Continuing the subject that Arjan posted earlier „Greed is no longer good” I offer some thoughts and observations on the book by Wayne Visser „The Age of Responsibility: CSR 2.0 and the New DNA of Business”. The book comes with a very clear message – we need a paradigm shift on how we live. There is no return „back to normal”, or pre-crisis way of life.
The book is thought provoking, insightful and at the same time easy to read. Businesses will find a number of inspiring examples of how to improve competitiveness by looking at “business as usual” form a different perspective. Moreover, I would like to say that this book is a must read not only for individuals and businesses, but also for public officials – since the proposed paradigm shift requires conscious and long term commitment of public sector, or “smart regulation”.
In the context of writing this post the beginning of the book is worth quoting, particularly for audience of Latvia – in the light of events of 28 May 2011 when the President, first time in history of our republic, used his right to initiate dismissal of the Parliament. It starts with “What is responsibility?”
What is responsibility? “Responsibility is literally what it says – our ability to respond. It is a choice we make [...]. To be responsible is to be proactive [...]” or „Taking responsibility is a way to taking ownership in our lives, of acknowledging our own hand in the shaping of destiny.” The book offers a good platform to increase awareness of the context, through facts and references to global problems, links with business operations and individual responsibility. It verbalizes links between global problems and micro-level activities.
Wayne also offers his definition of CSR, which nicely combines various positions leaving the specific wording (corporate social responsibility, sustainability, citizenship etc) for your own choice: “CSR [Corporate Sustainability and Responsibility] is the way in which business consistently creates shared value in society through economic development, good governance, stakeholder responsiveness and environmental improvement or CSR is an integrated, systemic approach by business that builds rather than erodes or destroys, economic, social, human and natural capital.” Accordingly, if defined like this – CSR has failed and therefore we require a paradigm shift from Age of Greed to Age of Responsibility. It is not enough to start doing “less harm”, but to turn the planet towards positive balance of its resources (all types) the book calls to redefine the approach. What does it all mean?
The ages and stages….
The first part of the book – The ages of Greed, Philanthropy, Marketing, Management and Responsibility – is the facts and context review of CSR development. While in practice such linear development is observed in many of the companies – the stages do not imply a linear development that a company has to go through.
Apart from getting more insight into facts and figures and CSR development, I found interesting facts on the purpose of corporations and principle of reciprocity.
Age of Greed provides extensive examples of the corporate dis-balance, including personal greed. However, this part also leads us to think of the unbalanced rules of the game (national and global economy, use of resources, externalization), governance issues and performance management (all reflected later in the other “Ages”).
Age of Philanthropy introduces “The Golden Rule”, found in the major religions of the world – “what you do not want done to yourself, do not do to others” (quoting Confucius). This enlightened self-interest to look into future and not just at the very moment forms part of the principles for change discussed later in the book. It makes one think about long term business and impact vs. short term deals.
Did you know that originally the Charters of Incorporations were given only to companies that provided some sort of public good? We now take for granted “company limited” titles – that is acquitting or limiting responsibility. Whereas historically this limited responsibility was granted only for the purposes of business that generated greater public wealth, like railroad, water, communications… “The notion that this was simply about creating wealth for the owners of the company was alien” .
Through Age of Marketing we are introduced to the Drivers of CSR: brand, trust, reputation. Unfortunately, seems like in Latvia, we are yet stuck in the thinking of how to communicate (read “sell”) better and manage potential risks of reputation, without considering the real impact of activities. As example, see the 10 signs of green-was: do they not reflect the current reality, at least in the Baltic states?
“The Greenwash Guide” by Futerra: 10 signs of greenwash
- Fluffy language – words without clear meaning (like ECO-friendly)
- Green products vs. dirty company
- Suggestive pictures (unjustified green impact, like flowers growing out of factory exhaust pipes)
- Irrelevant claims (emphasising small benefit, when everything else is un-green)
- Best in class – declaring you are greener than competitors
- Just not credible – like “eco-friendly cigarettes”
- Gobbledygook – use of jargon that only scientists can understand
- Imaginary friends – a “label” like third party endorsement, though it does not exist
- No proof
- Out-right lying
See the link for the guide http://www.futerra.co.uk/downloads/Greenwash_Guide.pdf
The history and context part of the book ends with Age of Management where risk management for marketing purposes is taken a step further and some efforts to include the CSR into company strategy are made. “Triple bottom line”, “eco-efficiency”, “stakeholder engagement” are the terms widely used by this generation of CSR. The questions asked here are:
- Is standardisation of CSR good? This discussion is particularly relevant in the Baltic context, as movements to make one reference point are created. Shall we leave business to “self-regulate”? Some arguments still dominant in Latvia are that CSR has been initiated by companies, therefore it should be left for self-regulation and it has nothing to do with government regulation. The risk here remains that the root causes of the problems are not addressed, therefore the answer of the book on “letting voluntary codes set the bar” is NO. Standardized checklists limits creativity and solutions that are needed to address the root causes of the problems faced by the society and companies as its members;
- Does performance measurement rewards long term thinking? – likewise, no. Not because companies are not interested, but because market rewards externalization.
- Are stakeholders involved? Involving stakeholders should be in the core of the corporate governance.
These different approaches to CSR have resulted in increased number of CSR reports, but often with CSR being “add-on” activities, that have nothing to do with the company core operations. The good governance, stakeholder relations and eco-efficiency is thus still seen as a risk management issue, rather than radical innovation to change the paradigm and reporting by itself is not a solution. To summarize, John Elkington in his book Cannibals with forks, borrowing title from a quote by Polish poet Stanislaw Lec “Would it be progress if cannibals learned to eat with forks?”, compared that “cannibals were companies – displaying aggressive, acquisitive behavior in the marketplace – and forks the three prongs of the triple bottom line” widely used in the various reporting indexes, but leaving the root causes not dealt with.
The book leads through these questions to the final context chapter “Age of Responsibility” or the “radical confessions”. Examples and stories of conventional businesses turning around and introducing radically new ways of taking on core business responsibly. This part also introduces the principles that had for a while dominated the leadership and human resource discipline, along with developments of the web and networking culture – people as a capital and their capacity to innovate through cooperation. Somehow the individual and rights perspective was missing in the book so far. It does come in at this stage and through the second part of the book, but considering the power of global companies (equivalent to states in some cases) the debate on legal and human rights could have been included more.
Nevertheless, the second part of the book goes on to answer some of the questions and dilemmas, offering a framework for change through value creation, good governance, societal contribution and environmental integrity. It offers a WEB 2.0 analogy and 5 principles for successful business operations that can help th paradigm shift: creativity, scalability, responsiveness, glocality and circularity.
How to apply these principles? – to be continued in a week…
 The Age of Management, from quote of Joel Bakan, author of The Corporation. Pp.105