When considering where to direct investments in corporate social responsibility (CSR), executives should keep in mind strategies that offer maximum potential for shared value creation. Often, companies’ CSR portfolios are a mixed bag, containing philanthropic efforts that provide the business limited value, executives’ small-scale pet projects, or public relations directed more toward shaping opinion than offering solutions to social ills. All of these avenues lack the capacity to substantially increase shared value. In establishing a strong CSR relationship, businesses shift the focus of CSR from merely insuring their reputations, to achieving mutual results.
To build a strong, long-term CSR partnership, companies must integrate CSR as a fundamental element of strategic planning. However, initiating and managing smart CSR practices requires organizations to navigate a few basic challenges.
Taking inventory of all current CSR activities, then mapping their objectives, benefits, and relation to key strategic goals is a good first step. From there, companies can determine how the value-creation potential of current efforts can be expanded. This is done by locating areas of interface and dependency between a business and society, and pinpointing opportunities for a revised relationship that offers both sides new benefits. For instance, a business looking to minimize unemployment rates in a poor rural community, and increase distribution across rural markets might install a distribution center, and staff it with local employees.
A CSR relationship is founded upon generating mutual benefits; however, like any strategy, its ability to create value needs to be assessed, so that CSR projects and other investments can be prioritized accordingly. The time-frame in which objectives will be met, and benefits accrued should be evaluated, as well as the nature of the benefits themselves–are they tangible, such as increased sales, or intangible, such as better employee morale? Information should be gathered that determines whether current and future CSR initiatives are significantly impactful, scalable, and aligned with core strategic objectives.
When addressing social issues, change rarely occurs instantly. Social improvement requires building trust and putting plans into consistent action. Therefore, CSR commitments should be backed by visible results. Long-term success requires not just taking the initiative, but maintaining it, which is impossible if a company’s leadership is not actively engaged in a project’s undertaking. It’s the responsibility of senior executives to set an example by remaining personally dedicated to CSR projects. This way, all involved parties can be motivated to hold a similar standard of commitment.
Businesses that produce mutual value realize that prosperity grows best when shared, rather than hoarded. Well-built CSR relationships serve as a creative method for improving societal living standards, while also progressing core organizational goals.