Business Innovation, CSR and Competitive Advantage: Strategic pathways to value
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Presentation to Saudi Arabian business leaders at the Maple Leaf Club, Canadian Embassy, Riyadh, Saudi Arabia November 29, 2015 To keep updated on postings and events go to www.csrtraininginstitute.com and sign up for the newsletter. If interested the CSR Knowledge Centre http://bit.ly/CSRknowledge contains a series of short, pragmatic articles on CSR Strategy, Management and related areas.
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Business Innovation, CSR and Competitive Advantage: Strategic pathways to value
- 1. Business Innovation, CSR and Competitive Advantage Strategic Pathways to Value Nov 29, 2015 Maple Leaf Club Canadian Embassy Riyadh, Saudi Arabia Presented by Wayne Dunn Professor of Practice in CSR (McGill University) President & Founder, CSR Training Institute wayne@csrtraininginstitute.com
- 2. Business Innovation, CSR and Competitive Advantage • CSR History (how did we get here?) • What is CSR? • More than philanthropy? • All about value • CSR Value Frameworks • CSR, business strategy and competitive advantage Strategic Pathways to Value CSR What it is|What it isn’t|What’s in it for you?|What’s in it for Society?
- 3. CSR and Islam • CSR actions are not new (maybe the CSR name is) • Builds from concepts of ethical and social behaviour • Applies to individuals and organizations • Sharia compliant finance and banking Islamic institutions are perceived to be an essential part of the larger environment and therefore should also contribute to the needs of the larger environment, as Islamic moral economy requires horizontal and vertical equality and growth in harmony with all the stakeholders, and also aims to remove all the barriers in front of the development path of all the stakeholders including individuals, society and natural environment. Financial Times
- 4. Lecture Focus • This lecture will focus on CSR from a broad, global perspective rather than exclusively on CSR and Islam • Will use some examples drawn from Islam based companies • For more specific information on CSR in Islam References from Qur'an, Hadith, and Islamic history and practice. • http://www.slideshare.net/farhanahmad/concept-of-csr-in-islam • http://www.slideshare.net/aizannoriz/corporate-social-responsibility-based- on-islamic-perspective
- 5. Rise of the Global NGO Movement By 2006 • The NGO sector was the eighth largest economy in the world • Worth over $1 trillion a year globally. • Employs nearly 19 million paid workers, not to mention countless volunteers. • NGOs spend about $US15 billion on development each year, about the same as the World Bank. https://www.globalpolicy.org/component/content/article/176/31937.html
- 6. Where did it come from? Globalized world is demanding more of business… • Global media – The CNNization of the world – remote local issues direct to television screens • Internet – direct communications from remote projects to worldwide audience • Proliferation of NGOs and CBOs – direct, well organized and financed support to communities • Global Democratization – increased attention to local issues • Social Media – everywhere is here and instant
- 7. You think business is easy?
- 8. Has the World Changed? 1960s • NGOs • Communications • National Governments • Business • Technology Today • NGOs • Communications • National Governments • Business • Technology Society expects more AND has more power to force change
- 9. Increasing societal expectations and influence 0 50 100 150 200 250 300 1975 1980 1985 1990 1995 2000 2005 2010 2015 SocietalExpectations&Influence Applies to organizations of all types, but especially business *directionally indicative data derived from SWAG analysis
- 10. Managing societal expectations & creating shareholder value Framework Plan ?Results? System
- 11. Think before you spend More spending and more complexity doesn’t always produce more value
- 12. CSR is Simple: Just Charity • CSR is about philanthropy and charity • Done on the margins of business • Unrelated to core business activities and operations • Not necessarily about business or shareholder value
- 13. CSR is about Value • Can include charity • Can include philanthropy • MUST include value FOR THE COMPANY • And for one or more stakeholders
- 14. Value for company & society Business • Employee attraction • Access to contracts • Access to customers • Market development • Employee retention • Reputational (customers, regulators, stakeholders, employees, etc.) • Operational/financial efficiency • Shareholder returns Society • Social • Health • Education • Poverty • Development • Community • Etc. And environment and ecosystems too
- 15. Business / Society Interface Business Society Environment Where business meets society and environment
- 16. CSR can be confusing
- 17. What about “Shared Value” The ‘Shared Value’ 4 bucket model Do Nothing Bad Philanthropy Better But not good CSR Alright OK.. The Best Shared Value
- 18. CSR Value Continuum© Value Distribution Value Creation © CSR Training Institute 2013 From Value Distribution to Value Creation It’s all Shared Value Every CSR investment and activity should create value for the company & for one or more stakeholders. CSR Value Framework
- 19. Thinking about CSR & Value • Mining company builds a community sports field • Mostly charity and philanthropic • Reputational capital for company • Community, social, youth… value for community
- 20. CSR Value Continuum© Value Distribution Value Creation © CSR Training Institute 2013 From Value Distribution to Value Creation It’s all Shared Value Every CSR investment and activity should create value for the company & for one or more stakeholders. CSR Value Framework Community sports field Mostly about value distribution
- 21. CSR and Value Alignment CSR is about value alignment between and organization/business and society • Value for shareholders • Value for society • Better value alignment | value proposition innovation • More value for society AND shareholders
- 22. Value Distribution Value Creation © CSR Training Institute 2013 From Value Distribution to Value Creation It’s all Shared Value Every CSR investment and activity should create value for the company & for one or more stakeholders. Value Proposition Alignment 1 1 3 CSR Value Alignment Framework©
- 24. Beyond philanthropy building from core business interests and strengths to support societal value • Extensive community engagement around health and well-being. • Support and partnership in key programs addressing important community health issues • 10KSA – Holistic Health (breast cancer focus in 2015) • www.10ksa.com to sign up for current program King Faisal Specialty Hospital and Research Center Health and social cohesion value Market awareness, reputational capital, partnership development and staff engagement value
- 25. • Integrating CSR into regular staff functions and activities • Innovative use of strategy, communications and outreach • Big internal and external impacts • See more at http://www.kfshrc.edu.sa/wps/portal/En when it is unveiled tomorrow! King Faisal Specialty Hospital and Research Center
- 26. Value Distribution Value Creation © CSR Training Institute 2013 It’s all Shared Value Every CSR investment and activity should create value for the company & for one or more stakeholders. Value Proposition Alignment 1 1 3 CSR Value Alignment Framework© KFSHRC – beyond philanthropy More value created for society & business
- 27. Value Sustainability •CapEx or OpEx? • Does the initial investment continue to provide value beyond the investment timeframe • Investment? • Expense
- 28. Value Sustainability© Current Value Medium Term Value Long Term Value Does a CSR investment continue to produce value over time? © CSR Training Institute 2013© CSR Training Institute 2013
- 29. Saudi Telecom Company Societal and shareholder value • Research Chairs Program (10mm Riyal/$2.5mm total project cost) • Communications and Networks Factory and Electromagnetic Imaging Factory at the University • 16 Research projects • Consultancy support to Ministry of Defense • 38 Scientific workshops • Publication of 35 scientific research papers Societal value (students, academia, business advances and efficiency) Company value (recruitment, access to research, market profile, links with leading researchers, employee retention, reputational capital)
- 30. Value Sustainability© Current Value Medium Term Value Long Term Value Does a CSR investment continue to produce value over time? © CSR Training Institute 2013© CSR Training Institute 2013 Saudi Telecom Research Chairs Program
- 31. Supply Chain & Customer Experience • BlueBud program • Mentors small start-ups to become suppliers (primarily food related) • Includes all aspects of operations plus environmental/climate change impact • Partners with GrowNYC, a nonprofit that supports local agriculture and farmers' markets • Vendors helped include • ice creamery Blue Marble, • 2 Degrees Bars • Ronnybrook yogurt
- 32. Supply Chain & Customer Experience Value Proposition • Societal value (local business/income, employment, support infrastructure) • jetBlue (unique artisanal suppliers, wholesome onboard food, climate- cleaner supply chain, public profile, reputational capital) • CSR investment leverage – more value per $ spent • Environment (climate cleaner operations)
- 33. Value Distribution Value Creation © CSR Training Institute 2013 It’s all Shared Value Every CSR investment and activity should create value for the company & for one or more stakeholders. Value Proposition Alignment 1 1 3 CSR Value Alignment Framework© jetBlue – BlueBud Increased value through aligning interests
- 34. Value Sustainability© Current Value Medium Term Value Long Term Value Does a CSR investment continue to produce value over time? © CSR Training Institute 2013© CSR Training Institute 2013 jetBlue – BlueBud program Short, medium and long term value
- 35. Employment & Procurement • Developoment of Uranium mining industry – remote, undeveloped area (40,000 people, 250,000 sq miles) • No history of industrial employment • Needed local support for industry to develop • Launched comprehensive employment, training and supplier development program plus philanthropic support
- 36. Employment & Procurement • ~75% northern and Indigenous • Up to $400 million/year in local procurement • Transportation • Catering • Underground mining • Camps • Supplies • etc Value Proposition • Society (business, income, employment, infrastructure, grants, etc.) • Company (social license, happy communities, local employment and procurement reduces costs, relationship with regulator)
- 37. Value Distribution Value Creation © CSR Training Institute 2013 It’s all Shared Value Every CSR investment and activity should create value for the company & for one or more stakeholders. Value Proposition Alignment 1 1 3 CSR Value Alignment Framework© Cameco: employment & supply chain Increased value through aligning interests
- 38. Value Sustainability© Current Value Medium Term Value Long Term Value Does a CSR investment continue to produce value over time? © CSR Training Institute 2013© CSR Training Institute 2013 Cameco – employment & supply chain Short, medium and long term value
- 39. Triple header impact limited promotion! (yes, this is that Nike) • Support to community athletics & athletes • Support to hi- performance athletes • Support to communities where products are made • Limited communication and promotion!
- 40. CSR, Value, Sustainability & Balance No hard and fast rule • All have their place • Value distribution (pure philanthropy) • Value creation • Short, medium and long term value returns • Successful strategies generally involve all of these • Saudi Arabia CSR seems to have a lot of philanthropy/charity focus • What is important is clear understanding of the motivation and the value strategy
- 41. CSR is about Value • Can include charity • Can include philanthropy • MUST include value FOR THE COMPANY • And for one or more stakeholders
- 42. CSR, Value and Balance
- 43. Value for company & society Business • Employee attraction • Access to contracts • Access to customers • Market development • Employee retention • Reputational (customers, regulators, stakeholders, employees, etc.) • Operational/financial efficiency • Shareholder returns Society • Social • Health • Education • Poverty • Development • Community • Etc. And environment and ecosystems too
- 45. Other issues (for another lecture) • Stakeholder engagement • CSR Communications • CSR Metrics • Social License • Global Standards and Norms • CSR Partnerships • CSR History (where, how, why, when) • CSR and Natural Capital/Climate Change • CSR and Tax Strategy
- 47. Below are some recent articles and publications on CSR Communications and strategy that you may find interesting. They are short and pragmatic, hopefully helpful and interesting. Read them, download them, share them and feel free to comment on them by sending us an email. CSR Knowledge Centre Articles on CSR & Value Available online http://www.csrtraininginstitute.com/knowledge-centre/
- 48. Business Innovation, CSR and Competitive Advantage • CSR History (how did we get here?) • What is CSR? • More than philanthropy? • All about value • CSR Value Frameworks • CSR, business strategy and competitive advantage Strategic Pathways to Value CSR What it is|What it isn’t|What’s in it for you?|What’s in it for Society?
- 49. Contact Information Wayne Dunn Professor of Practice in CSR, McGill University President & Founder, CSR Training Institute wayne@csrtraininginstitute.com www.csrtraininginstitute.com