If you want to reap the benefits of good corporate citizenship — stronger reputation, better employee engagement, greater social license to operate, deeper customer relationships — you’ve got to have an effective strategy. So, how strong is your strategy? What stage of corporate citizenship development does your organization currently occupy? What are you doing well, and what needs to be improved? Do your actions have a unified and compelling “why” at their core, or do your communications feel more like a disconnected hodgepodge of “feel good” stories?
The above questions might not have simple answers. But consider this post – and the following five “tests” – as a simplified starting point to a deeper dive into evaluating the effectiveness of your citizenship strategy.
1. Is our strategy aligned with the CEO’s priorities?
An effective citizenship strategy must be aligned with, not separate from, broader business objectives. If the CEO is talking about citizenship as something that is ancillary to the company’s business objectives, or views citizenship as some kind of penance that must be paid for revenue-generating activities, that’s a red flag.
Managing up, and bringing leadership up to speed, can be a challenge. But to convince a leader who still needs convincing, you’ve got to speak the CEO’s language. Fortunately, the body of evidence that points to the strategic value of citizenship, and can help you make your case, is growing by the day.
2. Are we focusing on what’s material?
For folks who view citizenship through the lens of environmental sustainability or sustainability reporting, the topic of “materiality” can be fraught.
Semantics aside, a useful strategy should be focused on managing the biggest risks and most significant impacts in your value chain. It sounds simple, but you’d surprised at the number of companies whose strategy essentially amounts to: “We focus on the three key areas of people, planet, and performance”. The “3-P’s” alone are not a strategy.
A strong strategy should reflect a more thoughtful prioritization of key issues and should make clear to stakeholders how you determined your priorities, why they are important, and how you’re managing the biggest threats to the future viability of your business.
3. Is our strategy future-oriented and aspirational?
An effective citizenship strategy is a plan for making your ambitious vision a reality. What are you hoping to accomplish? What is your vision for the future, and how does your organization fit into that picture? How will you operationalize in order to make your vision a reality?
The difference between organizations that approach citizenship as an exercise in risk-mitigation vs. those that view citizenship as an opportunity to drive growth is a difference of ambition. Risk-focused organizations focus on protecting what they have; visionaries view citizenship as a tool for driving innovation, creating new markets, and solving new problems with new products and services.
4. Are we addressing opportunities that we’re uniquely positioned to capitalize on?
What is it about your business model, your people, your processes, your technology that puts you in a position to capitalize on market opportunities, and solve problems in ways that no one else can?
Anyone can cut a check – and there are plenty of good charitable causes to support. But the most effective strategies focus on the opportunities that exist at the intersection of a company’s products and services and the challenges presented by an evolving, resource-scarce world. The most compelling strategies articulate the ways in which a company can both grow its business and solve social or environmental problems at the same time.
By expanding access to wireless technology,Qualcomm’s Wireless Reach initiative is both improving quality of life in developing countries while growing its business in developing markets. It’s a true win-win.
5. Are we creating value for all stakeholders?
A compelling citizenship strategy should outline your plan to create value – not only for your business, its customers, and shareholders – but for ALL stakeholders. For most companies, this expanded list includes (in no particular order) employees, customers, investors, community, NGO’s, government/regulators, and suppliers. Of course there are subsets of each of the above segments; and, your list will need to be appropriately broadened or narrowed, and prioritized, as appropriate for your business or industry.
If the concept of value creation is a new one, or if you just need a refresher, the “six capitals” of the IIRc’s Integrated Reporting framework can be a valuable lens for evaluating your company’s value creation model. Don’t worry, you don’t need to be producing an “integrated report” to make use of this useful conceptual model.
These 5 “tests” are just a sampling of a much broader set of questions we ask when we’re helping clients sharpen their citizenship strategies.
For those looking for a deeper dive into the topic of citizenship strategy development, there are a number of great tools out there that can help. One of my favorites is this simple tool from the Boston College Center for Corporate Citizenship that can help you identify what stage of corporate citizenship development your organization currently occupies, and things to consider as you move forward.