Magazine article New Zealand Management

Where Opportunity Knocks

Magazine article New Zealand Management

Where Opportunity Knocks

Article excerpt

When company strategists scratch their heads over what new products would appeal to which target markets, the 1.2 billion people around the world who lack access to clean water are, in all probability, seldom top of mind.

But they are the primary market for a new branded product from major household/personal care manufacturer Procter & Gamble. It's a small sachet capable of transforming a bucket of contaminated water into something clean and drinkable. UK visitor David Grayson has several of these sachets in his pocket, not because he's worried about New Zealand's water supply but because it's a good example of what he was recently here to talk about--corporate social opportunity (CSO).

Co-author of a recently published book on the topic (* Corporate Social Opportunity: 7 steps to make corporate social responsibility work for your business), Grayson wants a more exciting, entrepreneurial frame around the "socially responsible" side of business. And he's touched a nerve.

"Many people like the emphasis on opportunity--which isn't really surprising," he says. "Those who go into business want to make a difference and they are, by and large, entrepreneurial. The more you can link social responsibility back to creativity, innovation and a can-do attitude, the greater the chance of embedding it inside the business purpose and strategy and not simply as a bolt-on to business operations."

His book's promotion material suggests: "Don't be misled by the word social--this is a book about how to improve corporate performance and gain competitive example." It is stacked with examples of how the CSO approach can "fuel the engine of business growth" and contributes to social, environmental and sustainable development.

P&G's water purifying venture was, says the company, built on an "economic business model" rather than philanthropy because it is more sustainable that way. There is an incentive for everyone in the value chain to distribute it widely.

Grayson thinks achieving that has some implications for management training. In Brazil, for instance, P&G sends its bright young brand managers to work in street markets for a couple of weeks to become familiar with how distribution systems work in less-developed communities.

And Avis Rentals in the United States has tapped into an $8 billion market by modifying vehicles to cater for the disabled, while delivery company FedEx worked with Environment Defence on a hybrid electric delivery truck that reduces pollution and halves fuel costs.

ABN Amro's Brazilian operation has invited Friends of the Earth to train its loan managers in social and environment risk, raising their motivation and productivity while attracting new customers.

Grayson believes mutually beneficial liaisons with non-government organisations (NGOs) will increase as companies explore innovative new ways to succeed financially and as a socially responsible corporate. The option should be factored into general scenario planning when interpreting how trends will impact a business, its markets, customers and employees, he says.

"I don't think corporate social reponsibility (CSR) should be a separate thing--it's very much part of the horizon scanning that's done in relation to customers or employees. What kinds of employees do we want, what sort of business will they be attracted to? What do our business customers care about? What are far-sighted investors asking about C[O.sub.2] emissions? These are trends that sensible managers ought to be talking about as part of their job."

Grayson's book suggests that while CSR has become a more mainstream preoccupation, its adoption is still largely driven by the fear factor and a need to minimise risks rather than embrace new possibilities. This may be a perfectly valid and sensible approach, but it tends to make CSR a "must-do" rather than "want-to-do" option which can limit its potential, put focus on cost rather than value and prompt companies to see it more as an add-on activity rather than an integral part of business operation. …

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