Beyond Good Company: Next Generation Corporate Citizenship

287 Pages·2007·5.277 MB·English

by  Bradley K. Googins, Philip H. Mirvis, Steven A. Rochlin (auth.)

Beyond Good Company
Next Generation Corporate Citizenship
Bradley K.Googins,Philip H.Mirvis,and Steven A.Rochlin
Beyond Good Company
Copyright © Bradley K.Googins,Philip H.Mirvis,and Steven A.Rochlin,2007.
Softcover reprint of the hardcover 1st edition 2007 978-1-4039-8483-8
All rights reserved.No part ofthis book may be used or reproduced in any manner
whatsoever without written permission except in the case ofbriefquotations embod-
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First published in 2007 by
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ISBN 978-1-349-54010-5 ISBN 978-0-230-60998-3 (eBook)
DOI 10.1057/9780230609983
Library ofCongress Cataloging-in-Publication Data
Googins,Bradley K.
Beyond Good Company:Next Generation Corporate Citizenship / by Bradley K.
Googins,Philip H.Mirvis,and Steven A.Rochlin.
p.cm.
Includes bibliographical references and index.
1.Social responsibility ofbusiness.I.Mirvis,Philip H.,1951- II.Rochlin,Steven A.
III.Title.
HD60.G663 2007
658.4’08—dc22 2007018522
Design by Scribe,Inc.
First edition:December 2007
10 9 8 7 6 5 4 3 2 1
To Edmund M.Burke and J.Donald Monan,SJ
Contents
Acknowledgments vi
Introduction From Margins to Mainstream 1
1 Next Generation Corporate Citizenship 11
Part I A Movement Afoot
2 Business and Society:A View from the Top 27
3 From Good to “Best ofthe Good” 43
4 New Rules for Business Success 61
5 Stages ofCorporate Citizenship 75
Part II Repurposing the Enterprise
6 Defining What Matters 95
7 Taking an Integrated,Strategic Approach 113
8 Leading Next Generation Companies 129
9 Engaging Employees as Citizens 147
Part III Putting Citizenship To Work
10 Integrating Citizenship into the Business 165
11 Taking Citizenship to Market 181
12 Co-creating Value for Business and Society 199
Conclusion Can Business Step Up? 217
Appendices
Appendix 1 Business in Society Interviews 231
Appendix 2 Business Case for Corporate Citizenship 233
Appendix 3 Stages ofCorporate Citizenship—Self-Assessment Survey 235
Appendix 4 Roster ofFounder/CEO Citizenship Trailblazers 239
Appendix 5 Today’s Socio-commercial Entrepreneurs:Select Examples 240
Appendix 6 Corporate Community Involvement in China:
Select Examples 242
Appendix 7 Corporate-Nonprofit Partnerships:Select Examples 244
Appendix 8 Global Citizenship Organizations:Select Examples 248
Notes 257
About the Authors 275
Index 277
Acknowledgments
We have dedicated this book to the combined vision and dedication ofEd
Burke,the founding director ofthe Boston College Center for Corporate
Community Relations and J.Donald Monan,S.J.,former president of Boston
College.More than twenty-five years ago,Ed Burke,former dean ofthe School
ofSocial Work,had the prescience to realize that the role ofbusiness was chang-
ing and executives needed to learn how to manage new societal expectations
related to the communities in which they manufacture,sell,and source.Father
Monan’s support and recognition that Ed’s vision was an opportunity to express
Jesuit values beyond the campus ofBoston College has been the bedrock ofour
organization and has allowed it to grow in size and scope and evolve into the
Center for Corporate Citizenship.We also want to thank the Carroll School of
Management for supporting the Center,especially the early leadership of Jack
Neuhauser that provided the fertile ground and entrepreneurial space that
inspired thinking,learning,and networking.This has continued to the present
with Dean Andy Boynton who allows us the flexibility to be responsive to the
world’s leading companies.
Most of the others we want to thank stand on the shoulders of Ed Burke—
from those who helped build the Center’s premiere executive education pro-
gram, beginning with Nancy Goldberg and Tamara Bliss followed by David
Abdow, Billy Brittingham, and Chris Pinney.An effective education program
requires a foundation of solid research and through the years the Center has
built that capacity.The many years ofresearch are present on every page ofthis
book and reflect the hard work ofso many,including Guy Morgan,Kwang Ryu,
David Wood,Belinda Hoff,Vesela Veleva,Jonathan Levine,Julie Manga,Mick
Blowfield,Kathleen Witter,Kristen Zecchi,Sapna Shah,Platon Coutsoukis,and
Janet Boguslaw.
The Ford Foundation,with the leadership ofFrank DeGiovanni and Michele
Kahane,was instrumental in helping the Center build its research credentials.A
strong research cornerstone for the Center has been the biennial State of
Corporate Citizenship survey work that would not be possible without the sup-
port of The Hitachi Foundation and the efforts of Barbara Dyer and Mark
Popovich.Another research project that has strengthened the field ofcorporate
citizenship and shaped this book is the Global Leadership Network that the
Center created with Simon Zadek and AccountAbility. The GLN that was
inspired by Stan Litow at IBM with support from Bob Corcoran ofGE,Shizuo
(Ricky) Fukada ofOmron,Mitch Jackson ofFedEx,Geoffrey Bush ofDiageo,
Rodolfo Santiago Larrea Vega ofCEMEX,Mark Murphy ofCargill,Kathy Reed
of 3M, David Jerome of GM, and Helen Kerrison of Manpower. Others,
ACKNOWLEDGMENTS vii
including the World Bank’s International Finance Corporation,continue to sup-
port this work.The Executive Forum research community was also instrumen-
tal to the content ofthis book and we want to especially thank Reeta Roy,Kevin
Callahan, and Susan Beverly of Abbott; Gene Endicott of Agilent; Allyson
Peerman and Phil Trowbridge ofAMD;Theresa Fay-Bustillos ofLevi Strauss &
Co.; Hazel Gillespie and David Stuart of PetroCanada; Laurie Regelbrugge of
Unocal;and Chris Lloyd and Susan Sullivan ofVerizon for their participation.
The Center is proud to be known as a place where business comes to unite,
not compete.Our membership team,with the leadership of Cheryl Kiser,has
created a supportive environment we call “In Good Company.”Other colleagues
supporting our 350 member companies include Seema Bharwani, Eileen
Blinstrub,Susan Fonseca,Eve Kristiansen,Kit Manning,Lisa Medolo,Colleen
Olphert,Karen O’Malley,Chris Ryan,Josh Shortlidge,and Susan Thomas.
The academic community has also informed and supported our work and
this book. The insights of many have been invaluable, especially Sandra
Waddock,Jane Nelson,Jim Walsh,David Vogel,and Dave Cooperrider,not to
mention graduate students Keith Cox, Mona Amodeo, and Guy Vaccaro. We
have built a world-class faculty for our executive education program that
includes: Ron Brown, Ken Freitas, Myriam Laberge, Lawrence Moore, Celina
Pagani-Tousignant,Ann Pomykal,Richard Pringle,Susan Santos,Ann Svendsen,
Dick Trabert,and Eric Young.
The dynamics of the twenty-first century have required the Center team to
have a global reach,which we have done by creating partnerships with so many
around the world including Susanne Lang, Michael Buersch, and Frank
Heuberger in Germany;Derrick de Jongh in South Africa;David Halley in the
United Kingdom;Ricardo Young and Mariana Pereira in Brazil;Dante Pesce in
Chile;Simon Pickard in Belgium;and Francisco Roman,Jr.in The Philippines.
Leadership is a key component ofnext generation corporate citizenship.The
Center has been fortunate to be influenced by some extraordinary executives
who have chaired our International Advisory Board. For their demonstrated
leadership and commitment to making this a better world through this service,
we thank Dick Trabert,formerly of Merck,Mary O’Malley of Prudential,Lew
Karabatsos, formerly of HP, Theresa Fay-Bustillos of Levi Strauss & Co., and
Edgar Rodriquez ofCEMEX.
This book was also informed by hundreds of other men and women inside
business who have provided us their knowledge and perspective.While space
does not allow us to name everyone, we must acknowledge Paula Baker,
Raymond Baxter, John Bloomfield, Jennifer Brown, Alice Campbell, Carolyn
Casey,Evern Cooper,Ann Cramer,Sasha Dichter,Mary Franco,Nathan Garvis,
Adrian Godfrey, Michelle Grogg, Barbara Haight, Greg Hall, Lisa Hamilton,
Tanya Hayes,Deborah Holmes,Rose Jackson Flenorl,David Gonzalez,Stephen
Jordan, Donna Klein, Kimmo Lipponen, Kevin Martinez, Joan McDade, Ria
Messer, Bo Miller, Bob Morris, Nancy Nielsen, Donna Obuch, Pat O’Reilly,
Douglas Pinkham, Karen Proctor, Ralph Reid, Jerry Ring, Martin Sandelin,
Johanna Schneider, Brad Simmons, Helen Smith Price, Laura Tew, Dave
Thomas,Kevin Thompson,John Weiser,Allen White,and Bill Valentino.
viii ACKNOWLEDGMENTS
And finally,we thank a few other key players that made this book possible:
Research assistant Sylvia Ciesluk never failed to find facts,figures,and the most
appropriate example to illustrate a point;Sharon Sabin for her first-rate chart-
making skills;and Leslie Stephen for her spot-on copy editing.Lastly,our appre-
ciation to Peggy Connolly for managing to keep the project on track and the
authors focused,grounded,and well-prepared.
Bradley K.Googins
Philip H.Mirvis
Steven A.Rochlin
September 2007
Chestnut Hill,MA
Introduction
From Margins to Mainstream
Aselect set of big businesses and entrepreneurs are moving beyond the tire-
some terrain where shareholders’interests are pitted against other corporate
responsibilities. At this socio-commercial frontier, companies are using time-
tested strengths—risk management, R&D, market prospecting, innovation,
brand differentiation, and continuous improvement—to bring corporate citi-
zenship from the margins oftheir agenda into their mainstream business.In so
doing,they are enlisting their employees,suppliers,and customers in a new mis-
sion and working together with other companies and nonprofit partners around
the globe.
Consider some examples of how business is applying its know-how and
imagination to a diverse set of activities that have,to this point,been lumped
under labels of social responsibility,environmental sustainability,or corporate
citizenship (the inclusive term used here):
•In light of pricey energy and the threat of global warming,GE launched its
“ecomagination” campaign and is investing $20 billion in technologies to
reduce its customers’energy consumption and carbon emissions;
•Drawing on its open-sourcing philosophy,IBM is applying know-how from
its philanthropic “reinventing education”efforts to social problems having to
do with health, transportation, and crowded urban life and inviting thou-
sands ofstakeholders to use its tools;
•In a bid to expand markets and shrink the digital divide,AMD,Nokia,HP,
and others are reaching millions of poor people with inexpensive software,
cell phones,and hand-held PCs;
•Faced with local competition and the glare of global critics, P&G and
Unilever have new business models to deliver purified water and fortified
foods to the “bottom ofthe pyramid”;
•Recognizing problems and seeing opportunities, Starbucks and Green
Mountain Coffee have,along with non-governmental organization (NGO)
partners,created a market for “fair trade”coffee that brings benefits to sub-
sistence farmers and serves a growing segment ofethical consumers;
•Seeking a first-mover advantage,Goldman Sachs created an environmental,
social, and governance index that documented how those firms with the
strongest ratings outperformed the overall market and industry peers from
2 BEYOND GOOD COMPANY
August 2005 to July 2007.Now other investment banks and consulting firms
are establishing practices and gaining credibility in these domains.
•Meanwhile,Johnson & Johnson is tackling the dire nursing shortage while
Manpower is training millions ofhard-to-employ youth;and
•Novo Nordisk, Novartis, and other big healthcare products companies are
sharing patents and working with generics to greatly increase access to life-
saving medicines.
These companies plus others are moving beyond legal compliance,checkbook
philanthropy,and even stakeholder management to define the next generation
of corporate citizenship.The players range from old-timers in new hands,like
Ben & Jerry’s and the Body Shop,to new entrants like salesforce.com,touting e-
based “compassionate capitalism,” to late-to-the-game Wal-Mart, rapidly
greening its Chinese suppliers and its own facilities and offerings,to emerging
market powerhouses like CEMEX (Mexico) that has aspirations to “make a bet-
ter world.”
The Facts up Close:What this Book Is About
The Boston College Center for Corporate Citizenship (the Center) has been
studying and working with these companies for decades.1The Center,neither as
critic of nor cheerleader for business, has amassed a database of evidence—
including personal,in-depth interviews with the CEOs ofthese and many other
global businesses,hands-on case studies ofwhat’s behind these efforts and what
they can and cannot deliver,plus multiyear surveys ofbusiness leaders—to pres-
ent a clear-eyed and,we believe,compelling case that an increasing number of
companies and their values-driven leaders are redefining the business-of-
business today.
Nevertheless, most everyone familiar with decision making in corporate
boardrooms and executive suites—or who manages or works in an office,plant,
or retail outlet—has to take this sort oftestimony with a cautionary grain ofsalt.
After all,most of the work dealing with issues raised by employees,customers,
suppliers,NGOs,regulatory bodies,and the media is handled by diverse corpo-
rate staff functions and addressed through policies, programs, and reporting.
Meanwhile,business managers are busy activating strategies to gain competitive
advantage,using disciplined processes to drive quality improvement,cost reduc-
tion, and innovation, and relying on sophisticated measurement systems to
ensure efficiency and support improvement. Thus the work of citizenship in
most companies is,at best,an “add-on”to the business agenda.
A slew ofrecent articles,books,conference reports,and surveys contend that
business is entering an era ofstakeholder capitalism and thought leaders tout the
prospect ofsolving the world’s problems through business-driven solutions.At
the same time,skeptics rightly point to the “limits of virtue”in markets even as
critics question to what extent corporate social investments constitute anything
more than window dressing.2And a public mistrustful ofbusiness,not to mention