their drive to make the organisation stronger? The room we give our employees to exercise their third drive of ‘purpose maximisation’ will undoubtedly also bring them closer to that feeling of fulfillment that has been so strongly associated with the charitable sector for all these years. Creating the space where staff can create, exercise individuality and feel they are making progress (and contributing to the progress of things that are close to their hearts), and using that space to contribute to the company’s overall objectives, is paramount, and something that only a minority of companies are doing well.
Contrary to the myth, the likes of Apple, Nike, Google or Semco do not create employee engagement by giving perks (other companies give more perks but do not have employees tattooing the company’s logo in their bodies), but by constantly finding ways of creating a space where employees feel they are understood as individuals and are making progress. And, to make it a two way street, these organisations found clever ways of translating this creative spaces into corporate profits. A good amount of Google’s product portfolio, including some the most famous one, were originated out of the 20% of time employees can dedicate to their side projects.
-Kim
Pink talks about drive and motivation on two different levels. The first are our biological motivations, to eat when we are hungry, drink when we are thirsty, etc. The second drive, well rehearsed in sectors across the board and in many styles of parenting, is of reward and punishment. Promise us a pay rise or pocket money, and we will work harder or clean Dad’s car after school; should we fail in our roles, we won’t be expecting a promotion but may expect to be grounded. Nothing unacceptable or unusual there.
These drivers ring a tune not too dissimilar to Maslow’s hierarchy of need or Herzberg’s motivation-hygiene theory. Herzberg, in particular, identified motivations of recognition, advancement and competency as crucial factors in keeping us satisfied in our roles, and then looked at the environment we work in as being crucial to providing a ‘hygiene’ level that keep us from being dissatisfied.
Pink innovates by suggesting that our approach to motivating factors in management need to move beyond employee compliance and competency in doing the job, and engage our staff in a third dimension: it’s the drive that leads us to take on a challenge, do something meaningful, the drive that engages employee creativity and innovation, that stretches us to do more than just what is expected. In other words, employee engagement is not only aligning brains and needs, but also co-opting souls.
This is a challenge many of our clients are looking to overcome as our societies become increasingly risk averse, especially in the difficult economic climate.
The question we work on with our clients then becomes, how do we use CSR to shape the company environment? What will encourage individual engagement, and improve their drive to make the organisation stronger? The room we give our employees to exercise their third drive of ‘purpose maximisation’ will undoubtedly also bring them closer to that feeling of fulfillment that has been so strongly associated with the charitable sector for all these years. Creating the space where staff can create, exercise individuality and feel they are making progress (and contributing to the progress of things that are close to their hearts), and using that space to contribute to the company’s overall objectives, is paramount, and something that only a minority of companies are doing well.
Contrary to the myth, the likes of Apple, Nike, Google or Semco do not create employee engagement by giving perks (other companies give more perks but do not have employees tattooing the company’s logo in their bodies), but by constantly finding ways of creating a space where employees feel they are understood as individuals and are making progress. And, to make it a two way street, these organisations found clever ways of translating this creative spaces into corporate profits. A good amount of Google’s product portfolio, including some the most famous one, were originated out of the 20% of time employees can dedicate to their side projects.
-Kim
