Nearly 200 executives from some of the world's largest companies met in August as part of the business roundtable. Discussing the most pressing issues facing modern businesses, their manifesto marks a radical change from the traditional business philosophy. His main message? Shareholder value is not everything.
Whatever the scope of their call for change, the reality is that consumer and shareholder demands are often contradictory. Ignoring the first to appease the latter is a recipe for disaster.
When dollars do not make sense
Profitability is no longer about selling good products and making sound financial decisions. Today's consumer-driven marketplace – increasingly suspicious of corporate motives – rewards transparency, authenticity and caring. This penalizes companies that do not respect these values.
As society grapples with issues such as income inequality and environmental degradation, companies have had to prove that they care about their lives. For some, this means rethinking partnerships, processes, supply chains and business models as a whole. For others, this means doubling PR marketing and messaging. But for almost everyone, this means implementing corporate social responsibility initiatives. They need to demonstrate their commitment to employees, consumers and the planet – even though this could mean more modest payments for shareholders.
Elina Tang, a marketing professor and consultant for the American Council on Education, believes that these initiatives are now the cornerstone of a good deal. "Today's consumers want businesses that are honest and transparent in their actions," she says. "In addition to demanding products or services that take into account the social and environmental impact, they are increasingly aware of the importance of CSR and are eager to be part of it."
Companies that can show the world that their business decisions are based on shared values can strengthen relationships with their customers. Ignoring consumer perceptions risks losing customers. If you do not place much emphasis on corporate responsibility, it's time to show the world that you love it. Here are three ways to do it while improving your business:
1. Establish value-based partnerships.
Your business is as good as the one it keeps. Any business that supports a cause should start by associating with organizations that are fighting the same fights. One solution is to establish long-term community partnerships with charities and non-profit organizations that share your values and concerns. Partnering with reputable organizations to solve societal problems can create exciting business opportunities. However, it is equally important to cut off partnerships that are not based on shared values.
That's exactly what Patagonia announced by announcing that it would no longer produce co-branded products with non-eco-friendly businesses. The company wants to be a beacon of environmental stewardship, making it selective in relation to its corporate partners. By focusing on organizations that prioritize sustainability and social responsibility, the apparel manufacturer sends a strong message about its priorities.
2. Invest in education.
Generation Z is the most likely to spend money with brands supporting social causes. Generation Z is also the workforce of the near future and is part of the solution to the often-discussed skills gap. Companies facing a critical shortage of STEM talent, advancing science, technology, engineering and mathematics is a good cause – and good business sense.
The Intel Foundation, a non-profit organization funded by Intel Corporation, sponsors programs such as She Will Connect to strengthen STEM education for girls. It shows how a company can bring change to young people while promoting fundamental values such as innovation and technological expertise. Linda Ingersoll, chief investment strategist at MDR, the education division of Dun & Bradstreet, believes that corporate initiatives such as these give lasting results. "Brightening the STEM spark earlier for skills that will be in high demand in the near future is a way to help CSR initiatives, teachers and their students, while contributing to your manpower pool. of work, "she says.
3. Make a social cause your differentiator.
Giving and supporting social causes benefits society, but also generates the goodwill of consumers. Modern consumers want to do business with companies that share their values. That's why companies built around a specific mission – beyond shareholder value – often find it easier to attract customers.
The fast food company This Save Lives, co-founded by actress Kristen Bell, has the mission to end malnutrition among children. Each snack sold is distributed to the regions most affected by malnutrition. From marketing to packaging, everything is focused on achieving this mission, by making its granola bars stand out among similar products. It's good for business – and ends up being good for everyone.
Corporate social responsibility is not a fad. It is a consumer demand that concerns virtually all businesses. Fortunately, there are countless ways to improve the world while improving your business. If you want to be successful now and in the future, give consumers what they want.