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Wednesday, January 27, 2010

England and America: Two Nations Separated by a Common Language

Not specifically CR, but one thing that has struck me on this visit to the UK are the number of issues, in the newspapers and on the TV and radio, that are common concerns for the British and the Americans.

Amongst them are overcrowding in prisons, dealing with released sex offenders, costs and end of life decisions of aging populations, discrimination against older people (in the UK required to retire at 65), the optimum age for testing for women’s cancers in particular, achieving good completion rates for the national census, an ever increasing gap between the rich and the poor.

That isn’t to say that each country is reaching the same conclusions on how to address those issues. Far from it. But having lived in two countries for a significant length of time I have a developed a strong appreciation for the view that you cannot simply transplant solutions across international borders, even with two countries with a common language and similar levels of economic and educational development.

Solutions that work do so because they tie in with many interdependent factors specific to the community in which they are applied. But we can learn from each other and, although I cannot articulate why, I do get some level of comfort from seeing the issues feature here too. Maybe it is a validation that they are real and difficult issues if another country is struggling with them too.

Monday, January 25, 2010

Sustainable Behaviour in the UK

I am in the UK. Vacation last week, work this week. Some observations thus far;

Browsing the newspapers, perusing the roadside and station platform advertising, I see very little green marketing compared to past visits or compared to the USA. Interestingly the only advert I have seen that refers to green issues is from Exxon, an American company. My impression is that the UK has moved on from green advertising and I might be tempted to conclude that the UK has slowed the pace of sustainable activity, but a closer look reveals another perspective.

I see comprehensive green actions in the areas of transport and homes. Gas for cars continues to be significantly more expensive, diesel fuel more widespread, public transport much more widely used. According to today's Daily Telegraph, a government department is recommending introducing ‘average speed traps’ on the roads to reduce driving speeds and hence carbon emissions. Walking, scooting and cycling is far more common and much better accommodated (although why do so few adult cyclists wear helmets ?).

I haven’t seen any solar PV installations, but I have seen three solar water heaters on homes. I don’t ever recall seeing one in the UK before. My parents are about to get their loft insulated at no cost to themselves through a government grant. Many householders are required to rigorously split their trash into four different bins; paper/plastic recyclables, cardboard and card, compostable food waste and regular trash.

Toilets in public places of any significant size, have dual flush modes - something I used to associate with going on vacation to other countries.

All in all, although there is a long way to go, I see a more comprehensive adoption of sustainable behaviours than at home in the US. More thoughts from my visit here later this week.

Wednesday, January 20, 2010

Sustainability is Overrated

Well, perhaps I really mean overemphasized rather than overrated. As I said in my ‘Themes for 2010” post, I have some thoughts on terminology. I hear the term sustainability used as a catch all for corporate social responsibility. I hear it used as a catch all for addressing environmental issues. I don’t think either uses are correct.

The overarching theme is corporate responsibility. (Is it too late to change the title of my blog to CRPerspective?)

Then I see there being a set of principles that can be applied to help us in our corporate responsibility. Those principles are governance, accountability, ethics, transparency, materiality, and, of course, sustainability.

Many of the principles, but in particular sustainability, can be looked at within the context of three interdependent realms; social, economic and environmental.

So, for example, sustainability can apply just as readily to social and economic issues in the community as it can to environment. Consider the impact of sub-prime loans on the economic sustainability of the communities in which they were offered and the impact of tobacco on social sustainability (which includes health).

But the other principles are equally important. In using the term sustainability to describe the whole shebang of corporate responsibility we are underplaying the importance of those principles. We will not effect change without corresponding attention to governance, accountability, ethics, transparency and materiality.

And what of volunteering, community investment, stakeholder engagement, diversity, philanthropy, reporting, risk analysis, incentive programs, business cases and many other things that comprise the daily bread and butter of the job of CR practitioners ? I see these as tools. Tools that help the business deliver against the principles and across the three realms of CR.

I would be interested in your views on my approach.

Postscript - I added a new post on this topic titled "Ethics Trumps Sustainability" on May 26 2010

Friday, January 15, 2010

Regaining Public Trust

The public’s trust in corporations is low and we all want to do something about it. I would like to suggest two connected issues that are worth attention. Truthfulness in communications and how we resolve some of our differences.

Truthfulness in our communications; don’t confuse the telling of true facts with truthfulness.

The December 4th edition of Politico carried an advocacy ad from the American Coalition for Clean Coal Electricity addressing the importance of coal to power, jobs and a healthy economy. But power, jobs and a healthy economy are not the primary issues in question. The primary issue in question is climate change. An ad from a coal industry coalition with facts about power, jobs and a healthy economy, but no comment on climate change isn’t portraying a truthful position. A truthful ad would state clearly the ACCCE’s perspective on climate change before commenting on the other impacts of the sector.

The previous example originates in politics and advocacy, but the approach extends into the commercial world too. On December 20 ‘09 the major papers carried dueling ads. One encouraged the public to sign up to demonstrate support for Time Warner’s position; “some TV networks want massive price increases or they’ll pull the plug on their programs. We think that’s unfair….” The dueling ad encouraged people to go to to demonstrate their support that Time Warner shouldn’t increase their rates. “Time Warner Cable is using programming costs as an excuse to raise your bill while they continue to rake in billions in profits”

The ads tell truths, but in telling only part of the story, neither is a truthful portrayal of the situation. Moreover as the ads do not address the same issues (Fox didn’t actually comment on whether it was trying to increase its rates, Time Warner made no mention of profitability) a consumer reading each can make no reasoned determination. These ads can serve only to reinforce preconceptions.

Which gets me to my second issue. I wrote a post early last year “Legal Is Not Sustainable” that explored the adversarial approach we take to dispute resolution.

A headline in the NYT a few weeks back “Are Advertisements True” referred to advertising disputes from AT&T and Verizon, Campbell Soup and Progresso, Pantene and Dove, UPS and FedEx, GE and Bracco.

I see an underlying theme through many of the disputes. The facts in the positions are true, but the facts chosen tell only part of the story.

When companies duke it out in public like this, they demonstrate a lack of trust in each other. If companies don’t trust each other, why should Joe public trust companies?

Tuesday, January 12, 2010

Guest Blog Post: The Boeing Company

Veronica Cavallaro directs Research and Measurement activities for Global Corporate Citizenship at The Boeing Company, working with various stakeholders to collect and analyze meaningful data to both inform strategy and demonstrate the effectiveness of our work.

Before joining Boeing, Cavallaro served as chief quality officer at Illinois Action For Children. She began her consulting career at Arthur Andersen working in the areas of bankruptcy, forensic accounting, white-collar crime, and litigation support. She gained significant perspective and experience in management consulting and audit through her work in Europe, Asia and Mexico. Additionally, she spent several years consulting to Illinois-based organizations in the areas of workforce development, technology, transportation, education and housing. Cavallaro is qualified as a Certified Fraud Examiner.

As I sit here at the beginning of a new year, I pause to think of what we are achieving as CR practitioners and how that relates to our business at The Boeing Company. Just before the holiday break, our new generation 787 aircraft took flight. For our company, this was a major achievement in a year where good news in the business world was tough to come by.

As an employee working in our corporate headquarters in Chicago, I am not directly involved in the production of the 787. Most of our workforce on that program is located in Puget Sound (Washington). The first flight of that aircraft was a milestone in a long list of milestones for that program. But this milestone was different.

It didn’t occur to me how different this milestone was until after the plane flew. Certainly, watching the reaction of our employees as the plane took off was emotional and delivered an overwhelming sense of pride straight across all 155,000 of us. Designing and producing an aircraft is a monumental effort that takes people with varied skill sets and perspectives to bring everything together successfully. It takes time, a laser-like focus on the goal, and perseverance.

The first flight was surprising to me because of the attention it garnered from people who do not appear to have a vested interest. Friends and acquaintances from around the world contacted me offering their congratulations. It made me realize that the level of visibility of that singular event was truly global and people from all walks of life took interest.

Having grown up in Detroit where the workforce was linked in some way to the auto industry, I don’t recall a similar excitement from the announcement of a new car. Sure, everyone has their favorite car or car line and new releases are causes of delight for some, but I can’t think of another example that has caused people around the world to connect and be excited. Boeing’s products over the years have tended to do this…from the birth of the company back in 1903 to putting shuttles and satellites in space, to revolutionizing commercial aviation with the 787. It is an amazing and humbling experience to be a part of this rich history.

So, back to my comment about how rarely we have received good news this past year. Perhaps people are just looking for something positive to hold on to. Perhaps these well wishers are actually stakeholders of a different sort? Is it possible that the traditional view of stakeholders – employees, customers, suppliers - is due a rethink or expansion?

Presumably, the folks who contacted me are customers of our airline customers and see the 787 as the product it is – a new generation aircraft that will connect people and places together. However, it strikes me that perhaps the interest people have taken in this plane is due to something much simpler. Maybe people have hungered for a success story and after a year bombarding us with negative news, this is the type of success story they have been waiting for.

Relating back to CR, the opportunity for people to feel good about something – as alluded to in several posts on this blog – is an important element of employee engagement. Perhaps more importantly, it is part and parcel of the human condition.

Friday, January 8, 2010

My Themes for 2010

Below are some themes that appeal to me and that I plan to explore further during the coming year. Hopefully you can see a link between these and some of the items on my wish list for the coming decade in my previous post.

Regaining trust – A major discussion within the business world. Businesses are at the bottom of the barrel on public trust, equal only with politicians. Will increased corporate citizenship be enough to change this or do we need to do something more fundamental?

Stakeholder engagement – I spent a lot of time on employee engagement in the last month or two of 2009. I am interested in other stakeholder groups too and in particular the contrasting expectations individuals have of a company depending on which stakeholder hat they are wearing.

Terminology - CR, sustainability, philanthropy... we sprinkle these and many other terms into our discussions. While I am aware of the differences in their meanings I have had difficulty envisaging a framework that accommodates them all. I have recently started to see how they could fit together and I hope to collect my thoughts enough to write a short paper on this, or failing that, at least a chart!

The role of the CR practitioner – What are the components of a profession as opposed to a job? Certification, ethics codes, job descriptions, specialist recruiters, insurance indemnity. As a governing board member of the Corporate Responsibility Officers (CRO) Association and chair of the professional development committee of the association I am passionate about creating a foundation for the CR practitioner that puts it on a par with other professions. I hope to work on making some of these a reality in 2010.

Public versus private companies – I am interested in the change in value judgments in privately owned companies compared with public companies. Whether the paternalistic approach of small family owned business, the reasons for the feeling of betrayal when companies like Ben and Jerry’s and Stoneyfield’s Yogurt are acquired, the strong ethics values felt by employees of Mars (a family owned business) compared with the superior transparency of publicly owned companies.

Measurement –I want to make CR more accountable through increased quantification of CR initiatives. At the same time I want business to be less beholden to narrow objectives and quantification of results and instead be able to take a more holistic view of success. Are these two objectives complementary or irreconcilable?

I’d also be interested in hearing your thoughts on what CR themes and issues are going to impact 2010. Have I left something out?

Wednesday, January 6, 2010

My CR Wish List For the Coming Decade

I know, the horse has bolted on some of these but it shouldn’t stop me from hoping, after all there are many things in place now in 2010 that we couldn’t have anticipated ten years ago. Here is a wish list for 2010 – 2020 that led me to envisage the press release in my previous post.

Daily stock prices become unavailable because no one has any interest in them anymore. Investors are in for the long haul and only really pay attention to the five year, ten year and longer term outlooks.

The ethical, social and environmental sustainability record of a corporate leader is as much a part of their professional credibility as the financial performance of the businesses they have led.

The CR role has become a profession that complements the accountants, lawyers, engineers and marketers that run our businesses such that corporations are not required to have a CR practitioner on the leadership team because they wouldn’t think of doing otherwise.

The predominant mode of discussion in the business world shifts from binary positions, legal style advocacy and resolution through the law and instead puts more emphasis on understanding alternative views, on holistic decision making and on arbitrated resolution of disagreement.

Green products, advertising and marketing disappear because it has become a basic requirement of doing business and it makes no more sense to advertise that your company is green than to advertise that it isn’t fraudulent or criminal or your product is not a safety hazard.

Individuals are able to reconcile the contrasting values they apply as members of civil society with those they apply as employees, as investors and as customers of a company, to reach a consistent and balanced view of how companies should act.

Monday, January 4, 2010

A New Year’s Wish for the Coming Decade

With some wishful thinking, aided by a glass of champagne to bring in the new year, I envisaged this press article from later in the decade . . .

PWF Inc, the global conglomerate, today announced Donahugh, currently president of a key business unit of the company, as its new CEO. The last and most senior appointment in its refreshed executive team. Corporate responsibility has been a defining component of Donahugh’s management style.

Over a year ago at a boisterous annual meeting, shareholders demanded a change of leadership and, consistent with the lead set by so many other businesses, approved the cessation of reporting the forthcoming quarter’s expected earnings, to be replaced by annual reporting of the five and ten year outlook.

Although disappointed with the lackluster performance of the company, shareholders offered some limited praise that the current leadership had in the mid part of the decade overseen a fundamental shift of the core business across to new sustainable raw materials. In so doing, the worst of the price hikes that had left some less enlightened competitors in the dust were avoided. The true winners in the sector though had been those that saw this coming in the Aughts.

In making the announcement, Chairman of the Board Peterson pointed out that “It is not coincidental that Donahugh, our pick for the role, headed the division of PWF that over ten years steadily outperformed many stock market darlings which had started so well but then fell by the wayside”

Major pension fund shareholders also made clear that after decades of leadership swings between the traditional management disciplines, it was time for leadership with a new all encompassing perspective. “We need the companies in which we invest to take a more holistic approach” said Green, VP at a large institutional shareholder, “An approach that takes into account engineering, finance and sales to deliver a long term return to shareholders but within the context of the society in which the company operates. In many cases our clients, as well as being investors of PWF, are their employees and customers too or are impacted by PWF simply as members of civil society. We see leaders with a strong record of corporate responsibility to be best placed to fulfill that role”.

Donahugh has a Masters in Sustainable Business Administration and is a Chartered Corporate Responsibility Practitioner.