Don’t Cut CSR Spending; Reallocate to Build Your Brand

As consumer expectations rise and trust in corporations decline, the need for ethical business practices is greater than ever. Yet in a recession, companies seeking to cut costs will likely postpone important CSR initiatives or cut spending in favor of core business initiatives.

But it doesn’t have to be either-or. Companies that consider social and environmental initiatives as potential innovation platforms and brand builders — not expenses — will come out ahead.

The Opportunity Audit helps prioritize and inspire

To aid businesses in evaluating initiatives, (re)allocating resources and exploring white-space opportunities, we’ve developed the Fruitful Opportunity Audit. This tool maps what a company does, not what it says. That means you won’t see cause marketing programs on this audit, mainly because the Brand/Customer quadrant could hypothetically be filled with greenwash. (click to enlarge)

opportunity-audit

The columns represent the locus of initiative; whether it primarily resides with your suppliers, employees or internal operations, community or customers.

The bottom row shows tablestakes initiatives that most businesses are undertaking regardless of industry. These include basic blocking and tackling like sustainability initiatives in energy, water, waste, IT, supply chain, employee volunteerism, fair labor practices, and so on. Note that it also includes philanthropy efforts that are not directly aligned with the category or brand.

The middle row represents activities that are industry-specific. Now we’re getting into actions that are more strategically in line with your business and therefore could be more effective in reputation-building. Electronics recycling (Community/Customer), industry-related training and job creation (Employee/Community) or Fair Trade efforts among coffee and tea manufacturers (Suppliers) are a few examples.

The top row is where it gets really interesting… this is where you’ll see social-impact initiatives that directly support the brand promise. The most effective initiatives often span most, if not all columns in this row; think Plan A from Marks & Spencer, GE’s Ecomagination, Timberland, Clorox GreenWorks, and specialized ethical brands like Whole Foods and Seventh Generation. Other examples might include Best Buy’s Geek Squad Summer Academy (Community) or Fairmont Hotel’s Green Cuisine (Supplier/Community/Consumer) that aligns with their authentically local brand pillar.

Now is the time to kill sacred cows

If you plot your CSR initiatives on this chart using bubble size to approximate relative spending, you’ll see where most of your dollars are going. Is your chart weighted more heavily at the bottom or the top? If the former, how much could be  shifted to brand-building without compromising on the essentials? If the latter, good job; just make sure you’re covering your bases at the bottom to eliminate risk of goodwashing claims.

shift-resources

This process will inevitably generate some controversial discussion around cutting philanthropic programs that aren’t aligned with your brand.  NCR, a former client of mine that I helped reposition their brand around self-service technology, supports a wide variety of charities completely unrelated to their business through the NCR Foundation; buried on the last page of their Citizenship Report is a brief mention of how they are improving access to technology for disabled and areas with low literacy. That’s a fantastic example of triple-bottom line innovation driving the brand, but it’s being communicated like an afterthought. Imagine what a powerful ethical brand NCR could build if it reallocated its CSR investments in favor of value creation at the intersection of self-serve technology and social needs.

Please note that this is not intended to decrease the amount of funding that any particular non-profit should receive from corporations. Rather, if all corporations were thoughtful about which non-profits to support, then everybody wins. The non-profit could benefit from their corporate partner’s lobbying power and investment in ethical brand-building; the corporation benefits from the strategic alignment with the right non-profits. 1+1=3. The recession is a good opportunity to justify such shifts.

Finding competitive opportunities – a retail example

When you plot your top competitors on the same chart, you’ll start seeing patterns that give insights into opportunity areas for the brand. You might also want to plot related but non-competitive companies on the same chart to bring new ideas to the table. Below is an illustrative example from the retail space; you’ll see that Marks & Spencer in the UK has done a great job creating ethical brand drivers across all columns. Retailers in the US can borrow ideas like branding internal initiatives similar to Plan A. Likewise, M&S could borrow an idea or two from Best Buys’ branded Employee/Community initiatives. (BTW, don’t get hung up on circle size; I don’t have enough info to map to investment levels. Just take it for the illustrative example that it is.)

sample-retail-audit1

You can push the innovation potential even further by mapping completely unrelated companies or industries for inspiration. For example, what could micro-finance teach the retail industry? If I’m Target, perhaps I combine “enabling individual potential”  of Kiva.org with my “design/value” brand promise to create a program that gives design students (or employees!) an opportunity to be discovered, promoted and funded for their product design ideas. That’s a program that spans all four columns of Brand-Builders.

I’m interested in your feedback. Is this a useful framework? What are the roadblocks to adopting this approach in your company? Who would actually drive this… CRO or CMO? CEO? And of course, if you see anything big that I missed in the retail audit, let me know.

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6 Responses to “Don’t Cut CSR Spending; Reallocate to Build Your Brand”

  1. Jennifer, I think this framework is very well thought over and extremely useful. One suggestion maybe : the bubbles in your example can vary in size, not only in terms of the money spent (which might be hard to find out for your competitors) but on ‘audience awareness’ : the more the initiative is known in the market, the bigger the bubble. This way you not only assess what your competitors are doing but also what ‘space’ is left for your company. From a branding-POV it’s not really effective to try to have a bubble in a square where your competitor is dominantly present.
    Who should be responsible ? As far as I am concerned I strongly believe that all matters branding should ultimately be a CEO-responsibility. That’s even more so when social-impact initiatives are designed to support the brand promise.

  2. Hi Walter, thanks for your comment! Great idea to size bubbles based on awareness; too many companies are shy to talk about their CSR initiatives. RE: “not effective to have a bubble where a competitor is present”… I’d suggest that it would be effective if a) it’s a tablestake that you’re not doing well, or b) your execution of it would differ from your competitors. If your competitor is building their ethical brand, you should also be playing in those quadrants but in a way that’s unique to your brand.

  3. Hi. Really enjoy reading your blog & think ‘Don’t cut CSR spending’, is one of your best yet – a very clever model that puts CSR at the centre of strategy with a
    ‘Brand driving the Business approach’ as opposed to the more common ‘Business driving Brand’ mindset of management teams.

  4. Excellent blog Jenn. Really great breakdown of CSR spending flows in this post. Appreciate you putting your thoughts out there–very motivating !
    –Ryan

  5. [...] Fruitful Strategy: creating corporate social opportunity http://www.fruitfulstrategy.com/blog/2009/05/don%E2%80%99t-cut-csr-spending-reallocate-to-build-your-brand – view page – cached Fruitful Strategy is a management consultancy that aligns business strategy with social impact. We identify risks and opportunities, make actionable recommendations, and help you close perception gaps in order to create both competitive and societal advantage. — From the page [...]

  6. [...] of who you are. For a more thorough answer on this, you can refer to one of my recent posts on how to align CSR and philanthropy to drive your brand. Name: Jennifer Rice Title: Principal Company: Fruitful Strategy Website: http://www.fruitfulstrategy.com [...]

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