IMPLEMENTING CSR STRATEGY: INCLUSIVE AND SUSTAINABLE DEVELOPMENT* Prof. Colin Coulson-Thomas University of Greenwich, UK * Paper published as: Colin Coulson-Thomas (2011), Implementing CSR Strategy, Inclusive and sustainable development, in Lt Gen J S Ahluwalia and Pradeep Chaturvedi (Editors), CSR – Driver of Social Inclusion, Sustainability and Profits, New Delhi, MM Publishing / Institute of Directors, pp 18-31 According to the World Economic Forum (WEF, 2011) mankind faces a variety of significant and interconnected global risks that are perceived as likely, or very likely, to occur in the next ten years. The scale of the challenge is such that multiple responses are needed. Organisations must raise their ambitions, and ensure strategies to reach and engage much larger numbers of people are quickly implemented. In different arenas, and over a period of many years, significant gaps have emerged between the articulated strategies of boards and their implementation, to such an extent that achievements have sometimes fallen far short of aspirations. This paper examines what boards can do to obtain more of a balance between words and deeds in the area of corporate social responsibility (CSR) and cost-effectively engage additional groups. The paper will also examine an alternative or “bottom up” way of achieving distributive social justice and sustainable development, namely corporate championing of a growth model that is rooted in the empowerment of people, including the communities that CSR policy is designed to benefit. The suggested approach provides the support necessary to enable many more individuals to take responsible and beneficial decisions, thus widening inclusion. IMPLEMENTING STRATEGY While some boards appear almost exclusively concerned with reviewing and formulating strategy, because of the separation of ownership and control (Fama and Jensen, 1983), they may need to be reminded that shareholders and other stakeholders are primarily concerned with results rather than rhetoric. Aspirations are noble, but it is outcomes that people can see, smell, taste and feel. The implementation of various strategies is an important aspect of the work of boards (Stiles and Taylor, 2001), and a board should ensure that its strategic intentions are realised (Brauer and Schmidt, 2008). This might require looking beyond the formulation of strategy and greater concern with its implementation (Siciliano, 2002). Strategies have been easier to formulate than implement to such an extent as to raise the question of whether some visions might actually represent a con in view of a gap between management myth and corporate reality that has arisen (Coulson-Thomas, 2002a & b). They can also raise expectations, and lead to disappointment, if people are not provided with the support required to achieve desired outcomes. While the measurement of board effectiveness is far from easy (Allen et al, 2004), one possible criterion is the extent to which a board ensures that the people of an organisation are equipped to do what is expected of them, and those it wishes to help are enabled to help themselves. Non-executive directors could question the extent to which performance support is provided to employees and other stakeholder groups. DIRECTION AND MANAGEMENT The distinction between direction and management is an important one, and effective boards endeavour not to become involved in operational matters, but to focus on strategic decision making (Forbes and Milliken, 1999) and their specific roles and responsibilities. While implementation might be considered an executive or management rather than directorial activity (Mace, 1971), a board should monitor developments and take steps to ensure progress is made, and the strategic direction they establish is followed (Jensen and Meckling, 1976). Strategy and policy implementation can stall for a variety of reasons. Areas other than CSR have had problems. For example, in relation to quality, one survey suggested that quality standards had neither captured imaginations nor produced outstanding results over a 15 year period (Seddon, 1994). Another found quality programmes were running out of steam and lacked management support (Voss and Cruise O’Brien, 1992). Top management support has been shown by a succession of studies to be important for strategy and policy implementation (Coulson-Thomas, 1997). Boards and management teams need to ensure people understand why changes are needed and how they can to contribute to bringing them about. Ideally, they should also be helped to do what is expected of them. In relation to social responsibility, recognition of the need for corporate awareness of the impact of business activities (Barnard, 1938) and the issues of responsibility, control (Clark, 1939) and social performance (Kreps, 1940) is not a recent phenomenon. It has long been evident that corporate activities can have an impact upon the lives of many people (Bowen, 1953). The challenge is to ensure these impacts are positive and beneficial. It has been suggested that companies adopt a longer term perspective, or more strategic approach, to their responsibilities (Davis, 1960; Johnson, 1971). One option is to build the capabilities of key groups, including intended beneficiaries in order that CSR initiatives have greater impact. Cost effective ways of providing large and scattered communities with relevant and 24/7 support as and when needed are now available (Coulson-Thomas, 2011). In competitive markets and tight economic situations many business decision makers are keen to be responsible, but they are also under great pressure to improve performance and contain expenditures. At the same time, they are aware of customer, public and media expectations, and of their legal duties and responsibilities. In the UK, for example, the 2006 Companies Act requires directors to take account of the consequences of board decisions for different groups of stakeholders. Is it possible to be both socially responsible and profitable? Can one be more ambitious at less cost? TOP DOWN AND BOTTOM UP APPROACHES Many bodies adopt an approach, which could be termed “top down”. A corporate board itself takes CSR and other decisions, for example to reduce an organisation’s carbon footprint. Another approach - namely performance support - which could be labelled “bottom up”, is for a company’s board to equip others to take decisions with less detrimental and more sustainable consequences, and with a view to reaching larger numbers of people and democratising opportunities. In relation to sustainability, climate change, environmental and other impacts, the governing bodies of organisations could consciously set out to make customers and users of their various offerings more aware of the consequences of buying decisions. Directors can take steps to encourage and enable more responsible and less harmful purchasing and consumption. Health, the environment and corporate profitability could all benefit. In addition to the impacts of their own activities, boards can also secure a multiplier effect by equipping others to behave responsibly. This could apply to customers, users and other target groups, as well as to employees and business partners. Boards can ensure that the people of an organisation are equipped to do what is expected of them, and others are supported and enabled to create and deliver sought after outcomes. PROVIDING IMPLEMENTATION SUPPORT Too often corporate social responsibility (CSR) and other policies remain as words on paper and there is a wide gap between boardroom aspiration and the reality of conduct on the corporate front line. The author has argued (2007a) that as well as assembling relevant capabilities a board must ensure that, the processes and tools are in place to apply these capabilities to the achievement of its vision, goals and objectives. Many boards need cost effective ways of implementing policies if their good intentions are to result in desired outcomes. The good news is that there are practical steps a board can take to increase awareness of the potential consequences of different courses of action, and change the behaviour of customers, employees, users and citizens whose collective decisions and conduct can have varying degrees of harmful or beneficial impact. Performance support can address multiple needs of both a company and external stakeholders. For example, applications can help others, boost performance and speed up and enable bespoke responses, as well as reducing stress, avoiding risks and cutting compliance costs. Such favourable outcomes and high returns on investment (ROI) have been achieved within a year (Coulson-Thomas, 2007b). Providing support makes it much easier: for staff and customers to understand complex options, inter-actions and implications; for people dealing with customers such as contact centre teams, sales staff and account managers to do difficult jobs ; and for customers to make responsible choices. Today people can indeed be helped to help themselves. Adopting a different approach requires a shift of emphasis, for example from selling to enabling customers and others to determine the least harmful or most beneficial option, and making it easy for them to buy a solution that addresses their individual needs, priorities and concerns. The support provided can free people from dependency upon particular locations and enable mobile activities, relocation, outsourcing and different ways of working and learning. WAYS OF PROVIDING SUPPORT Organisations can greatly increase the scope and impact of their CSR initiatives by helping people to better understand complex areas and tackle difficult problems. The effect can be further multiplied, and many more people empowered to participate in development activities, and benefit from them, if at the same time users of support can be helped to adopt the approaches of those who excel at the activities in question. Various companies have used performance support tools developed by Cotoco to enable average performers to emulate the approaches of high performing “superstars”. To illustrate an application area, solutions have made it easier for users to understand what is available and buy in markets that are complex, and - in the case of telecoms and financial services regulated. Tools provided to staff in the front line, and to channel partners, have helped people to comprehend advanced technologies, relevant options and likely benefits, and assess the implications of their choices. Support can be designed so that users develop the confidence to address more complex problems and difficult decisions. Features can enable them to learn from each use. Performance support can have a much more direct impact upon both understanding and outcomes than e-learning and traditional face-to-face training (Fuller, 2010). The fact that it can be delivered via the internet and the latest generation of mobile phones meets a requirement for many more people to receive mentoring support (Clutterbuck, 2004), thus democratising opportunities and widening inclusion. As a result of incorporating critical success factors for the activity in question, whether winning business (Coulson-Thomas et al, 2003), pricing (Coulson-Thomas, 2002) or purchasing (FitzGerald, 2000), and capturing and sharing how superstars operate, users are also enabled to behave like high performers whether buying or selling. In both cases a wider group of people can be involved, engaged and helped to behave responsibly. Solutions can be simple, scalable and cost effective (Coulson-Thomas, 2007b). Animation and graphics may be used to aid comprehension of difficult areas. Different language versions, including Mandarin and Japanese, are relatively easy to produce. The ability to costeffectively address diverse audiences and support various language groups can meet international needs (Clutterbuck and Ragins, 2002) Cisco Systems uses tools to support buying decisions in over 100 countries. Because tools can be updated on line, they also enable content to be easily changed and kept current. Hence new offerings and services, innovations, discoveries and new approaches can be quickly and simultaneously launched worldwide. Best practice and fresh insights can be shared among users. The support tools used to enable more responsible choices are web compatible and can be delivered and updated whenever users are on-line or have a working mobile phone. Depending upon bandwidth, new generation website applications can also be used (CoulsonThomas, 2009b, and social networking incorporated. A simple checklist could be regarded as a support tool. In the case of a mobile phone application large numbers, or many millions, of people could benefit. UNDERSTANDING ENVIRONMENTAL IMPLICATIONS To illustrate what can be done to support and empower, let us examine how to make customers more aware of the environmental impact of their purchase decisions. Many corporate CSR strategies embrace environmental considerations and impacts. Support provided by suppliers can help people to understand and assess the consequences of available options and make more informed choices (Coulson-Thomas, 2009a). Rachel Carson (1962) in putting the case for the more responsible use of insecticides in her influential book Silent Spring argued that while it was not her “intention that insecticides must never be used … we have put poisonous and potentially potent chemicals indiscriminately in the hands of persons largely or wholly ignorant of their potential for harm.” Lack of awareness and understanding was also central to the critique of growth by Donella Meadows and colleagues (1972). Many citizens and buyers are not fully aware of the environmental and/or sustainability impacts of their purchase and/or consumption decisions. Some might behave differently if they appreciated certain connections, and were more aware of the implications of their actions. An understanding of different outcomes might enable them to select an option that minimises harmful effects. SUPPORTING RESPONSIBLE BUYING DECISIONS To illustrate how support tools can be used to help customers make more responsible choices let us consider a tool developed to support the sale and purchase of the Nomix TDC weed control system. Nomix is used by 85% of UK local authorities. Because of their environmental services responsibilities this community is particularly keen to behave responsibly and minimise harmful impacts when taking purchase decisions. The solution developed by Cotoco helps users to understand the environmental implications of different options that are open to them. For example the contamination risk of conventional systems was estimated by the UK Health and Safety Executive (HSE) to be 10, 20, 30 or 40 times greater than that of Nomix TDC. Buyers are given information that enables them to behave responsibly and justify purchasing decisions. When the support tool was built, particular emphasis was placed upon helping people to make informed choices. For example, prospective purchasers were shown how spray drift from an alternative such as a knapsack can cause environmental hazards, herbicide damage and health risks. Advantages of better alternatives are explained, for example that spillage can be avoided as a result of not having to mix different liquids. Spreading the cost of providing support across larger numbers of users can result in very low unit costs, especially when it can be provided over the internet or via a mobile phone application. Support can be made available to additional external groups, including the general public, to maximise impact at relatively little extra cost. KEY LESSONS FROM CASE STUDIES The experience of early adopters of performance support suggests there is much that companies can do to help their customers and other groups, and to democratise opportunities, by making advise hitherto only provided to a few available to many. We have seen how it can be used to enable people to make more responsible purchasing decisions. Helping people - supporting and empowering them to handle a range of challenges, questions and decisions, and achieve desired outcomes – could be made a core element of a CSR strategy. Suppliers should aim to make it very easy for customers to understand, select and acquire what they need. Each application should help a user to build confidence, knowledge and competence. Rather than just automate existing approaches and processes, these should be reviewed and improved. Critical success factors should be built into support tools, along with the superior approaches of high performers. Easy and on-line updating means that innovative approaches and developments such as new climate change research findings can be quickly disseminated. To some the notion of an organisation providing support can appear a prescriptive rather than “bottom up” approach. Yet social networking and other forms of collaboration can be included in the support provided, to enable users to share experiences, comment on each others views, provide feedback, and review, revise and refine certain aspects according to their experience and insights. “Bottom up” involvement can harness the expertise that might be latent in large groups. For example, BT encourages members of its large community of engineers to apply for support to enable them to capture and share ideas and practices, for example by establishing web pages and blogs, and filming what people feel are better ways of tackling particular problems. The company’s BTpedia is largely self policed, in that unsound suggestions quickly draw corrective responses (Dunbar, 2011). The approach advocated is more cost-effective with larger groups and relatively homogenous tasks, but the high returns on investment (ROIs) achieved in commercial applications suggest its beneficial use is feasible in a variety of contexts by organisations of different sizes. In particular, the right support can enable bespoke responses to individuals. Interested adopters should focus on opportunities for the greatest impact. Tools provided need to be periodically reviewed and regularly refreshed. Online updating can ensure that support provided is relevant and current. COMMERCIAL BENEFITS OF SUGGESTED APPROACH Commercial users of the suggested approach report a variety of benefits, and use various indicators to measure the results achieved, such as higher new business win rates, improved cross and up selling, shortened sales cycles, faster induction, lower training costs, less time out of the field, reduced support staff and fewer mistakes. Just in terms of new business won, SDX Business Systems found 30% of the increased sales achieved in the first year of adoption were due to its support tool, giving a year one return on investment (ROI) of 26.66 times the cost of the project. Eyretel commissioned a support tool which explained how its call recording equipment worked and helped customers to select, price, contract and explain a solution that addressed their particular requirements. The company achieved a year one ROI of 71.43 times project costs. The purchasing cycle was reduced by four weeks, and because people in the front line and their prospects were able to help themselves, two thirds of technical support staff were released to concentrate upon the development of the next generation of technology. Cisco Systems was faced with the challenge of introducing a new generation of technology into the marketplace and explaining the benefits which its own well qualified staff were finding difficult to understand. On the basis of only the first few interviewees within a large global sales force, and only counting new sales directly attributable to its use, an investigating statistician found the support tool’s ROI in the first six months was 38 times the cost of developing it. Again outcomes were achieved that benefited both company and users. The experience of these and other users is that performance can be increased, responses speeded up, stress reduced, risks avoided, bespoke responses enabled, and compliance costs cut. Customers can be helped to make responsible and sustainable choices at times and places that are most convenient for them. Understanding of options and implications can also be increased, and customer facing and other staff can find it much easier to do difficult jobs. Work can be relocated and outsourced. Corporate performance, customer satisfaction, and CSR aspirations can all gain. SOCIAL BENEFITS OF SUGGESTED APPROACH We have seen that commercial applications can have significant social benefits, for example helping to save the environment by enabling customers to assess the impacts of different purchasing decisions. Cotoco, which developed the SDX, Eyretel and Cisco Systems performance support tools just mentioned, has created other applications designed to address educational (e.g. for HSBC) and healthcare challenges (e.g. stroke care for Alliance PBC). According to a World Health Organisation (WHO, 2009) survey, the use of performance support in the form of a simple surgical checklist during major operations can lower the incidence of surgery-related deaths and complications by one third. Inpatient deaths following major operations fell by more than 40%. The WHO (2009) study was carried out in each of the six WHO regions, and in both high and lower income settings. The reductions in complications proved to be of equal magnitude in high and lower income sites. The author of the study (Dr Atul Gawande) believes that performance support checklists could increase the safety and reliability of care in numerous medical fields, and become as essential in daily medical care as the stethoscope (WHO, 2009). Using digital performance tools to help healthcare professionals could simultaneously address a variety of challenges, improve performance and standards, and benefit patients (CoulsonThomas, 2010 a and b). The approach can support the training, assessment, continuing education and development, updating and practice of healthcare professionals. It can ensure compliance with relevant procedures, regulations and standards and support collaboration across occupational barriers and between different organisations. Implementation is manageable, affordable and achievable within a relatively quick timescale. Benefits include better engagement with patients, greater understanding, improved performance, reduced costs, quicker responses and faster dissemination of beneficial treatment changes, less stress, higher standards of patient safety and care, and enforced and evidenced compliance. WIDENING SOCIAL INCLUSION As an alternative to developing their own tools, or as an alternative, companies that wish to further engagement, inclusion, and wider participation without themselves providing direct help, can support intermediaries such as charities and social enterprises that provide disadvantaged groups with ways of being involved. Support tools from simple checklists to mobile phone applications can be sponsored. Telephones are relatively familiar. Community Network has been providing social telephony services since 1989. Its vision is of “a world where telecommunications enables everyone to connect into their community so as to relieve isolation, overcome challenges and provide the opportunity for full participation and inclusion in civil society” (Fitzsimons, 2010). The charity’s initiatives widen inclusion by reaching groups such as the elderly who are “digitally excluded”. As Sir Michael Marmot (2010) put it “social isolation kills older people”. Groups targeted by Community Network telephone support initiatives include carers, seafarers, rural groups and refugees. Benefits for target groups include: the development of socials skills, companionship, alleviation of feelings of isolation and disconnection, keeping loneliness and depression at bay, improvement of mood and the creation of an optimistic mindset, the exchange of valuable information, and equality of access and input (Fitzsimons, 2010). CONCLUSIONS The commercial, social and inclusion benefits achieved suggest that helping customers and users to make socially responsible choices can enable a supplier to build longer lasting and mutually beneficial relationships with them. Boards can act with more confidence that people will be equipped to implement CSR and other policies. Providing target groups in the community with similar support can engage, inform and empower them, and help them to achieve beneficial outcomes for themselves and the planet. Internet, mobile phone and landline applications can enable much larger communities of people to be reached at minimal incremental cost in relation to the additional benefits of democratising support. People can be helped to adopt more sustainable and healthier lifestyles, engaged and co-opted by means of social networking into helping each other, allowing CSR initiatives to play a catalytic role, and securing considerable leverage and social returns on corporate investments. Strategies and policies can evolve beyond the achievement of initial aspirations, widen inclusion and develop a life of their own. FURTHER INFORMATION Do you and your boardroom colleagues take steps to help people to implement CSR and other strategies and improve aspects of their lives? Further information on what high performers do differently in areas that are vital for corporate success, and how performance support can make it easier for people to do difficult jobs and handle complex challenges, can be found in ‘Winning Companies; Winning People’ (Coulson-Thomas, 2007b). Reports on critical success factors for particular activities can be found on www.policypublications.com. Additional performance support examples can be found on www.Cotoco.com. 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Author of over 40 books and reports he has helped over 100 boards to improve performance, and has spoken at over 200 major events in 40 countries. He can be contacted via www.coulson-thomas.com