ReputationInstitute

Despite the economic downturn, there is still optimism within the corporate citizenship community. That was the clear sense I got from the 300+ practitioners and academics who shared ideas, visions, and concerns at the Boston College Center for Corporate Citizenship Conference in San Francisco from March 29-31, 2009. Leading companies such as Campbell’s Soup, Novo Nordisk and Best Buy presented the programs and activities they were implementing to make a difference in the lives of their employees and the communities where they work.  The results are impressive! Still, the big question everyone was grappling with this year is what is the specific impact of individual citizenship programs to the corporate bottom line? What is CSR’s ROI?

What I saw this year was that many Citizenship programs are still driven from a specific cause, and are falling short of a larger strategy that engages with other functions like sales, product development, branding, marketing, public affairs, or Human Resources.  Thinking back on my time at this year’s conference I see three roadblocks to understanding and improving the ROI from citizenship activities:

1. The need for integration: Addressing social, environmental and ethical issues are central to any business and are not something that should be done separately. Citizenship involves responsible product development, considerate employee development, careful public policy and accurate financial reporting. All too often, I see a lack of organizational integration in companies around CSR issues and activities.  Worse they may be doing all the right things in different divisions and don’t even know it.  This means social programs occur in silos. And because of that, many companies are not getting the greatest possible return on their investment in this space.

2. The need to build a common language: To successfully integrate pieces of the business there is a need for a common language for the functions to talk from. At the core of this language is trust. Trust was a central theme in most of the sessions. And trust is the link to the different business functions. We want customers to trust our products, we want the investors to trust our financial plan, we want employees to trust our long term vision for the company, and we want our partners to trust our business practices.

3. The need to use a credible measure: CSR professionals have the opportunity to take the initiative to integrate the importance of trust across the business. A way to do this is to understand that citizenship activities build trust – and improve reputation – with stakeholders from across the business.  At Reputation Institute we measure reputation as fundamentally being a level of trust, admiration, good feeling and overall esteem that stakeholders have towards a company. We know citizenship activities are a key driver of this trust and a company’s reputation.

What companies must recognize is that reputation is formed from all of its functional areas:  citizenship, products/services, innovation, workplace, governance, leadership and financial performance. Only by taking CSR outside of the silo can companies can see how their combined efforts build reputation. By managing reputation companies are actively learning to manage their stakeholders’ trust and by doing so are impacting the bottom line.