Be Bold and Be Humble: Lessons from the Front Lines of CSR
written by Nathalya Mamane, graduate student
There was a time when being a socially responsible company was viewed as ineffective, unimportant, and bad business practice. It was worse for corporations whose only scoring system for success was the use of their balance sheet. The idea of adding a new layer of responsibility that was unmeasurable was not only regarded as impossible, but seen as a corporate mistake. The business landscape and mindset have since changed, and more companies want to be more socially conscious and sustainable. Corporations now understand two critical points about social responsibility. First, recruiting and retaining talent and engaging stakeholders is essential to the growth of the organization. Second, the younger generation is more socially conscious and looks for corporations with a social-impact-driven mission when entering the workforce.
Ken Freitas MBA’87, Executive-in-Residence at The Lewis Institute and business leader in Corporate Social Responsibility, was at the front lines in the evolution of this change. Ken was working at Timberland as VP Global Marketing when then CEO Jeff Swartz offered him an opportunity to create something that at the time had little recognition. Ken describes how Swartz, “a visionary who knew the direction his company had to take and went for it,” asked him to build the company’s corporate responsibility program from the ground up. Since very few companies had any such program in place, Ken attacked the challenge head-on.
Ken never planned on being a social justice activist. But his background in marketing, communication, and advertising gave him the tools he needed to take this idea at Timberland and join this early movement. During his time at Timberland, Ken learned the importance of Corporate Social Responsibility first-hand. Between the relationships he made with various nonprofits and the early leaders in the movement, Ken discovered his fabric and launched his career in social enterprise.
Opportunities and Challenges of Corporate Social Responsibility
During a chat with Ken Freitas, I learned a lot about the opportunities and challenges in the implementation of CSR programs. According to Ken, “all great ideas face responsibility, accountability, and concerns. With responsibility come new relationships. With accountability come new partnerships. And with concerns come conversation.” No matter how much work is involved with managing the responsibilities and accountability, if done right, social leaders can reap many benefits.
“Many companies who decide to have CSR programs do so with the right amount of communication, transparency, and accountability,” explains Ken. Let’s examine Whole Foods and Patagonia. While the two companies are different in the product they offer, both have leaders who built socially responsible businesses. They are not only recognized for their transparency, honesty, and respect to their stakeholders, but also for the decisions they make in the production, supply chain, and delivery of their products. They are vocal about what is right even at the risk of losing customers.
Companies like these learned an important lesson: that honesty, transparency, and responsibly can add enormous value to their bottom line. Unfortunately, the rules of this game are not always clear to everyone. Ken shares his concerns with this growing corporate trend to use CSR as a veneer. While many companies choose to follow the movement as the new standard, many create programs that lack depth, with only superficial engagement from the stakeholders. With today’s access to social media, the opportunity to make your company look good is easy. According to Ken, “Everyone can understand, accept, and sell the rhetoric of social impact.” Anyone can package a CSR program beautifully to employees, clients, shareholders, and community, and get full buy-in. The challenge is sorting which companies use these opportunities as a veneer to look good, and those who don’t. Ken admits that it’s hard to tell the two apart: the veneer ultimately dilutes the mission and can affect the overall engagement. Avoiding this issue takes work from the leadership. They have to take the time to ask and to listen. They cannot hide behind the rhetoric and the veneer. They need to see beneath it all and take action to make changes.
Having CSR programs has become a new standard. A recent study performed by SAP revealed that “customers want to associate with sustainable companies” and according to Ken’s experience in the marketplace, the movement is growing. However, corporations struggle with how traditional scoring systems have remained the same. Corporate leaders still use balance sheets to measure success. On the one hand, a single initiative has a clear cause and effect and can be evaluated. For example, you send volunteers to paint classrooms and they get the job done. However, the effects at the corporate level are not as apparent. Did productivity, mood, or attendance increase as a result of that initiative? Does painting classrooms even align with the mission or talents of the company, or is there a better way to create impact? Leaders can no longer depend on just financials to score their company after adding this complex layer. They need to loosen up on that scoring systems so they can see how all the moving pieces, including the CSR strategies, work together in the long-term sustainability and success of the company.
B Corps have made great strides in changing the mechanism to evaluate successes with regard to the social responsibility programs. They have opened the conversation and opened the doors to move things in the right direction. But there is still a lot of work to be done. Corporate leaders need to be confident with reliable systems that better quantify the effects of CSR programs. According to Ken, it is a work-in-progress that still has some ways to go.
Before leaders can start executing on CSR programs, they need to be ready to do a few things.
Be Bold and Be Humble
Ken explains that leaders first need to be “bold” and “humble.”
Leaders need to be bold in their decision to make changes for the betterment of the company and their stakeholders. They have to stand by their mission for corporate change and the desire for social impact. They need to find the right people within the company, just like Jeff Swartz did when he chose Ken.
Leaders also have to be humble. They cannot implement change and expect buy-in if they use a position of power to impose change. They need to be ready to listen to ideas and point of views. Whether positive or negative, they need to be prepared to listen and accept the feedback. The listening part of the process is not only necessary but strategic. The deduction they make from listening will be valuable in the journey they take with their company.
Ken concluded with two important pieces of advice:
- Companies need to understand that they can’t fix it all. Companies need to choose one cause and do all they can for it, but avoid to take in more than they can chew. Sustainable companies still have to make profits, and they can with a conscious effort, but they need to also play smart.
- Companies must set realistic expectations. The corporate world has a demand for speed. We want everything done now and fast. When dealing with social enterprise and working towards social change, things take time and the pace can be slow. Ken warns to move quickly but with restraint. It may be hard for leaders to adapt to that kind of change, but it’s an important one to see long-term success.
Interested in learning more? Check out this free Babson edX course co-taught by Ken Freitas and Cheryl Kiser, From Corporate Social Responsibility to Corporate Social Innovation.