Organizational Governance Organizational Governance

21st-Century Corporate Citizenship, Ch. 4:
Connecting Corporate Citizenship to Business Strategy

This is an excerpt of a chapter from the newly released book, 21st-Century Corporate Citizenship (Emerald Insight, 2017), by Dave Stangis, Chief Sustainability Officer and VP of Corporate Responsibility at Campbell Soup Company; and Katherine Valvoda Smith, executive director of the Center for Corporate Citizenship Carroll School of Management at Boston College.

By Dave Stangis | Published 7 years ago | About a 16 minute read

This is an excerpt of a chapter from the newly released book, 21st-Century Corporate Citizenship (Emerald Insight, 2017), by Dave Stangis*, Chief Sustainability Officer and VP of Corporate Responsibility at Campbell Soup Company; and Katherine Valvoda Smith, executive director of the Center for Corporate Citizenship Carroll School of Management at Boston College.*

Why is this a big deal? Because your objective is to create both business and social value for your company. To do that, you need to understand how your company earns revenue and delivers value to customers and shareholders. Corporate citizenship and business strategy should be closely interwoven to optimize results.

As a corporate citizenship strategist, the context for your plan is your company, and your company’s context is its market, which exists in the broader context of the global economy, our society and the planet. You have to work through your company to create the impact you want to see in the wider environment, and you do this by understanding your business’ priorities, its internal and external stakeholder expectations, and what others in your market are doing. In the same way, your corporate citizenship program is not a one-size-ﬁts-all for your employees, neither is it for consumers.

Your own company’s strategy

Take a moment to understand the strategy of the corporation you work for by answering the questions in Table 4. First, answer all of the questions about your company’s business strategy to the best of your ability. Once you have completed the top row of questions, take a few minutes to think about how your corporate citizenship program can help achieve those business objectives. Does your company seek to attract top talent in a technical area? Employee involvement programs and matching gifts might help. Does your product require materials or ingredients that could be sustainably sourced? Working with an industry association on sustainably sourced goods or codes of conduct for producers may be a program you should undertake. Use this canvas to look for the intersections of your business strategy and corporate citizenship program. This is where you can ﬁnd the greatest value for your company and for society.

While completing this exercise, you may have realized how little you know about your own company’s overarching strategy. This isn’t unusual, nor is it uncommon to be unsure about how to ﬁnd out more. If you’re like many corporate professionals, you’ll ﬁnd these policies tend to get communicated down from the top. The further down the chain of command you are, the less information you may receive about strategy. In fact, most people in large companies know less about their company’s strategy than you will after working through this chapter.

If your company culture isn’t one in which strategy is discussed openly, one way to ﬁnd out about it is to read your company website; it probably won’t explicitly say what the strategy is, but it will certainly signal it. Speciﬁcally, the “mission and purpose” section of the site (often found on the “About” page), and the investor relations section with the SEC ﬁlings and transcriptions of analyst calls, will help you ﬁnd out what your company sees as its major areas of risk and opportunity. Read the risk and disclosure sections of your company’s 10K SEC ﬁling; many corporations include ESG risks that your corporate citizenship strategy can affect positively.

Do this bit of research now before you move on; it will help you when you come to create your own corporate citizenship strategy. As you’re doing this, make a note of the risks and opportunities in each of the ﬁve dimensions of your business strategy:

Competitors
Market arena
Economic logic
Customers
Supply chain

In each of these, there are six broad categories of stakeholders that can affect your company’s ability to execute its strategy:

Employees
Investors
Customers
Suppliers
Governments
Environment

As you read through your notes on your company’s business strategy, jot down which of the stakeholders above are most critical to your ﬁrm’s ability to execute its strategy. Is there one that emerges as more prominent than the others? This is an indication of how you might focus your program.

Connecting your corporate citizenship to your business strategy

How does your company intend to “win”? For instance, if it has a global growth plan, your social investment should not be entirely domestic. Or if your corporation intends to recruit large numbers of new staff, your programs should focus on how you’re going to connect with these new employees. Does technology play a major role in your business strategy and if so, how can you leverage that? Or if a large portion of your government business is based on military contracts (e.g., a healthcare beneﬁt business), you want a sizeable presence within the government military sector. Conversely, companies generally should not engage in a cause du jour — for example, if you have a limited connection to military customers or employees, don’t engage in military/veteran programs.

Which assets are most important?

Nobody wants to lose the value they’ve built in any of their business assets or stakeholder relationships. Remember, however, that strategy involves choice and you can’t do everything. You’ll have to prioritize how you allocate your budgets and what you do ﬁrst, second, third and so on.

While we talk about your corporate citizenship strategy, remember it is a set of tactics that advances your overall business strategy. So now, let’s get more speciﬁc about how your corporate citizenship strategy can support your business objectives.

Corporate citizenship programs return value to companies in speciﬁc ways, and one size doesn’t ﬁt all. … When you understand the mechanisms of value creation, you can use your resources more effectively to achieve the results you want.

For example, if your company strategy relies on being able to recruit and retain a highly skilled workforce, you should be thinking about developing programs that affect employees — recruitment, training and development, labor practices, philanthropy, employee volunteering,sustainabilityandreporting. You can see the programs most effective at inﬂuencing employees are different than those you might need to use if, for instance, you’re highly dependent on natural resources. Of course there’ssome overlap, and many companies will develop a portfolio of activities across many of these program types.

Because strategy involves choice, it is critically important to understand how corporate citizenship can create value for your business. When you understand the mechanisms of value creation, you can more effectively deploy resources to yield the results that you seek efﬁciently.

Issue focus

Deciding which issues you will try to address with your corporate citizenship program is one of the most important decisions you will make. In addition to thinking about aspects of your business strategy that you can support, there are issues in your operating context that are impacted by your company and that your company can be affected by. These issues can take the form of risks or opportunities.

A key responsibility of the corporate citizenship strategist is to continue to scan the horizon to monitor your context and identify emerging (and waning) opportunities and risks.

Let’s start with the risks or threats to your company. Ask yourself, where is my company’s operating context most likely to be affected? If the likelihood that your company will be affected is high, put a mark toward the right of the likelihood axis (Figure 7).

There are ﬁve criteria against which you can measure your program to determine whether you are really delivering maximum value to your company and to society:

Criterion 1: Your corporate citizenship efforts are maximized against what other corporations are doing. Successful strategies of others are adopted and improved.
Criterion 2: Causes supported and issue foci connect logically to the core competence of the company and its business context.
Criterion 3: The causes supported are important to your communities of operation or customers. They are relevant to maintaining your assets.
Criterion 4: You are reinforcing your points of corporate differentiation
Criterion 5: Corporate citizenship investments achieve the impacts sought — both in the business and with causes supported. You know because you measure.

Don’t forget the “because”

What is the logic behind your strategy? How will you actually measure success? Do you have the resources, ﬁnancial and intellectual, to be able to measure impact? Or can you only go as far as outputs? Only around 20 percent of companies measure impact of their corporate citizenship programs, and even then on only 20 percent of their programs.1 To do this often requires expertise and involvement from other people, and sometimes from people outside the company (Figure 10). What is your company’s appetite to measure impact?

One simple way to challenge yourself and your team on impacts and outcomes is to leverage the “why?” exercise. When you propose an activity or program for which you ﬁnd it difﬁcult to measure impact, ask yourself why you’re doing the particular activity or program. In the river clean-up example noted above, you may believe the “why” is to build stronger teamwork and provide employees with a better sense of your community. Then ask yourself why that is important. Perhaps you believe the employees will have a better perception of your company through the service or participate more in employee giving programs (guess what — both of these outcomes can be measured if you do the baseline measurements up front). Perhaps you believe that employees that engage in community service are more productive and contribute more in the workplace. Talk to your HR team, which may have a way to test that impact measure — for instance, engagement scores on annual employee surveys. Keep asking yourself why and you’ll often get to a measurable impact!

If your company is ready to make a long-term commitment to improve a speciﬁc social or environmental cause, you can design for measurement. For instance, if you’re setting up a partnership with an NGO, you can specify that a condition of funding would be for the NGO to provide speciﬁc data so that you can measure impacts and outcomes.

One key planning consideration is measurement at the beginning of a project, not at the end. Far too many corporate citizenship professionals consider measurement after a project or initiative was successful — then come to realize they needed to measure a baseline or starting point to show impact.

Make sure you've covered all your bases

Once you go through the exercise of writing your strategy, you’ll want to make sure you are an employer of choice (making recruitment easier), and that employees are knowledgeable about your offerings and fully engaged on behalf of the company (and therefore likely to stay longer and provide better service to customers). In this case, an element of your corporate citizenship program should focus on employee volunteer programs that provide opportunities for leadership development and mentoring. If you’re in a resource-intensive industry, you may want to focus more on environmental sustainability and natural resource stewardship and engage employees in the topic in a variety of ways, including “green teams” or resource stewardship councils. If you work in a ﬁnancial services company, you may want to lead social investment or ﬁnancial literacy programs.

Ask yourself: How can my corporate citizenship connect to top-line growth? How does it connect to bottom-line savings? How does it mitigate risk?

Does your corporate citizenship strategy ﬁt with your ﬁrm’s purpose, culture and corporate strategy?

Do your programs allow everyone at the ﬁrm to participate? Who are the leaders of your initiative?

Whose patronage do you need to secure for your strategy to be successful?

What traditions does your company have that can either be adapted or that must be continued? If you introduced the program tomorrow, would most employees be confused, or would they immediately think, “Of course!”?

Does your corporate citizenship strategy exploit your key resources and capabilities (For example, Brown-Forman) is a company that uses a lot of water to produce its products, and that sources and grows commodity ingredients such as corn, sugar and agave. This company would be better suited to focus on soil and water conservation programs than would Microsoft, which would be well suited to working on programs aimed at increasing access to technology)?

Is your corporate citizenship strategy differentiated or does it have a “me-too” approach? Most corporate citizenship programs will comprise a portfolio of activities that cover a range of topics and almost all will have some programs that are not differentiated. Think of the federated giving campaigns (United Way) as an example. Unless you are the largest giver, there are few ways for the company to be differentiated, though it is often a community expectation that your company participate. The key in these programs is to derive business value out of the effort by building great employee engagement or learning into your speciﬁc process. The ultimate goal is to ensure that most elements of your program are differentiated for your company. There are ﬁve criteria you can use to judge this:

You adopt, and then improve upon, what other companies are doing.
The causes you support and the issues you focus on connect logically to your company’s core competencies.
The causes you support are important to your corporation’s employees, community and/or customers.
You’re reinforcing your company’s points of difference.
You measure the impact of your investments so you can see if you’ve achieved what you set out to accomplish.

Do you have enough resources to pursue your strategy? You may ﬁnd that you have many strategic opportunities with your corporate citizenship program but lack sufﬁcient resources to pursue all (or sometimes any) of them fully. Here’s where you have to exercise “generalship” and make decisions about which aspects of your potential strategy are most important to pursue. You can also explore alternative ways to execute your program. Can you deliver an independent signature program, or are there opportunities to reduce costs by working in partnerships? Can you run a smaller pilot program that can be scaled up later?

Lastly, can you easily communicate your strategy and describe the value it will deliver (again and again)? You should be able to write a brief statement about what value your citizenship program will deliver to your company and society, and why your company is uniquely qualiﬁed to deliver that value. It should be simple enough that anyone can understand what you are trying to accomplish. Being repeatable is important (see Chapter 4), because the average person needs to hear something 3-5 times in order to be able to recall it (never mind act on it).

10 questions to answer before you move on

Can you deﬁne what a strategy is (and what it isn’t)?
What’s your company’s overarching business strategy? Do you know how your ﬁrm makes money and where? Do you know how your company is differentiated from competitors? Can you identify key issues of concern to customers? In your supply chain?
Have you identiﬁed issues that are important to your company’s success? Have you identiﬁed ways your corporate citizenship strategy supports the corporate strategy?
What does the future look like if your strategy is successful? How can your corporate citizenship program strengthen your company’s strategic position?
What will you need to do to get there? Can you engage employees more deeply, address the concerns of investors or customers? Create more sustainable and stable supply chains?
Have you written your strategy in such a way that all stakeholders can understand it?
Do you have the resources to execute your strategy? If not, what choices will you make about what you will do ﬁrst and what you will not do? What outcomes will be sacriﬁced as a result?
What are the “table stakes” programs that you will have to do because they are expected of everyone?
What will your program accomplish for the company that is different than what competitors are doing?
How will you measure success? Do you have the resources to measure the impacts you intend?

1 The Boston College Center for Corporate Citizenship (2015).