Ideas in CSR: Three Examples of Leveraged Competencies
The idea that a business' obligations are broader than maximization of profits is growing quickly these days (I'm going to avoid here the worn-thin indictment of "Wall Street" for neglecting these obligations; seriously people, enough already). A business, the concept holds, is also a social citizen and bears the responsibility of contributing to a just and sustainable society. A core component of this responsibility centers on companies doing business in a socially responsible way. For instance, Starbucks buys only "ethically sourced" coffee beans and Coca-Cola works to reduce its packaging and water footprint. But some companies are also pursuing another, less-common, angle on being a good social citizen.
Successful companies are successful because they have a more masterful command of certain key abilities than anyone else. In business-speak, these differentiating abilities are a company's "core competencies". Google's cloud computing and accessible satellite imagery capabilities are untouched. Coca-Cola's ability to rapidly move high-volume consumer products to retail locations around the world is astounding. Wal-Mart's ability to work with its many suppliers for greater efficiency is unprecedented. These companies have competencies that no other organization on the planet can match, period. Now, they are exploring ways to leverage their competencies to create social value in addition to private wealth.
Google's Deforestation Monitoring Prototype
Deforestation of tropical rainforests is one of the leading sources of carbon dioxide emissions. The UN's REDD framework (Reducing Emissions from Deforestation and Forest Degradation in Developing Countries) is designed to make it worthwhile for rainforest nations to prevent deforestation, but implementation will require the ability to accurately monitor deforestation activity.
Google, through its "philanthropy" arm, Google.org, is partnering with forest science experts to combine their software with its Google Earth satellite imagery technology to analyze changes in forest cover. Google then donates computing power from the "Google cloud" to reduce analysis time from what would take days or weeks on even a top-of-the-line desktop computer to a matter of seconds. The result is a prototype tool that brings us one step closer to having the power to effectively implement deforestation prevention strategies like REDD.
Coca-Cola's Pilot of ColaLife
ColaLife is a campaign aimed at engaging Coca-Cola (and eventually other companies) to help address what can be a big problem in the delivery of aid supplies in recipient countries: distribution. The idea is that one can purchase a Coke almost anywhere (the company's rise to dominance was built on the vision of putting a Coke "within an arm's reach of desire"), but that, in contrast, aid supplies like rehydration salts, medicines or water purification tablets sometimes do not make the "last mile" in distribution.
Last year, Coca-Cola and its local bottler in Tanzania began testing ColaLife's idea of leveraging the company's distribution channels to deliver aid supplies. They are exploring the viability of transporting "AidPods", which are packages designed to fit in the free spaces found in a crate of bottles, along with their product. In a good example of how NGOs and the private sector can work together, Coca-Cola is partnering with NGO AED for their expertise in social product distribution and social messaging.
Now, piggybacking on Coke's distribution channels is by no means a full solution to aid distribution challenges. And, indeed, the results of Coca-Cola's initial viability tests are not yet available, so it is unclear if the program will be continued. Nevertheless, that the company is open to exploring these types of possibilities is encouraging.
Wal-Mart's Sustainability Index
Wal-Mart is turning heads lately with its new effort to develop a sustainability index, which aims to assess suppliers, create a lifecycle analysis database and develop a simple tool to help customers make purchasing choices based on sustainability information. In the same way it famously manages its suppliers to achieve lower costs, Wal-Mart is now leveraging the same system for increased transparency around sustainability.
As Joel Makower explains in a thoughtful post:
Successful companies are successful because they have a more masterful command of certain key abilities than anyone else. In business-speak, these differentiating abilities are a company's "core competencies". Google's cloud computing and accessible satellite imagery capabilities are untouched. Coca-Cola's ability to rapidly move high-volume consumer products to retail locations around the world is astounding. Wal-Mart's ability to work with its many suppliers for greater efficiency is unprecedented. These companies have competencies that no other organization on the planet can match, period. Now, they are exploring ways to leverage their competencies to create social value in addition to private wealth.
Google's Deforestation Monitoring Prototype
Deforestation of tropical rainforests is one of the leading sources of carbon dioxide emissions. The UN's REDD framework (Reducing Emissions from Deforestation and Forest Degradation in Developing Countries) is designed to make it worthwhile for rainforest nations to prevent deforestation, but implementation will require the ability to accurately monitor deforestation activity.
Google, through its "philanthropy" arm, Google.org, is partnering with forest science experts to combine their software with its Google Earth satellite imagery technology to analyze changes in forest cover. Google then donates computing power from the "Google cloud" to reduce analysis time from what would take days or weeks on even a top-of-the-line desktop computer to a matter of seconds. The result is a prototype tool that brings us one step closer to having the power to effectively implement deforestation prevention strategies like REDD.
Coca-Cola's Pilot of ColaLife
ColaLife is a campaign aimed at engaging Coca-Cola (and eventually other companies) to help address what can be a big problem in the delivery of aid supplies in recipient countries: distribution. The idea is that one can purchase a Coke almost anywhere (the company's rise to dominance was built on the vision of putting a Coke "within an arm's reach of desire"), but that, in contrast, aid supplies like rehydration salts, medicines or water purification tablets sometimes do not make the "last mile" in distribution.
Last year, Coca-Cola and its local bottler in Tanzania began testing ColaLife's idea of leveraging the company's distribution channels to deliver aid supplies. They are exploring the viability of transporting "AidPods", which are packages designed to fit in the free spaces found in a crate of bottles, along with their product. In a good example of how NGOs and the private sector can work together, Coca-Cola is partnering with NGO AED for their expertise in social product distribution and social messaging.
Now, piggybacking on Coke's distribution channels is by no means a full solution to aid distribution challenges. And, indeed, the results of Coca-Cola's initial viability tests are not yet available, so it is unclear if the program will be continued. Nevertheless, that the company is open to exploring these types of possibilities is encouraging.
Wal-Mart's Sustainability Index
Wal-Mart is turning heads lately with its new effort to develop a sustainability index, which aims to assess suppliers, create a lifecycle analysis database and develop a simple tool to help customers make purchasing choices based on sustainability information. In the same way it famously manages its suppliers to achieve lower costs, Wal-Mart is now leveraging the same system for increased transparency around sustainability.
As Joel Makower explains in a thoughtful post:
It's definitely a bold move, one that stands to raise the bar on sustainability and transparency, empowering both retailers and consumers to leverage their buying power to affect change. It stands to spur innovation in products and processes. And it appears to be around for the long haul. Walmart has gone well beyond talking the talk here. It's changing the game.
The Concept of Leveraged Competencies
The word "leverage" is thrown around a bit too loosely, much like the "blame Wall Street" buzz-phrase of recent popularity. In fact, it probably belongs on a generalized version of this list. But, just as "infrastructure", "impact" and "catalyst" are valuable concepts in the right situations, so "leverage" has its appropriate uses.
Heather McLeod Grant and Leslie R. Crutchfield, authors of the nonprofit best practices book Forces for Good, explain the practical concept of leverage well:
In the three cases I describe above, the massive investment these companies have made in business excellence presents us with a unique situation: great social value can be created with a relatively small incremental investment. These companies are, in this sense, leveraging their competencies for social good.In physics, leverage is defined as the mechanical advantage gained from using a lever. In business, it means using a proportionately small initial investment to gain a high return.
