Drawing on the belief that the most successful enterprises generate benefits for both shareholders and the public good, two Harvard University professors look at examples from sixty companies including Starbucks, Dell, and Citigroup to show business leaders how it's done.
And what they find are seven principles that businesses can put to work: Harness innovation for public good; put people at the center; spread economic opportunity; engage in new alliances; be performance driven in everything; practice superior governance; and pursue purpose beyond profit.
To illustrate the "harness innovation" principle, authors Jackson and Nelson encourage businesses to innovate products that help the public and the bottom line. Toyota, for example, in 1997 became the first company to produce a hybrid carthe Prius. Their strategy, the authors say, provided free media coverage, numerous design awards, and made Toyota a leader in eco-innovation, now considered a serious business advantage for companies worldwide.
Shell Oil, which suffered bad press on both environmental and political issues, is examined to o demonstrate the "performance driven" principle. Among its changes, Shell now integrates sustainable development considerations into executive performance reviews and bonuses, and requires that new investments meet (publicly available ) financial, social, and environmental criteria. The result: Shell has reestablished trust with consumers, and dampened negative publicity from activist groups.
Companies that do right by society as well as investors not only will win today by improving market share, attracting top talent, and enhancing consumer loyalty, but also by building a competitive advantage for the future, say Jackson and Nelson conclude.Manda Salls