Aside from the fact that it’s the right thing to do and that we may be punished by shareholders, customers, partners and employees for not doing it, can we really tie CSR to better financial performance and competitiveness?
While the response seems to me to be a resounding “yes”, this “ethics
pays” argument requires that we take a broader view than simply the next quarter or financial report.
This view was recently echoed by Harvard Business Professor Michael Porter, a leading authority on competitive strategy. Mr. Porter and I were both part of a conference held recently at the Rotman School of business. He made it clear that companies are no longer self-contained entities. Their successes are intertwined with other firms, local institutions and communities. He called on business leaders to “closely examine this intersection and find the countless ‘win-win’ opportunities waiting to be discovered.” This shift in thinking from strategic and competitive heavyweights like Porter is good news for organizations, industries and indeed countries that are in a position to take advantage of this opportunity.
What does this really mean for us as we deal with the day-to-day challenges of managing profitable businesses? Speaking from my own experience in the technology world, I can tell you that the competitive differentiators of the past have become what we call “table stakes” today. Things like low cost and positive customer experience are a requirement of doing business, not something that sets anyone apart. And while innovation has always been a differentiator for HP, it is no longer simply about faster feeds and speeds. It is also about business models, go to market strategies and the effective integration of sustainability and CSR into our business strategy.
Not convinced yet? Let me share with you the stark realities of the technology business.
Only 10 per cent of the world can afford to buy the technology products we sell. Taking advantage of the opportunity to serve the other 90 per cent requires a different approach and thought process. There is a different hierarchy of needs in these markets and our success depends on our ability to recognize, support and capitalize on these needs and priorities.
This thought process, core to our strategy, has manifested itself under an initiative we call e-inclusion. The mission of this initiative is to provide people access to greater social and economic opportunities by closing the gap between technology-empowered and technology-excluded communities.
What is the benefit for HP? Business value creation through profitable growth and access to new markets; increased brand recognition; and incorporation of new products, business models and solutions into HP business portfolios.
What is the benefit for the community? Community value is created through advancement of economic self-sufficiency, contribution of business knowledge, skills and assets. It has also spawned innovation in public/private partnerships that address the social and economic needs of underserved communities.
Early efforts to develop new business models specifically for the billions of end-users in emerging markets have yielded promising results. We have developed a portfolio of solutions and services that feature non-traditional models for R&D, marketing, supply, pricing, delivery and support.
Given the new level of convergence of personal, business and societal values I’ve discussed, there is clearly a new imperative to act. In 1947, HP’s co-founder Dave Packard said: “The real reason HP exists is to make a contribution . . . to improve the welfare of humanity . . . to advance the frontiers of science . . . profit is not the proper end of management, it is what makes all of the other aims possible.”
While he was certainly ahead of his time, I think we can all agree that these principles have never been more important, not only to our families and community, but indeed to our ability to differentiate ourselves and succeed.
Today is just a continuation of the dialogue that Dave began almost 60 years ago. And we want it to continue. I hope you took the opportunity today to join in the dialogue at your tables and to share your opinions. I also encourage you to visit the HP CSR website to view the results of today’s informal survey and to receive a download called “Good Company”, guidelines for corporate social performance published by Canadian Business for Social Responsibility.
Our goal is to facilitate dialogue and action. For some, as it was for Dave, the impetus to act will be based on a true passion and vision. For others,it may be enlightened self-interest that will spur action – but either way, driving a balance between personal, business and societal values is no longer an option.
Good corporate citizenship at home and abroad, including respect for human rights, environmental stewardship and community investment, plays an essential role in enhancing public trust, attracting and retaining talented employees and reducing investor perceptions of risk. Canada could not be in a better position to lead the way.
Truly, we are a country like no other. It is up to us, as proud Canadians, to take our rightful place on the world stage.