May 17, 2016
by Karrikins Group
What does ‘doing good business by doing good’ mean to you?
It’s about the connections between purpose and profit. I think there is a rapid evolution going on in the way businesses are talking about purpose in their communities and in the strategies they are developing for that.
We had what you might call ‘Community Engagement 1.0’. This was when senior management delegated responsibility to a team to find projects to put funds into. That’s good for finding people to give money to and it’s good for tracking every dollar spent in the community. It’s not that good at creating genuine partnerships, and is not necessarily good at generating real community impact. We can do better.
How far advanced is this kind of work worldwide?
There is a massive spectrum, and that is one of the challenges. Some sectors are moving faster than others. The fast movers tend to be those with a more direct connection with these kinds of issues. They are healthcare companies, financial institutions and technology service companies. There are also those companies that have large supply chains and contact with developing countries. In those areas they can change a lot, they can have a big impact quite quickly.
The businesses that change most are those that are in the middle of a kind of perfect storm. External pressure or public sentiment that affects their business can sometimes provide a window of opportunity. For example, after the Global Financial Crisis many banks talked about community engagement and sustainability. Not all of them did something about it.
Then there are those businesses that have identified real competitive advantage in doing work in this area. For example, Unilever has found that there is real profit for them in lifting people out of poverty.
Finally there is leadership. Senior executives either get this or they don’t. This is the single most important lever that I would like to pull.
What is holding the world of business back from going beyond ‘Community Engagement 1.0?’
The reluctance to abandon legacy ways of doing things. Businesses have tended to contract with not-for-profits in much the same way as they have with other suppliers. It’s procurement of community engagement. There is very little room in that for genuine integration and partnership. And there is great reluctance to change that way of thinking. Senior managers tend to think: “That sounds hard”.
The other problem is that everybody that works in the sustainability field now knows they are meant to be talking a language of shared value and sustainability. A lot of people are so busy making that case they forget to actually do anything about it.
We have seen surveys saying that 90% of businesses believe consumers expect businesses to have a positive impact in their communities, but only about 30% of businesses actually go out and ask people what kind of things they want to see.
How far advanced is this kind of work in New Zealand?
I think in New Zealand there is at least an intellectual acceptance of the importance of environmental issues. There is a lot to be proud of. There are a lot bigger economies that are doing this a lot worse.
What can sustainability professionals do to speed up progress?
Sustainability professionals need to make the case for this. They need to demonstrate that it is important for the business to make these changes. They need to show that the business can do it. And they need to create a real strategy for making it happen. That is how they can win the internal battle.
What are you looking forward to about the SBN event?
At every event I go to like this I come away with one or two stories that really sum up the challenges or the opportunities.
I am also looking forward to the disagreement. If everybody agrees with everything I say then that is not mission accomplished. It’s when the conversation gets a bit tense that a lot of the real work is done. That’s especially true of areas like this, where best practice is still a moveable feast, it is yet to be formed.
This article first appeared online at Sustainable Business Network.