Where are you on the journey?

I have a penchant for simple models and frameworks.  In developing a presentation recently I used what I perceive as a three stage evolution of the corporate responsibility journey;  (1) how we give it away, (2) how we spend it and (3) how we make it.   The “it” of course is  money.

Stage 1; How we give it away. The traditional mode of corporate responsibility delivered through philanthropy, community investment and volunteering.  We make a profit and then we find ways to give it away for the good of society, sometimes referred to by the phrase ‘giving back to the community’, which carries the unfortunate (and I hope incorrect) implication that we took it away in the first place.     Strategic philanthropy is an enhancement in which giving is aligned with core business objectives and competencies.

Stage 2;  How we spend it.   All the ways in which we spend money. These are the realms over which we have the most direct control. This includes environmental management of our operations, energy and carbon footprint reduction, HR related issues such as diversity and employee wellbeing and  business practices such as bribery and corruption.   Another component of Stage 2 is looking along our supply chain (where we also spend a lot of our money) and influencing our vendors to align with our values.

Step 3; How we make it   This is where the most advanced companies are now exploring as they build sustainability into their core strategy for making money. Unilever, P&G and GE come to mind.  Stage 3 is encapsulated by the concept of  Creating Shared Value (CSV); identification of  opportunities to make money at the intersection of  profit and positive value to society or environment by analyzing  the financial, societal and environmental implications of an investment and prioritizing those with double or triple bottom line benefits.

The challenge for Step 3 is how we address the dilemma of what to do where profits and positive value to society do not intersect. What to do if portfolio components or potential investments are delivering a return for investors but do not bring net positive societal/environmental value. Perhaps in software terms this is Release 3.5. Status; ‘under development.’

  1. Comments 3

  2. Ed 11:00 pm on December 6, 2011

    This is a simple yet accurate framework describing the stages that many a company goes through. I believe that it is apropos of some individuals' career path as well.

  3. KevinMoss 3:03 pm on December 7, 2011

    Ed, thats an intriguing thought. I have tended to think of it the other way around that there are many wealthy business people who,as they approach the end of their careers start giving away the money they have made. Which puts 'giving it away' at the end of the process. I think that philanthropy is commendable and, goodness knows, charties and social causes need that money. But I hope that they made that money in responsble ways too.

  4. Andrew B 6:54 am on December 20, 2011

    Kevin - I like this framework. In terms of priority I would guess that many companies would (or perhaps should) place step 2 ahead of step 1, although in some circumstances this may not be as straightforward.

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