Who Are Your Champions?

When I was in business school, I read The Soul in the Computer for one of my CSR classes. What I got out of the book was that individual employees could bring their values to work and make change from within a company - and that it was important to identify and empower these employees in order to create change. The message seemed pretty elementary to me at the time, but after working in CSR for the past several years, the importance of this concept has only increased in my estimation.

If you ask most CSR practitioners, they'll tell you that one of their priorities is to "integrate" CSR into all parts of the business. Some will go so far as to say that they're trying to work the CSR practitioner out of a job. At one company where I worked, a Legal VP described CSR as "an insidious virus" that could spread through the company and take hold of all employees (This was meant to be a good thing!).

But it takes time to identify these change-makers and champions: people in traditional business functions who want to help with the CSR agenda and can help make decisions that are relevant to their particular functions. It's great when these like-minded employees approach you as the CSR practitioner, but I find that I need to plan time to proactively reach out to people who I sense are "of the faith."

The other day, I set up a meeting with someone who manages a very resource-intensive product. Without having ever met her, I simply sent her a meeting over Outlook, showed up to her office and explained that I was curious about her work. As we chatted, I asked about some of the potential environmental impacts and attributes of the raw materials that go into her product category and she lit up!

It turns out, she's passionate about environmental sustainability and had been thinking about these very issues, but never had anyone to discuss the topic with. We talked about some no-cost and low-cost ways to increase the environmental attributes of this product and scheduled some follow-up meetings with vendors to learn more. If our little covert operation is successful, we may be able to reduce one of the company's pretty big impacts, imbue the product with environmental attributes and enhance our brand from a CSR perspective.

Every company has people like my colleague and I see it as my job to start asking questions in order to find them. In many cases, people are simply looking for the opportunity to think these ideas through and will welcome the chance to test CSR-related projects. If you can find them, these champions can act like a special ops team - and lord knows every CSR practitioner could use more help and resources!

Kids, Pay Attention in Class!

No one in my b-school class would have confused me with a "quant jock." From the moment I stepped foot on campus, it was clear that I was a "poet" through and through. My liberal arts undergrad and my consulting-lite experience cemented my fate as the guy who would write the memo or design the PowerPoint slides in each group project. Leave the hard-core financial models to someone else.

My classroom experiences offered additional data points to show that I wouldn't ever be a corporate numbers guy. I sort of understood the concepts in my stats class and managed somehow to pass, but I knew in the back of my mind that I would never have to rely on unlocking an r-value to earn my paycheck. Queuing theory was an interesting exercise, but Gantt charts made me cross-eyed. I did, however, enjoy my corporate finance classes. Strange, but every data chart has outliers, right?

Fast-forward several years and I find myself in a position where I'm digging deep to remember details from classes I never thought I'd revisit again. Like the teacher trying to dissuade a 12-year old of the notion that he will never need to use algebra in "real life," I'm encouraging all you aspiring CSR practitioners in MBA programs to pay attention to these lessons!

In the past weeks, I've been pulled into conversations about AQLs and NPVs. I've had to seek correlation and statistical significance. My research has delved into countries' GDPs and labor optimization.

As a CSR practitioner, I'm effective at my job only as long as I understand the business I'm in. I find that I'm constantly trying to understand my business better, to figure out my colleagues' pain points and to find interesting social and environmental opportunities.

It's too easy to dismiss CSR as a fringe exercise that has no real relevance to the business, and in some companies, that may be okay. But if you really want to make a strategic difference - both to society and to your company - you'll go out of your way to learn the business, be conversant in important issues and create connections that others may have missed.

The Ethical Supply Chain

I recently returned from a trip to Hong Kong and China, where I had the opportunity to visit some of the factories that produce our goods. In today's economy, supply chains are global behemoths, with companies balancing, among other things, cost, quality, speed, trade preferences, technical capability, product assortment and "social and environmental compliance."

Obviously, it's impossible to maximize all the different variables, which is why companies also seek to diversify their sourcing base. You don't want to be beholden to one country and/or factory for all your goods. If anything happens to that country/factory, your company would find itself up the proverbial creek without a paddle.

My job is to help maximize the last dimension I mentioned in the opening paragraph: "social and environmental compliance." In my and other industries, "social compliance" is a common term. Many people are surprised to hear that most any western company with a global supply chain has a "compliance" organization. The tricky part for stakeholders is to understand what authority that "compliance" team has and how they approach this work.

Some companies take a "checklist" approach to compliance where they have a list of important attributes for their contract factories to follow. Typically, this includes a no child labor provision, no corporal punishment and paying workers. These companies are minimizing the risk that's inherent in sourcing from developing countries.

Other companies encourage their contract factories to "own" social responsibility and work with them to provide management and worker training. They focus on building socially responsible practices into factories' management systems and seek collaborative partnerships with local civil society organizations to keep all parties honest.

Not surprisingly, more companies follow the former model than the latter.

I had the chance to only visit three factories during my trip to Asia and I was pleased to see that they were all pretty good from a social and environmental perspective. Two factories had pretty robust programs where they self-monitor for social and environmental issues. They had stated philosophical approaches to social responsibility and one had even developed a set of standards that it hoped would be stricter than local law or any of its customers.

In thinking through my own company's approach, we definitely fall between the two extremes I describe above. By no means are we doing the bare minimum, hoping that social and environmental risks will never rear their ugly heads. But we haven't evolved to the point where we are actively building management systems in place for factories to embrace and own social responsibility. It's a journey that takes time and an evolution that requires resources.

I'm lucky that the executives I work with "get it" and support me in my efforts to elevate the company's ethical sourcing efforts. Would I consider my company a leader in the ethical supply chain? Not yet, but if I have anything to do with it, we'll get there.

The Ratings Game

Last week I had the chance to meet with several corporate CSR leaders and in many conversations, the CRO's annual list of "100 Best Corporate Citizens" came up. Like every other list that purports to rank companies based on CSR, differing viewpoints and minor controversy always arise.

When I mentioned the list last week (usually to congratulate a colleague whose company earned recognition on it), I heard several comments, including:

• "You know how it is. It's a game you've got to play and hope to influence."


• "When [company name] is in the top 25, you have to wonder how credible the list is."


• "Well, it means something only if you agree with the methodology, which I really don't."

Usually, these comments were accompanied by a roll of the eyes, a shrug or a dismissive noise.

In my last two CSR positions, I worked at companies that appeared on the list and part of my job was to furnish SRI investment firms with information that would help them provide accurate and timely information about our company's CSR practices to their clients. Since the CRO list gathers its research from such an SRI firm, I served as the point of contact to provide them with information about our company's efforts.

And while I agree with my fellow CSR practitioners who feel that these rankings create unnatural competition and cannot possibly provide an apples-to-apples comparison of companies' CSR programs, I do believe they can have value.

As one of my colleagues said last week, "At least it gets our CEO talking. He's mentioned it to investors and other business partners." It's a clear and easy proof point for executives to drop in a conversation. It can serve as a "measurable" way to validate the hard work of a CSR team. It can also serve as a framework for a company to organize, build and communicate a CSR program. (Although I wouldn't recommend using the last bit as a driving force for a CSR strategy.)

In the end, I truly do congratulate CSR leaders whose companies appear on this and other CSR rankings list, but I always remain skeptical of where companies are placed in relation to each other, especially when a company can jump 20 spots in either direction in the course of a year. But as long as they encourage companies to continuously improve upon their stated missions to help people, communities and the planet, I'm all for it. Even if it may be an artificial motivator.

Partnership Groundrules

I've spent the past several weeks trying to figure out how exactly we should be working with our third-party supply chain audit partners. Part of my responsibilities will be to make sure all the factories around the world that manufacture our products respect human rights, labor rights, communities and the planet's natural resources.

I used to work at a company where we had a very big, effective team that would visit factories on a daily basis. Not only did they conduct factory audits to ensure that they were upholding the company's standards, but they also ensured that factories followed up on corrective action plans and worked toward continuous improvement. At my current company, we've decided to contract with two providers of "social compliance."

The benefits of using third-party auditors is that it can be less expensive and time-consuming than building up an internal team, third-party auditors can leverage expertise and relationships from working with other customers and many of these auditors are certified by internationally respected NGOs.

The biggest challenge I've discovered with working with third-party auditors is that they don't have skin in the game. They're required to deliver audit reports, but they're don't necessarily have the incentives to follow up with factories or to do extra work to improve factory working conditions.

With that said, I don't think it's a lost cause. I'm realizing that we have to be crystal clear with what we expect as follow-up to a factory visit and we have to create mechanisms that make our auditors accountable for remediation. We need to figure out ways for our auditors to share our goals and to "own" the responsibility of factory improvement.

So, I've taken a stab at some standard operating procedures, which I hope will get us closer to this goal, but I'm not sure how well-received they will be. Hopefully they'll be strong enough to create a new dynamic of ownership and responsibility while giving us the assurance that these factories are indeed "good" factories when we don't have the manpower or the time to visit them firsthand.

Building the Fundamentals

When I was interviewing for my new position, I was informed that my role would be to build a program from scratch. So, I expected to think through some of the company's risks, review processes and work toward making recommendations.

Little did I realize that I'd have to take a few steps back!

In my first week-and-a-half of work, I've been working with our Sourcing and Supply Chain teams to build very basic processes such as onboarding a new supplier and determining a scorecard of metrics to rate supplier performance. It's been a very steep learning curve and I've had to not only learn the company, but I've had to familiarize myself with the industry and the intricacies of a global supply chain.

Even though I'm completely out of my element and trying desperately to understand our quality standards, purchase order processes, product capabilities testing, costing and production processes, I've realized this gives me a very unique opportunity. It's been frustrating at times, but I actually have a seat at the table during these discussions and I'm responsible for ensuring that social and environmental factors are included in processes and measurements.

From my past experience and from speaking with other CSR practitioners, I think it's typical for CSR to be "layered" onto existing processes and systems. We focus on finding ways to integrate CSR into business processes and finding opportunities to influence process change. Here, we're building processes and systems together, incorporating CSR considerations from the outset!

While it's forcing me way out of my comfort zone and while we're moving at lightning speed (much faster than I've had to work in a long time), I'm very excited at the possible outcomes and having a voice at the very beginning.

Industry Boomerang and Career Paths: An Open Letter of Apology

Dear internet friends,

I realize it's been a long time since I last posted, and for this I apologize. You see, since I last posted, I became pretty busy, wrapping up my job, coordinating a cross-country move (which is still in slow, slow progress) and preparing to begin a new job tomorrow.

After only 19 months in the healthcare industry, I decided to return to my roots, accepting a position to begin a vendor compliance and CSR program at a specialty apparel retailer. People have asked me if my time in healthcare was so bad that I lasted such a short period of time, and I insist that isn't the case. Instead, I was lucky enough to be offered an opportunity that will allow me to build a program from the ground-up.

As nearly everyone knows, the CSR "profession" is still a relatively new one. Unlike Corporate Finance, where a career path is relatively straightforward, positions in CSR differ widely from one industry to another - and even from one company to another within an industry. And thus, there is no one "career path" if you want to ultimately lead CSR at a company.

It was early on in my most recent job that my supervisor told me that it would be unlikely for me to find myself in a VP position in CSR at that company. Since she loved her job and continued to be challenged by her own VP position, she had no plans to vacate it. (And why would she?) So, she offered kindly, she would help me find a leadership position with another company, once I was ready for that next step.

Well, I think that next position is now in front of me, even if it arrived more quickly than either my former boss or I expected. The job I begin tomorrow puts me in charge of developing supply chain social and environmental standards and stakeholder engagement, with the hopes of building out a fuller CSR capability. It's in the industry where I got my first taste of a CSR role in a corporation and it's with a brand whose heritage I'm excited to become a part of.

My focus will be shifting considerably: from environmental sustainability to human rights in multinational supply chains. It's a shift I'm excited for, but I do hope to retain the environmental responsibility as well.

As I think about my career, it's important for me to "round out" my CSR portfolio, gaining experience in different focus areas so I may become a more effective CSR leader in the future. It's also important for me to find increasing levels of responsibility and challenge, to grow my skills and stretch myself. So, while I'm sad to leave my last company and the wonderful people I've had the chance to work alongside, I am very excited for this next chapter in my CSR career, where I will hopefully continue to learn and truly make a difference.

So, I apologize for the radio-silence, but I got very busy and I hope to post more frequently moving forward!

Sincerely,
Marcus