Believe in CSR? You’re in ‘Good’ Company in 2010
As 2009 and the decade of the 00’s come to an end, it is interesting to think about what will make a truly good company in the years to come. In the past, companies that made a profit, paid taxes, and provided employment were thought to be ‘good’ based on financial success alone. When they exceeded financial expectations, they were considered great. The higher the profits, the stronger the brand image became.
Then the economic crisis hit, along with the potential destabilization of the entire system, and the wisdom of pursuing profits at all costs turned out to have a price tag after all.
Now once again, times are changing. Post our entry into the Great Recession, a ‘good’ company has been redefined as one that adds value outside the realm of financial success. At the same time, social media has deconstructed the closed corporate culture, creating a transparency that provides consumers with an inside look at a company’s guiding principles.
The rise of Corporate Social Responsibility (CSR) has taken hold, and consumers are increasingly choosing to support companies that hold dear their own values, rather than simply produce a profit.
Here is a current snapshot of Consumer Sentiment, courtesy of Tim Sanders in Saving the World at Work:
-65% of Americans are willing to switch to brands that are associated with a good cause if the price and quality are relatively equal
-Two thirds of recent college graduates surveyed claim that they will not work for a company with a poor reputation for social responsibility
-Almost half of all consumers say they use the Internet to figure out if the products they buy are socially responsible
As it turns out, CSR is good for business as well. A recent global McKinsey survey indicated that a corporation’s environmental, social and governance programs create financial value by enhancing the reputation of companies. New philanthropy is not about writing checks, but rather leveraging corporate resources to help the communities address problems like hunger, poverty, and literacy. Smart companies are satisfying customer needs while letting them feel good about their patronage.
Just like anyone who has gone through a crisis and come out the other side, Americans have recently grown up some. We now recognize the benefits of being outwardly focused, and are smart and connected enough to become very powerful advocates for change.
As we turn the page on this decade, it is encouraging to see that the change in ourselves as consumers has brought about a powerful change in the culture of American business. We now save our admiration for companies that deliver financially, but that are also grounded by a value system that mirrors our own. As Warren Buffet recently said at Columbia University, “Having sound principals takes you through everything.”
Let’s hope next year more companies start to realize that they can do well by doing good.