Management Imperative #6: Practice Good Social Citizenship

In a world where companies can control information leaks and quickly hide their mistakes, there’s little need to worry about public relations gaffs like exploiting underage workers in developing nations, dumping pollutants in remote settings, or overselling mortgages to needy home buyers. But we don’t live in that world anymore.

The Internet has created an enormous spotlight that quickly shines on any corporate malfeasance. Whether it’s the uproar of a community of bloggers or an embarrassing video posted on YouTube, corporate executives can expect large numbers of people to learn about their mistakes.

In this environment, where the cost of problems has dramatically increased, companies need to step up their commitment to corporate social responsibility, which is nicely described in Wikipedia:

Organizations consider the interests of society by taking responsibility for the impact of their activities on customers, suppliers, employees, shareholders, communities and other stakeholders, as well as the environment.

Here are some areas in which executives can practice good social citizenship:

• Have a clear social mission. The commitment to good social citizenship needs to be integrated in the firm’s overall mission. Tesco, for instance, incorporates it’s commitment to the community as a core component of its overall strategy steering wheel. Here’s an excerpt from it’s Website: Our commitments under the Community segment of the Steering Wheel are to be fair, responsible and honest in everything we do and to be a good neighbour.
• Engage employees in community efforts. Don’t view social citizenship as just another top-down executive mandate. Instead, it should be used to engage employees. UMPQUA bank in Oregon, for instance, provides full-time employees with up to 40 hours per year –paid — to volunteer with youth and community development organizations and schools. The result: Employees feel good about working at UMPQUA. And engaging employees like this is a pre-requisite for engaging customers.
• Be as green as you can be. When it comes to protecting our environment, we all can do a better job. But most shareholders look for companies to deliver ROI, not go green. So executives need to find investments that are both good for the environment and good for their bottom lines. To balance these elements, execs can adjust their funding requirements for “environmentally friendly” projects by factoring in the cost of good/bad press and allowing a longer payback period.
• Make socially-conscious decisions. How can executives incorporate the right concern for social citizenship in their decision making? Assume there aren’t any secrets. Don’t make any decision that would hurt the company (or your career) if the press, employees, partners, or shareholders happened to find out about it. They will.

The bottom line: Make your organization socially proud; it’s good business.

P.S. Here’s a link to all 6 New Management Imperatives