The Future of Corporate Social Responsibility: Cross Company CSR

Imagine a manufacturing company in the business of producing and marketing farm implements. Business growth for this company, let’s call it Quality Tools Limited, depends amongst other factors, on the level of education (and hence comprehension) the potential buyers – the farmers – have, in order that they may better understand both the usage and the benefits of the implements the company markets. It therefore makes good business sense for Quality Tools to enact a literacy programme in the target market areas under its CSR (corporate social responsibility) umbrella. This will serve as capacity building of the farming community – enhancing their productivity, which will pay back into the company’s business. The idea is evaluated thoroughly and Quality Tools decides to undertake the literacy intervention at two levels – for the short to medium term an adult literacy programme that seeks to make present day farmers (customers) more efficient. And looking at it long-term, a primary and secondary education programme to prepare tomorrow’s generation (future customers) to be more educated and empowered agriculturists.

All very well, but the company then discovers that the optimum level intervention required for this initiative is going to cost well beyond what it can make available from its CSR portfolio. What is to be done?

Mull Over That. Fresh Thought Process:

Now imagine another company, Farm Fresh Foods Limited, a food processing company that purchases the produce of the same farming community. Let us say the farmers are growing orchard crops that the food processing company purchases to produce its range of popular jams. Over a period Farm Fresh Foods has been experiencing a loss of consistency in both quality and in quantity of the produce – causing supply shortages not infrequently and a high rejection rate owing to quality at times being below minimum acceptable standards.

This is a serious issue for both the farmers and the company. Farm Fresh Foods considers how the situation can be improved and reaches the conclusion that for long-term sustainable growth, the farmers really need to be educated at least to a level where they can read and understand a step by step set of instructions. This, will produce better and more consistent quality of produce and a higher quantity too. So the company consults suitable education service providers who come up with a programme that is at two levels – a primary and secondary education level to prepare tomorrow’s generation to be more educated and empowered agriculturists, and an adult literacy level that seeks to make present day farmers (raw material suppliers) more efficient.

Again, all very well. But when the details are worked out, the cost of the programme turns out to be prohibitive. Farm Fresh Foods can start off something at a lower level to match its available budget. But then this is not expected to make enough of a difference to justify starting the programme at all. So what is to be done?

Synergizing for Optimal and Wider Benefits

Ironically enough, while the 2 companies are individually trying to figure out a solution, not knowing that both of them are facing the same issue, it is their common stakeholder, the farming community that comes up with one. Separately executives of Quality Tools and Farm Fresh Foods have spoken to the community elders of the need to do capacity building of the people and the elders had bought into the idea.

This, the elders remember. When both companies eventually show reluctance in matching their promises with deeds because of financial constraints, the community leaders have a clear message for them. Join hands, they tell Quality Tools and Farm Fresh Foods. Pool in all resources – funds, management’s time and project management expertise and go for the establishment of the educational facilities together.

The idea is simple, yet exciting. The farming community is part of the value chain of both companies, divergent as their businesses may be. It serves both of them to strengthen it. And perhaps because their businesses are so different, there is no apparent competition or negative fall-out of a joint CSR initiative.

Soon enough a primary school is built which educates the community’s children in the daytime. This then serves as an adult literacy centre in the evening, when the children’s elder siblings and parents end their day’s work in the fields and are able to take classes. Even the physical space is thus optimized. A little after the project takes off, the ground-breaking for the secondary school is performed.

Revolutionizing CSR

What happened here? Well, we have just advocated a hypothetical, yet very possible in the real world, concept which can be developed as a new dimension for the future of CSR. We will call it simply by what it is – Cross Company CSR. The coming together of two or more companies for executing CSR initiatives which are of benefit to all and which can best be better executed by combining resources.

The general trend has been for more and more companies to get on the CSR bandwagon. Some have done it for the photo opportunity and have not progressed much beyond corporate philanthropy.

Others have advanced to more elaborate initiatives, while a few have even gone the whole 9 yards and built CSR seamlessly into their business operations. They have strategically pursued the triple bottom-line and have demonstrated that their CSR models are indeed sustainable. But even the top CSR champions have done it more or less alone. Examples of joint CSR programmes will be hard to find, at least in terms of these being strategically planned sustainable initiatives. More likely they would have come about, almost accidentally, to suit the expediency of a particular situation. This by itself hints at the initiative being non-sustainable, with one reason possibly being that it benefits one partner over the others much more, after the initial phase.

In the related world of corporate philanthropy however, one finds that two or several companies joining hands to support a cause is a common enough phenomena. Fundraisers are perhaps the best example, where several companies will take high priced tables at a soiree, which cannot take place to start with unless a minimum number of tables are taken up. Then there are numerous other examples from the world of sports, arts and culture, education and still others, where companies have pooled in mainly one resource – cash – to achieve a goal that cannot be achieved singly. It is another matter that such philanthropic bonding may do something for the image of the companies involved, but it will do very little if anything at all for the companies’ triple bottom-lines.

Benefits of Cross Company CSR

It is therefore now time for CSR to dynamically evolve to another level. Cross-Company CSR has obvious benefits. The benefits increase exponentially over time. Synergy, personified. Greater economies of scale can be achieved. Optimization of resources can be targeted. The spread in terms of the number of people benefiting will be far larger. And not least, the sustainability of the now-collective initiative is stronger.

The Way Forward?

We at tbl propose the commencement of an immediate dialogue between companies that are serious to explore Cross-Company CSR as a workable strategy for the future. Such dialogue can be initiated by any company, or by an independent body that takes on the task of research to identify possible areas of Cross-Company CSR cooperation, and then goes on to approach likely corporate partners with a view to setting up partnerships between like-minded companies. We believe that even if two companies make a start and launch a pilot project successfully, others will observe and draw learning. A momentum will be unleashed.

Our CCC Model

By Khadeeja balkhi
for tbl

We humbly share with you the outline of a model that we are currently experimenting with, on the ground.

The brilliantly simple observation this is based upon is: many of us businesspeople are working with the same groups, but separately.

Of course, we do know of some companies that are experimenting with this kind of collaboration. And here we begin to present a structure for that forward thinking. One that we hope will keep your commitment to triple bottom-line value creation focused and growing.

The model?s focus is the ?value chain? of an underprivileged stakeholder group.

The first point for action is identifying how you, as a company, can add value to that stakeholder group, within your business?s value chain. When you interact with a group, as a business entity, you do it because – theoretically at least – both parties are adding value to each other (as opposed to one party exploiting the other, as we?d like not to think may be the case with our corporate cohorts).

So, for example, if you?re a manufacturer of agri-tools (Quality Tools Limited in our model), it?s in your business?s best interest, short and long-term, that your customers understand the processes surrounding the application of your tools, even if seemingly simple. Then you help build the foundation for them to gradually upgrade to tools that further improve their productivity and so on. Who is your customer? The farmer. So, you understand that a viable value chain must have some manifestation of farmer capacity building in it.

Then, the CCC idea to extend your impact, is, to collaborate with other companies who also interact with this stakeholder group. Thereby efficiencies of scale and scope are built, in the case of our model, towards the larger upliftment of a farming community. Together, you exponentialize the impact of your efforts.

The bottom-line: pooling hearts, minds and pockets with our corporate brethren towards a much larger ?value chain?.

We at tbl, find beauty in simple things. We?ve tried to keep the concept-model basic, so the idea is not lost.

Having said that, we can?t wait to delve deeper into it with those of you who are willing to experiment at the cutting edge.

See you at the C3 Roundtable!

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