I have discussed the role that volunteer work and philanthropy can play in an organization, enabling entrepreneurs and their staff members to pursue causes near to their hearts while providing the added benefit of boosting the companies’ image. However, sometimes charity runs and volunteer days are not enough to make a sustainable difference.
Michael Porter, a professor at the Harvard Business School, has been advocating a different model of running a business that turns a profit while helping society. In a 2006 piece for the Harvard Business Review, he and co-author Mark Kramer charted the rising awareness of corporate social responsibility (CSR). The authors noted that the societal and environmental improvements made through business programs “have not been nearly as productive as they could be.” This is in part because they “pit business against society” and also because CSR strategies have been “generic” rather than tailored to fit individual businesses’ strategies. So how can socially minded organizations maximize the image of their efforts?
Porter noted in a May 2012 presentation for the FSG Shared Value Leadership Summit that “Despite growing corporate citizenship activities, the legitimacy of business has fallen.” For entrepreneurs to elevate the image of their enterprises while continuing to do good for their surrounding communities, they will need to start thinking about CSR strategically, interweaving it with their business models instead of treating it as finite projects.
Rather than investing in corporate social responsibility or philanthropy, which produces minimal returns for businesses beyond personal satisfaction and publicity, he promotes the idea of creating shared value (CSV). Consider products or services you can deliver that foster prosperity without detracting from the health and greater good of the broader community, he advises. To achieve CSV, businesses must think of how they can integrate “social improvement into economic value itself.”
Take a look at your current product and service offerings. Is there room within your corporate structure to create new lines of business that may benefit an untapped client market without incurring additional expenses? What aspects of your infrastructure lend themselves to further development, allowing you to help underserved groups or societal subsets in a way that also allows your organization to make money or give back in a new and unique way.
It’s not necessary to think about social responsibility and business productivity as mutually exclusive goals. Reflect on ways that your company can direct its energy toward activities that provide value for society and for the business.