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Changing Business from the Inside Out

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The BP oil spill, the 2008 global financial collapse, and revelations of scandalous working conditions at Chinese electronics supplier Foxconn show why so many are suspicious of promises of corporate responsibility. But slowly and fitfully, corporations are changing. It’s not just because of the high cost of making amends and a fear of negative publicity. Consumers are demanding better corporate behavior, and an increasing number of executives are eager to make their organizations more of a force for good. But corporations can’t act in responsible ways if no “treehuggers” are working inside the system to lead the effort.

For more than two decades, Timothy J. Mohin has worked to improve working conditions, clean up factories, and battle climate change—all while being employed by some of the biggest companies in the world. In Changing Business from the Inside Out he’s written the first practical, authoritative insider’s guide to creating a career in corporate responsibility. Mohin describes how to get started and what the day-to-day experience of being “the designated driver at the corporate cocktail party” is really like. He recounts colorful case studies from his own career, provides advice on how CSR workers can have greater impact, and even looks into how employees in other corporate functions can make a difference. He details the programs and processes needed to support a comprehensive CSR effort, but perhaps most importantly, he identifies the personal and professional skills needed to navigate corporate politics and get buy-in from sometimes skeptical colleagues.

With more than 80 percent of the Fortune 500 now publishing “sustainability reports,” a new career path has been forged in corporate responsibility. From strategy to data mining to supply chains and communication, this book is the “operator’s manual” for this new career path.

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1 The department of good works

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This chapter covers the evolution of the corporate responsibility function within companies, its organizational structure, and how these factors affect the practice.

Doing well is the result of doing good. That’s what capitalism is all about (Ralph Waldo Emerson).

I believe that most people would claim that they want to do good things for others. But, when it comes to their careers, that inner altruism is often forced into the back seat. At the risk of stating the obvious, “the business of business is business.” When you go to work for a company, whatever your role may be, you are expected to deliver a return on the company’s investment in your pay and benefits. For most roles within big companies, this means that saving the world may not fit into your job description – at least at first glance.

The reality of working in a big company is this: you are given a set of goals, your progress toward those goals is measured (usually in periodic performance reviews), and your performance is typically ranked against your peers (which is somewhat counterintuitive since most companies extol the value of teamwork). The environment is competitive, with money and advancement up the corporate ladder on the line. On top of the intrinsic competition, and lurking in the background at most companies, is the very real threat of layoffs that are increasingly a fact of life. All of these pressures drive you to keep your head down and remain focused on delivering on your goals, not taking time out to help make your company more sustainable.

 

2 Skills for success in corporate responsibility

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This chapter outlines the essential skills and personal attributes needed for success in a corporate responsibility career.

Skill is the unified force of experience, intellect and passion (John Ruskin).

While numerous graduate programs are popping up that offer training in sustainable business and corporate responsibility, very few people in the CR field have these degrees. Most people working in CR positions have education and experience in some other area and have followed their passion to get to one of these jobs. After talking to several of my colleagues and thinking through my own experiences, I identified some core skills that are important elements to success in corporate responsibility:

Working in corporate responsibility is a lifelong learning experience that rewards the flexible and curious. Corporate responsibility touches just about every issue within the company. On a single day, you may have to field questions on your company’s human rights policy, the independence of the directors on your board, your water conservation measures, and the diversity of your workforce.

 

3 Setting the strategy

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This chapter outlines how to design a robust corporate responsibility program, including a step-by-step approach to establishing clear strategies and objectives, as well as how to predict and manage emerging issues.

If a man knows not what harbor he seeks, any wind is the right wind (Seneca).

You have a role or are thinking about a role in corporate responsibility. What do you do first? How do you prioritize all of the issues that compose the huge scope that you must cover? How do you accomplish all that needs to be done with the limited resources that are the norm for corporate responsibility departments? In this chapter we will cover methods to establish priorities, set clear goals, and distribute the workload. We will also outline techniques to identify emerging issues to ensure your programs stay on the leading edge.

Working in corporate responsibility can be a lot like being the plate spinner at the carnival – you are constantly moving between projects and disparate topics that are important and without your care and feeding may fail. Developing a successful corporate responsibility program requires that you start with a clear strategy based on a few critical, high-priority issues. Corporate responsibility practitioners call these “material issues” and the technique to identify these issues is a “materiality analysis.”

 

4 Running a data-driven program

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This chapter covers how to run a program based on clear objectives and data. It also covers techniques for running effective management committees, driving continuous improvement, communication, and recognition to motivate your team and internal stakeholders.

What gets measured gets managed (Peter Drucker).

In many companies that you may work for, the strategy for the corporate responsibility program is already well established. In these cases, your job will likely be more focused on managing the day-to-day operations of the program than on developing new strategies.

A lot of my training in the program management discipline stems from my career at Intel. Each new employee starts with training on the Intel values: customer orientation; discipline; quality; risk-taking; great place to work; and results orientation. After working there a couple of months, Intel employees usually re-order these values as: Results, Results, Results, and all those others.

The laser focus on getting things done at Intel drives the culture and has helped that company rise to dominance in its industry. While this culture can take its toll on the employees, there are some valuable lessons to be gained that can be applied in corporate responsibility programs, or just about any program.

 

5 Environmental sustainability

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This chapter defines the structure, functions, and typical goals of a corporate environmental department at a high level and outlines methods for integrating environmental management with corporate responsibility.

Keep close to Nature’s heart … and break clear away, once in a while, and climb a mountain or spend a week in the woods. Wash your spirit clean (John Muir).

Similar to my own experience, many people who migrate into the field of corporate responsibility have a background in the environmental field. For these people, this chapter will be too basic. The concept underlying this chapter is to provide the information needed for the corporate responsibility manager to effectively interface with the company’s environmental team. So, rather than delving into all of the details around environmental management, this chapter will establish a framework and provide practical tips for integrating environmental sustainability into corporate responsibility.

The term “sustainability” has become synonymous with environmental issues, but its roots are much broader. As defined in Chapter 1, environmental, social, and economic issues are the three pillars of sustainable development – the so-called triple bottom line – also known by the alliterative phrase, “people, planet, profit.” In practice, however, most people associate the word sustainability with environmental protection. Let’s start this chapter by identifying where the people with control over your company’s environmental footprint live.

 

6 Supplier responsibility: Part 1. Establishing the program

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This chapter sets the context for “supplier responsibility” and covers the steps to establish your program.

All is connected … no one thing can change by itself (Paul Hawken).

There are probably more jobs and more job growth for corporate tree-huggers working on supply-chain issues than in any other area of the company. Because of the rapid growth in this area, unlike the previous chapter on environmental sustainability, this chapter will delve into the details of how to set up and run a “supplier responsibility” program. For this area, the word “treehugger” may not be the most appropriate because, as you will see, most of the priority issues in this space tend to be social (i.e., labor and human rights).

Decades ago, companies figured out that it was far cheaper to outsource their manufacturing to suppliers in “low-cost” countries. While the primary driver behind outsourcing is cheaper labor rates, many of these low-cost locations suffer from lax labor and environmental regulations and/or poor enforcement. As a result, an increasing number of companies are hiring people to monitor conditions in the factories that manufacture their products.

 

7 Supplier responsibility: Part 2. The four essential program elements

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This chapter sets out four elements for implementing your supplier responsibility program and provides tips to balance compliance activities with other techniques for maximum effectiveness.

Trust, but verify (Ronald Reagan).

In setting up the Apple supplier responsibility program, I spent hours on benchmarking and research to understand how other companies (most in the footwear and apparel industries, which have years of experience in dealing with these issues) had structured their supplier responsibility programs. The goal of this research was not to copy what others had done, but to assess what had worked and what had not. Based on the results of this study, I established the following four program elements: compliance; business integration; capacity building; and communications and stakeholder relations.

Most supplier responsibility programs are compliance-focused, with most of their resources consumed by conducting audits, correcting deficiencies, and following up. This chain of events sets up a paradigm where the customer is in the role of enforcer and the supplier is being regulated. The compliance paradigm is necessary, but it is not sufficient for creating an effective supplier responsibility program. As the next few sections will outline, additional program elements are equally important and you must titrate the emphasis that you apply to these programs to find the right balance for your company’s goals. But first, let’s explore the aspects of a robust compliance program:

 

8 Communicate! Part 1. Talking about corporate responsibility

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This chapter outlines specific tips for building your skills in spoken communications about corporate responsibility both internal and external to your company.

Action speaks louder than words but not nearly as often (Mark Twain).

At the core of the corporate treehugger’s skill set is the ability to communicate well. Whether you are in the environmental department, supplier responsibility, or corporate responsibility, the ability to communicate is the single most important (and perhaps the most overlooked) skill. It comes in several forms: public speaking (conferences and stakeholder events); writing (the corporate responsibility report, blogs, and even tweets); and influencing others within your company (aligning on a common strategy).

The ability to communicate well verbally can be a touchy subject because it is closely integrated with your personality. Some of us are extroverts and thrive by talking (though simply loving to talk does not a good communicator make). Others are introverts and prefer their own company to interacting with others (conversely, introverts can be excellent communicators because they think through what they will say before they say it). Whether you love to talk or are happier with your own “inner voice,” verbal communication skills can be learned, and with practice you can improve your abilities.

 

9 Communicate! Part 2. The corporate responsibility report and beyond

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This chapter covers planning and execution of the essential forms of written communication for corporate responsibility as well as social media, audio, and video formats.

Either write something worth reading or do something worth writing (Benjamin Franklin).

Like spoken communication, writing is a critical tool in the corporate treehugger toolbox. Most people will be more comfortable with either spoken or written communication, but it is important for your success in this field to be good at both.

In today’s corporate responsibility departments, there are several common forms of written communication. Figure 5 outlines some of the major forms of written corporate responsibility communications as a function of the depth of their content and the frequency of delivery.

Figure 5 Frequency vs. depth of corporate responsibility communications

The corporate responsibility report

The classic form of written communication for the corporate treehugger is the annual corporate responsibility report. The production of these reports has spawned an entire industry for communications agencies and a substantial number of jobs for corporate treehuggers. Over the last ten years, the number of corporate responsibility reports filed with the Global Reporting Initiative has increased by 300% and most of the largest firms as tracked by the Fortune 500® now file some form of responsibility report.68

 

10 Stakeholders and investors

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This chapter outlines how to identify, prioritize, and engage with external stakeholders to add value to your corporate responsibility program.

Feedback is a gift (source unknown).

When I started my career in environmental management in the mid-1980s, the term “stakeholder engagement” did not exist. Today, there are businesses built around providing your company with this essential aspect of your corporate responsibility program.

There are several schools of thought about engaging stakeholders in your program, and like so many things in the sustainability/corporate responsibility field, the definitions can be vague and imprecise. Let’s start with a definition of stakeholder engagement:

Stakeholder engagement is a formal process of relationship management through which companies or industries engage with a set of their stakeholders in an effort to align their mutual interests, to reduce risk and advance the triple bottom line – the company’s financial, social, and environmental performance.69

 

11 Employee engagement

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This chapter outlines the methods for engaging your company’s employees in corporate responsibility to achieve tangible business benefits.

Passion is the genesis of genius (Tony Robbins).

While it may not be intuitive or obvious, one of the biggest benefits that the corporate responsibility department can deliver to a company is employee engagement. Most people entering this field are focused on the benefits that their work can produce for people and the planet, but not necessarily motivating and inspiring their fellow employees. As you will read in this chapter, there is a very strong case for employee engagement as being one of the primary value propositions for the corporate treehugger.

Let’s start by defining employee engagement. A human resources (HR) expert at AMD defined employee engagement as the “motivation to invest discretionary effort into work.” According to Scarlett Surveys: “Employee engagement is a measurable degree of an employee’s positive or negative emotional attachment to their job, colleagues and organization which profoundly influences their willingness to perform at work.”78

 

12 Diversity, governance, and ethics

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This chapter delivers the essential concepts needed to understand and communicate the diversity, governance, and ethics aspects of your corporate responsibility program.

Action indeed is the sole medium of expression for ethics (Jane Addams).

Diversity: the art of thinking independently together (Malcolm Forbes).

So far this book has covered the “bread and butter” issues at the center of the corporate responsibility profession. But there are equally important issues that are included in the definition of a responsible company. If you study the Global Reporting Initiative (GRI) guidelines you will see a number of questions aimed at the diversity of the company’s workforce, the governance structure (as well as compensation), and corporate ethics policies.

Like the previous chapters, I won’t attempt to dive into each of these topics in great detail but instead provide an overview and practical tips that you can apply in real-world settings. Remember, the corporate responsibility manager has to work with a wide variety of functions that cut across multiple business units within the company. For most of these functions, you will have limited expertise and no direct authority over how the function is managed.

 

13 Recognition, awards, and rankings

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This chapter delves into the complex, but important, world of corporate responsibility rankings, lists, ratings, and awards.

Don’t worry when you are not recognized, but strive to be worthy of recognition (Abraham Lincoln).

Allow me to start this chapter with a bit of a rant: The field of corporate responsibility has become a ratings game. On the one hand, this can be viewed as a positive force as companies compete for top billing in the various public ratings. On the other hand, the ratings game has become something of a beauty contest that, at its worst, threatens the credibility of the corporate responsibility movement and, at its best, takes a sizable amount of corporate treehugger time. For a deep dive on this topic, I recommend the “Rate the Raters” study by Sustain-Ability mentioned in Chapter 10. It is a comprehensive and timely exposé on the issues associated with the proliferation of CR ratings.

A recently launched initiative called the Global Initiative for Sustainability Ratings (GISR) is aimed at bringing consistency to how companies are ranked on responsibility issues. Its goal is to create a framework for the convergence and harmonization of the vast number of sustainability ratings that have cropped up over the years. Its task will not be an easy one because sustainability ratings have become fairly entrenched in the corporate responsibility world.

 

14 Match your passion to your profession

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This chapter forecasts the trajectory of the CR profession and provides practical tips for getting a job and lessons to take on your journey.

It is up to us to live up to the legacy that was left for us, and to leave a legacy that is worthy of our children and of future generations (Christine Gregoire).

Today, corporate responsibility is a growing profession with a career ladder extending into the executive suite of the world’s largest companies. This is a relatively recent change and the knowledge, skills, and abilities for this emerging field are still being defined. The CR role cuts across almost all business functions and is housed in a wide variety of corporate departments. Similarly, there is enormous variability in the job responsibilities, ranging from the art of communications, to the technically demanding field of environmental management.

The newness and variability in this profession means that there are many different backgrounds that can qualify for and thrive in these roles. Notwithstanding this variability, throughout this book I have described the common skills and attributes essential for success in corporate responsibility. This book has also delved into the substantive aspects of the role that you must know to acquire a job and succeed in the field of corporate responsibility.

 

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