Having run three workshops on corporate social responsibility across
three very different countries in the South Caucasus during the last
week, the key theme again and again has been leadership. Unfortunately,
to be precise, the lack of it.
It is always more difficult to get a head of steam behind CSR in business environments that are dominated by the activities of foreign multinationals. These companies will often have a well developed approach to social and environmental issues, developing top leadership responsibility, corporate policies and processes, measuring and reporting performance.
But these activities take place at head office. What happens then in each of the outlying countries on the ground is, hopefully, some evidence that the companies are generally well managed (that carries no label or tag whatsoever) and what they do under the name of 'CSR' is pretty much writing cheques to give to local community initiatives.
There is nothing wrong with local community initiatives, obviously. And giving strategically can make a huge difference. But it is not a process that the local business leaders will look at and understand that this is something to do with leadership - and that it goes to the core of how you do business.
The exam question for the week has been this: 'how do you build a CSR movement in a country that sees itself very much on the first rung of the ladder?' It is a difficult enough question to answer. So many people will tell you that the business environment is too difficult here, corruption too rife, people too selfish, the government too incompetent, whatever it may be.
The real need in these countries is to encourage the people - they exist in every society - who won't accept things the way they are if they need changing. The people who will build coalitions of support rather than simply look out for themselves. In a word, the people who have the capacity for real leadership.
By coincidence, I was reading during this week Allan Leighton's recent management book on leadership. Drawing from the lessons of a number of the most successful British CEOs, it draws together some key themes of what makes good leadership in business. Unsurprisingly, many of them are obvious in the absence in countries where CSR has yet to take hold.
I tried to pull out my own hybrid list, and came up with the following features of CSR leadership.
CONFRONTING THE ISSUES - There is no point in hiding from the truth, whether it relates to the state of the business or the state of the society on which the business depends. Honest appraisal of the problems is a pre-requisite to resolving them.
Certainly, Allan Leighton when he and Archie Norman first took on failing UK retailer ASDA spent a lot of time visiting different parts of the business, talking to people on the ground, and doing their best to build an honest picture of just how bad things had really got. They were shocked at what they found, but it was a necessary first step. Leighton then did the same when he took on the Royal Mail, confronting at an early stage the fact that the company had only 20% of staff staying that they felt valued by the company, with 25-30% of the staff saying that they felt bullied or harrassed. Not a pleasant finding, but very important to know.
There were certainly some frank discussions about what the issues were in society, but at least in some places this did not seem to be expected. There was some doubt expressed whether it would be acceptable to raise the issue of corruption, but at one session it became the dominant them with delegates returning to it again and again.
In one country, I was advised not to mention that I had visited one of the other countries. I mentioned it anyway, and astonishingly the roof didn't fall in. The presence of unmentionable issues should be an early target for a group that wants to develop a real dialogue on CSR.
And, just as the best leaders believe in getting onto the shop floor and seeing where the problems are for themselves, so there is a real value in business leaders getting to see some of the societal issues that affect them at first hand. Arrange visits to the local schools, for instance, to talk to the people on the ground as to what the real problem are. Find out whether the generalisations that people make ("lots of our teachers take bribes") really match the reality.
BELIEVING IN THE POSSIBILITY OF CHANGE - 'Things don't work like that around here' is a phrase that has been translated at some time into every single language in the world. Its essential message is that the person arguing for a different way of doing things is outside the loop, and those on the inside know better. It is an argument made either through powerlessness and despair, or through the vested interests of those that benefit perfectly well from the present, thank you very much.
It takes an entrepreneurial spirit - to be found in all cultures although its exact appearance may differ - to break this one. Successful leaders in CSR will see possibilities, and take on the challenge of bringing them about. This is a quality that has long been associated with successful business anyway.
TAKING ON THE RESPONSIBLITY OF CHANGE - The phrase "it's not the role of business to worry about that" is one of the biggest barriers.
It is an understandable one, particularly in small countries that are dominated by big government. And it's not that there are no boundaries here - businesses do not, for instance, have democratic legitimacy and that ought to constrain some of the activities they could potentially make that would affect the governance of a country.
Nevertheless, if the state of education is producing a business problem, as well as a societal one, business should be pragmatic enough to believe it can take an important role in addressing that problem.
GET THE BEST PEOPLE AROUND YOU
In turning a business around, this is about building a strong management team, obviously. I sometimes wonder what people think this means. There are certainly leaders I know that would make this one of their top three management tips, and certainly aim in principle to attract top talent to their organisation. But then they brook no dissent. They expect people to buy into their vision, and argument even in the privacy of the boardroom is somehow a problem. But leadership is strongest when it's proposals and plans are tested by different visions and different perspectives. It's why having diversity within the organisation is a good idea.
In terms of building a CSR movement, it is about bringing together some of the top leaders, as well as those with primary responsibility for some of the CSR functions in their businesses, to look at how they might collaborate to build the movement. You can, of course, have individual companies anywhere that decide for themselves to create a business based on values. A Tata, or a Cadbury, both companies which started their lives as beacons of light in a pretty difficult status quo. But if they aim to for business to be a real agent of change for good, then it has to achieve scale.
STEAL GREAT IDEAS SHAMELESSLY
When Leighton was running ASDA he spent a lot of time looking at other people's stores. The targets of his interest started, naturally enough, with companies that looked like ASDA. He spent a great deal of time, for instance, in Wal-Mart in the US, applying their best ideas then in ASDA in the UK (which made life very easy when Wal-Mart eventually bought ASDA). But he also visited other sorts of shops - because good ideas that might transfer into his context could be found literally anywhere.
Another flavour of the argument that says "you don't understand how things work here" is the one that says "give us local case studies, only local case studies will be accepted as valid". And yet business is inherently an international institution. They exist to make profit. The logic of the marketplace tends to be remarkably similar wherever you are - it's not that there are no differences, but the similarities are at least as important.
Anyway, you can often learn more and better by looking beyond the obvious. If all the retailers compare what each other does, and they all copy, then they will all end up the same. When Steve Jobs created the Apple Mac computer, he wandered retail stores looking at home consumer items - he wanted to design something that would change the context of his industry, not something that would match the standard boring boxes of his competitors. If you want to be remarkable, you need to accept ideas from wherever they can be found.
I don't imagine this to be an exhaustive list, but it's certainly a starting point. The key question is how develop such leaders in business environments where businesses are often not that entrepreneurial, and certainly when leaders look around at this thing called 'CSR' all they see is community affairs managers writing cheques.
It should be the distinguishing feature of the advanced multinational that where they operate abroad, they do two things not one. The first thing by all means can be to write cheques. The second - play a leadership role in bringing together local heads of business to inform, educate and inspire those people about the value of corporate social responsibility.
An Article from Business
Respect, Issue Number 131, dated 5 Jul 2008
By Mallen Baker