Stephen Greene is passionate about measuring the value of social programmes.
He is the co-founder of Rockcorps, a brand communication company that uses music and sport to inspire people to volunteer and get involved in their community. Rockcorps mission is to make volunteering 'cool' and with partner brands including Orange and artists such as Lady Gaga and Snoop Dogg, we think they are well on their way.
We share Stephen's belief that we will enter the social era for business when we learn to put a value on social programmes. It is the difference between philanthropy and a way of doing business, between self interest and enlightened self-interest. That's why we backed Stephen as our Changemaker for July 2013.
Stephen's guests came from the Premier League of sustainability. Glen Manoff explained how O2 is measuring its goal to improve the lives of one million young people by 2015, Craig Williams shared how GSK is developing new ways of valuing investments in its targets to help save 1m children's lives, and Bella Vuillermoz discussed the social value of the Bigger Picture programme to Sky.
Social programmes are arguably one of the most exciting areas of sustainability, but they are also among the most difficult to measure. We are deeply grateful to our panel for sharing what are, by definition, early stage strategies, but where the potential for business to make a difference is clear.
This was a crowdsourced event, and we pulled together the latest thinking from the UK and beyond via blogs, a survey, our panellists and a range of bespoke roundtables. After the event we pulled together the findings with our crowdsourcing partner, Fishburn Hedges, with the aim of cross-fertilising sustainability strategies.
Can we create change? That will come down to all the minds involved. We have no doubt that if everyone shares their experiences in this critical area, we can help build the business case to tackle some of the most pressing issues facing society.
DISCUSSION: Changing the culture of an organisation. How can an organisation engage its stakeholders around a social or environmental issue? This table will consider the barriers and the solutions.
Top three recommendations for businesses:
1. Targeted stakeholder management is crucial, particularly in ensuring CEOs and CFOs understand the value of social programmes
2. There was general consensus that the social element of sustainability is where environmental was a decade ago, a journey of education and understanding is required
3. In the current economic climate it is vital that initiatives are communicated in a manner that the wider corporate environment will understand
• There was consensus that engaging leadership was vital in ensuring success
• The group believed that environmental rather than social impact was of greater interest but it was often more difficult to create advocates in this space given the emotive impact of the latter
• The current economic climate has made it more difficult to secure support for initiatives and it was agreed that sustainability should be embedded in the language of efficiency and explained to in terms people understand in a corporate environment
• When it comes to further barriers to effective stakeholder engagement, there was agreement that CEOs needed to be engaged in a way that chimed with their values – though concern was raised that some CEOs may be focused on a vision which was not appropriate for the journey the business needed to take
• Engaging with employees was also seen as a vital part of this process as they have day-to-day knowledge of the business
• When it comes to ROI, there was agreement that short-term thinking must be tackled and the focus placed on the long-term value derived
• On the issue of building broader support, there was consensus that being able to explain the value of programmes in ways that CFOs will understand was important. Particularly as many CEOs have a finance background themselves.
• There was agreement that everyone should be prepared to show leadership qualities as part of the process of changing corporate cultures
DEBATE: “Organisations should now be working out the brand impact of social and environmental programmes”. Most companies see calculating the brand value as too complex, but is this the next frontier?DEBATE: “Organisations should now be working out the brand impact of social and environmental programmes”. Most companies see calculating the brand value as too complex, but is this the next frontier?
"Not everything that is right can be measured", as one member of the crowd put it. Several cited O2, whose CEO Ronan Dunn apparently warned of measurability becoming the tail that wagged the strategic dog on corporate responsibility.
Winning over “hearts and minds” can be as important as making a measurable business case – making sure an initiative is important to employees and central to company culture will ensure its longevity.
1. Selling social value internally - where it's not always possible to put a £ on an initiative
2. Social metrics are different in that they are less measureable, impact is harder to attribute, and impact is generally local so metrics can’t be aggregated in a meaningful way.
3. Those in charge of social programmes are often detached from brand
1. Start with identifying the issues that make most sense for the brand to own; if there is strategic agreement with the business case underpinning the programme, measurement can be less critical
2. The vision needs to be very well defined – you don’t have to know how to do it or measure it when you start out, as long as it is very clear what you aim to achieve
3. Ensure social programmes link back to the business objectives
DISCUSSION: How, beyond the use of social media, can technology help create greater transparency? Will an age of more sensors than people lead to more openness, or a charter for the secret state?DISCUSSION: How, beyond the use of social media, can technology help create greater transparency? Will an age of more sensors than people lead to more openness, or a charter for the secret state?
Top 5 recommendations for businesses:
• Data: Statistics and information provide a solution, but require extensive human analysis and input in order to become useful.
• Data: Interpretation of customer data is key. The weigh off between organic data vs. forced data will lead to different, and potentially skewed, sets of insights and observations.
• Data: Enable your business to overcome the challenge of creating a set of actions resulting from customer driven data.
• Technology provides greater access and speed for the transfer of information, to increase the chances of a solution to organisational problems.
• Technology presents a playoff between health and innovation, e.g. mobile phones are proven to be damaging to human health, but are now the most popular form of internet access.
• Data and transparency are critical, but it’s all about doing and not just talking.
• The application of technology is important – it can be the catalyst to improving the quality of life for your customers.
• Data collection is about providing knowledge and then building systems for change.
• Collaboration between organisations to solve issues with data and technology, presents a big opportunity to work together to tackle societal issues.
• Technology and data have the tendency to be time dependent, which is where human analysis forms a key part of turning a problem into a solution.
• Technology and data enable action, and provides solutions to completing tasks and determining organisational priorities.
• Data collection and actions should always be about building relationships and creating connections, if social good programmes are to be successful and solve societal issues.
• Consumers need to be aware of the data that they’re providing companies – however, data can be skewed when forced, so organic collection may be the solution.
• EXAMPLE: Tesco’s Club Card provides customers with products that they want, but has to the potential to provide customers with health diet tips, a balanced diet and also money saving advice. Could also be used to help medical issues to eat the proper produce, e.g. those with heart problems can help their condition with the right diet. Also potential to address poverty issues and cut food wastage.
• EXAMPLE: Virgin Media have lots of data on internet usage and download information, so could be used to report criminal activity to the police and authorities.
• EXAMPLE: TFL using Oyster usage data to improve the efficiency and operating schedules of transport systems in the Capital.
DEBATE: “The concept of “shared value” should be more widely adopted by the business community”. This table will debate issues such as whether “shared value” represents new thinking, and whether there are other frameworks that can better connect business with society.
Top three recommendations for businesses:
1. Understand what your business is truly about before implementing system changes. However, real system change occurs when businesses redefine their purpose (whether it’s just to make money or contribute to a social good).
• Participants from Nestle and Experian both said their companies were examples of this.
2. Change must happen from inside the organisation (or at least in parallel with internal changes) before you can truly address the external.
• This means that strategies must aim to support staff too. The crowd mentioned companies with great CSR programmes, but where employees are working long hours and aren’t supported. The crowd agreed that a company needs balance to truly create shared value.
3. Don’t underestimate the power of a wakeup call. Several participants said emerging markets, where problems are most apparent, can demonstrate how necessary it is for business to be a positive force.
• e.g. Experian - took their exec on immersion programmes in Mumbai lead to positive change within the company.
• However, strategies must address developed countries where the organisation has a presence as well.
Frameworks: The group discussed three different frameworks:
• The ‘capitalist’ model – prioritises profits. Proponents argue value is created by virtue of the fact that companies offer meaningful employment, benefiting society. Business has no ‘higher purpose’.
• The ‘John Lewis Partnership’ model – cited as a company with a business model balance between profits and delivering social good. Pegging of the CEO’s salary to those at the bottom was referenced as a good idea, but the crowd agreed that it’s hard to implement because most high earners won’t agree to this.
The ‘shared value’ model
o The crowd agreed the ‘shared value’ model is more a concept than a framework - it doesn’t define exactly how to operate.
o It was argued by some that it’s not a massive game changer. It can simply be a redefinition of activities the business is already doing.
o As such it was questioned whether shared value leads to systems change. Some (i.e. NGOs) argue businesses need to throw away the system and start again, whereas shared value is more about incremental changes.
o Therefore what’s interesting is how it works in practice – should it be core to the business? Some argued it could go beyond CSR strategy to form a holistic business model.
o Because it’s not transformative or radical allows businesses to do harm in society and off-set through ‘shared value’.
Insights and summary:
• The public sector is pulling back – there’s a far greater expectation of companies to act as a force for good than previously.
• The crowd agreed that it is often cheaper to invest heavily in external programmes than make systematic internal change, and often an easier sell to internal stakeholders.
• The goal of creating a better social programme may lead to adaptions in the business model to meet those objectives, ultimately shaping more than just CSR strategy.
o Transformations happen when you overcome the conflict between profit maximisation and social good.
• You must think long-term – cannot create meaningful change overnight.
• People are motivated to work by more than just money – meaningful employment is no longer enough.
• The crowd questioned whether consumer behaviour must also change to maximise social good – does all responsibility lie with businesses?
• If your purpose is good then the values you share will be good. If your corporate strategy is just to make money then the values you share will have limited positive social impact.
• A debate emerged whether companies’ social goals are always correct.
o The example of addressing poor parenting was cited as one of the biggest problems in society, which business rarely takes a role in addressing.
DISCUSSION: What are the key ingredients to measuring the value of social programmes? This table will continue the conversation from the panel and identify three initiatives that would work for most businesses.
Top three recommendations for businesses:
1. We need to get rid of the mystique. It’s not as hard as you think and you’ve probably already got more data than you realise.
2. Identify your internal and external stakeholders and talk to them. Finding out what they care about will help define materiality and shape your strategy, goals and what to measure.
3. Be ambitious. Have the courage to set a bold target, and remember that ‘bold’ is relative to each business. Start as small as you have to. Having it in place will push you to work out how you get there. You will learn your way to your goal through innovation and partnership
• The group discussed whether all social programmes are aiming at, and therefore measuring, the same things. It was agreed that all programmes are trying to effect and measure change.
• Having a baseline to measure from is vital. It was noted that setting a baseline is easier for programmes and campaigns, than for products and businesses as a whole, which are less likely to have defined start points.
• Connect what you’re already measuring – most businesses will already have a lot of data that could be useful e.g. employment and retention statistics.
• The group agreed that having an impact doesn’t always have to be about changing what you do; it could be about making what you do empowering (e.g. making products Fairtrade), changing the way you do things (e.g. reducing carbon footprint, eliminating negative impacts) or recognising the positive impacts of your BAU activity itself.
To assess the impact of social programmes, speak to the beneficiaries. Businesses always test products with consumers, why not review social programmes with those taking part? Getting direct feedback from beneficiaries as part of measurement is as important to understanding the impact and effectiveness of what you are doing as quantifiable indicators.
• It was agreed that you should involve your stakeholders (e.g. employees, consumers, Government, customers) in deciding what is meaningful to measure. Find out what matters to them, and use that to help shape your focus.
• It was acknowledged that inputs and outputs are easier to measure than outcomes and impacts. When assessing impacts, recognise the role of other parties in achieving change. Include your own organisation and partner organisations (e.g. NGOs) as well as the beneficiaries. Set objectives for each area so you can measure your performance across the board using a combination of quantitative and qualitative indicators.
• Don’t try to over claim impact. Be humble and authentic about what you have done, but also highlight what others have contributed. It’s better for your brand anyway.
• The group discussed whether, when budget is limited, businesses should focus their social programmes on the most important issue for the community, or for the business itself . For example, if the local community is most concerned with a health issue like HIV/AIDS, but the business is most concerned with an issue like preserving biodiversity, what should you prioritise? The group felt that working with partners can be valuable here – you can find other organisations that have complementary interests (e.g. in health) and you can work together in a region to tackle a range of issues.
• It was acknowledged that the activities of Foundations that operate independently to a business are often highly regarded. However, this is not necessarily the ‘answer’ and may not be the right model for all companies. Talking to stakeholders and understanding your business objectives will help to identify the most appropriate strategy and approach.
DISCUSSION: “Determining materiality. How should companies determine which social initiatives are most suitable for their organisation? The table will consider which stakeholders to focus on, whether there should be a link with core business and more
Top three recommendations for businesses:
1. Business strategy should strongly influence a company’s choice of social initiatives
2. The social initiative should also be determined by the expectations of the companies key stakeholders, with a recognition that these groups will vary considerably on a business by business basis
3. The third key issue to consider is a business’ purpose and values and the value proposition for each key stakeholder. These inform both the business strategy and in the best companies provide the galvanising vision for everyone in the business to get behind the social initiatives.
4. There are some common social issues where almost all businesses have a part to play, such as tax, working conditions and the skills gap.
• The group agreed that the most important considerations for choosing social initiatives is ensuring they align with the business strategy, that they are determined by the expectations of company’s key stakeholders and that the programmes are inspired by the company’s purpose and values. Practically, it is important that programmes are easy to scale up, and that they are sustainable. Starting with this in mind works best.
• It is also important to develop a strategy for rolling out initiatives across a multinational business. Participants agreed that while the strategy should be decided at a global corporate level, it is important to have the flexibility to account for variations in local dynamics. There were differences about what such flexibility might mean, i.e. local offices going outside the strategy for local projects or having a sufficiently flexible strategy that it can be adapted to local markets.
• When it comes to the key stakeholders that need to be considered in relation to social initiatives, there is a recognition that these groups will vary considerably between businesses. For example, in highly regulated B2B industries, governments are likely to be key stakeholders, whereas in consumer-facing industries initiatives are likely to be targeted at users, and governments may be less important. Sometimes an internal audience is a key stakeholder, as social initiatives can be used as a means of motivating and building employee engagement.
• There was some recognition that it can be difficult to measure the direct causation of an initiative into a positive social outcome. Some corporations have therefore chosen to focus on their role as “contributors” or “helpers” e.g. house building or health.
• The table explored whether there were priority areas for social initiatives that might be common across all businesses. There was a general consensus that the EY research [link to be inserted] into the priorities of corporate responsibility executives was a good starting point: working conditions are particularly important because the working experience of employees is an area where the company has greatest responsibility.
DISCUSSION: Joint ventures between corporates and NGOs. As an increasing number of these partnerships appear, what are essential ingredients to successful partnership?
Key ingredients of a successful partnership:
• Build a partnership around common aims and objectives: Ensure that as a corporate your aims and objectives align with those of the NGO. These should be kept under regular review and refined as needed.
• Create a partnership that is of mutual benefit: Partnerships where there is a clearly articulated benefit for the NGO and corporate partner tend to stay the course.
• Have a clearly defined partnership exit strategy: A clear exit strategy will help to protect a corporate’s reputation and will also mitigate the potential financial risk to the NGO.
• Take into account strategic relationships: Relationships can make or break a partnership. Relationship management is hugely important and should not be undermined.
• The group agreed that the most successful partnerships have joint aims and objectives which are adhered to throughout. These should be regularly reviewed to help mitigate any potential problems. This has been the key to the success of Sky’s partnership with the Youth Sport Trust which has been running for over 10 years and which as a result of periodic reviews has seen the partnership grow and develop.
• Partnerships where there is a two-way learning process can be hugely rewarding. Within the group, RBS noted that via their work with WWF they have been able to both gain and share expertise and insights around issues such as agricultural commodities where there is common interest. Similarly it was acknowledged that where there is mutual benefit, partnerships are at the strongest. This could for example include helping raise the profile of a smaller NGO while simultaneously leveraging their impact in a particular market.
• The group also spoke at length about the different merits and value that partnering with a smaller versus larger NGO can bring. A smaller NGO can provide targeted and tailored support around a local community or issue while larger NGOs are best to support large scale projects with widespread reach. The latter also often have more resource to dedicate to driving a specific project or programme of activity.
• The group also acknowledged the need to conduct an appropriate level of due diligence before entering into a partnership. This is something that Aviva for example takes very seriously. Part of this is also ensuring that an exit strategy is in place before signing a contract. This can provide protection to the NGO in the event of the partnership coming to an end and there being a sudden drop in income. The corporate can also put in place measures to diminish the reputational risk or fallout of the partnership ending.
• Lastly, the group concurred that relationships are key. Those partnerships with strong relationships, built on mutual trust and understanding are the most productive and effective. From a corporate perspective relationships can often be strengthened by having senior executive buy-in to the partnerships overall aims.
Social accounting – should companies account for their social impacts, negative and positive in their financial statements? What is the business case for effectively treating society as a stakeholder, and managing these externalities?
Challenges associated with accounting for social impacts in financial statements:
1. How ‘naked’ will you choose to be – if you’re going to truly measure your impact there will be good as well as bad
2. Timing – financial statements have a regular, short cycle whereas social impacts can be a longer-term game
3. Where do you draw the line on what do you measure – it can feel like there’s just too much to include
4. Lack of standardisation – even when you do measure, how does that stack up against other organisations
5. Smaller businesses may find the resources needed to social account more difficult to find
6. Audit – is a major challenge for social accounting
Solutions for overcoming these challenges:
1. Principles – define the guiding principles to give you focus e.g. transparency, defining attribution, positive and negative
2. Open source – don’t be afraid for it not to be perfect first time, consider opening your methodology up for discussion
3. First steps – if you need to, start by getting social risks added to the risk register
4. Collaborate on standards – get involved in the International Integrated Reporting Initiative or SROI network
• The was a mix of feelings around the benefit of social accounting in financial statements. The benefit isn’t necessarily clear, and by implication, a company needs to determine if this is right for them, their stakeholders and shareholders
• You should consider if it is the best place to report? Are you trying to communicate with two separate audiences with separate interests in one go (shareholders and wider stakeholders)? Is what you are reporting material?
Some wider thinking:
• Proving the business case – given measurement in this space is hard, proving the business case with hard numbers is difficult
• You need senior buy-in if the effect is to truly be transformational. You need belief or values from the board – the business case won’t be easy to define in hard figures and shareholders won’t necessarily ‘get it’
• Big ideas – if you go ‘incremental’, the business is unlikely to give enough resource. Be bold if you’re going to show real impact.
• You have to start with real commitment because the often the impacts will take longer than e.g. three years to show
• Talk risks – show the risk of doing and not doing
• Whatever you do in the social space has to align with the business model and be tangible
• Look to identify where in the business projects may be prevented by a lack of licence to operate from not enough social engagement.
“All companies should be measuring the value of their organisation to society”. A number of leading companies, such as Sky, are calculating their contribution. But for whom, and why?
We were asked to identify the top three challenges associated with measuring the value of an organisation to society and the top three solutions to overcoming these.
The roundtable was made up of 3 corporates, 3 charities and 3 advisors (approximately) so a good mix of opinions.
Top three challenges
1. How do businesses work out where to invest?
2. Who do we measure for? Who is the audience?
3. Should we introduce a standardised measure? How can we measure like for like when the metrics are different each time? We mainly dealt with the first challenge due to time.
Top three recommendations for businesses:
1. A CEO’s passion is incredibly important at first. A company needs a vision when deciding how to contribute to society, and a CEO can help to unlock this and give the business a clear message. Everyone agreed with this. In the long term however, it must become embedded within the business in order to be sustained.
2. A values approach is important but there was some concern about whether this might mean major social issues would be ignored. E.g. the ‘unglamorous issues’ such as chlamydia. Will companies coalesce around the easier issues? Or will there be a higher return on some of the more complicated issues, such as tax avoidance?
3. The most important recommendation to come out of the discussion was that a community strategy must be linked back to the core business. No one disagreed with this – everyone felt very comfortable with this general direction of travel. Good examples were cited such as Kingfisher and M&S (directors at the latter are remunerated on this now). Companies need to be credible and authentic in the space they decide to operate in.
• The group agreed that the most important element of working out where to invest is being able to tie it to the core business.
• A CEO’s passion and vision is also important
• When it comes to applying a values approach, everyone agreed it was important but may result in major and less ‘glamorous’ social issues being ignored.
• There was general consensus that companies need to be credible and authentic in the space they decide to operate in
DISCUSSION: What is the potential for the ‘people’ pillar of sustainable energy strategies? Does it really just mean turning off monitors?
Top three recommendations for businesses:
• Recognise that sustainable energy strategies must be driven by culture, rather than behaviour change. Acknowledge that your ‘people’ are a valuable resource in your sustainability strategy (as much as another resource such as infrastructure or supply chain). Changes made to quantifiable resources may demonstrate a more immediate effect, however these changes will not last if there is no buy in from your employees and they incorporate these changes into their day to day lives.
• Recognise the importance of human emotion, such as competitiveness and envy, as well as correctly targeting your messaging. For some companies, it may be simply enough to have the C-suit on-board, while with others, it might be necessary to target your messages to the manufacturers of the end product, down to the floor staff.
• Encourage constant innovation. Developing your energy strategy is a creative procedure, however when it is detached from employees they feel it might be someone else’s problem. By encouraging innovation and ideas amongst your employees, they feel like they are being listened to, as well as empowering them to make change a part of their job. A good leader listens to his employees and encourages independent buy-in.
• The group agreed that the potential for the ‘people’ pillar of sustainable energy strategies is powerful, as long as these people feel like they are personally invested within it. In studies, behaviour change consistently delivers the best return on investment in energy strategies. However, the difficulty remains in quantitatively measuring both the value, and the longevity, of its effect.
In measuring the effectiveness of energy strategies, there must be an acknowledgement of the need to change the criteria of effectiveness, shifting away from the ‘business case’ and emphasise how a strategy can become a key part of a business’s DNA – e.g. M&S Plan A.
• The targeting of messaging, particularly from the top down, was an important aspect of the discussion. It was recognised that each organisation is different, and while for some the decision of the C-Suite may be adequate, for others it essential to make energy strategies relevant from the bottom up. While overall reductions may not be seen to be in the control of the individual, it needs to be clear that each employee is making a difference to ensure that each single employee changes their behaviour.
• The group also acknowledged that recognising the role of people within a strategy requires an understanding into how human behaviour works, and how this can be harnessed effectively. Human emotions, from competitiveness, to inclusion, to envy, can all play a role in encouraging people to invest in a strategy and strive to deliver within it. Employees need to be personally motivated.
• The group discussed the value of technology in encouraging people to play a key role in the strategy. While certain aspects of technology, such as the capturing of data, can be beneficial, it was argued that big technological schemes can often be ineffective. Often, they are seldom understood until properly explained, and can often serve to alienate those they are trying to help. More importantly, if the language and tone around new technology is not conveyed properly, employees will feel ignored.
• When it comes to maintaining the longevity of a strategy, it was agreed that it needs to be viewed as an extension of the identity of a company, and not a shallow reputation campaign. For example, innocent was discussed as a company where the energy strategy is an intrinsic part of the brand, and therefore employee buy-in is motivated by a belief in the values of this brand. Sustainability strategies need to be viewed as an intrinsic part of the corporate strategy of the organisation, and must acknowledge fundamental questions it wishes to address; such as what kind of company it wants to be, what its long term goals are, and what its role in the industry, and wider society, is.