#SAPRadio Recap: Corporate Responsibility – Nice or Must Have?

Today’s buzz: Corporate responsibility (CR). How’s yours? This week I joined a panel of other experts with host Bonnie D. Graham for this episode of Coffee Break with Game Changers sponsored by SAP Radio (iTunes).  Here are some of the highlights:

[1:50] Bonnie introduces William Newman, Managing Principal of Newport Consulting Group (that’s me!) who states “Disney’s decision to pull out of Bangladesh based on the government’s slow response to the building collapse illustrates CR isn’t just for branding anymore. Lives are at stake.” (Killer quote!)

[4:10] Bonnie and I say hello … nice intros from Bonnie.

[8:27] Talking about sustainable supply chain.  This is really a key element of operations, based on large part relationships both inside and outside the company.  This is an extension of the brand, and consumers don’t delineate between what a brand like Disney owns directly and a contract manufacturer they may use in some far away developing country. Sometimes contract manufacturers such as those in Bangladesh and Pakistan – where recent horrible disasters occurred – were fully audited by brands such as Disney and they employed “audit theatrics” to check the boxes and continue with bad business and safety practices.  So you really need to get CR out of the CEO’s office and into the operations of a business.

[10:05] Bonnie asks about the impact of social media and the instantaneous response of customer opinion.  I suggest that developing countries where many contract manufacturers are located aren’t impacted really, more the developed country brands like Disney who get this immediate, “omnichannel” response from consumers.  Particularly millennials and other educated consumers who are very interested in knowing where their products are manufactured. That hits the bottom-line and revenue shares of brands.  So from that perspective social media is a big impact and leverage on brand companies.

[26:00] What’s in my coffee mug? Shout out to Portland, Oregon and our friends at the University of Oregon Sustainability Leadership Program … drinking Stumptown Coffee out of a fresh press. Delish.

[28:00] Who is responsible for CR? We found in our CXO Engagement study found that 89% of professionals surveyed felt that CEOs should drive the initiative – lead from the top.  But there is a big fall-off even within the boardroom with only 20% of COOs and only 18% of CFOs are engaged in the companies we surveyed.

[31:20] Moving CR into the higher education system to foster bottom-up elements.  From business ethics to sustainability. I suggest sustainability leadership (UO) which transcends industries.  Key though is to move the conversation into CR and its application to business practices. This is moving from MBA programs to business undergraduate programs. Millennials are demanding this education curriculum.

[35:02] Key to move CR out of the boardroom is the need to attach metrics to performance management topics in this area.  We called out Niko and her team at SAP who – along with Alaska Airlines – were key leaders in this area called out in our CXO Study.

[40:28] CR isn’t just a nice to have, it makes good economic sense.  Dow Jones Sustainability Index (DJSI) companies have outperformed their peers 7-22% over the past several years.  B Corporations – new legal entities established by state legislatures – allow for companies to be for-profit without only benefiting their shareholders.  A real shift in the undercurrent of business practices.

[48:50] My crystal ball… Operations and finance will engage and it will become very important.  CFOs and COOs will finally engage in the next five years despite the current findings of our CXO Engagement Study. Profit motive, financial reporting standards like integrated reporting, Sustainability Accounting Standards Board (SASB), and a maturing Global Reporting Initiative (GRI) will all drive interest in new ways of operating business since CR metrics will be reported and disclosed.

For more on our CXO Engagement study follow hashtag #CXOStudy on Twitter.  Please join Cindy Jennings and I for a new online workshop hosted by our friends at Sustainable Industries Magazine on December 11, 2013 “Sustainability 102: Moving Beyond the Boardroom.”  Learn more about the program on the registration page.


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One response to “#SAPRadio Recap: Corporate Responsibility – Nice or Must Have?

  1. Pingback: What to Look for: Microsoft Accelerator to be announced at SAP TechEd | The View from C-Level

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