|Social Responsibility and ROI.|
By Vijay Dandapani ~ Hotelier's outlook on NYC, travel and the industry
Thursday, 3rd October 2013
Corporate Social Responsibility or CSR is an oft discussed and written about topic but it is unclear if the debate on its impact to the bottom line can be settled definitiely in the affirmative.
An example that suggests that CSR should at best be a by-product of the pursuit of corporate is a paper by an academic at the Michigan School of Business. It essentially urged that "social responsibility (be) a financial calculation for executives, just like any other aspect of their business." The paper goes so far as to suggest that urging corporate social responsibilty is "pointless" as executives will truly embrace CSR initiatives only if the primary goal of making profits can be attained.
Affirming CSR's benefits is an article in McKinsey & Company's latest journal on the topic that spells out the many benefits that flow to, not just the affected communities, but also to businesses and their leaders from CSR initiatives.
Entitled "Doing well by doing good" the report delves into the collaborative efforts of 3 business leaders in the Minneapolis-St.Paul area that resulted in a civic alliance aimed at "boosting the economic and social health" of the area. By forging links between the business community and the University of Minnesota the initiative dubbed the Itasca Project has served to improve higher education, generate quality-job growth and addressed transportation issues.
Perhaps the most intriguing finding of the Itasca project is that the corporate titans (and others) who participated in it found it to be "incredibly meaningful" with their "personal return on investment far exceeding that of pretty much anything else they've done". While altruistic work has always been known to bring about intangible personal benefits the project also served to bring about development stemming from observing peers with some of the corporates incorporating findings into formal corporate goals.
Encouraging responsible behavior among consumers can begin within corporations some of whom seek to stand out in the crowd with irresponsible advertising. Examples are the offensive (to most women) Jim Bean ads from the noughties named the neighbors or more recently Hyundai's attempt at touting its emission free green car as one that can thwart an attempted suicide via carbon monoxide poisoning.
Embracing and duplicating the precepts of Itasca elsewhere may follow more slowly than many would want but companies and even small businesses can perhaps emulate aspects of it in the near term. The benefits have been well docomented with some reports stating that as many as 90 percent of customers are likely to change allegiances to a company that supports a worthy initiative.
What's more, an equally large ratio of potential employees reportedly consider social and environmental issues when deciding where to work, what to buy. The opportunities in the service sector are many times in plain sight. For hotels it could start with a resolve not to offer adult movie, a bete-noire of families.
Given, the tendency of most customers to bring their own devices it is increasingly not a source of revenue and arguably a drain on one.
Vijay is Chief Operating Officer and part-founder of Apple Core Hotels- a chain of 5 midtown Manhattan hotels offering value and comfort in the heart of the city. Member of the board of Directors - Hotel Association of New York.
Read Vijay's blog HERE