73% of all consumer recommend a brand with CSR focus. Today, it is time for the IT department to wake up, to support customer engagement, corporate reputation and the brand in the digital era – and take a social responsibility in all dimensions of their work. Leaving responsibility to someone else is not good enough!
Today, 73% of consumers across the 15 biggest markets in the world are willing to recommend a company that they perceive to be delivering on Corporate Social Responsibility (source: ReputationInstitue.com). But regardless of 50-100 million USD of annual CSR investments, only 5% of companies in these markets live up to what this promised. In fact, approximately 60% of all consumers state companies cannot be trusted in supporting a sustainable environment.
Reputation is key in today’s digital environment to build corporate brand and customer perception. Companies without an ethical and sustainable brand have simply no place in today’s business society. There are obviously many ways of building reputation (for example: moments of truth and social marketing) but CSR work has increased in importance. Companies are spending more money than ever before on creating a socially responsive brand built on ethics and sustainability than ever before.
Unfortunately, CSR work is concentrated to the communication and/or PR department and is seldom integrated in the business strategy and business operations. Also, CSR work is mainly taking its starting point from personal emotions and feelings rather than facts and strategic reasoning. It is still considered a “feel good” practice.
Displaying an ethical brand
The question we must ask ourselves is whether a company should engage in social responsibility? Isn’t the main objective of a firm to generate shareholder value? Well, maybe not completely.
Today, the value of the brand is the basis of competitiveness and customer reputation (spread by word of month). For example, companies haunted by environmental or financial scandals lose the trust of the public and consumers choose another brand that is more aligned to their own ethical standards. In order to achieve shareholder value – the company need to display an ethical brand.
Social Corporate Responsibility: “Economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time.” (Carrol and Bucholtz, 2003)
When studying CSR facts and figure presented in annual reports – they are mainly focusing on production of commodities and investments. What I find interesting is that most production seems to be OK – until it is caught in the eye of media. Then millions of USD is donated to charity to rebuild trust with its consumers. But hardly any fact and figures relate to the IT organization. This is strange considering that the IT department has huge impact on the society (economical, legal, environmental, and discretionary) by the consumption of infrastructure, software, laptops, printers, screens and phones. Does anyone know were these actually are produced and where they end up after replacement? I do not think so.
The fact is that most IT equipment is produced in countries like China, Philippines, and Malaysia under horrible working conditions in the cheapest way. The equipment is then shipped off to another “poor country” to deal with the IT waste. It is not our problem. The problem is that no one seems to take responsibility or understand the complete picture – and nothing is done to change the situation. Most IT department has outsourced the procurement of IT equipment – not wanting to know what the global impact is.
Taking the responsibility – instead of faking
A couple of years ago, I worked in a large IT organization and “green IT” was launched to display some CSR thinking. The purpose was to attract younger employees with a social conscious. The project was limited to turning of the PC when leaving the office. What is that? The message of having “green IT” has more important than actually doing anything. At the same time, millions of USD was spent on IT equipment from an outsourcing provider with no questions asked about how and where this equipment was produced or terminated. This is not an isolated incident.
Looking at the corporation, they spend large amounts to paint a social responsible picture of them but at the same time look away from the biggest impact on society (environment and working conditions) – IT equipment. Mainly – we don’t care. My point of view is that IT is still driven from an Operational Excellence perspective to “deliver IT” to the lowest cost selecting outsourcing vendors to fulfill that task.
Digitalisation is changing all that. Today, the IT department must support customer engagement and the brand – and take a social responsibility in all dimensions of their work. Leaving the responsibility to someone else is not good enough! Responsibility starts by the ambition and willingness to make a difference – not looking way from the problem and leaving responsibility to someone else.
What can we do?
It is clear that the business case for investing in CSR is fairly good. A small investment in CSR will result in improved reputation and therefore there is not excuse for not investing in IT CSR. There are a few steps to take to CSR assuring the IT organization.
- Understand the impact of the IT organization on the UN Global Compact principles. Does the IT department align to these principles in all its activities?
- Set up principles and an action plan to drive the IT CSR work. It is never too late to start.
- Understand how IT can cooperate with business, marketing and Communication to drive the CSR question.
- Include CSR as a key strategic objectives for IT and set up KPI:s to measure the progress.
I must say that I am often skeptical to learn about corporate social responsibility project, because I know too well the global footprint of the IT department. The question I ask myself is what I can do to support the UN Global Compact principles. Well, my ambition is to spread awareness and help IT department to take the first step. It is important to understand that the cheap servers or memory we purchase from a vendor has a much higher price in terms of corporate reputation. It is time to act today!
About the author
Hans Gillior is Senior Advisor at Sofigate, specialising in IT management with expertise in Performance Management (Business Controlling, Governance and IT Strategy) and Digital Strategy/Performance in various industry. He also has expertise in Agile IT Performance Management with purpose of optimising business value of IT organisations working in fast changing environment due to high level of disruptive digital trends.
Original source of this text: Hans Gillior’s blog post