Hi-tech leaders, from Google to Cisco, all carefully practice social responsibility. To understand the strategic advantage of doing so, we must trace the concept of “social responsibility” among corporate leaders as it has evolved from “why?” to “how?” to “better?”
There was a time in the early 1970s when Milton Friedman famously wrote that the sole purpose of a company was to make money. At that time he was stating an obviously belief of most people. Those days are long gone.
“The theological question—should there be CSR?—is so irrelevant today,” says John Ruggie of Harvard University’s Kennedy School of Government. ‘Companies are doing it. It’s one of the social pressures they’ve absorbed.’”
The Business Council of BC reported in a recent survey that 83% of companies make corporate social responsibility a priority, compared to just 54% three years ago. Michael Porter, the renowned strategic thinker notes that, “CSR has emerged as an inescapable priority for businesses in every country.”
Concern over climate change is viewed as one of the biggest drivers behind the social responsibility movement. The venerable Economist explains, “Company after company has been shaken into adopting a CSR policy: it is almost unthinkable for a big global corporation to be without one.”
The discussion then moved from “why?” to “how?” Companies recognized the many benefits of social responsibility. “One way of looking at CSR is that it is part of what businesses need to do to keep up with (or, if possible, stay slightly ahead of) society’s fast-changing expectations. It is an aspect of taking care of a company’s reputation, managing its risks and gaining a competitive advantage.”
A strong social responsibility program also benefits employees. For example, “Ask almost any large company about the business rationale for its CSR efforts and you will be told that they help to motivate, attract and retain staff.” Often company-wide efforts, such as participating in a walk for cancer research, will be engaged in not only for supporting a worthy cause but also as a team-building exercize.
The emphasis in today’s market among many companies relates to how to practice social responsibility. With respect to the how of social responsibility, large hi-tech companies generally take on projects in which they can leverage their expertise and make a difference in a practical way.
These large companies practice very deliberate strategies to leverage their time, expertise and financial resources. The vision and mission of the Cisco Foundation, for example, is to address basic human needs, education and economic opportunities and to “focus this work on underserved communities and look for solutions that harness the power of the internet and communications technology.”
Smaller companies likewise generally look for selective opportunities but they may end up being pursued in an uncoordinated manner. Smaller companies can not always allocate resources to devise a deliberate social responsibility strategy. In addition, they are not always able to convey a clear message into the marketplace as to the causes they support.
So, how to practice social responsibility “better?” According to the Economist, “The next wave, some believe, will be one of disruptive innovation, featuring a new breed of “social entrepreneur” that will take over from the established big companies as the driving force. [One respected executive,] Mr. Benioff of salesforce.com reckons that social entrepreneurs have “cracked the code” of the next generation of corporate responsibility: it will be for-profit and self-sustaining.”
Joseph Schumpeter’s gale of creative destruction will descend upon the environment of social responsibility and from it will eventually emerge new models. The next generation of social entrepreneurs will likely be those who can combine a for-profit enterprise with social good—and demonstrate that they are not polar opposites.
The next generation of social entrepreneurs will surely include those who integrate Web 2.0 strategies and technologies. These will be the companies that make the world a better place. And they are more likely to do so by working with socially-responsible corporations rather than supplanting them. This will have moved us from “why?” to “how?” to “better?”