Which is more important – profit or doing good? For most corporations, profit has been everything. “Doing good” has been charitable donations, programs or other community engagement has been the window dressing for many companies so they can say they are socially responsible. And yet, there are so many times we hear of questionable or unethical practices such as credit card companies are charging fees even when you have a zero balance, manufacturing processes that release dangerous (even lethal) substances into water systems or mistreating their employees. Often these behaviors stem from people in a particular company seeking to save money and increase profits so they can expand, pay bonuses and/or dividends.
Harish Marwani’s perspective
In his TED talk, Harish Marwani, CEO of Unilever, proposes that corporate social responsibility is a standard part of any 21st century business. He proposes that there is a fourth G in his growth philosophy:
Marwani explains that:
Companies cannot afford to be just innocent bystanders in what’s happening around in society. They have to begin to play their role in terms of serving the communities which actually sustain them. And we have to move to a model of an and/and model which is how do we make money and do good? How do we make sure that we have a great business but we also have a great environment around us? And that model is all about doing well and doing good.
It is more than making the product or service you are known for. In Marwani’s case, Unilever is known for making soap. He spoke about the programs sponsored by Unilever as part of their sustainability model. He also said Unilever was also looking for sustainable sources for ingredients in their products. For Marwani and Unilever, doing good is about finding sustainable sources for their products and sponsoring programs.
John Paluszek, Pioneer of Corporate Social Responsibility
It has been the practice of companies, particularly larger companies, to focus on increasing profit as well as value for shareholders. More recently, there has been a trend for companies to ask if there is some sort of relationship they should have with the community in which they are based and maybe even beyond with vendors and charitable groups. John Paluszek is one of the drivers of this conversation.
In a Forbes interview, Paluszek explains five areas of corporate responsibility:
- “Natural” accounting dilemma and environmental impact
- Noticing which framework(s) provide the best way of accounting and set the tipping point for corporate social responsibliity to become mainstream
- “Business for peace” (UN Nations Global Compact)
- Inequality will be a driving force for new thinking about a greater commitment to ethics, morality in business decisions and capitalism
- The next generation of leaders will be more committed personally and professionally
Not entirely clear yet
It is difficult for some people to adjust to the idea that business can be a force for good. There are people who are willing to buy from companies who actively engage in sourcing sustainable ingredients, attend vigorously to environmental concerns and sponsor charitable programs. But other questions arise. The very definition of “doing good” is fraught with the history of one group coming in and telling others what is good for them without regard to what might already be in place. There is also the question if mainstream consumers care more about price or the reputation of the company. And maybe most of all, there are serious questions about capitalism and how it influences human behavior.
What do you think? Could a company be more sustainable if profit and doing good are connected? Join us Friday, March 7, 2014 at 5pm GMT/12pm ET/9am PT to look at this more closely on the Twitter chat, #KaizenBiz
What differences exist between smaller organizations and large corporations embracing corporate social responsibility ?
Who defines what is “doing good”?
What sort of definition(s) are we giving to “sustainability”?
How is the desire for meaning and purpose of the individual employee influencing organizations engaging in corporate social responsibility?
How would you measure how companies make a profit and do good?