You’re an executive, so you’re about to lose your job
My morning routine is simple—I grab coffee, get into my car, scan through the radio pre-sets to find the most interesting topic of the day, and prepare myself for the morning commute, already considering what my day might entail.
One day last week, I happened across an NPR interview with Shankar Vedantam—a very well-informed and articulate guest on the morning show that just happened to be speaking about my industry—needless to say, I immediately tuned in.
He was armed with a study suggesting that CEOs who actively invest in corporate social responsibility (CSR) initiatives may be at risk of losing their jobs. Now, I found the title and subject matter to be provocative to say the least. Then again, my blog title is just as guilty. But all clickbait aside, the question is: Why is CSR such an important topic?
Throughout the twentieth and now into the twenty-first century, there has been a long-perceived moral divide between business and society—a perception rooted in the idea that the interests or successes of one come at the expense of the other. In fact, it’s a perception so prominent that it even comes with its own unfortunate and defining slogan: Doing good versus doing well.
And though CSR originally emerged to bridge the business versus social divide—in short, an attempt at self-regulation—the unfortunate reality is that it has often missed the mark. And in doing so, it has become the proverbial whipping post for critics and cynics—often being touted as nothing more than corporate window-dressing, green-washing, unrealistic, ineffective, insufficient, and even self-serving.
However, it’s also fair to say that critics have been far too biased as there have been many highly successful CSR initiatives throughout a wide variety of companies and industries. But that doesn’t change the fact that the stigma associated with CSR still lingers—the frequent lack of public faith and the challenge of quantifying its positive benefits have limited CSR’s effectiveness over time.
For many, the label itself has even fallen out of favor—rebranded in less offensive terms such as shared value, sustainability, social impact. For others, CSR has devolved from a meaningful social effort into something more basic—a category of risk management that checks a required but uninspired box.
So, if all of this is true, then yes, the interview was bang on: unmanaged or uncared-for CSR initiatives will ultimately lead to corporate criticisms, the associated bottom line impact, and, as a result, an executive’s demise.
But—and this is a very large BUT—today, failure as it pertains to CSR is no longer an option. In an ever-connected world where brand and consumers have become one, the demand for companies to succeed on both the business and social fronts is paramount. In fact, global connectivity and a seemingly unlimited access to information has lead to an era whereby consumers have unprecedented power and influence—a never-before-seen ability to reward those companies that do a good job, and severely punish those that do not.
The bottom line: businesses no longer have the option of avoiding responsible, sustainable behavior. That’s a non-starter. At the same time, NPR and critics alike are telling us that chasing CSR can be a race to a pink slip. So, what is a beleaguered CEO to do?
As the NPR interview suggests, if CSR initiatives are pursued but managed poorly, then they will ultimately lead to business issues and the resulting demise of executives. And similarly, if a business is struggling in other fundamental ways, then pursuing CSR, successfully or not, won’t rescue a sinking C-level.
Luckily, there is a third scenario.
If a company designs and executes its CSR initiatives to be integrated with corporate strategy, aligned with and in support of successful financial performance, and measured and managed in the same way as other operational activities, then under these conditions, actively investing in CSR is no longer a risk for the C-Suite. In fact, if CSR is no longer a separate or stand-alone set of activities, but part of the corporation’s core, the divide between business and society vanishes.
By not viewing CSR as a mere accounting line item, business limitation, or prerequisite charitable deed, executives can revolutionize their companies—driving everything from innovation, to acquisition of market share, to increasing competitive advantage, and more. The best part: imagine being able to demonstrate that CSR activities are addressing stakeholder and shareholder objectives in tandem—tying the once intangible benefits of CSR directly to the organization’s financial success and, by association, benefits to shareholders.
So yes: done poorly, CSR can get an executive fired. Done right, however, it can ignite success.