Monday, July 30, 2012

The Business of Social Responsibility.

Business and social responsibility are frequently regarded as opposite poles in a decision spectrum.  This is unfortunate and may result from the way such questions are posed.  Sometimes, knowing the right questions or how to look at the decision can frame the decision in a way that makes sense to everyone. 

Several years ago, a Baldrige award winner recalled the day when his lawyer advised him that the state had issued a warrant for his arrest because of the environmental pollution from his factory.  His first thought was to close the factory.  Then, he thought of the employees who would be out of work if he closed, so he decided to stay open.  In looking at the sources of pollution, he realized that the material going into the local streams was waste from his processes and that he had paid for that waste.  Perhaps, if the processes were more efficient, he would be putting less money into the local water.  A few years later, he received an award from the state for environmental stewardship . . . and a Baldrige Award.  Socially responsible decisions made ultimate business sense.

About ten years ago, I installed solar photovoltaic panels on my roof at considerable expense.  The decision was motivated by a love of technology, a need for back-up power, and a desire to reduce the consumption of grid power by my home.  Friends and neighbors laughed and pointed to the long payback period.  However, “payback” is not the only way for a business to evaluate an investment.  My system makes enough electricity to return 6% per year on my investment—and that’s tax free.  (You never pay tax on savings.)  Another socially responsible decision that makes business sense, but only if you know how to evaluate the decision.  I’ll take a 6% tax free return any day.

I once visited a hospital in CA that sponsored a health fair that provided well-child exams and some immunizations without charge to a local indigent population.  I asked why his hospital would do this, and he replied: “My kids play with their kids.  When their kids are healthy, my kids are healthy.  Besides, when they do get a job and money, guess where they buy their healthcare!”  There was more.  He pointed to a pushcart in the hospital lobby.  “That guy used to be on a street corner in town.  Business was poor, and he had no health insurance for his family.  Now, my employees have ready access to good coffee, he has health insurance, and guess where he comes for care!” It’s still not clear that the health fair was a good business decision, but the CEO had evaluated it from social and business aspects and made his decision.  Even considering the donated time and medications, you’d probably have to include the enormous PR value to sell this to the board.  The CEO had done this, and the board had signed off on the health fair for several years. 

My point is that social responsibility and business decisions are not really such strange bedfellows.  Sometimes it means making the decision to “do the right thing,” and then finding a way to make money off that decision.  It’s all in asking the right questions and framing the answers in a way that business people understand.  Perhaps the quality professional is uniquely positioned to help with these decisions, given our emphasis on data collection, analysis, and presentation. 

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