By Kevin McCauley
The Economist’s May 19 Schumpeter column notes that corporate social responsibility programs are evolving from empty phrases and becoming a little less flaky.
“Gone are the days when it was mainly about managing corporate reputations or “greenwashing,” to its critics. It is now more about business fundamentals, such as how products are designed and how supply chains are managed,” according to the piece.
The magazine credits the push for “sustainability” for making CSR more attractive to business.
Sustainability “fits nicely with lean production and tight supply-chain management” and “provides new ideas for reducing costs.”
Schumpeter cites Unilever as an example of a company that extended the notion of ‘lean’ from the factory to the home, by producing detergents that use less water when you rinse your laundry.”
Sustainability can also be measured. UPS, for instance, has a carbon calculator to track the carbon footprint of individual packages. That “allows green consumers to buy carbon offsets that will compensate for the pollution caused by having parcels trucked to their door.”
The Economist said CSR was bad for the reputation of business when it was just considered a PR move.
Companies “seemed to concede that profit making was a bad thing. They bowed to anti-business activists and made amends through good deeds.
“Today’s iteration of CSR is less self-abasing and more constructive. It is encouraging businesses to become more frugal in their use of resources and more imaginative in the way they think about competitive advantage.”
Took Swipe at Rep Management Biz
Schumpeter, last month, rapped the reputation management industry for the naïve view that a company with a good image will find it easier to attract customers and survive crises.
The column noted that companies with “awful reputations” like tobacco sellers and discount airline Ryanair are highly successful operations.
The biggest problem is the “central conceit: that the way to deal with potential threats to your reputation is to work harder at managing your reputation. The opposite is more likely: the best strategy may be to think less about managing your reputation and concentrate more on producing the best products and services you can.”
Schumpeter wrote that BP’s “beyond petroleum” branding campaign “did nothing to deflect the jeers after the oil spill in the Gulf of Mexico,” while successful companies like Southwest Air and Costco “are noted for their intense focus on their core businesses, not for their fancy marketing.”
The column concludes: “If you do your job well, customers will say nice things about you and your products.”
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