The History of the Company

As a CEO of Corsential, a provider of customer experience management programs  for the past seven years, I’ve had the opportunity to establish a values-driven strategy with the company that I lead. Our firm’s mission is to help companies improve their customer experience by enabling the front line (the culture of the company) to implement the customer experience strategy. Since leaving, I’ve been looking at how to leverage a corporate culture to accelerate the corporate strategy. I have observed a clear trend that will in some way shape the future of corporations across the globe; corporations are realizing the need to do good, or do right by society, while creating an enduring strategy that is positive for all the stakeholders—including the society and natural environment—that we all share.

In the past few years, there has been extensive research and observation of the companies and trends that exhibit this “responsible operations” feel while succeeding beyond all competitors. This is research that is generated by leading minds in business, and shared widely: in Michael Porter and Mark Kramer’s article Creating Shared Value; Umair Haque and Gary Hamel’s The New Capitalist Manifesto; and blogs and articles by Roger Martin and Richard Florida. A recent article by Jamie Dimon and Lloyd Blankfein champions the idea that corporate leaders have a responsibility to ensure that society—including financial systems as an element of society—remain sustainable with a minimum risk. We also see the major philanthropic activities spearheaded by Warren Buffet and Bill Gates committing to unparalleled societal improvement. In a recent Economist article, Richard Branson talks about changing his mantra from “Have Fun, Make Money” to “Do Good, Have Fun, Make Money,” These articles and initiative’s often employ differing syntax, but ultimately, it comes down to applying a proactive approach to making sure that the company is acting, through strategy and execution, in a fashion that adds value to each stakeholder on that stakeholders terms, and that it is responsible for its impact on society, both directly and indirectly (sometimes called pre-cradle to post-grave stewardship).  

 It struck me that a comprehensive stakeholder view (shareholder, employee, customer, partner/supplier, and society) is a logical progression from the work we were doing as customer experience professionals.  Treating customer experience as a core business practices requires us to drive the customer centric views more deeply into the corporate strategy and culture. We have clearly established, especially in the service realm, that superior customer experience has a direct, positive impact on the bottom line. Therefore, companies are now elevating the customer lens to a top priority in their corporate strategy, following financial return and top-line growth. In 2011, it became clear to the market that the interplay of employees and customers was key to their engagement in the business. For distribution and consumer goods companies, there is a higher focus on the supply chain lens, as improvements in the supply chain have a very direct impact on product cost to the consumer, energy consumption, and flexibility. In product-oriented companies, the major focus is on the product redesign to decrease the impact on society, such as reducing energy consumption and toxicity during production, and increasing focus on recyclability—all to reduce the real cost of the product. With a marginal shift in thinking and strategic planning, these firms can begin to embrace the concept of creating shared value.

So how do society and the environment factor into the corporate strategy? Companies typically assign coordination of the charitable activities to a corporate social responsibility function that reports status to the board, but this is hardly a proactive part of the corporate strategy and it is not reliably sustainable. In this new perspective of creating shared value for all stakeholders, companies will need to determine an effective approach to make the needs of society an integral part of the corporate strategy and culture, not just a post-operation philanthropic donation.

We can’t get hung up on the syntax of this shift in corporate strategy. Corporations need to develop an approach to becoming more responsible to all stakeholders.  Therefore the business much operate  such that all initiatives drive long-term improvements to the bottom line, reduce corporate risk, and add value to all stakeholders. The authors  mentioned earlier have documented the work of Walmart, Nestle, Google, Nike, Threadless, Tata, and other companies that are making comprehensive changes to all facets of their strategy and corporate culture to “do good” and “make more money.” Umair Haque argues convincingly that this shift is critical to the long-term survival of every company, not just the Fortune 1000..

Walmart has reduced energy consumption through distribution and sourcing redesign, and reducing waste through packaging redesign. Nestle has gone to the source of their product, the coffee farms, and invested in what the which increased the yield, quality and stability of the coffee production. Google is experimenting with everything from energy reuse & green tech to implementing the Data Liberation Front. Nike has reinvented the way they source, build, distribute and recycle their shoes. Most of these initiatives would be considered inconceivable a short 10 years ago. Now that there is a library of successful initiatives, many companies that are lead by enlightened executive teams will be looking for a best practices and expert advice and creativity to support this shift in corporate strategy.

As in all of these initiatives, the idea is compelling, but “the how” and best practices are more difficult to propagate. Even today, only 10 percent companies have integrated customer experience into the core of their strategies. Similar ratios apply to the promotion of supply chain and partner optimization, employee engagement, and product design principles. There is a light on the horizon. There is a group in Toronto working to establish an open source approach to articulate “the why” and the “how to” of transitioning to a shared-value-based corporate strategy and provide guidance on driving this change profitably. This process delivers on the classic needs of defining the corporate strategy while aligning the strategy with the customer, employee, supplier/partner and society perspectives. The method requires the corporate planners to execute according to their normal process, with the addition of the establishment of a set of aligned objectives from the CEO down to the front line that consider each of the stakeholder communities.

Corporate society is driving toward a more responsible approach to running their corporations, ideally because it is more sustainable, profitable, and lower risk. But it’s also a result of the baby boomers growing up and realizing that happiness is not found in a few dollars more. Happiness is found in generating constructive growth of things that we can influence. Our corporate leaders have a latent desire to do the right thing; let’s take this opportunity to make it easy for them by giving direction and support.

Derek Bildfell