Profits with Principles: Seven Strategies for Delivering Value with Values

As Dean of the Drucker School of Management at Claremont Graduate University in California, Ira really does get what it takes to survive in today's business climate.

Corporate social responsibility (CSR)-how well businesses behave in the marketplace as citizens and what they contribute, beyond how they actually run their businesses-has been on the corporate agenda for several decades, and served as a proactive way for corporations to demonstrate core `values' beyond the profit incentive. Some companies, such banking institutions, came to table reluctantly, and only after being coerced by the 1977 Community Reinvestment Act, which mandated that banks increase lending broadly in inner-city (and often impoverished) communities where they did business. Other international companies, such as Anita Ruddick's worldwide chain, The Body Shop, took it upon themselves to aggressively do business in a principled, values-defined way. Not all corporations were so inspired, of course, to do good; and most businesses viewed CSR as being limited to charitable donations and philanthropy, not to a systemic and strategic choice for embracing social values to create core value for stakeholders. In the late 1990s, when American saw their financial wealth increase by $3 trillion a year for the years 1998-2000, at a time when the Dow had rocketed to the11,000 level, stakeholders were less concerned with how well the corporation was doing for society. But those days are over, at least for the foreseeable future, and businesses now must react to public demands for better governance, transparency, and accountability. They have to do this on their own, building trust from stakeholders, enlarging their reach to fuel economic growth, tapping their `distinctive competencies' to harness innovation for public good, and do so while adding real value (in the form of profits) while they create values, grow stock price, improve employee satisfaction, and enhance their global brands as a fundamental part of doing business. A new approach for helping corporations to achieve that ambitious task is Profits With Principles: Seven Strategies for Delivering Value With Values, by Ira A. Jackson and Jane Nelson, both fellows at Harvard's Kennedy School of Government, a book that uses case studies of companies that have created incremental value for their firms while bringing values into the way they do business. They also suggest that companies have to react to a crisis in confidence facing business, that while "two-thirds of Americans think that corporations make good products and compete well in the global economy . . . only one-third feel large corporations have ethical business practices." Those attitudes inevitably affect share price and sustainable competitive advantage, issues that reflect directly on company worth, shareholder return, and brand equity. In fact, Jackson and Nelson suggest that intangible assets-the very kind CSR activities help create-contribute significantly to corporate value, with some 50 to 90 percent of value being based on those assets, depending on industries. "They are often spoken about in terms of different types

Finally, one place to turn to for a scholarly yet inspiring look at the social responsibility movement. Jane Nelson and Ira Jackson have pulled together the fractionated resources, rationales and best practices into a cohesive guide. It's the big shoulders on which the next iteration of capitalism can build. A valuable resource for the practitioner, and inspiration for the 'global citizen' in all of us. Elsie Maio