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The Economist

Are Corporations Outsourcing Responsibility?

(This guest blog was originally printed in The Economist  ( http://ccdebates.eiu.com) in a shorter version

Are Corporations Outsourcing Responsibility?

Corporations outsource everything from accounting and manufacturing to human resource functions. For the most part, charity and Corporate Social Responsibility (CSR) are methods of outsourcing responsibility, handing off the heavy lifting to someone outside the company who will make strategic decisions to bring about transformations and decide when success has been achieved. These days, with CSR the fastest growing consultant practice, too many companies ask little more of themselves than to find a congenial not-for-profit organization or consultant. When the brand is protected—or even better, enhanced—and performance can be reported on a responsibility annual report, they assume that they are. . . well. . .being responsible.

Real responsibility is up close and engaged. When Colgate Palmolive, South Africa decided to help birth the New South Africa, it did not give money to not-for-profits. Stelios Tsesos, the company’s general manager in Africa, chartered and then prepared Colgate’s entire local workforce to help the new government succeed. Individuals and teams drew on their business acumen to develop innovation that included engaging respected women leaders in the townships. They educated them on oral health, something that Colgate knew well and that was core to their business, and helped them build skills to run small businesses. Then they set up these entrepreneurs to sell very small lots of dental care products within the townships, producing income for themselves and supporting and improving the health of their communities.

The Colgate employees took their engagement even further. They helped lead Mandela’s effort to set up townships councils for improving governance in the fledgling democracy, relying on skills they acquired as they learned how to run Colgate Palmolive, South Africa in the new era. They knew firsthand whether they were succeeding in their promises to the local communities because they were tracking and adjusting toward the results, themselves. We built business skills across the company which was used in these activities. The effect for Colgate was a growth rate of 40 percent per year—all through insourcing, never outsourcing.

Colgate’s effort was company-wide. Another subtle way to outsource responsibility is to set up a CSR department and let everyone else in the organization off the hook. There is no reason for anyone outside the department to think about CSR at all, let alone to think about it every day. It doesn’t get embedded in their decisions. There is no CSR planning and challenge except as the department strategy proposes them. Officially outsourced CSR is all about charity or corporate philanthropy. “Compartmentally sourcing” it has similar effects.

Goggle keeps CSR inside and internalized in everyone’s work. For example, Google Global Food Services has given itself the mission of changing all people’s understanding and behavior in regard to food and its effect on health. Michiel Bakker, Director of the service, has devised a way to work on people’s interactions with food and their understanding of its relationship to health, based on the five stakeholders’ framework in my book, The Responsible Business. As a way to start, Google has launched an Innovation Lab, made up of a broad coalition of experts developing actions to change human behavior and choices.

I am very proud to be a part of this initiative, as well. When Google makes donations, they stay in the wheelhouse and in locations where they can engage directly. Their charity path is targeting childhood obesity.  Part of what the Innovation Lab discovers will be directly connected to this work, as well. When not-for-profits are involved, it is with the Google organization, where they participate actively. Thus understanding and responsibility remain within the company.

The idea of “giving back” should not replace “giving as.” The programs at Colgate Palmolive, South Africa and Google Global Food Services exemplify giving as we do business, not after the fact. This provides one more reason why a business should become directly connected to the everyday work of any charity it supports. Making responsibility a way of doing business, including it in every decision, task, and product, is far more effective than the substitution of donations, good deeds, and sustainable “best practices,” for acts of irresponsibility.  Giving as goes way beyond giving back; the only way to guarantee full integrity is by making responsibility in-house and integral.

Approaches  to responsibility without this level of direct connection and strong commitment to making “it happen”—in ways that allow for continual course corrections—are more like hand offs. Outsourcing and compartmentalizing CSR splinter a company’s efforts and fragment its connections to what it’s really trying to accomplish. Which is not to say that charity is always a bad thing; obviously we must all contribute when dire situations arise. But charity should never be a substitute for full, company-owned responsibility.

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One Response to Are Corporations Outsourcing Responsibility?

  1. Alleli Aspili May 2, 2013 at 6:12 pm #

    I didn’t know that companies like Google Global Food Services and Colgate Palmolive are actually doing these sorts of things. There’s really a huge difference between “giving back” and “giving as” since those ideas shouldn’t interchange with each other. Outsourcing had clearly shown a long way to go.

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