CSR as a Strategy

In an HBR blog The truth about CSR Kasturi Rangan, Lisa Chase, Sohel Karim dissect the CSR initiatives of many companies and come out with three categories in which the CSR initiatives typically fall. The categories are kind of intuitive:

  • Philanthropy or donation / charity
  • Improving Operational Efficiency – this includes things like reducing waste, reducing consumption etc
  • Transforming the business model – here they quote interesting examples of what Hindustan Lever did with women in rural India – where they increased their market share and reach by converting thousand of women as their distributors – both increasing their household income and increasing their sales.

They go on to suggest models that companies should use for most effective use of CSR initiatives.

So, What the authors are suggesting is make the best use of CSR dollar spend and make it work to drive more profit for the company – may be in  the garb of social consciousness while generating some numbers that show that you are making an impact on the society. They talk about giving loans to farmers to increase productivity and to buy the produce at a certain price from them. To me CSR would be if you help them increase productivity irrespective of who they sell their produce to. Otherwise it is just a business investment with an expected return.

Second it made me think, would the real CSR not be to do business in a fair way, by not taking unreasonable margins on your products that directly impacts all your consumers and in a way also helps you increase your customer base. When you do that there is no need for you to do extra effort to show that you care. Otherwise, first you are squeezing your customers to pay you more and then passing them something back in the name of CSR. I understand the purpose of business is to make profit but should be profit – as much as possible at whatever cost? That is a question that businesses need to ask themselves. Where did the need for CSR come in the first place? Will businesses respond in the same way as they do to somehow adhere to other regulations / norms / trends etc.

Time to think and re-align your base strategy.


Workspace Design for Innovation?

In the HBR article Workspaces that Move People, authors Ben Waber, Jennifer Magnolfi, and Greg Lindsay present a case for workspace design that can lead to more interactions within the workforce that in turn leads to improved productivity that obviously means more business for the company. They quote examples of Google that has designed its office for serendipitous encounters between its diverse teams and Yahoo’s decision to cut down on telecommuting – a trend that was experimented with in last few years. The quote examples with data on the changes made and the corresponding change in productivity. 

I have two contradicting views on this. Yes, meeting more people always improves business for various reasons. It is always easy to deal with real people than virtual. Conversations, specially around the coffee machine often lead to new ideas and new interactions tend to cut down bureaucracy to a large extent. New connected dots create new opportunities so organizations should do whatever they can to improve these exchanges – including changing the design of the office. This could be as simple as articles mentions in an example – have one coffee machine for 100+ people rather than for every 5-6 persons, restricting their access to those limited people.

On the other hand I feel sometimes small points like re-designing the office get too much importance when they are put up as if that is all that matters in bringing down inefficiencies. These can be small experiments that can be used to shake up the stuck energy in the organization and the bigger changes can be done based on how well they have been received by the teams and how well they have worked for the organization vis-a-vis the investments done to make the changes.

Telecommuting as an idea failed primarily because team members feed on each other’s presence and on live interactions rather than those enabled by technology only. While tech based communications are a part of our lives, they at best compliment the real-world interactions, and can not replace them, at least not yet.

Peter Drucker on Knowledge Management

Mckinsey published this classic Peter Drucker essay ‘The Manager & the Moron’ that he wrote in December 1967, good 47 years ago. Its a long one but you would enjoy reading each word of it and admire the author even more. Here are some gems that I picked up from essay and see how relevant they remain even today.

At the end of 1967 he says the world had not changed much since 1913 as far as various dimensions of economy are concerned. He talks about increased agricultural productivity, steel industry that continues to use the same technology, automotive and electrical appliances industry that has not changed much and identifies plastics as the only industry that has changed itself and the world around it.

He observes that till 1900 or so, every society had some men of knowledge but the society would not any different with or without them. But now, with the advent of knowledge that is going to change and we would need to learn the applications of knowledge. He quotes two laws of knowledge that make it different from the skill  – The first one is that knowledge evaporates unless it’s used and augmented. Skill goes to sleep, it becomes rusty, but it can be restored and refurbished very quickly. That’s not true of knowledge. If knowledge isn’t challenged to grow, it disappears fast. It’s infinitely more perishable than any other resource we have ever had. The second law is that the only motivation for knowledge is achievement. Anybody who has ever had a great success is motivated from then on. It’s a taste one never loses. So we do know a little about how to make knowledge productive. He goes on to describe how knowledge workers would supersede the workers who learn totally on the job and speak only from their experience. He differentiates that knowledge can be imparted but experience can not be, as it must be experienced. Peter Drucker makes a case for hiring young men of knowledge for doing big jobs and warns about the frustration the two generations will have working with each other.

For computers he says, we have not started using the computers as yet. He also says if it only does the work of a clerk, it may not be worth investing into. I loved his analogy of computer to electricity The computer is to information what the electric power station is to electricity. The power station makes many other things possible, but it’s not where the money is. The money is in the gimmicks and gizmos, the appliances, the motors and facilities made possible and necessary by electricity, that didn’t exist before. Information, like electricity, is energy. Just as electrical energy is energy for mechanical tasks, information is energy for mental tasks.  He makes a few predictions like the cost of computing coming down and we know how true it was for following years. He said the information was costly and it was the kindergarden stage of computing and a kindergarden are always expensive but necessary. His final observation is that computer is a moron that does all the dirty work for you and gives you more space and time to do think.

I have been thinking how much time the computer really leaves for me to think given the tools that it comes loaded with to engage me at various levels.

Thank you Peter Drucker for making me think once again.