TheIncubator: musings on the social sector

What Makes a Triple Bottom Line Business a Triple Bottom Line Business: Part 2

I started a post on this topic here. And I think that the problem in this question lies within what I talked about with Corporate Social Responsibility here.

Triple Bottom Line needs to be strategic, and when it is strategic, it is ingrained in the company and is inseparably aligned with the company's core competencies. It must be unique to each company--custom designed to fit that business's location, staff, product/service, and competition. A real "Triple Bottom Line" Company needs to go beyond the generic, the ready-made list, and expand to innovation. So the concept of standardization is limited--not out--but limited. The ready-made, standardized list provides the very first baby-step. Where things get interesting is when a company looks at itself as a unique entity and thinks of how it may become singularly Triple Bottom Line. The custom-tailored aspect of this process cannot be overlooked.

Now, back to Michael E. Porter and Mark R. Kramer's article, Strategy & Society: The Link Between Competitive Advantage and Corporate Social Responsibility, HBR December 2006.
They talk about "Looking Inside Out: Mapping the Social Impact of the Value Chain" and then "Looking Outside In: Social Influences on Competitiveness".

Looking Inside Out: Mapping the Social Impact of the Value Chain
"The value chain depicts all the activites a company engages in while doing business". This includes firm infrastructure (financing, investor relations), human resource management, technology development, marketing and sales, data collection, supplies--everything. Within all these areas are opportunities for triple bottom line innovations.

For example, let's take human resources. A generic (and good practice) triple bottom line practice is offering at least a living wage to all employees, not just the minimum wage. But for triple bottom line to grow even more inseparable from the actual company's core competencies could mean having a company-only wiki that eliminates hierarchy and allows each employee to contribute their ideas for how the company can improve, innovate, and work better for its employees. Finding a way to involve all your employees for a thorough investment is unique to each company and allows each company to tap into each of its unique assets--its people.

The point, though, is to design something that looks at all the unique characteristics within your company and use them to your advantage within a triple bottom line framework, and it's going to vary from business to business, but you've got to start mapping it out and then brainstorming.

Looking Outside In: Social Influences on Competitiveness

Looking at a company's unique diamond framework (Context for Firm Strategy and Rivalry, Local Demand for Conditions, Related and Supporting Industries, and Factor (Input) Conditions) will affect its ability to compete.

Context for Firm Strategy and Rivalry are "the rules and incentives that govern competition". A company needs to look at the way the game is played and find oppotunities for triple bottom line innovation (could it be using only fair trade practices, complete transparency and reporting)

Local Demand Conditions are "the nature and sophistication of local customer needs". This could mean only using organic and locally grown produce and also advocating for the regulation of such practices. Maybe it means offering educational classes to locals about your advocacy efforts and establishing a community of advocacy. But don't make the mistake of creating innovations that are separate from your core competencies. If your company has nothing to do with children, don't make a day care for the local community (day care for you employees may be fine--but that's part of the Inside Out issues above), when it has no relevance to you.

Related and Supporting Industries are "the local availability of supporting industries". This is one of your opportunity to invest in your community with other businesses. This is where people need to come together and look at all the ways they can partner and support each other--not in martyrdom, but to the benefit of all.

Factor (Input) Conditions talks about the "presence of high-quantity, specialized inputs available to firms". This means looking at what human resouces are available locally, what kind of training does your firm offer, access to natural resources, availability of scientific and technological infrastructure.

Using a simple framework of people, profit, and environment, a triple bottom line business will map out all of these areas as they uniquely relate that that business and innovate ways to become a truly integrated triple bottom line business.

What's the Big Deal with Identity Anyway?

This is not really very related to the social sector, or maybe it is, but. Well, I have to say I'm fascinated with people's fascination with their own and others' identities--or the outward manifestations of it. We have the competing adages, "Don't judge a book by its cover" and "First impressions matter most" [or whatever it is, it is my less favored adage of the two ;)]. A lot of this comes down to outward adornment. And interestingly, as people study idenity and it's presence on-line, it is the outward adornment that is scrutinized (colors, pictures used, font style, music included). I guess for me, I just don't think of my outward adornment as shaping my identity. My face is an integral part of my identity, surely, and definitely. But my clothes? Not so much. Even my hair is not that integral to what I identfy myself as.

Truthfully, I'm not all together sure as to what shapes my presentation of myself to the public, but I find the obsession with the adornment as identity a little odd, for some reason. Perhaps it has some biological root--animals have outward adornment to identify and stay away from their enemies and to stick together for preservation purposes with their own kind. And in the identification of flora--how are we to know what is healthy or poisonous save the outward appearance?

But we're all humans, and no amount of changing the outward adornment of our species is going to change that. It seems that our clothes, and hair styles, and whatever else alienates us from fruitful relationships with those that we percieve to be so different from us. It's rather sad, really. And it's really interesting to notice how much of an obstacle outward adornment can be to a simple conversation.

Could an online community be a place to shed some of these obstacles since we cannot see each other and pass judgement on what the other is wearing? I'm not sure, because, as mentioned, the online communities push their own signifiers of identity. I've even started doing it with my color choice, the (all of two) music preferences that I've listed. I guess I am hoping that it can be a place, nonetheless, where a little of that may be shed, and we can start having conversations with one another and seeing where that could possibly lead us....

Cross-Sector Dialogue: Where's It Happening? #1

This list is not (I hope) complete, but I thought I'd start compiling a list of places, nooks, and crannies where there are conversations brewing that cross-over the lines of feverishly-held identity. I know that it is human nature to develop an identity and associate with a group of people who have like-minded objectives; and that people are very defensive about those identities. But I want to search out those places where people can leave a little bit of their prejudices, self-preservation, and utter devotion to only their own thoughts behind, and entertain a conversation with an "other". So, I'm on the search.

My first thought was of wikis. The collaborative authoring efforts are extremely interesting for information sharing. Now, I did just realize that there is still a difference between information sharing and dialogue. The two are not inherently the same, so something like Wikipedia is not what I'm after. I'm looking for something that encourages a bit more interactive dialogue.

Ok, here's one, it may be a bit of a stretch, but it's a start: FluWiki According to FluWiki, the purpose is "to help local communities prepare for and perhaps cope with a possible influenza pandemic. This is a task previously ceded to local, state and national governmental public health agencies....But no one, in any health department or government agency, knows all the things needed to cope with an influenza pandemic. The world is filled with competent others who are likely to have credible and useful information about some aspect of each of these tasks." So here, there is a cross-sector dialogue between the public, the government, and health agencies about the topic of flu pandemics--with the idea that such dialogue can increase a knowledge base as well as knowledge flow. There also seems to be a discussion forum (I'm a little confused as to the navigation and it took a round-about way of getting there, but it does seem to exist) where users can maintain discussions with each other.

Why Flu Wiki is worth mentioning: I'm not sure how much actual cross-sector dialogue actually happens, but the point here is that there is a place where it is encouraged. With a defined subject matter, but an undefined user-base, people of all opinions and theories are able to exchange their views.

Now, for a side note. In the middle of my writing this post, I came across a blog titled, eastwikkers: a group blog on technology, communications, and the place where they meet , who launched a project titled, "33 Wikis". "33 Wikis" is a compilation of "best-practices in wiki-based collaboration". This is, in fact, where I discovered FluWiki. And their process of compiling and posting on these wikis spurred me to do it in a similar style--instead of searching for all the wikis I kind find and including them in one post, I will continue the search and post them, with different numbers in the title. (whew, that was a long sentence, was it hard to follow? I can do that sometimes). So I'd like to steal their methodology, if I may, and use it to list my places of cross-sector dialogue.

Continuing the Conversation: How Do We Define Corporate Social Responsibility?

I just read an article in the Harvard Business Review, December 2006, titled Strategy & Society: The Link Between Competitive Advantage and Corporate Social Responsibility, by Michael E. Porter and Mark R. Kramer.

The authors offer a way for businesses to look at Corporate Social Responsibility (CSR) as a source of opportunity, innovation, and competitive advantage; as opposed to a PR scheme, a way to mitigate bad press, or an obligation. The key is to fully integrate CSR into each individual company's unique strategy and identity.

Often, the prevailing method in approaching CSR is a disassociated effort that is ad hoc and responsive. This approach focuses on "the tension between business and society rather than on their interdependence" and usually uses generic methods. According to Porter and Kramer, "Responsive CSR comprises two elements: acting as a good corporate citizen, attuned to the evolving social concerns of stakeholders, and mitigating existing or anticipated adverse effects from business activities." This is all okay, but it is limited. Positive corporate citizenship initiatives may have some interesting social benefits but they remain incidental to the company, doing little to strengthen the core competencies. And along the lines of mitigating damage, "some companies will be more proactive and effective in mitigating the wide array of social problems that the value chain can create. These companies will gain an edge, but--just as for procurement and other operational improvements--any advantage is likely to be temporary."

Porter and Parker suggest that companies adopt a more strategic approach to their CSR initiatives. This involves looking at the company's core competencies, its place within society, its customers, its competitors and then discovering "shared value by investing in social aspects of context that strengthen company competitiveness." This means eschewing the boring, generic approaches to CSR that leave everyone wanting something more and something different. Hopefully, a company can develop a corporate competitive strategy that is inseparable from its social impact. By understanding one's own company from a competitive level and combining that with an understanding of its social impact, the two can come together to create a force that is truly beneficial to all. This is integrated, as any competitive strategy, throughout the whole organization, as opposed to those pithy ad hoc efforts.

I think that Porter and Parker are spot on. The whole thing is that CSR does not need to be a ball and chain. As with anything, if a company looks at it with the right attitude, opportunities come bubbling forth, offering myriad ways for increasing competitiveness, innovation, and ultimately greatness. The thing that I found lacking in this article was an encouragement for dialogue between the sectors. While Porter and Parker talk about the importance of changing the perspective of "us against them" or the social sector pitted against the business sector, there's no real mention of the two (or any other groups not lumped into these convenient titles) having dialogues. Perhaps it's obvious, but then I think that the obvious bears repeating. There's a definite need for cross-sector dialogue.

Cross-sector dialogue will (hopefully) start to alleviate that tension between sectors. Cross-sector dialogue will also give rise to those opportunities for coporations to find where they can make a social impact and the social sector groups can find partners to aid their mission. It spurs on action and innovation and makes the strategies of both sides much more effective.

I wonder if their are other examples of different kinds of "cross-sector" conversations going on.....I'll have to search for that.

It's Been so Long....

Well, it's been awhile since I last wrote. I got a little overwhelmed with the wrapping up of the school semester and my job, which ended last week. I shall be back on track soon!

What makes a Triple Bottom Line business a Triple Bottom Line Business?

Within the social sector, or those that are concerned about their footprint, there seems to be a lack of definitions and criteria. I've talked a bit about this, in some past posts, in relation to nonprofits, but does this hold true for triple bottom line businesses as well?

So in this quest to find some measurable criteria, I first looked up Wikipedia's definition of triple bottom line, which locates the concept in a set of values that measure organizational success based on profit, environment, and social. Yes, this is what it is, but I'm not answering the question with such a definition, am I? The question then becomes, how? How are you measuring organizational success in the environment and socially (profit's easy--net gain or loss).

From a bit of research, it does seem as though there are some firms that are instating accounting reports and measures. Here is Ernst and Young's method for reporting a company's sustainability efforts:

The problem with this is that it's very company specific--it focuses on defining, for a specific company, the ways in which it may develop it's own sustainability practices, as opposed to a way for everyone to recognize good sustainability practices. Is it possible to sum up your social and environmental performance to arrive at a defensible, coherent bottom line?

GreenBiz.com featured an article titled "Adapting Your Accounting Practices to Triple Bottom Line Reporting". They, too, talk about each company developing it's own concept of standards as they relate to: percentage of materials used that are wastes, direct energy use segmented by primary source, standard injury lost days, absentee rates and fatalities, as well as including such peformance indicators as total recycling and reuse of water to help calculate profit, for example. Is there, though, a sense that one can understand it's positioning in relationship to profit and environmental and social benefit? Or is it fairly subjective?

I will keep searching, but as of right now I can find no explicit standards defining success in environmental and social "profitability". There is a general sense of how businesses should conduct themselves, but there are no real standards or definitions. Much seems to be based upon each company's unique strucutre and position within the marketplace. So. More later.