Over the past several years I've followed the evolution of the conversation about Corporate Social Responsibility with great interest. The notion first hit my radar screen when I was an investment banker working with retail companies and apparel manufacturers and Nike was challenged to address working conditions at its factories in Asia.
On a trip to Vietnam in 2003 I had the opportunity to visit several of Nike's plants outside of Ho Chi Minh City. The company's routine jobs--mostly for women--carried education, health care and meal benefits. When measured against the alternatives I saw in the rest of my travels throughout the country--back-breaking work under hot sun, knee deep in water-filled rice patties--it was hard for me to conclude that Nike was being anything other than socially responsible in its day-to-day operations, creating steady income and positive opportunities for its employees and their families.
Since that time, and especially since the financial crisis, the idea of Corporate Social Responsibility (CSR) has continued to evolve. Today there are myriad interpretations of the concept--blended value, conscious capitalism, new capitalism, constructive capitalism, shared capitalism, triple bottom line, shared value and contributory capitalism--among others. Unlike early versions of CSR--which were mostly separate from a company's core business and often viewed as a less than satisfactory offset for doing bad--most of the newer iterations of the idea focus on ways that companies can authentically integrate doing good and being profitable.
Into this active dialogue, then, leapt Daniel Altman and Jonathan Berman last week with the publication of a brief white paper entitled The Single Bottom Line, a clear, basic consideration of the idea that if companies simply focus on doing their jobs well over the long-term, they will create the greatest social benefit of all. Profit is the single bottom line.
With a thesis that mirrors closely the spirit of Milton Friedman and Ayn Rand, Altman and Berman bring the conversation about companies doing good full circle, landing squarely where I've also found myself, after thinking about the idea from each of its many angles. It's a point of view that will undoubtedly prove controversial--given the licking that both Friedman and Rand have taken over the years--and Altman and Berman don't do themselves any favors by sticking to a very pure academic approach, offering up an example-free study of the topic. As a result it may be easy sport to take aim at their ideas, which, without a human face, can easily be seen to have no heart.
Yet my own conclusion over time has been that heart is exactly what successful practitioners of this approach have in spades. Perhaps the very best example is Ray Anderson, Founder and Chairman of Interface Carpet, whose own radical shift in 1994 to a twenty five year strategy for zero waste has served as a source of inspiration for many other industrial manufacturers and suppliers and, most notably, Wal-Mart.
Read Anderson's impassioned Business Lessons from a Radical Industrialist--succinctly subtitled How the Hard Driving CEO of a Carpet Company You Never Heard of Doubled Earnings, Won New Customers, Inspired Employees and Created Innovation with One Simple Idea: Take Nothing From the Earth that Cannot Be Replaced By the Earth--in tandem with Altman and Berman's paper, and you can't help but conclude: love is the single bottom line. Profit is the happy by-product.
Love is an under-used word in business. It's the spirit, however, that's implicitly central to all of the conversations about Corporate Social Responsibility and its derivatives: can people create business communities grounded in love? To me the appeal of Altman and Berman's notion is that it's a simple, dispassionate framework which people--passionate, heretical, disruptive CEOs like Anderson--take and enliven with soul, heart and conviction, inspiring employees, building communities and delivering satisfying--and love-driven--financial--and emotional--results.
(June 27, 2011) Late last week Altman and Berman published a brief piece with Stanford Social Innovation Review expanding on their idea of Single Bottom Line, necessitating a Woops! from me. It turns out that Altman and Berman's Single Bottom Line is in fact an approach to companies doing good that is closer to traditional CSR than it is to straight up corporate profit. And today I learned that their piece provoked a lively back and forth on the idea of corporate philanthropy between blogger Felix Salmon and Matthew Bishop, New York Bureau Chief of The Economist and author of Philanthrocapitalism. Their most recent volleys on the topic can be found here and here.
In misinterpreting Altman and Berman's piece I inadvertently created the opportunity to outline the basics of my own perspectives on CSR (and I elaborated some in the response to the comment below). I'm not entirely sure where my take falls out in the conversation between Salmon and Bishop--and since I haven't yet read Philathrocapitalism, and I misinterpreted one piece already, I'll reserve conjecture! Suffice it to say that to me it's CEOs like Ray Anderson (and Mobius Motors' founder and Echoing Green fellow Joel Jackson--who I wrote about in early May) who are really revolutionizing what it means for companies to do good and create wealth at the same time. As others take their cues from them, I expect--and hope--that we'll see more following suit.