Value is the theme that should unite all CSR projects and should be a key factor in major project decisions and strategies. Value for shareholders, value for local communities, value for stakeholders; these are the considerations that should underpin program and budget decisions and actions. If value is not central, what is? What can make a CSR project sustainable if value is not present?
Yet, too often the issue of CSR and value is looked at only peripherally, if at all. It is almost as if somehow value is crass and CSR should be ‘above or beyond’ value considerations.
Hogwash! Balderdash! Why else would industry, communities, development partners and others engage in and with CSR if not for creating, preserving or maintaining value?
CSR is truly a self-interested activity and has a much better chance of success when the value interests of industry and stakeholders can be aligned and maximized.
Over the last couple of decades of working on and analyzing CSR projects and activities across many industries and on all continents I’ve noticed some strategies for maximizing value from CSR.
These have worked quite consistently across industries, sectors and geographies.
That doesn’t mean that they all work, or even that they all apply all of the time. But, if you are looking to maximize the value created through CSR this is a good list to review. You may find some gems.
This list of eleven strategies for maximizing value from CSR is applicable to all partners and stakeholders in CSR.
1. Strategic partnerships
CSR is tough and expensive to do alone. Strategic partnerships can bring incremental resources (financial and other), execution synergies, and an expanded network and enhanced sustainability to CSR initiatives. But, be careful, partnerships take work and planning and can go off the rails if not developed and managed properly. Two steps are critical to developing partnerships that add value.
The first is to ensure that there is a meaningful alignment of interests; that all parties can share at least some common objectives and approaches. The second is to get to know your partners well.
Partnerships can make your project smarter and stronger. But, only if planned and executed well.
CSR should seldom be a stealth operation. Neither should it be the focus of a ‘shout from the rooftop’ type of indiscriminate communication strategy. Communicating the right messages to the right audiences at the right times and doing so in a way that they can hear and absorb the message can add a lot of value to most CSR projects. Doing it wrong, or badly can destroy a lot of value. Key audiences to keep in mind include partners, stakeholders, influencers and (often missed, or misunderstood) internal stakeholders.
3. Internal synergies
Often you need to look no further than the next desk to find strategic opportunities to add value. Engaging your internal colleagues can unlock value for shareholders and stakeholders and often enhance the long-term sustainability of CSR projects. Some of the most efficient and effective ways to create community and stakeholder value may be through integrating corporate CSR objectives across corporate operations.
Local procurement, local hiring, enhanced training for locally engaged staff, employee volunteerism and other strategies and tactics can create value for shareholders, communities and other stakeholders. In addition to the obvious synergies for companies, there is often an enhanced camaraderie amongst staff as a result of this sort of internal collaboration – and this can translate into value on other dimensions.
4. Fresh-eyes review
Familiarity creates blindness, or at least vision problems! Sometimes, quite often actually, a fresh set of experienced eyes can see opportunities (and challenges) that are easy to miss if you have been involved in a project day after day after day. Experienced fresh eyes take less for granted, ask dumber questions. Sometimes the dumbest questions can unearth the most amazing insights. Don’t hesitate to bring someone in who knows nothing about your project (but a lot about CSR and value) and have them take a look at where new or enhanced value may be found.
There are frequently gems hidden in plain site that only a fresh set of eyes can see. Fresh eyes can often spot value gems that are hidden in plain site.
5. Forget do-gooderism
If you are doing CSR because you want to save the world, or even just to save the adjoining village, do everyone a favour and resign. Seriously, CSR is not about do-gooderism. It is about hard-headed value creation, value optimization, risk management and other core business needs. If done well CSR can and does do a lot of good work and value creation for communities, stakeholders and society at large (and for shareholders too!).
But, always remember, that if you set out on a CSR journey with a plan to only do good works you are likely to stumble and fail and do damage rather than do good. And that is not a strategy that will produce much value for society, for shareholders or for you.
6. Metrics and measurement
You can’t measure temperature with a speedometer! The key to using metrics and measurement to unlock value is having project-appropriate metrics and measurement. The metrics and measurement should drive from the ‘why’ and the ‘how’ of the project itself and not from some preconceived corporate or external framework.
We’ve all heard that you can’t manage what you can’t measure. In CSR there is another every bit as true.
You can’t measure what you can’t measure!
Metrics need to fit the project and be as simple as possible. If they don’t they cost money, cause frustration and accomplish little. Metrics and measurement are important for sure but sometimes corporate reporting frameworks, or directives to adhere to this or that global norm, standard or protocol, end up with the CSR frontline teams trying to measure the wrong things in the wrong ways. Every CSR project should rigorously and systematically measure progress and key indicators and have appropriate frameworks for recording and analyzing the data.
At the beginning of every project, or right now for those that started without this, there should be a thorough analysis of the ‘why’ and the ‘how’. Why is the company investing time and money into this particular project and not another? And ‘how’ can it track progress towards the ‘why’. This should give you the insights to help identify what metrics you need to track and measure. The answers will generally be specific to each project so it stands to reason that the metrics that are tracked and managed would be unique as well. Once you have settled on metrics you need to set up a systematic process for gathering them on a regular basis.
You also need to regularly review the metrics themselves. It is not uncommon that a few months into a project it becomes evident that some new metrics need to be tracked and/or that some of the existing ones aren’t helpful to track. What is key is to find the metrics and the data collection and analysis protocols that allow the project to efficiently track progress and use that information to constantly improve project management and implementation. This isn’t to say that all corporate CSR frameworks should be ignored or abandoned, or that compliance with global norms and protocols is unimportant. Far from it.
It is to say that project specific metrics that help you do a better job of managing and implementing a particular project are as important. Sometimes even more important. Good corporate frameworks should have the flexibility to accommodate and support project specific metrics and management.
Get the metrics right and new value can emerge.
Compliance with global norms, protocols and standards should be considered carefully and where/if they create too much added burden on CSR project management maybe they need to be reconsidered.
7. Strategic focus
How sharp is your strategic focus? Some CSR programs end up looking like they are trying to be everything to everybody. Most of these end up accomplishing very little except burning through budget and goodwill; both internal and external goodwill.
See the next point for what to focus on…
Lose focus and lose value. Stay focused and create value.
8. Systematically review CSR programs and their connection to value
Like most things in business and in life, CSR programs can get off track and out of focus. They can drift this way or that, or the reasons they started may no longer exist. Periodic reviews should be carried out on all CSR programs. They don’t have to be complex but should answer some basic questions.
- Why did this program start? What was the original value proposition?
- Is the original need still valid?
- Is it still as important as it was?
- Is the program meeting that need effectively?
- Does meeting that need produce value for society AND shareholders?
- If the program were just being launched now, is there anything that you would organize or do differently?
- Are you engaged with the right partners? Are there new ones? Are the old ones still the right partners?
9. Interest alignment analysis
This is all about lining up what’s in it for you with what’s in it for them. The essence of CSR is about aligning shareholder and societal interests in a way that produces value for both. An interest alignment analysis examines CSR programs to ensure that value is produced for both society and shareholders. It also explores opportunities for additional value and alignment, which can help to identify and develop strategic partnership opportunities.
Aligning interests more effectively increases value for shareholders and society.
10. Use consistent frameworks to understand value
Don’t expect value to emerge spontaneously, even if you are doing good work. Meandering through CSR projects waiting for value to show up may produce some results. But, not many and not consistently. And you should be fired for doing it!
Value happens when you plan for it and work for it. It helps to have a framework, or frameworks that help you to better understand value and how to optimize it so you are maximizing value for shareholders and stakeholders. I often use a series of related frameworks based on a CSR Value Continuum. You may have others that work as well or better. What is important is to find a way that allows you to quickly and consistently analyze and understand the value dimensions of your CSR projects.
The CSR Continuum is part of a series of frameworks that I’ve found to be quite helpful. There are others. Find one or more that work for you.
11. Understand the value sustainability
How long does the value last? Is it like OpEx or CapEx? CSR programs and investments produce value (or they should!). You can often find ways to generate and capture more value if you look at it in terms of time. Does the value that your program produces last beyond the current period? Will it continue to produce value over time? It can help to think of it in terms of Operating expenses vs Capital expenses. One produces value that is basically used up in the current period and the other produces value that lasts beyond the current period. Don’t make the mistake of thinking that CapEx type of CSR programs are necessarily better. They aren’t.
What is important is to understand what type of CSR investment you are making and use that knowledge along with other insights and analysis as you seek to maximize value for shareholders and stakeholders
CSR investments can be broken into OpEx and CapEx types of investments.
These eleven strategies for maximizing value from CSR have been developed over a lot of projects and with insights and support from a lot of colleagues and mentors.
A veteran of 20+ years of award winning CSR and sustainability work, Wayne Dunn is President & Founder of the CSR Training Institute and Professor of Practice in CSR at McGill. He’s a Stanford University Sloan Fellow with a M.Sc. in Management from Stanford University Graduate School of Business. He develops and delivers training programs worldwide and consults on strategy, economics and operations to industry, government and international organizations. His work has won major international awards and has been used extensively as ‘best-practice’ by industry and academia, including being made into a Stanford Business School Case Study.