IQ

The Corporate
Citizenship Issue

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The Political
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What's in Store
for 2013

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Paved with Good Intentions

Tom Zara

Paved With Good Intentions Image


Just how little can $5.2 billion in corporate and individual charitable giving buy? And how can we do better?

In January 2010 an earthquake of 7.0 magnitude rocked Haiti, leaving 650,000 Haitians homeless and destitute. Already one of the poorest countries on earth, with a crushing mixture of exposure to natural disasters, poor infrastructure, rampant malnutrition, and low educational attainment, Haiti on the eve of the quake had already spent decades near the bottom of every global index. The Haitian people, as a result, had become forgotten and ignored by much of the global community, consigned to the “basket case” category by the cynical and the well meaning alike.

After the quake, something remarkable happened. Money, relief, and volunteers began pouring in to the country, much of it through corporate giving and corporate matches—eventually totaling over $5.2 billion. Largesse this robust carried the potential not only to help Haiti recover from the earthquake, but also to “build back better” so many of the social institutions and infrastructure Haiti had long lacked. Yet today more than 600,000 Haitians still call displacement camps home, generally under squalid conditions and with uncertain hopes for the future. More than mere metaphor, this episode speaks to the failure of good intentions. While this chapter of human suffering remains unfinished, and the resolve to bring some semblance of normality to all Haitians continues to motivate millions of generous intentions, the question remains glaring: Why hasn’t citizenship, and corporate citizenship in particular, been more effective?

We’ve split off our best thinking from our best intentions. Focus is the key to reuniting them. We need to remember there are two pieces; “citizenship” is only half of it. We like to say yes to the ever-widening requests for help. We want to try to be good citizens, but in doing so we are, ironically, neglecting the “corporate” piece—which is where the focus and effectiveness reside. If our efforts are failing to register a meaningful change—if all that money is adding up to mere hand wringing, as the Haitian case suggests—then we need look no further than our own tendency to think of corporate citizenship as an addendum to our business (at best) or a necessary medicine we take because we’re told it’s good for us. It’s past time to align strategy and social conscience.

One would think that marshalling energy and desire into a concerted and focused corporate citizenship strategy would be a logical and presumed competency of any well-managed organization. Evidence would suggest otherwise. Having canvassed CSR executives, heads of corporate foundations, CMOs and CEOs on the efficacy of their corporate citizenship, the frequent lament was the same: The tendency to steadfastly perpetuate grandfathered charitable efforts, coupled with the seemingly inexhaustible number of requests for help, contributes to an overwhelming set of choices and decisions.

We must operate companies in the hard light of economic uncertainty and face the cold facts that more are in need and there are fewer funds to support these needs. Corporations have fallen into the trap of diluting their commitments as a compromise to “feed the mouths” of more obligations. This well-intentioned thinking is taking us down the wrong road.

Corporate citizenship has six constituents that define the horizon of any strategic approach of “doing good.” They are: the corporation’s employees; its customers; its suppliers; the communities in which it operates and plays; the governments with jurisdiction over the corporation’s affairs; and the planet we all rely on.

A 2009 Interbrand global study on corporate citizenship concludes, among other things, that any aspect of corporate citizenship directly correlates to all other aspects of the definition. In other words, if you are known to excel at programs that relate to the community, you get credit for all five other dimensions of citizenship. One has both the opportunity and permission to focus, and the reputation of the company is neither diluted nor compromised by embracing the strategy of single-mindedness.

That focus will enable you to manage the gap that exists between your corporate citizenship performance and public perception. It was this gap that shaped Interbrand’s latest corporate citizenship research, our Best Global Green Brands study. We knew that if we were going to create a better measurement of a brand’s participation in sustainability (and there are already over 100 in existence), we needed to consider two dimensions. The first was public perception. What does the customer actually think about these brands relative to their responsibility to the environment? We also know that in this world of transparency there is a tremendous amount of data available. Today we can actually examine the processes and the performance of these organizations. It’s the marriage of these two metrics, performance and perception, that gives us a truer reflection of how well these organizations are doing. And each must be managed carefully, as scoring too highly on either measure can be dangerous. If public perception outpaces your performance you could be called out for greenwashing. If your performance far outweighs perception you are leaving a considerable amount of value on the table.

How an organization chooses where to focus and communicate that focus is the key—the place where the rhetoric gives way to reality. And that is precisely the place where this issue of IQ picks up the trail.

FYIQ