Top 10 and Counting… How GE Became a Good Corporate Citizen and How You Can Too
The Conference Board’s recent 2007 Leadership Conference on Global Corporate Citizenship set out to prove that citizenship could be a “Growth Driver.” The 170+ Fortune 500 delegates in attendance in New York City were there to learn about achieving solid, sustainable growth, not from business modeling gurus with expertise in management accountancy, but from seasoned business people who have approached the issue of growth and profitability from a rather more holistic angle.
Participants heard about what must have been the one of the most refreshing messages ever communicated in the corporate world, originally issued by the CEO of Toyota to his management team, as he urged them “not to watch the stock” in measuring and managing growth. Instead, James Press, President of Toyota Motors North America, told us, employees are encouraged to think about their company’s place in the world in terms of other, harder-to-measure metrics, like how the adaptation of their products today will serve future markets tomorrow. The word ‘profit’ is rarely mentioned – Toyota’s leaders assume it will follow where the concept of corporate citizenship is king.
Many delegates from less-enlightened companies, however, have not enjoyed the benefits of never having “consciously thought about what citizenship is – it’s just why [Toyota] exists,” in the words of Press. For those companies without a Prius up their corporate sleeve, how do they go about becoming a good corporate citizen, and more importantly, how does this all come back to making shareholders and investors happy?
The stalwart of all things metrics-based, not to mention the number-four ranking company on the 2006 Fortune 500 “most profitable” list, General Electric, stepped up to shed some light. GE’s Robert L. Corcoran, Vice President of Corporate Citizenship for the Diversified Industrials giant, makes a compelling spokesperson for the triumph of common sense over some of the more academic approaches taken by others in this increasingly-crowded market. For one, his approach to the challenge of responding to the Conference Board’s brief of ‘how to make it work’ appeared in the format of a Top 10. And for two, there was not one nebulous term, mention of CSR (Corporate Social Responsibility) or complex concept in sight…
According to Corcoran, the Top 10 ways to ‘make it work’ are as follows:
10. Make money
One of three pillars on which the whole concept of corporate citizenship must be based, says Corcoran, is the simple foundation of any business. Without a sustainable, thriving business model, your role as a corporate citizen is short-term at best. To have a place at the table, you need to bring something to it.
9. Make it ethically
Companies that survive have high ethics, and this is the second pillar of their corporate citizenship. Enron sounded good, and behaved philanthropically, but at its core it was “rotten.” To prevent another Enron, companies need to have good compliance and ethical policies. Corcoran, for one, believes in not differentiating between the scale of “stealing” amongst employees if you can fire someone for stealing millions of dollars from the corporate coffers, you should be firing someone for stealing period, regardless of the amount, to set clear ethical standards.
8. Make a difference
The third of the three core pillars on which all companies need to be based. Whether it’s through your products, services, collective voice or contributions, each company needs to ‘make a difference’ in the world in order to exist.
7. Engage your people
Once your business base is established, engage your people. Remember that employees are more than people who work at the company. They have friends and families their experience of speaking with those friends and families, in relation to the company, needs to be positive. Engaging positively with them is critical.
6. Engage your communities
Corcoran talked about the more than one million hours GE spends, collectively, volunteering each year. For GE, as with many companies, education is the focus of its work with its communities. Its motivation for engaging in education is the subsequent threat to the knowledge-based economy we have become, should state investment not be adequate. Business leaders, says Corcoran, need to get on a platform and talk about this – ultimately a business unengaged with its community will not have a future workforce, or consumer base, to depend upon.
5. Engage your stakeholders
Adopting the mantra ‘keep your friends close, but your enemies closer,’ Corcoran believes in talking to “people who hate you and criticize you.” Twelve years ago, GE began a multi-stakeholder dialogue that has helped to inform its business journey. Since then, it has taken part in over 100 different engagements with NGOs, recognizing that these groups are a company’s most credible spokespeople.
4. Practice good governance
While public companies have an obligation to tell the world what they’re up to, the more companies can be transparent in their reporting, the better corporate citizens they are likely to be.
3. Practice helping governments
Governments will look to work on the issues that are popular, and companies can play a role in identifying and solving those issues, leading governments to them. Companies should choose the issues they want to tackle wisely, taking a stand on what is the “right” issue to address, and not just on the issues that will help them make money.
2. Save the environment
Corcoran pulled out two statistics: 83% of Americans believe that global warming is real. 87% believe that global warming will affect their children. (Less printable is what Corcoran said about the 13% that didn’t!) With this in mind, companies have to help address environmental issues for their own sustainability, if not for future generations. Corcoran advised “getting on the side of ‘goodness’” and talked about GE’s doubling its sale of recycled products from $10-$20 billion as a result of taking this stance. Moreover, GE is doubling its research and development into sustainable products and reducing carbon emissions by 30%. The cost to the business, says Corcoran, is high but only in the short term. As further evidence of GE’s role as a corporate citizen, it has joined with 10 other companies and 4 environmental groups to lobby in Washington.
1. “Save the cheerleader, save the world”
While it’s unlikely that Corcoran’s final missive made it into GE’s executive boardroom, there’s something quite encouraging in the idea that all those delegates, taking notes and wondering how to implement all this back at the office, could be inspired to become their own corporate heroes, in their own, ordinary fashion.