Thursday, September 19, 2019

Driving the Shift from CSR to Purpose – Even through a Financial Meltdown

Phil  Haid, CEO, PUBLIC Inc.
It was not easy to talk about Profit with Purpose when Phil Haid started Toronto-based purpose and communications firm PUBLIC Inc. in 2008. It was the height of the financial meltdown in fact. But his belief that business must be and can be a major catalyst for social impact was so strong he persevered.
Since 2008, PUBLIC has been working to show that integrating business benefit and community benefit is mutually reinforcing and scalable when community benefit becomes an explicit goal of the enterprise and society needs and challenges are factored into mainstream business decisions.
Phil says that in the past few years, the market has started to respond to this idea. And, in the past 12 months, the shift has been palpable.
Below, I share excerpts from a recent conversation I had with Phil about this growing shift from traditional corporate social responsibility (CSR) to Profit with Purpose.
MK: When did you first come to believe in Profit with Purpose, and what led you to this deep belief that you have built PUBLIC around?
PH: In 2000, when we were doing CSR communications strategies for companies, I saw that clients were always limited and ring fenced in terms of the time, attention and budget they received. They tended to sit aside and be divorced from their organization’s core business. To me, this didn’t make sense. I wanted to see more impact, but we were always limited and knew the approach we had built at client after client was never going to scale if it didn’t somehow become part of how these companies did business. At the time, there weren’t many examples of companies doing this, and this is what led me to create PUBLIC – to prove this thesis [that you could tie CSR to the core business] at scale.
MK: And has it worked?
PH: I think so. The change in the past five years has been remarkable. Five years ago, when we were talking about this [integrated purpose], we got glazed looks, disbelief and comments such as ‘it’s a nice to do, not a need to do.’ Every conversation was really  hard. People were still caught in the charity model. But today, you see the shift [from CSR to integrated purpose] happening.
MK: How do you encourage a shift within organizations from charitable donations to integrating purpose into their strategic, revenue-generating side of the business?
PH: I wish I could tell you I had a brilliant argument that swayed them. But, it’s really hard to make an argument to someone that purpose can help acquire customers, sell products, attract top talent when that person or organization is not open to moving in that direction. If they aren’t open to the idea– then they aren’t really the right fit for us. Instead of pushing our agenda too hard, we work to find a more practical way by designing a strategy or a campaign that moves the needle in the right direction. For example, we worked for a food company in Canada and started with a platform around how the company could address food insecurity. Over time, we were able to link this more closely to their core business and products. It’s hard for companies to make big shifts in their approach all at once; sometimes it has to be incremental. Companies have to move at their own pace.
MK: You believe that community benefits must become an explicit goal of the enterprise and that society needs and challenges must be factored into mainstream business decisions.  Can you share examples of companies that are doing this? 
PH: As it relates to sustainability, there are several examples, such as Unilever, where it has integrated purpose into some of their brands completely -- from how they create the product, to its supply chain, to how they market it. Marks & Spencer’s Plan A is another example. In Ontario, we are working with the Liquor Control Board helping them to look at their procurement process. They have put in place a whole social and environmental criteria of what suppliers need to do to be listed in their stores, similar to Walmart’s greening plan. They are pushing suppliers, for example, to move to lighter-weight bottles and to look at the human component of lifting and employee safety in warehouses. Tiffany in the U.S., another client, has introduced a diamond traceability initiative, which provides provenance information for every newly sourced, individually registered diamond it sets—a significant step for diamond transparency. And, San Francisco-based apparel label Everlane has built its whole business around the notion of radical transparency. It reveals the costs behind all of its products—from materials to labor to transportation. We’re seeing more and more examples, especially in start-up companies, where purpose is built into the business.
MK: How are consumers and other groups pushing companies toward Purpose?
PH: Consumers are making it clear they have a preference and expectation that companies and brands do the right type of things – they want to know, for example, how they produce their products, not just what they do in the community.  Customers are pushing for this and businesses are responding. Boards of directors are also starting to ask questions about social and environmental impacts, and employees are also a big force, as we saw in the recent Wayfair incident with walk outs and employee protests over sale of furniture to border detention facilities. Employees want to feel good about the company they work for. All of this is putting positive pressure  on companies to change inside and outside. There are also millennials and gen Z’ers who just ask why wouldn’t you create a company that does both – that makes money and creates value? This will help drive toward a purpose economy. 
MK: Looking into your crystal ball, what will successful businesses look like in 2030?
PH: I think we will  see in next 10 years an acceleration where social purpose and sustainability and shared value will be just how businesses operate. It will become ubiquitous. Brands and businesses that resist will perish. We will also see companies and leaders of companies becoming a much more forceful player in the global system. Business will change the world through its influence and its reach on issues such as the climate crisis and refuges. We’re already starting to see this.

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