Social Responsibility

Dave Stangis, VP of Corporate Social Responsibility and Sustainability for Campbell Soup, believes that setting "big, hairy, audacious goals" is necessary to set up the kind of tension needed to motivate and inspire the people who need to reach them. Formerly the Director of Sustainability at Intel, he was able to build on his knowledge and bring a wealth of experience when he was hired into his new position at Campbell three years ago. Setting the right goals and metrics is important, but so is getting buy-in and support across the organization. Stangis says it's critical to have top-level CEO involvement, and to establish governance structures that work. He talked with MIT Sloan Management Review's Managing Editor Nina Kruschwitz about the kinds of language and conversations that propel a sustainability agenda, the benefits of engaged employees, and using stakeholder conversations to see into the future.

How are organizations moving from a "provide and pray" approach in social business to a strategic and purpose-driven one? In an interview with Executive Editor David Kiron, Mark McDonald and Anthony Bradley, both of Gartner, and authors of The Social Organization, discuss some of the frameworks they've developed to move companies along the social business path. McDonald and Bradley say that movement along their "six-F" continuum fear, folly, and flippant to formulating, forging, and fusing has been rapid in the last few years. Executives are understanding the value and potential of becoming a social business. But they are still struggling with devising a strategy to get there. The key, McDonald and Bradley say, is to have a purpose, a well-defined purpose, around which a community will rally, engage and participate. It's participation anchored by purpose that delivers value to the business.

This is the third year that MIT Sloan Management Review has teamed up with the Boston Consulting Group on their Sustainability and Innovation Global Executive survey, to which more than 4,700 executives, managers and thought leaders from around the world responded. Results from this year's survey--conducted during June and July of 2011--indicate a growing interest in sustainability on the part of businesses. More respondents this year than last believe that sustainability- related strategies are necessary to be competitive. Respondents said their organizations are committing more money and attention to sustainability--and anticipate a continuing commitment in the coming year. The authors suggest that these findings indicate that sustainability is becoming an element on the agenda of top management. However, in the short run, sustainability is often eclipsed by other pressing business issues: Most survey respondents do not consider sustainability-related topics to be one of the top three business challenges their company faces in the next two years. The charts in this preview article represent the answers to just seven of the survey's 27 questions. The full report will be published this winter.

There's a problem with most major environmental rankings of businesses: Too often, the ratings fail to incorporate advocacy activities that influence environmental regulation.

Statkraft, Europe's largest renewable power producer, led by Christian Rynning-Tonnesen, made a strategic decision to enlarge its portfolio of renewable technologies long before most other power companies. They first invested in understanding the political economies of target country's energy markets, then built on their established skill base in hydropower to add other technologies to their portfolio of plants. The company developed organizational structures that helped them in creating new profitable projects. Their strategy process depends on accelerated cycles of action and observation. As new strategic plans are implemented, the process of strategic exploration and invention for the next phase is already in motion. Quick feedback on what is working and what isn't ensures the company can innovate for competitive advantage. Encouraging a management style based on mutual trust and respect, rather than fear, ensured they could identify dangers, catch problems early and adapt quickly.

When the Gap decided to overhaul the way it interacted with critics, it launched a strategy of stakeholder engagement.

Lessons from the successes and failures of many emerging technologies offer a helpful guide in how adoption works.

Jim Rogers' official titles are chairman, president and CEO of Duke Energy. But he says those titles boil down to two roles: general and scout. As general, he sets goals for people. As a scout, he gets to meet people, listen to their ideas, and think about all the potentials for his industry. He thinks of his company as a technology company disguised as a utility. Energy has been at the front of innovation, he notes. Duke Energy is a Charlotte, N.C.-based electric power company that supplies and delivers energy to approximately 4 million U.S. customers. Rogers sees the company's job as being a "nimble pioneer" to help usher in new technologies, new public policies, and new ways of thinking about energy directions. Rogers spoke with Michael S. Hopkins, editor-in-chief of MIT Sloan Management Review, about why education is not sufficient to get people to do the right thing, when it's good to give in to risk, and how Duke Energy plans to shift from being a "supplier of electricity" to an "optimizer of use."

The timeline of energy development projects now is largely driven by sustainability and social performance issues, says Marvin Odum, president of Shell Oil Company. That's prompting innovations in how the company involves external stakeholders, incentivizes employees and drives changes throughout the entire energy industry. "When I look at an investment proposal now," says Marvin Odum, president of Shell Oil Company, "it still covers the technical issues, of course. It certainly covers the financial issues. But fully half of that proposal deals with what I would call the non-technical risk: social performance and sustainability issues." Like other energy companies, Shell is in a classic "rock and a hard place" situation. The world wants what Shell provides, but it wants it when it wants it, at a price it likes to pay, and with positive or at least neutral environmental and social impact. That's forced the company to adapt its traditional innovation approach and even its overall organizational structure in some surprising ways. The need for those changes has also been heightened by the environmental damage and public relations disaster of the BP oil spill in 2010, Odum says. "What the Gulf of Mexico spill shows us is we are dependent on how the whole industry performs; it affects a part of our license to operate." This is true even though Shell enjoys a reputation for sustainability performance that is stronger than that of most other energy companies. Still, dealing with the broader public perception and wariness that greets energy companieshas become a major focus of the company. Today, managing the concerns of external stakeholders has prompted changes in management approaches and strategy internally, and sustainability issues have moved in Shell from being a company "priority" to a "core value." Odum's responsibilities at Shell Oil include exploration, new business development, and venture management as well as stakeholder management and sustainable development. He spoke with Michael S. Hopkins, editor-in-chief of MIT Sloan Management Review, about what a shift in "core values" really means for company operations and management.

Sustainability assessment tools are increasingly becoming a predictor and opportunity finder for efficiency in a company's business practices. Duke Energy, a Charlotte, N.C.-based electric power company that supplies and delivers energy to approximately 4 million U.S. customers, uses something it calls the Duke Energy Sustainability Filter to encourage innovation and resource efficiency throughout the company. The tool has already saved the company millions, including over $2 million over six months in startup process for their combustion turbine plants. Roberta Bowman, who has served as senior vice president and chief sustainability officer for Duke Energy since 2008, says that the filter is a lens through which every decision in the company is made. "It's is the tool for conversation and decision-making," she says. The filter employs a series of questions around four key areas: "connection," "efficiency," "balance," and "grandchildren." The filter is one of the tools Duke shares with other organizations looking to evaluate their own risks and practices from a sustainability standpoint. "There is an openness to sharing approaches and techniques that works," says Bowman. "There is sharing and learning at a utility level, and also at a global industry level, from the World Business Council for Sustainable Development to Corporate Economic Forum." In this MIT Sloan Management Review case-study interview, Bowman explains how the filter developed, and why she hopes it puts her out of a job some day.