Illustration by Adam McCauley
As much as corporate social responsibility (CSR) programs have become a badge of respectability among firms, the truth is that they often languish. The reasons vary: Managers are frequently reluctant to sacrifice scarce resources, employees see them more as a chore than an opportunity, and participation is too quick and superficial to make an impact.
But a study by Bocconi University professor Christiane Bode and INSEAD professor Jasjit Singh examines an unusually successful corporate social initiative (CSI) that was created and led by an individual employee, got the buy-in of other employee participants and the company, and managed to become financially self-sustaining.
In their paper “Cross-Sector Convergence: Building Sustainable Collaborative Initiatives Inside For-Profit Firms,” the researchers focus on the emergence of this successful program and how it differed from the more typical top-down, management-directed CSR programs. Although management controlled the allocation of resources, the employee who launched the CSI acted as a social intrapreneur, by taking responsibility for its design and execution through his own initiative. Thus, the integration of societal concerns into the firm’s strategy became a bottom-up phenomenon.
“The vast majority of research on sustainability looks at the effects of programs already in existence,” says Daniel Korschun, associate professor at Drexel University’s LeBow College of Business. “This research draws back the curtain, so to speak, on how companies get engaged in the first place.”
The CSI was initiated by a senior manager who returned from a yearlong sabbatical related to development and wanted to pursue such work further at his management consulting firm. He sought to create a program for employees to offer their services to NGOs and aid agencies in the development sector.
To convince management, he would need to present a valid business case. He emphasized the intangible value of social initiatives for recruiting and retaining talent. As the plan evolved, he figured that management would be more amenable if the program were financially self-sustaining. He persuaded the firm to accept below-market fees that would cover costs and exclude profit margin and overhead. This required the typically resource-starved clients to pay a fee for the consulting, rather than receive it pro bono. With such buy-in, both the clients and the program participants found greater value in the engagement.
To make the program work, the CSI initiator believed—correctly, as it turned out—that motivated colleagues would accept a salary reduction for the project’s duration, of 25 to 50 percent, depending on the market location. His instinct that such a commitment would increase employee retention also proved correct, especially with younger employees, who are more interested in “hybrid” careers that combine business with social work.
To ensure the reintegration of the CSI employees into the commercial practice, the intrapreneur began framing the program in terms of its potential career benefits, such as real-world experience developing leadership skills. Participants would tackle more challenging roles, with more responsibility, than they might have been offered on consulting teams working with corporate clients. In post-project surveys, employees reported that the CSI experience boosted their confidence. The CSI experience was eventually integrated into performance evaluations, and the employees eventually associated their participation with positive career outcomes.
Throughout their analysis, the researchers were careful to distinguish employees’ actual prosocial behavior from their stated preferences, as well as the difference between the attitudes of CSI participants versus the rest of the employee population. While they found that not everyone would be interested in participating, Bode says, “there is in fact a large sustained interest in the overall population,” which indicates that such programs could be scaled up.
The researchers compared the consulting firm’s CSI program with a top-down CSR program launched by a healthcare company where employees were assigned for about a month to a social-impact project funded by the corporate CSR budget. Participants were not selected for matching skills or personal incentive, so there was little invested by any stakeholder, including the client, which received the services pro bono. When the company faced a financial downturn three years after the launch, the program was terminated.
In the more than 15 years since the management consulting firm’s first CSI project was launched, more than 1,000 projects have been completed. “Now the NGO clients seek out the firm, while the firm continues also to seek out clients by being involved in various initiatives and networks where corporations connect with NGOs and development organizations,” Bode says. In addition, private companies are hiring the consulting firm to help promote their own CSRs and sustainability agendas and pay full fees for such services.
Christiane Bode and Jasjit Singh, “Cross-Sector Convergence: Building Sustainable Collaborative Initiatives Inside For-Profit Firms,” working paper, 2018.
Read more stories by Marilyn Harris.