Jul 292010

By Scott Henderson

Several months have passed since we gathered at the Smith School for the 2010 Social Enterprise Symposium and feasted on a variety of perspectives and ideas shared by presenters, panelist, and audience members alike.  One particularly profound perspective deserves further reflection and consideration.

In recent weeks, two separate op-eds ran in the Washington Post (http://www.washingtonpost.com/wp-dyn/content/article/2010/07/16/AR2010071604070.html) and Wall Street Journal deriding corporate social responsibility initiatives.  Both commentators framed their arguments around the maxim that corporations must place the creation of value for shareholders as its primary objective.  While Matthew Bishop and Michael Green (http://www.philanthrocapitalism.net/2010/07/is-csr-evil/) offered a solid rebuttal to the two critiques, something we learned at the Symposium needs to be included in this debate.

Stanley Litow’s keynote address about IBM’s decision to center their core strategy on corporate citizenship provided substantial proof on the prudence of corporate citizenship.  What was most compelling was his statement that IBM reaps a 3:1 return on investment for their corporate citizenship efforts.

By devoting their best and brightest minds to tackling some of the world’s most vexing issues, Litow claimed IBM can trace its ROI to five sources:

Talent – recruitment and retention of their knowledge-based workforce.

Investments – IBM has seen sizeable investments in its stock from Socially Responsible Investment Funds (SRIs) that account for $1 trillion in assets and must invest in socially responsible organizations.

Technology innovation – the world’s biggest problems require new solutions and breakthroughs, many of which IBM can use to solve similar problems for their paying clients and generating revenues from licenses and patents in the broader marketplace.

Brand – the major emphasis of their advertising and marketing campaigns center around their corporate citizenship efforts and helps them stand out from their competitors

New market entry – they have found much greater success in gaining entry into new countries and regions by leading with their corporate citizenship initiatives

The ability to generate $3 for every dollar invested in corporate citizenship initiatives is important and noteworthy.  Because it is IBM making the claim, we social entrepreneurs can take great comfort in their validation of the notion that doing good can translate into doing well.

What do you think? Is this noteworthy or not worthy?

Scott Henderson is managing principal of CauseShift, a team of strategists who help clients provoke, connect, and market. He has led shifts for a variety of organizations, including P&G, UNICEF, and wecanendthis.com, a yearlong, multi-partner initiative to spark innovation and engage more people in the cause of ending hunger in America. Scott is a regular keynote speaker and publisher of rallythecause.com.

  One Response to “The ROI of Doing Good: Reflections on the 2010 Social Enterprise Symposium”

  1. This is certainly noteworthy, Scott. IBM’s initiatives are the perfect rebuttal to the “Is CSR Evil?” question.

    Corporate citizenship doesn’t mean a company has stopped focusing on their bottom-line for the community’s sake. However, it implies the company values the community’s well-being as well as their own.

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