Corporate Social Responsibility or CSR is not fit for purpose, and we need something better to hold corporations to account for their social and environmental impact. Business is business — If there is a conflict between maximizing shareholder value and an environmental or social impact, the bottom line will win out in this model.
CSR framed in terms of restricting harm a business can do or to “white-wash” its business activity, have little to do with having any good impact they can bring. With the case in many unethical companies, they are donating money to some causes or funding some initiative with a tiny fraction of the profits make is going to make the world a better place as their CSR.
On social media, the customers do play a significant role in sharing the good and the bad. Many corporations that may have been in the spotlight for doing something wrong will have a lot of negative buzzes created. The publicity may cause a possible boycott of the products, or these customers pressure their politicians to do something, which may hurt the bottom line of the corporation. And no amount of CSR can change the opinions of the public.
A common question asked is, “Is there a better way in which we might assess and improve business’s impact on society and the environment?” The public is getting more informed from some of the negative expose of large companies due to the Internet. It is not enough to have a CSR program and believe that it will change the impression of the public; corporations need to think beyond CSR and engage with stakeholders beyond shareholders.
On Social Media, the question asked is, “How can we used New Media to get closer to customers?” People like to do business with the people they want. However, in many organizations, their primary focus is on operations, margins, and efficiencies over customer experience. It is hard for a customer to empathize when the organization is more focused on a spreadsheet. It is impossible to change if you can’t see what it is they value.
Humanizing the brand and being customer-centric starts with breaking down internal silos. It is having a culture of listening and communicating with customers as well as using feedback to improve relationships and experiences. It’s about empowering the employees to enhance and contribute to a new era of customer engagement and collaborations. They have to care, not because they are human, but because it is part of the corporate culture.
Innovation and collaboration is an outside-in and an inside-out process. Engaging with customers forces a groundswell that inspires top-down transformation from the bottom-up. It is time to invest in relationships that yield insight and impact. Businesses must earn affinity, loyalty, and advocacy through ongoing relevance.
There are much learning and adaptation, and a corporate culture that recognizes the connected customer and having a management infrastructure necessary to adapt is critical.
Putting 2 and 2 together, transforming CSR with customer advocacy can bring the social to the next level. In an era of Capitalism, many people feel the need to address the income gap problem between the haves and have nots. Striving to have high stock price does not mean a company cannot also have high social capital. Philanthropic Capitalism — the merger of philanthropy and Capitalism may set the stage for a new era of socially responsible businesses.
There are many opportunities wealth provide, and many questions on the responsibility of wealth. With more companies increasingly interested in humanistic Capitalism, a consumer can find opportunities to work together to make the world a better place through everyday commerce.
Many companies are mismanaging CSR opportunities. Because the initiatives need to yield more returns in the form of sales or merely branding, often millions of dollars are spent on CSR Programs and millions more marketing the campaign. The companies are also not transparent and not taking on the core problem or even the issues they cause while doing business, and CSR is often seen as “white-washing” the companies.
Meanwhile, social projects, socially driven by staff and customers, can be supported by the company, and this gives a different dimension to social engagement. Otherwise, companies can also use their influence to promote and create social awareness. The RED program for Starbucks is a great example where customers paying with the RED rewards card also contributes to Global fund to help people living with HIV / AIDS in Africa.
Philanthropic Capitalism nurtures empathy into a competitive advantage. It allows the corporation, the staff, and customers to do good while doing business together, and with social media, amplify their efforts for a more significant cause.
It is natural for Social Media to converge socially. It is the future direction for social evolution.