There’s nothing like a good story to engage and excite an audience. The human story behind the numbers is what communications experts always look for as they try to transform dry facts into something that will capture the imagination of a message-overloaded public.
But in the world of corporate social responsibility (CSR), it is precisely this reliance on the simple story that is now holding back progress. CSR has tended to be dominated by stories. Polished case studies from corporate affairs departments on the one side, and half-baked horror stories from campaigners on the other.
The problem with this confrontational approach – this briefing and counter-briefing, descriptions and counter-descriptions of reality – is that we actually miss the real story: that business can have a hugely beneficial impact on international development.
The answer lies in dry facts. What’s been missing is an evidence-based dialogue. For too long CSR has been led by hearsay and anecdote. Thankfully, things are changing.
In our Book Club, we highlight a new publication by Ethan Kapstein on Unilever's economic footprint in South Africa. Recently, the World Business Council on Sustainable Development published the results of a two-year project to develop a framework for measuring the contribution of business to the economic and broader development goals. Other companies (such as Anglo American and SABMiller), donor agenices (such as the International Finance Corporation), and non-government organisations (such as Oxfam) have also been developing practical ways to quantify impact.
Businesses recognise that better measurement can support their license to operate and stakeholder relationships, as well as enable them to better manage risk and develop strategies that deliver even greater positive outcomes for their businesses and the societies in which they operate.
What are your thoughts on measuring impact? Is it worth the effort? What are the benefits when it is done right? Do you have any good practice examples that you can share? Are there examples where an impact assessment has led to organisational learning and improved outcomes? If you've measured business impact, what tips do you have for others? If you haven't, what questions do you have?
I take the point that stories can be haphazard and anecdotal - but they do serve to get messages across in a memorable way. If people are to be encouraged to think of business as a long term solution to poverty then the stimulus of sharing and developing ideas on how to make that happen is useful. Business people have said to me “we don’t do development”. And yet they do! They just don’t recognise the terminology used by “development” people and do not see their activity in creating employment and skills as development. Perhaps more focus by companies on what they do as part of their core business, recorded in terms of outcomes in personal, social and environmental terms, would be helpful to raise awareness within those companies and lead to a more shared understanding with the community outside the private sector. This is not about CSR reporting. It is about the mainstreaming of another element in responsible business practice.
If I might give an example (declaring a personal interest). Tedcor (www.tedcor.co.za) is a company that delivers a high standard of solid waste collection in very poor communities in Africa. Its was designed from the outset to be labour intensive, rather than capital intensive. The founder, John Houghton, a British engineer working in South Africa, created a model that contributes to five of the MDGs and has a very high level of sustainability in development terms since a training programme in entrepreneurship is built in. And yet he had never heard of the MDGs until I told him about them - some ten years after his business model was fully operational. Are there not more examples of smaller businesses that have similar approaches? And would this not be a suitable network to share some of those experiences and the outcomes?
Michael, I agree that there will always be a place for high-quality stories that bring to life the contribution that businesses can make. We do often fall into the trap of using jargon, and stories help cut through that. For me, the problem has been that stories have in most cases been driven more by corporate PR or NGO campaigning. That means we are left with a “their word against ours” approach. I believe it would be helpful all round if we could consistently measure, compare and communicate the contribution that businesses make to poverty reduction. And that means credible data.
Thank you for setting up this discussion group and raising some key questions/concerns WBCSD has been grappling with since it started developing the Measuring Impact Framework back in 2006. As Zahid mentioned in an earlier entry, the WBCSD has spent the last couple of years developing a Framework to measure the contribution of business to the economic and broader development goals where they operate. It is co-branded by the IFC who was involved in both the development of the Framework Methodology and its deployment with their private sector clients, starting with a mining site in Ghana. http://www.wbcsd.org/web/measuringimpact.htm
As a member led, member driven organization, the WBCSD Development Focus Area takes on projects or initiatives because our member companies see value in sharing experiences across sectors and building a common approach that can not only improve the way they do business but enhance business practices as a whole. Over the last two years, we have reviewed a number of different approaches to measuring impact, many of which were developed by our members (some mentioned above, Unilever, Anglo American, Vodafone, etc) but we have also expanded our research to look at monitoring and evaluation work as well as development effectiveness approaches used by many development agencies/actors including the IFC.
As Michael said above, companies are not development actors but they “do” development and thus if we are ever going to understand how much and how well companies contribute to development/society we need to be able to measure it. Only by measuring can we improve. As Zahid said, data is important. It helps us track progress over time and it is easy to communicate. However, as representatives of OxfamNovib and Unilever argued at a recent WBCSD event, data is important but equally important are the perceptions and interpretations of the data. There were many cases where Unilever and Oxfam reviewed the same data in the Indonesia study but interpreted it differently. What is 1,000 jobs? Is it good, is it bad?
The big over-arching question the WBCSD Framework aims to help companies answer is really one about what business is capable of and responsible for – what can they control, influence, leverage, etc and what development priorities do they contribute to directly as well as indirectly through their partnerships with others, and/or knock-on effects, some of which may be far removed from their direct control? We hope that this Framework is not only helpful for companies wishing to build a better understanding of the way they do business, mitigate risks and identify key drivers for supporting development but also to deepen the debate about how we can build the right framework conditions to support positive contributions by business to society.
We look forward to continuing the discussion and learning/sharing more about ways companies are measuring their impact.
On Tuesday, Unilever, SABMiller, Business Action for Africa and the Overseas Development Institute hosted an event in London on “Measuring Business Impact”. Here is a link to the presentations: http://www.odi.org.uk/events/business_impact/index.html
I was at the above Tuesday event which did indeed present several interesting perspectives on how to measure the impact of Business in terms of sustainable development. For me the input-output model made sense in that it would be fairly straightforward for me to write the outcomes of what we do – at least in broad simple terms – against the inputs. I also related to the WBCSD framework approach that included consultation and feedback from the beneficiaries of the outcomes. This checks whether what were perceived by the business to be the benefits were seen the same way by the targets of those benefits. It includes a reassessment loop to review the business approach in the light of this feedback.
But I am still faced with the age-old conundrum that any bureaucratic process, however worthy, costs a small business so much more resource than the larger corporations. I was not the only person at the Tuesday presentations who was wondering how these models might be applied to smaller businesses.
Some of the evaluation processes really are resource-heavy. Could I make a plea for a model to be designed specifically for smaller businesses, perhaps by WBCSD? Something that could be completed in, say, an afternoon?
And using readily available or obtainable data. For example, we know how many women Tedcor engages as Community Contractors and how many women are employed as labourers in our model. (Gender was an important issue at the Tuesday meeting). And we also know how many of our Community Contractors are successful in obtaining the Certificate in Small Business Management (accredited by UNISA) as a direct result of the training we give them. But we are not able to conduct long-term follow-up studies to determine precisely what those people have achieved – over five years, say – that is directly attributable to the certificates. In the UK it is assumed that a GCSE or A-level certificate indicates a level of capability that will immediately qualify the holder for increased opportunity for employment and remuneration. We believe the same is true for the training in entrepreneurship that our company gives our sub-contractors.
A simple evaluation tool would help engage the interest of a much wider range of smaller (and larger probably) businesses in understanding the sustainable development dimension to which they are actually or potentially contributors. When they are larger perhaps they can graduate to more sophisticated impact measurements.
I found this discussion very interesting and would like to suggest an alternative market driven approach to CSR.
The evidence presented to support CSR is all too often leaky and in most cases supports existing flawed structures or ‘green’ fashion actions. However laudable past social responsbility programmes have been (social auditing, social accounting) once past the social consciousness they have been forgotten.
The easiest model would be an investment portfolio that required nothing mre than an agreed sales related threshold. Simple for the small business and could easily be monitored and managed effectively and transparently.
I have worked with many socially accountable small businesses who use this style of community investment and tax effective to support local community projects. The community impact assessments used demonstrates that this approach creates strong local customer loyalty and a strong link to environmental and sustainability issues with a raised awareness of global issues even at a local level.
Like most well meaning activities they start off as a heartfelt measure and become more structured and stilted by well meaning ideas of monitoring the impact at too close a point. Businesses, shareholders, accountants, governments and economists will measure the impact of these by a bottomline, so the key is not to over elaborate.
There are definitely more examples of smaller businesses that have similar approaches - doing business in ways that drive development, whether intentional or not. I’ve been working with UNDP’s Growing Inclusive Markets initiative, which commissioned 50 case studies on approaches like this, and a solid half, if not more, are small to medium size firms. These small to medium size firms are also some of the most interesting examples.
You ask whether this would be “a suitable network to share some of those experiences and the outcomes” - I would be thrilled if people started doing this - we tend to hear of the same cases over and over, when we know there are so many other interesting cases out there under the radar of the ‘international development community’! What would be the best way of collecting cases like Tedcor on this site - would we create a group, or… ?
A delayed response to this as I have been away on business in Africa for most of May. I have seen organisations, including the UNDP, debating the merits of private sector approaches, so I hope they might be one source of more case studies. I also hope that the Business Fights Poverty network will generate a spreading of the message among people working in, or with contacts in, smaller businesses generating development outcomes. Are your 50 cases published somewhere?
Meanwhile - are there more cases out there? Let’s share and make more impact as a group.
Mr. Houghton is to be commended. On the MDG’s I had never heard of them before two years ago. This proves that cutting edge development and socially responsible business doesn’t necessarily come from lofty goals no matter who signs on, or even from the opinions of highly respective figures, but from simple people who are actually doing the work and innovating on the ground.
Last week at a finance forum in Paris I listened as a rep. from a large oil company proudly stated that they gave 19 million dollars to development in Congo. He stated, and probably should not have, that their gross revenue was 3.9 Billion last year. I’m sorry, but 0.5% just doesn’t seem like anything worth bragging about. What really galled me was when he suggested that buying mosquito nets and providing anti-malarial drugs saved them 4x the expense in reduced medical costs and employee time loss. “Helping people is good for the bottom line.” Wow, did they just figure that out? A few of the Africans sitting by me shook their heads in amazement. The company was doing something about malaria but not much by contrast to the wealth they were extracting out of Africa.
I try to keep positive that anything sustainable that impacts poverty is worth supporting at best, and learning from at worst. With a billion people living on less than $1.00 per day I would suggest as mom use to say, “Any step in the right direction is a step in the right direction.” Every construct has its flaws - its boiler plate problems - but with just a little effort every approach can have some impact.
