Sparks Fly on E Street: Radical Change in the Future of CSR

“I saw my rock 'n' roll past flash before my eyes. And I saw something else: I saw rock and roll future, and its name is Bruce Springsteen. And on a night when I needed to feel young, he made me feel like I was hearing music for the very first time.”

That’s music critic, manager, and record producer Jon Landau’s description of seeing Bruce Springsteen at the Harvard Square Theater on May 9, 1974. Over the last year, I had my own epiphany and thought a lot about Landau’s transformational experience with the Boss. My awakening wasn't as sudden, but it came at a time when I was hungry for a renewed sense of purpose in an area in which I’ve been immersed for the past 15 years: the intersection of business and social change.

Aligning business with social issues has always been a challenge. This is because most corporations come to social change reluctantly, as a reaction to a growing expectation among the public that businesses ought to “give back” in some way. Not surprisingly, the resources businesses allocate to this area are chronically inadequate for the purpose, and it’s been more of an exercise in optics rather than anything material and measurable. The objective seems to be: Do the minimum work necessary to get employees, customers, and the public to see you in the right light.

The challenge is also reflected in the inability of the business sector to consistently describe what happens in this area. Corporate social responsibility (CSR), corporate citizenship, corporate responsibility, sustainability, cause-related marketing, and shared value all describe the relationship between business and social change. This inability to agree on the most basic description indicates a lack of clarity and commitment that simply doesn’t exist with other business priorities such as marketing, sales, human resources, or finance.

Finally, while businesses have done many socially minded things (well-known examples include TOMS’ creating a new mass retail model to address social problems in developing countries, Unilever revolutionizing business sustainability, and Starbucks prioritizing hiring vulnerable youth and participating in the 100,000 Opportunities initiative, there is no shortage of unethical practices. I’ve dubbed 2015 as the year of corporate social irresponsibility. Volkswagen lied. Amazon conducted an experiment to see how far it could push white-collar workers to achieve its business objectives. Grocery stores sold shrimp peeled by slave labor in Thailand.

Besides specific incidents of good and bad corporate behavior, on a deeper level I sense that businesses don’t believe corporate social responsibility is worth the effort. As a result, much of the work that companies put into social efforts is smoke and mirrors—not substance. I also sense that the small industry of people inside and outside businesses that work in this area have become very nervous, and are thinking, “It was lots of fun while it lasted, folks, but the secret is about to get out, and then it’s back to business like everyone else.”

Despite the fact that CSR—or whatever a business chooses to call it—has become ubiquitous and seems ripe for improvement in all kinds of ways, making real headway has become next to impossible. I’ve spent years writing about business and social change, but last year I found I didn’t have much to say anymore. It felt like CSR was rock 'n' roll past.

Against this rather bleak picture, however, I actually see a silver lining. There are more opportunities than ever to engage corporations in social change—but not until we stop trying to improve an approach that businesses don’t really want in the first place. My vision of the future is built on three principles.  

First, those working at the intersection of business and social good need to take a hard look at whether their current investments in social change are yielding real impact and be empowered to make change as required. Businesses should focus investments on helping solve a specific social problem, maintain aspects of current programs that are delivering value, and reallocate all other investments.

This is also an opportunity to shift from CSR-based investments to innovative, disruptive and, technology-based solutions. For example, a bank could leverage its IT expertise to establish a crowdfunding platform that helps social entrepreneurs, nonprofits, and community groups raise funds. Pharmaceutical companies, many of which have agricultural divisions, could help hospitals provide healthier food to patients by operating their own farms. (This idea isn’t so far fetched. St. Luke’s University Hospital operates a hospital farm on its Anderson campus in Easton, Pennsylvania.)  

Second, more new social enterprises should offer businesses the opportunity to solve social problems in a way that is indivisible with their business objectives. For example, Impakt, the B Corp that I lead in Toronto, recently developed HireUp, the first national job portal dedicated to ending youth homelessness. Developed with the support of The Home Depot Canada Foundation and Workopolis, HireUp helps businesses meet recruiting objectives by hiring young people who have experienced homelessness and are now prepared to join the workforce.

It’s also important to recognize that any business contributing to positive social or environmental change directly through its business activities doesn’t need to be involved in CSR at all. B Corps and other social enterprises are good examples of businesses that are inherently “responsible.”

Finally, while charitable organizations and nonprofits play an important part in helping to solve social issues, social enterprises are also extremely powerful agents of social change. However, despite the growing importance of these organizations, companies make CSR partnerships almost exclusively with charities and nonprofits. This must change. We must base corporate social investment decisions on outcomes, not on tax status. HireUp is a good example of the future in this area. It is not a charity, but was developed with the support of businesses and will operate as a sustainable social enterprise.

For me, moving away from CSR has been rewarding to a degree that makes much of the other work I’ve done seem trivial. However, like most extraordinary things in life, this has come at a very high cost. I significantly underestimated the time and money that was needed to develop HireUp, we lost most of our bread and butter consulting business, and we’re still working out how to operationalize and scale as a social enterprise. But I’ve seen a new future of how to help businesses solve social problems and going back to CSR past just isn’t an option.

The first words that Landau would have heard from Springsteen in 1974 were “Sparks fly on E Street.” Today, sparks are flying in the world of CSR, and the future is already looking very different. It seems somehow fitting to me that Bruce Springsteen and the E Street Band are starting a new tour this month.

Read more stories by Paul Klein.