At Coca-Cola we used to put our “corporate social responsibility” activities in three buckets: the right things to do, valuable things that helped us as well, and things that merely strengthened our brand.
First, there were contributions we made because they were the right things to do. For example, we donated water after natural disasters. Our bottling plants had large supplies of clean water. When people needed it, we donated it. We didn’t publicize it. We didn’t expect any return. It was simply the right thing to do.
Second, there were contributions that positively impacted communities and helped build our brand. Think sponsoring local festivals, education initiatives and the like. We were doing good things and doing well by doing them.
In the third bucket were things with no meaningful return to society, but strengthened our brand. These are situations like highly targeted contests impacting very few directly, but highly valuable in publicity or advertising.
Activities in the second bucket were what Michael Porter and Mark Kramer described in their 2011 Harvard Business Review article on Shared Value. Specifically, they argued, corporate social responsibility initiatives should evolve from pure philanthropy to a set of initiatives shared between the corporation and the communities in which the company operates. By creating shared value, both economic and societal progress is gained.
Shared Value at PTC
PTC, a Boston-based company that develops “technology solutions that help manufacturers transform the way products are created and serviced” embraces this philosophy. CEO Jim Heppelmann explained to me the “round trip nature” of their Shared Value efforts.
When it first initiated corporate social responsibility efforts, PTC donated playgrounds to local communities. But their shareholders suggested focusing on activities more closely aligned to the company’s core mission. It’s not that the shareholders weren’t generous. It’s just they believed the company should maximize profits for shareholders, enabling them to choose where to donate for themselves. They didn’t believe the company “had the luxury of giving things away,” although, as the program evolved, they were willing to let the company share its value in different ways.
That’s when PTC got serious about Shared Value –getting involved in programs that impact society in a way that also impacts the company. For example, PTC has become a big supporter of FIRST (For Inspiration and Recognition of Science and Technology). Essentially, this is program makes science and technology exciting for kids in school. PTC provides major support for FIRST high school robotics competitions which encourage and enable teams to build robots that compete with other teams’ robots – lots of fun and excitement for the engineers of the future.
PTC donates cash to the program. It provides employees to mentor the teams. It provides software to the students so they can do three-dimensional modeling. Last year, PTC supported over 100 teams around the world, even helping to start up a few new FIRST programs in countries like China and Romania from scratch.
The “return trip” to PTC comes in different ways. Often it will team with a customer to sponsor a team. This builds its relationship with the customer who sees PTC and PTC’s software products in new ways. Students using PTC’s software may eventually become engineers who can encourage their new companies to purchase that software. And PTC gets all sorts of positive publicity in their local communities. It’s also been a good way for CEO Heppelmann to shape the culture of PTC – building more personal relationships with some of his 6,000 employees, joining alongside some as they mentor or judge the robotics teams.
This is an example of the heart of The New Leader’s Playbook: BRAVE Leadership
We’re all new leaders all the time. So remember all the time that leadership is about inspiring and enabling others to do their absolute best together to realize a meaningful and rewarding shared purpose. With that in mind, BRAVE leaders pay attention to their Behaviors, Relationships, Attitude, Values, and Environment – all the time.
The key to doing well by doing good is the “both and” or “return trip” nature of the effort. Whether it’s Coca-Cola’s second bucket activities or PTC’s FIRST activities, the actions that make a difference have both a meaningful impact on society and provide a tangible reward to the organization doing the giving.
Guess what? The model works with your team as well. The more time they spend on things that they see as both meaningful and rewarding, the more they will experience the “return trip” value of committing to your purpose. So, what’s your next second bucket activity?