High-purpose companies survive to serve basic human needs, advance society, and nurture an advanced form of capitalism. They address serious problems and make more money as an outcome. For example, in 1997 British Petroleum took a stand on global warming. By 2003, the company had reduced its greenhouse gas emissions by over 10 percent, and become the foremost provider of cleaner-burning fuels and the second-largest manufacturer of solar panels. BP generated $650 million worth of value on a $20 million investment in ecologically friendly products and policies.
Examples of Corporate Social Responsibility
Comparable examples abound.
- Interface Corporation, the largest commercial carpet and textile manufacturer, saved $230 million in overhead costs and increased market share because of its pledge to environmental sustainability.
- Green Mountain Coffee Roasters grew fast because of its commitment to fair trade.
- Stonyfield Farm Yogurt Company became the biggest organic brand in the U.S. though practices that helped struggling dairy farmers to survive.
- Hewlett-Packard has positioned itself for long-term by helping close the digital divide.
Each of these companies is dedicated to a wider concept of social responsibility— no longer an postscript, a compliance issue, PR gimmick, or ugly stepchild to profit and strategy. It can help your business prosper. Rosabeth Moss Kanter of the Harvard Business School characterizes the approach of the new givers, “We fixed American business; now we need to fix charity.”
Five Keys to Purpose First, Profits Second
The ability of successful entrepreneurs to generate considerable wealth is obvious. As such, their capacity to contribute from their resources to projects and organizations with a specific social enhancement agenda is also apparent. This potential for successful entrepreneurs to improve the quality of the society or societies in which they live and to become role models of philanthropic attempt is exemplified by the recent commitments of two of the most high profile and successful entrepreneurs in the United States, Bill Gates and Warren Buffet. There has nevertheless been little scholarly investigation into the comparative tendency for entrepreneurs to participate in philanthropic endeavor, and whether entrepreneurs are inclined to adopt specific forms or tactics to their philanthropy.
Here are five keys to cultivating your performance via social responsibility and a high-purpose strategy:
- Face the truth. To take up a higher purpose, you need to “own up” to your past. Carefully evaluate your company’s impact on society and the environment. Often, this review can divulge opportunities and can serve as a powerful catalyst to stimulate your organization and enable it to move in unison towards the best solutions. Today’s new rich have the opportunity to shape America-and the world-just as intensely as Andrew Carnegie and John D. Rockefeller did. However, so far most have declined to take it.
- Choose a relevant crusade. Your company can create more social and financial value by supporting a cause that directly relates to your business. What problems are unique to your company or category? What issues are most pressing to your customers, employees, suppliers, or shareholders? Discover financially self-sustaining charitable models that are relevant to your business. Effective charitable programs pay for themselves. The purpose of the crusade is to provide communities with practical experience in philanthropy and the opportunity to think consciously about giving back to society.
- Do something that no one else can. What does your company do better than anyone else does? How can you use the company’s fortes, resources, and expertise to help solve the chosen problem? Develop an line of attack that cannot be easily mimicked. This way your core assets become recognized as being of service to humanity, thus rising the company’s value.
- Put the problem first. Although every company should aim to secure rewards from their high-purpose initiatives, the character of the chosen social or environmental problem should point the direction. Take a needs-based approach. Study the problem, the circumstances surrounding it, and the people most affected by it. Then, engineer business-building solutions.
- Expand definitions of success. Rather than define success solely in terms of short-term cost-effectiveness, build value and sustainability in all forms. Define and monitor your performance. The firm set up the foundation by means of its growing role in society. Managers faced operational and strategic quandaries concerning the host-countries’ poor public healthcare provision and in coming up with operative solutions.
Importance of Corporate Social Responsibility
The paybacks that you gain through high-purpose strategies range from competitive edge and growth opportunities to better stakeholder relationships, higher innovation, quality, efficiency, and lower overhead costs. This approach to philanthropy increases dependency and reduces initiative and enterprise. It doesn’t create the necessary human capacity to make communities self-sustaining and independent.
Today you must deliver social value. Companies that compete unfairly or function without regard to the collective interests will fail in the long term. High-purpose strategies do not disrupt companies from achieving the highest financial returns for shareholders. On the contrary, they build business, making them one of the best investments a company can make. Globalization is weakening the ties that bound companies to the communities that gave them birth.