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Social Responsibility is a Good Way to Do Business
Harvy Simkovits, CMC — Published in Boston Business Journal 6/30/00

"Social responsibility" has become a buzz phrase in some business and community circles, but it is the new wave in how companies are attracting and retaining customers and employees in this competitive marketplace. More and more, customers and employees want to affiliate with suppliers and employers who demonstrate ethics and integrity in their business dealings.

Every year, organizations like The Smaller Business Association of New England and Businesses for Social Responsibility put on conferences that brings forward business leaders of large and small enterprises to speak about their successes and challenges. These companies tend to be highly ethical and responsible organizations, and have developed a unique set of practices that promote company excellence. These practices help to bind customer and employees to these companies. Every small business can learn and benefit from these examples.

Rather than just doing good, admirable organizations succeed on three fronts: They create economic and social prosperity for all their stakeholders (be it customers, employees, community and stockholders), bring about improved productivity in the workplace, and generate personal fulfillment for their leaders and members. 

Creating Prosperity

One well-known New England retailer continually works to exceed customers' expectations. They create a unique and fun consumer shopping experience at their stores, give back generously to their communities (through employee volunteerism, donation of their facilities to non-profit causes, running camps for children with AIDS, and hosting parties for children needing adoption). As well, they treat their employees as truly special (taking them on fun retreats, giving surprise bonuses, and training them to become the best at their profession). Through these practices they have achieved indubitable retail success.

The trick lies in an ability to simultaneously create customer value, community wellbeing, employee capability, and thus stockholder wealth. According to the company owners, their business wealth came about as a result of attending to the former three areas first. They clearly see business as a marriage of their company, the public (their customer) and their community. 

Improving Productivity

A consumer food-products manufacturer has found ways in which collaboration and high-value relationships with vendors and strategic business partners can lead to greater productivity that benefits the company, employees and the community at large.

Over the last five years, through workplace initiatives, this company has cut energy use by 38% even as product sales have soared. They have also brought their net hazardous emissions to zero, and dramatically reduced water usage and product waste. Those ecological savings have then been turned into planting trees to offset the company’s carbon dioxide emissions, and into support for charitable and political causes. Also, by creating a high-quality, all-natural product, they have been able to position themselves as the fastest growing food brand in their category, shaking up their competition.

Productivity increases can also translate into bonuses for employees and reduced costs to customers. Everybody can win by helping a company improve its work processes.

 Generating Fulfillment

Having fun at work makes people want to come to work. However, this approach is not the only way to ensure that employees find personal fulfillment in their work-life. Why should employees want to help customers, and stick with a company, if they are not excited by and committed to their work?

Progressive companies make significant investments in responsible workplace practices (involving everyone in problem-solving and decision making, allowing people to balance home-life and work-life through flexible work scheduling and time off, paying people for their level of ability, etc.) that empower, include, develop and care for people. Such investments engender a company culture of creativity, hard work, and loyalty.

In building exceptional organizations, another business owner admits that "money is not everything, but the business world is focused that way." However, more and more consumer research, such as the Cone/Roper 1999 Consumer Trends Report, indicates that "consumers want companies to do the right things" and "will more likely buy from those businesses that have a progressive social agenda as long as price and quality of their offerings are comparable." Therefore, corporations more and more need to consider both the social and environmental impacts of their businesses, and how they care for their people.

Today’s innovative companies are making executive decisions based on creating lasting value and prosperity for all company stakeholders, not just based on maximizing shareholder value for owners. It is these companies that will stand the test of time by holding onto their customers and employees.

If you are interested in moving your business in the direction of becoming truly exceptional, then consider the following questions:

  • To what extent is your organization creating prosperity for all your stakeholders? How much prosperity are you building in relation to what you are potentially capable of?
  • To what extent are people working together in your organization to build its productivity? How effective is your organization in relation to the potential of your people, processes and systems?
  • How personally motivated and satisfied are your organization’s members as they perform what the organization needs them to accomplish? How much personal meaning and purpose are they deriving, compared to what is possible?

As exemplified by the examples mentioned here, great organizations continually raise the bar by always asking themselves these powerful questions, and then by working diligently to find the answers.

Harvy Simkovits, CMC, President of Business Wisdom, works with owner managed companies to help them grow, prosper and continue on by offering innovative approaches to business development, company management, organization leadership and learning, and management education. He can be reached at 781-862-3983 or .

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