Corporate Social Responsibility (CSR) is seemingly everywhere these days — in the media, on store shelves, in classrooms, even on Wall Street, where impact investing continues to gather interest and momentum. Formerly the niche passion of a few crunchy companies and the hardcore wonks and activists who loved them, CSR has now become, indisputably, a mainstream must-do. As companies increasingly get involved in tackling societal issues, bringing more and more resources and assets to the table, the need to focus on tangible results is more important than ever. It’s time for a new, impact-driven approach.
Consumers around the world are fanning the flames of change. Our recent research shows an overwhelming majority of people globally — 94% — believe companies must do more than just make money. A full 60% say companies should advocate for change and evolve the way they operate. And consumers aren’t just talking: 55% report they’ve refused to buy products in the past year because companies behaved irresponsibly.
Responding to this pressure, businesses and brands of all kinds are jumping on the CSR bandwagon —seeking to build trust by demonstrating their commitments to positive change. But here’s the problem: Many aren’t looking before they leap. In a headlong rush to do good, companies often tackle too many issues, hastily pick nonstrategic nonprofit partners, and spend precious resources in ways that don’t accomplish much. It turns out there’s a big difference between trying to do good and actually having an impact. And it’s impact that people increasingly want: 86% of consumers are more likely to trust a company that reports its CSR results than a company that doesn’t.
Many companies are stuck in a rusty gear, particularly when it comes to corporate community involvement. Pick up a CSR report or corporate press release and you’ll likely see a proud tabulation: Employee volunteer hours, product donations, philanthropic giving, etc. These are all terrific and important indicators of passion, commitment and participation. But what’s hard to discern in these numbers is what actually happened, which specific problems were solved or addressed, and how the world is better off as a result.
It’s time for a new, impact-driven approach — adopting a mindset built around what I like to call “impact thinking.” This means creating systems and programs focused on outcomes and results, versus intentions, actions and transactions. Contrast counting the number of employee hours spent volunteering in schools, versus measuring the number of students actually graduating as a result of a company’s involvement and you’ll see what I mean.
Impact thinking is based on five, common-sense principles. Use these to shape your company’s social impact commitments, and you’ll soon be on your way to driving real and relevant results:
1. Determine Why: It’s critical to know why you are undertaking social impact or cause efforts in the first place. Do you have a clearly defined and compelling purpose?
2. Define What: This is about figuring out what you specifically want to accomplish — identifying the change you would like to see in the world and clearly setting corresponding objectives and impact goals.
3. Understand Who: Make sure you identify not only the pressing needs of the beneficiaries you are trying to reach, but also the priorities of your critical stakeholders.
4. Establish How: What are the concrete, pragmatic interventions you will put in place? Where many go astray is underestimating the difficulty of the societal challenges they are tackling, missing entrenched barriers to change, and failing to take a long-term view.
5. Measure: Collaborate with nonprofit partners to develop a focused measurement dashboard of key success metrics. Invest in measurement tools to know if you are actually succeeding. Have the courage to stop doing things that aren’t working.
To be fair, there’s a reason many companies aren’t doing this: It’s frankly a lot easier to count things like dollars donated and hours volunteered than to deal with the messy reality of actually making things happen. To meet evolving stakeholder expectations, companies must take things to the next level —determining the societal issues they are going to solve, setting clear impact objectives and then pursuing these relentlessly with all the focus and ingenuity they can muster.
Sound daunting? Get over it. Many consumers are way ahead of companies on this. They have the highest of expectations, believing that companies can uniquely solve societal problems that governments or nonprofits acting alone simply cannot. Does your company think of itself this way, as a dynamic and potent force for positive societal change? If no, why not?
It’s time for companies to rally around the real, to close the gap between their intentions and results, and to make good things happen. Adopting the simple, yet powerful principles of impact thinking can help unlock this transformative change.