Deciding where - and when - to get involved

Companies can't afford to neglect good corporate citzenship

Daniel F. Muzyka and Darcy Rezac
Globe and Mail - Report on Business
February 18, 2008

Daniel F. Muzyka is Dean and RBC Financial Group Professor of Entrepreneurship at the Sauder School of Business

We wrote some months ago in this column (“Community Connections,” The Globe and Mail, June 25, 2007) that to be successful in the long term, corporations and their teams must be engaged with, and invested in, the broader community.

Afterwards, we heard a common question: “How do you decide where and how to get involved?”

This question was front and centre at the recent World Economic Forum annual meeting in Davos, Switzerland, which we attended. Central to the WEF discussions was this position that corporate citizenship matters, and that success is determined by how effectively corporations engage all stakeholders – customers, shareholders, employees, governments and the greater community.

Most chief executive officers today believe the purpose of business goes well beyond the bottom line. And it involves more than chequebook philanthropy. Corporate citizenship involves decisions on the allocation of our time, talent and treasure that reflect our corporate values.

At the annual meeting, Bill Gates urged CEOs to apply capitalism and philanthropy to people who have been left behind – “a sustainable way to reduce poverty in the world” – and he labelled it “creative capitalism.”

Darcy Rezac is Managing Director and Chief Engagement Officer of the Vancouver Board of Trade.

Both Indra Nooyi, CEO of PepsiCo, and Cisco CEO John Chambers spoke about their corporate citizenship initiatives – and the impact they have had on community engagement, employee morale and the bottom line.

So, let's get back to the question of where and how to get involved. What are the guidelines for any firm, large or small? And, how do we do it right here at home?

Our first guideline is to build on our core capabilities. The most successful interventions by companies in addressing community needs are by engaging through our products, skills and networks. The most effective interventions don't involve companies and their teams having “out of body experiences.” It may be tempting to take on a popular social need outside our sphere of competency, but it is less likely to be productive.

A computer company may want to improve educational opportunities by getting involved in building and installing new computer platforms, or by training volunteers. Doing what we are good at will have a higher payoff and often engage many individuals within our organization.

Second, avoid setting up a separate entity to deal with a social challenge. This is a common criticism by community agencies when a new organization pops up with “new solutions,” which are well meaning but often have less impact than working with existing agencies. The quiet assumption that a new entity is needed ought to be challenged from the outset.

The third guideline involves one of the main themes from Davos this year, collaborating to innovate. Try to build solutions to pressing social needs along with governments, non-government organizations (NGOs) or not-for-profit agencies, and other companies. The best solutions are ones that can involve and bring to bear the perspectives, capabilities and network of all players. The solutions also tend to become better embedded. Don't try to go it alone.

The fourth guideline is that companies and their teams should try to contribute where possible to existing overarching goals. At Davos, the Millennium Development Goals – which strive to deal with some of the most pressing issues in bridging the divides between the first and third world – were often cited.

As we consider options for involvement, why not try to help our community achieve some measurable goal? If crime is a community issue for example, how can we help?

Adding our resources, energy and talent to existing efforts can often have a greater impact than taking on a new challenge. Help contribute to that critical mass needed to achieve a tipping point to make a difference. Many organizations decide to focus and collaborate on a few key community priorities – this approach is recommended.

Finally, our efforts should be applied across a finite portfolio of issues so that success is more likely. A single focus is risky should it not succeed. Too broad a focus disperses resources. Balance and an explicit policy is key. Many corporations encourage employees to volunteer in community organizations and have a policy for some time off – commonly 4 hours per month – or a matching donation based on hours volunteered. Some require executives to sit on local boards of not-for-profit organizations. A clearly focused effort consistent with corporate values enhances the chances of success.

In summary, if your organization doesn't have a strategy for corporate engagement, perhaps it's time to revisit your policies. Use these guidelines:

Don't have an “out of body” experience. Open source your capabilities with the broader community.

Don't reinvent the wheel; look for well-run organizations that deal with social challenges. Warren Buffett went with Bill and Melinda Gates.

Collaborate to innovate with others including government, NGO's and other players.

Avoid pet projects. Instead focus where your organization can add more value. Engage employees in the process. Pepsi “Performance with Purpose” had an internal benefit as well.

Single focus is risky. Grand plans are risky. Create a portfolio that reinforces and reflects your corporate values, go for success.

Nineteenth century French philosopher Alexis de Tocqueville defined citizenship as “self-interest rightly understood.” Neurobiologist Matt Ridley calls it, “selfish for the common good.” Some call it “enlightened self-interest.” It requires engagement and it applies equally to individuals and corporations.

At the end of the day, all a company can do is invest, disinvest or do nothing at all. Zero engagement is not an option. Disinvestment is not sustainable. Appropriate corporate citizenship is all about investing our time, treasure and talent … for good.

Daniel F. Muzyka is Dean and RBC Financial Group Professor of Entrepreneurship at the Sauder School of Business at the University of British Columbia.

Darcy Rezac is Managing Director and Chief Engagement Officer of the Vancouver Board of Trade, an author and lecturer on engaged leadership.

Management consulting and technology services firm Accenture practices good corporate citizenship. Read more or view PDF...

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