TheIncubator: musings on the social sector

Mission Matters: Attitude and Social Change

I was reading another article in the Chronicle of Philanthropy titled Making Money With a Mission:  Many charities are starting business ventures, but their goals are as much social as they are financial.

What I want to muse about is the importance of mission--whether or not you are for-profit or not-for-profit.  Now any  person with some sort of business knowledge will say "of course" and maybe roll his/her eyes at suggesting that--it's a fairly basic rule of business.  And mission is known  to be helpful for keeping a business on track, focused, and successful.  Business 101.  But the key, if you are concerned with social responsibility, is that your mission has to have soul.  Not only should the mission statement describe what you do and how you do it, and what you see your focus and responsibility as, but it should also be embedded with the passion that you hold for what you do.   In thinking about the mission statement that I'm trying to draft for  a nonprofit that I'm trying to establish, it doesn't have that resonate echo of passion and soul for our cause (yet).  It merely outlines, in a rather dry and sterile way, what we do, for whom, and the desired outcome.  I think that if your passion is honestly reflected in the mission statement, then it will be easier to consult when you need a reminder of what your doing and why.

Then, with your soulful mission statement, you do need to constantly consult that passion and mission to drive the initiatives that you are undertaking.  In the Making Money With a Mission article touches on this.  Mike Burns, former CEO of Pioneer Human Services, a Seattle charity that runs 9 businesses to contribute to the nonprofit's budget, is quoted, "What makes us successful is the passion for the mission, not the passion for the business disciplines.  The business disciplines are just a vehicle for us to accomplish our mission."

This quote reminds me of my gripe with the former museum with whom I was recently employed.  I was in the Development office and our job was to raise money for the capital campaign.  The thing that most disappointed me was the lack of passion for the mission.  Not once did I hear the leaders talk about the mission of the museum.  Not once did we discuss how the new building would actually improve the lives of others in our community (we talked about it in proposals--to convince donors, but there were no passionate reminders amongst the staff).  Money came first, everything else fell in line after that, and I have no idea where the passion for the mission fell in.   Money and profitability are important, and they can be such wonderful assets to drive your mission.  But if money comes before mission, the purpose is deflated, and the social benefit is diminished.  At the museum's Development office  I thought that we should focus less on ranking wealthy individuals and more on driving fundraising efforts with the passion for our mission.  Then, perhaps, the funds would fall into place more easily.  But to be fair, the museum has a horribly written mission statement--one that is long, soulless, and antiquated.  Again, if your mission statement itself lacks soul, it's rather hard to get passionate about it.

Now, idealistically, I think it would be great if every business set up their missions and visions like this--with a social purpose.  Which is actually probably possible if people put a little thought into it.  Then, once getting the whole organization passionate about the way you are serving others, the profitability should fall into place.  Again, profitability is essential--you have to make money to exist and carry-out your mission, but the social mission, how you are serving others, should be the driving force.

Humility and Social Change

I was reading the article, "Moments of Truth: Global Executives Talk About the Challenges That Shaped Them as Leaders" in the January 2007 copy of Harvard Business Review, vol. 85, no. 1. The article is comprised of various Presidents and CEO's describing their opinions of important attributes of leaders. Olli-Pekka Kallasvuo, who is the president and CEO of Nokia, talked about humility.

First, I just want to quote a few snippets from his perspective: "if (a company) is to continue to prosper, (it) has to be externally oriented. It must have the kind of humility that makes it listen to the customer and seek ideas from outside." "Managers must humbly accept that their own perspectives need to be broadened by others." These comments about the concept of humility being linked to the ability to listen and broaden your own perspective by the perspectives of others is important. This is part of the backbone to what I believe is important to initiating social change. Each change-maker limits himself in operating within isolation. A person interested in social impact must constantly bounce ideas off of others. And change-makers that are afraid of cross-sector dialogue limit themselves as well. It is scary to make yourself vulnerable to challenges that are voiced against your position. But maintaining that humble spirit is a vital spirit in assisting change.

Kallasvuo also mentions, "Having humility does not mean that you are quiet or that you lack the courage to say what you think. Courage and humility are more complementary than contradictory." I don't know, you may think that talk about state of mind is rather silly and stupid, but to me, state of mind seems rather essential to getting the job done. And initiating social change takes leadership and it takes courage. And part of being a leader is taking on a spirit of humility and service, which takes a whole lotta courage.

The thoughts expressed by Kallasvuo on humility and the ability to listen to others while informing your own perspective with the perspective of others sounds a bit like the eradication of hierarchy and controlled authorship through the vehicle of wikis. As voice is given over to many, and one gives up the illusion of control that is encouraged through single-authorship, the spirit of humility and collective action can thrive. Ideas and innovation flourish. The thought that you are giving up control actually then yields to the realization that you are better aiding your own company and also the common good. And that seems like a positive thing to me.

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.

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.

Corporate Social Responsibility

so. i was out the other night, and happen to engage in a conversation about corporate social responsibility with some guy who's in the corporate world. the conversation didn't go that well. for 2 reasons. 1: i did not do the best job at articulating what i meant about corporate social responsibility, and 2: he was focused on the money aspect of it all, meaning that he didn't think he had the resource so to put toward such efforts.

i realized the incredible importance of understanding your definitions. when i attended a conference for the Nonprofit Congress this very issue came up--that it can be hard to articulate what nonprofits do. and because of this, many people do not understand how nonprofits play an integral role in the fabric of our economy and society. there are many misperceptions about what a nonprofit is, what they do, what is expected of nonprofits, how they operate, etc. this is a liability for nonprofits, or anyone advocating for them. articulation is very important.

i am going to take the time to plug a book that i think is quite great. it relates to corporate responsibility, leaning more toward a environmental sustainability approach, but it's fascinating. it does a good job (in my opinion) of pointing out that corporate responsability is just plain good business. it makes sense for so many reasons, many which are touched upon in the book. not investing in your employees, not understanding your footprint in the environment, is really bad business--you can end up loosing valuable people and costing yourself waaaaay more money.

you can get it on amazon.