Why Corporate Social Responsibility Could Be Your Next Strategic Priority

Derek Klobucher

When organizations do the right thing, value can extend far beyond the good deed itself. Corporate social responsibility (CSR) can help drive better business outcomes, attract like-minded partners, increase employee engagement and more.

“Just like human resources years ago … CSR is going to grow into a strategic partner in the company,” John Matthews, SAP’s global vice president of HCM LoB Business Partner, Global Customer Strategy & Business Operations, said on Changing The Game with HR last week. “Doing good is also good for business.”

CSR refers to how organizations go above and beyond to evaluate and own their environmental and social impacts. But growing into strategic partnership with other, more quantifiable lines of business would require objective CSR metrics.

Quantifying good deeds

“We’re going to see the emergence of an index that captures the corporate social responsibility agenda … the responsibility with which companies act,” Chris Johnson, senior partner at New York-based human resources consulting firm Mercer, said on Changing the Game with HR. “And the index will be a key part of how the company will be accountable to its shareholders.”

If this seems farfetched, consider that shareholders are also beginning to demand sustainability. And organizations already get rated as best places to work, on work-life balance, and many other ratings; and Mercer even sponsors the Britain’s Healthiest Company index.

Johnson predicts a CSR index within the decade.

“It could be a very public account—a transparency and public accountability thing,” Johnson said. Advocacy groups “will be able to go to those companies that are low down [on] the index, and offer them a way of clamoring up the index and demonstrating their broader responsibility to society.”

“People love to work for a corporation that is paying it forward,” Bonnie J. Addario, founder of the Bonnie J. Addario Lung Cancer Foundation, said.

But CSR-minded organizations will still want a return on investment.

Paying it forward

“Corporate social responsibility also helps the bottom line, meaning that it helps you build trust with customers, employees, as well as with your suppliers,” SAP’s Matthews said. “If you give them that guidance, that direction, and you’re clear on what matters, others will come running to you—and come running with you to help solve problems.”

One of Matthews’ “problems” is a 3,400-mile bicycle ride across the U.S. to raise awareness—and funds—for lung cancer research; he’s doing so in memory of his late mother who died of the disease. Whether the issue is healthcare, education or implementing design elements that cut costs by increasing energy efficiency, corporate social responsibility can be an effective way to increase employee engagement.

“People love to work for a corporation that is paying it forward,” Bonnie J. Addario, founder of the Bonnie J. Addario Lung Cancer Foundation, said on Changing the Game with HR. “It’s not always about money … it’s about involvement—it’s about having an emotional connection.”

“We’re going to see the emergence of an index that captures the corporate social responsibility agenda … the responsibility with which companies act,” Chris Johnson, senior partner at New York-based human resources consulting firm Mercer, said.

More than a cause

“CSR is becoming much more of a heritage asset, meaning people prefer their service efforts to leave lasting effects,” Kevin Xu, CEO of global intellectual property management company MEBO International, stated on Forbes CommunityVoice last month. “Rather than championing campaigns that make big splashes, businesses want to build and work toward causes that resonate with and get carried on by younger generations.”

These efforts can lead to new partnerships with like-minded organizations—what a wireless solutions provider’s CEO called a “return on doing good,” as opposed to a simple return on investment. And it’s a great way to build pride within the organization.

“I’ve already had 30 people from SAP from all across the world … who just heard what we were doing, and said, ‘How can I help?’” SAP’s Matthews said. “And it grows every day … so I’m very happy, fortunate, and proud to work for SAP.”

This story originally appeared on SAP’s Business TrendsClick here for a replay of this episode. And click here to learn more about Matthews’ ride. Follow Derek on Twitter@DKlobucher

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About Derek Klobucher

Derek Klobucher is a Brand Journalist, Content Marketer and Master Digital Storyteller at SAP. His responsibilities include conceiving, developing and conducting global, company-wide employee brand journalism training; managing content, promotion and strategy for social networks and online media; and mentoring SAP employees, contractors and interns to optimize blogging and social media efforts.

Purpose-Led Organizations: Another Buzzword Or Something More?

Yvonne Fandert

Were jobs in the past meaningless before consultants, researchers, and practitioners identified purpose as a critical differentiator for companies to be successful in the digital age?

Is becoming purpose-driven more hype leading to the expectation of increased profit for those who talk about it? Or is there something more substantial behind this new corporate trend?

And if so, how much of it is really new versus old wine in new bottles? And more importantly, what does it mean for us as HR professionals?

According to a KornFerry study, purpose-driven businesses have 4x the compound annual growth rate (CAGR) of companies in the S&P 500 Consumer Sector. Nearly all employees (90%) in purpose-driven organizations report feeling engaged, compared to 32% of employees in other companies. As SAP colleague Florian Kunzke highlighted in this article, purpose makes people 3x more likely to stay in an organization, leading to 1.4x more employee engagement, and 2x more optimistic employees. It also creates 75% more customer retention.

So there seem to be some convincing – profit and nonprofit related – arguments to inspire organizations to become purpose-led.

What does it mean to be purpose-led?

According to Markus Heinen, chief innovation officer of EY, “Purpose is an aspirational reason for being that is grounded in humanity and inspires action.” In other words, an organization needs to stand for something it believes in, going beyond profit and impacting society. This can, of course, extend beyond pure social projects. If a company can direct its vision, mission, and business model towards something that creates purpose, and can demonstrate how their products create purpose, it is even stronger.

Many great companies show a strong focus on purpose, including:

  • Unilever, one of the top-ranked purposeful brands, states that to succeed requires “the highest standards of corporate behavior towards everyone we work with, the communities we touch, and the environment on which we have an impact.”
  • Patagonia, which produces gear and clothes for alpine and outdoor sports, is determined to reduce waste and impact on the environment. Why? To allow its customers and society to continue to enjoy what they are passionate about: the great outdoors. These goals are reflected in the corporate values as well as many processes such as the famous buy-back initiative of used gear.
  • Zappos and its famous “happiness culture” create not only a distinct corporate culture, but also happy, loyal customers. 

The causality and relevance of purpose

Purpose-led companies usually have strong employee engagement that has increased year over year; they also see an increase in retention. Yet, we could conclude that there is a direct correlation between purposeful activities and the impact just mentioned. But would that be “jumping to conclusions”? My personal view is that purpose certainly helps, but profit is essential as well: not only to fund the social projects, but also to keep your employees happy with a fair and competitive salaries. Purpose and profit should not be seen as contradictions, but complementing factors. As research, such as WillisTowersWatson in 2016, shows, base pay/salary is the second top attraction and retention driver.

Let’s have a deeper look at causality: The impact of the unconsciousness on behavior and decisions is not a new study field. If you research the field of social and market psychology, you will find many studies that show how often we behave irrationally, driven by heuristics and emotional arousal. To put this in context: people behave in a way that makes them feel good; they prefer to be around people they trust; they are more likely to buy products in an environment that makes them feel good. This in turn shows that experience is vital. Therefore, it is vital to focus on consumer experience, treating each other as internal consumers, and putting the consumer into the center of everything.

The human wish to do something meaningful is also not new. It seems to be ingrained in our human nature. Asking “what’s the purpose of (my) life” might be as old as human mankind. At the same time, the answer to it will differ depending on the context, circumstances and the phase/situation of life you are in right now. While, for example, after WWII, people in highly impacted countries focused on starting from scratch to survive hunger and get a job to feed their children. Many are luckily now in a much better position. The unemployment rate is low, and for many people, earning money is not enough anymore, as they take it for granted.

Contributing to a higher purpose has become more relevant. Somehow like the pyramid of needs: moving from core needs towards personal growth and development, until contributing to a higher purpose that goes beyond the individual contribution. In addition, experts confirm that we are in a candidate-driven market, in which candidates hold more power than employers, a trend that seems to be deepening. This means that employees have the power to request a deeper purpose from their employers, a situation that did not exist 50 years ago: “Future generations want the organizations where they are spending their time and energy to match their personal values and purpose in life,” according to Nancy Birkhölzer, CEO ixds. This is also underlined by a recent study done by the MRI Network: 90% of all recruiters are convinced that we are in a candidate-driven market.

experts have described the current labor market as “candidate-driven.” Job seekers hold more power than employers, a trend that seems to be deepening

2017 Recruiter Sentiment Study MRI Network

Source: 2017 Recruiter Sentiment Study, MRI Network.

How to drive purpose in organizations

Now after having explored the various impact, and the increasing relevance that purpose has, let’s have a quick look at some general principles and best practices that helps organizations to improve their purpose:

  • Have an authentic purpose that also fits your business model
  • Communicate it to the employees in a clear way -make them believe in it, and let them experience it
  • Have each team, department, and role design their own purpose which serves an overall purpose and let them act according to it
  • Hold people accountable to the purpose
  • Define metrics and goals based on purpose to assess effectiveness

Conclusion

The relevance of purposefulness has increased over the past years. While knowledge about the human mechanics that are running in the background is not fundamentally new, how it’s being expanded into the business world, including profit organizations, is. This has to do with the increasing importance of employer branding to attract but also retain best talents.

Nevertheless, it is imperative to go beyond pure lip service or marketing brand – just writing down a purpose-driven mission statement is not enough. Purpose-led companies need to be followed by consistent leadership behavior, tangible examples, and continuously evolving and adapting strategy and execution along with the rapidly changing environment.

Profit and purpose do not contradict, but they can complement each other. Successful companies will find a way to keep profit and purpose in a healthy balance.

For more on this topic, see Engage Employee Engagement By Connecting Them To Your Company’s Purpose.

This article originally appeared on LinkedIn Pulse.

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Yvonne Fandert

About Yvonne Fandert

Yvonne Fandert is leading the HR Office for the MEE and EMEA region at SAP. She joined SAP in 2006 and held various local and regional HR Business Partner positions, as well as project director positions within HR. She did a Master in Business Administration at the University of Mannheim, Germany, and a Master of Human Resource Management and Coaching at the University of Sydney, Australia. Being a certified coach, Yvonne feels passionate about personal development, and is a firm believer of personal growth via constant learning and self-reflection.

Corporate Social Responsibility: More Than A Checkbox On An Annual Report

Gergi Abboud

I know from first-hand experience what it means to be displaced.

Displaced from everything—your family, your routine, your possessions, your basic amenities. Everything. While I experienced a fraction of what some refugees go through today, nevertheless, it was devastating for my parents and terribly hard for me as a child.

Those images and experiences remain with me. And they serve as an important reality check to remind me of how hard life can get for no fault of your own making. But I was lucky. I had the opportunity to go back to my community, to my country and be welcomed by them. Many refugees today face challenges in developing their own potential and returning to their homes.

As the world faces increasing social, political and economic dilemmas, never before has corporate social responsibility (CSR) been more relevant to businesses as it is today. Business growth is directly linked to smart investments in CSR—which also helps attract and retain customers and top talent.

And perhaps, most importantly, because businesses today are defined by their people, it becomes critical for organizations to support causes that are close to the hearts of their people.

Aligning business objectives with a greater purpose

CSR is no longer a mere checkbox on an annual report. Traditionally perceived as a tool to seek stakeholder approval and trusted brand recognition, CSR has now evolved to become one of the strategic pillars for holistic business growth.

Doing ‘good’ is not only about giving back to community and needs to be an organizational quest for finding purpose that aligns with business objectives. Only then can it leave lasting value and impact for those who receive it. And the ones involved in extending it.

An imbalance of opportunity and need

We live in world of contrasts. People are often polarized between having opportunity and not. A good example of this is the ongoing digital transformation that is sweeping the business world.

For example, Gartner predicts that the region’s IT market in the region continues to grow at 2% in 2017, presenting strong technology job opportunities. Among companies in the Middle East and North Africa, 43% are looking for Junior Executives, according to Bayt.com. And the Kingdom of Saudi Arabia alone is short 37,000 ICT professionals. Similarly, the Saudi Communications and Information Technology Commission states that Saudi Arabia is short of a cumulative 37,000 ICT professionals from 2014-2017.

Potentially, this trend means that all markets will need a steady supply of core computing and coding skills to support this growth—which means more jobs. However, the reality remains far from ideal.

As per statistics from Bayt.com and YouGov, youth unemployment in the Middle East and North Africa is among the highest in the world—23 percent, which is nearly double the global average of 13%. However, that is not due to a lack of workers—it’s due to a lack of workers with the right skills.

Solving real world problems with skilled volunteering

To help address this, let’s think of ways organizations can contribute to lasting social impact. One key way Skilled Volunteering, which allows organizations to harness specifically their skill sets and strengths to add value to CSR initiatives. It helps bridge the social ‘needs’ gap as well as address other real-world problems. And a great live example of this is the Refugee Code Week (RCW).

It uses skilled volunteering to alleviate not only the current, but the future of the refugee situation.  It looks at providing refugees with access to coding literacy. To me, this is the closest thing to a super power than can be taught in today’s digital age. Coding literacy can help empower refugees to become sustainable and employable, and in turn help empower other young refugees in the long run.

Turning refugee settlements into recruitment grounds

How exactly is RCW solving real-world problems? Most obviously, it helps address the refugee condition, giving them hope and empowering a better future for them based on education. It also helps address another serious challenge facing companies and nations today—a crippling paucity of Information and Communications Technology (ICT) skills. CSR initiatives such as RCW serve as the perfect bridge, leapfrogging literacy into employability.

Particularly, coding literacy happens to be the rare skill, that can be taught in a minimal timeframe (as little as 16 weeks) while making people immediately employable. While those being supported gain the necessary skills, companies on the other hand can tap into this massive refugee talent pool and meet their ICT skills shortfall. And the success of our first Bootcamp, with nearly 100% placement of all trainees including refugees, stands testament to the viability of this model.

Education bears the torch

The impact of the refugee situation has been monumental on their lives. Many refugees are not optimistic about their future, and are calling on the global community to come together to find practical solutions to education and careers. However, after volunteering myself, and seeing the heartbreaking situation first hand, I passionately feel that the entire weight of changing the refugee situation hinges on education. Having heard countless moving stories from the camps, I’ve see that the hope in peoples’ hearts is born from one of their most precious possessions carried on them even through displacement—their high school diplomas and educational degrees.

And this gives hope to us as well, to help turn their resentment and negativity into productive time spent to learn skills that can help them integrate better into the community. It gives us direction as corporates, to look at the refugee pool as untapped intellectual potential that can help solve the shortage of ICT skills in the global economy.

And the end objective, is to see these young refugees and youth become social innovators, solving social problems not just with their skills and mindset, but with hope and conviction in their hearts.

With thanks to Batoul Husseini, Global Lead for Refugee Code Week.

For more on this topic, see Can The Social Enterprise Reshape Big Business?

This article originally appeared on Forbes SAPVoice.

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Gergi Abboud

About Gergi Abboud

Gergi Abboud is the Managing Director of the Gulf, North Africa, Levant, and Pakistan regions at SAP. He is responsible for developing the company’s in-country presence and growth strategy, as well as
sales, planning, and marketing activities across these regions. Connect with him on LinkedIn or Twitter @gergiabboud.

Human Skills for the Digital Future

Dan Wellers and Kai Goerlich

Technology Evolves.
So Must We.


Technology replacing human effort is as old as the first stone axe, and so is the disruption it creates.
Thanks to deep learning and other advances in AI, machine learning is catching up to the human mind faster than expected.
How do we maintain our value in a world in which AI can perform many high-value tasks?


Uniquely Human Abilities

AI is excellent at automating routine knowledge work and generating new insights from existing data — but humans know what they don’t know.

We’re driven to explore, try new and risky things, and make a difference.
 
 
 
We deduce the existence of information we don’t yet know about.
 
 
 
We imagine radical new business models, products, and opportunities.
 
 
 
We have creativity, imagination, humor, ethics, persistence, and critical thinking.


There’s Nothing Soft About “Soft Skills”

To stay ahead of AI in an increasingly automated world, we need to start cultivating our most human abilities on a societal level. There’s nothing soft about these skills, and we can’t afford to leave them to chance.

We must revamp how and what we teach to nurture the critical skills of passion, curiosity, imagination, creativity, critical thinking, and persistence. In the era of AI, no one will be able to thrive without these abilities, and most people will need help acquiring and improving them.

Anything artificial intelligence does has to fit into a human-centered value system that takes our unique abilities into account. While we help AI get more powerful, we need to get better at being human.


Download the executive brief Human Skills for the Digital Future.


Read the full article The Human Factor in an AI Future.


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About Dan Wellers

Dan Wellers is founder and leader of Digital Futures at SAP, a strategic insights and thought leadership discipline that explores how digital technologies drive exponential change in business and society.

Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation.

Share your thoughts with Kai on Twitter @KaiGoe.heif Futu

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How Manufacturers Can Kick-Start The Internet Of Things In 2018

Tanja Rueckert

Part 1 of the “Manufacturing Value from IoT” series

IoT is one of the most dynamic and exciting markets I am involved with at SAP. The possibilities are endless, and that is perhaps where the challenges start. I’ll be sharing a series of blogs based on research into knowledge and use of IoT in manufacturing.

Most manufacturing leaders think that the IoT is the next big thing, alongside analytics, machine learning, and artificial intelligence. They see these technologies dramatically impacting their businesses and business in general over the next five years. Researchers see big things ahead as well; they forecast that IoT products and investments will total hundreds of billions – or even trillions – of dollars in coming decades.

They’re all wrong.

The IoT is THE Big Thing right now – if you know where to look.

Nearly a third (31%) of production processes and equipment and non-production processes and equipment (30%) already incorporate smart device/embedded intelligence. Similar percentages of manufacturers have a company strategy implemented or in place to apply IoT technologies to their processes (34%) or to embed IoT technologies into products (32%).

opportunities to leverage IoTSource:Catch Up with IoT Leaders,” SAP, 2017.

The best process opportunities to leverage the IoT include document management (e.g. real-time updates of process information); shipping and warehousing (e.g. tracking incoming and outgoing goods); and assembly and packaging (e.g. production monitoring). More could be done, but figuring out where and how to implement the IoT is an obstacle for many leaders. Some 44 percent of companies have trouble identifying IoT opportunities and benefits for either internal processes or IoT-enabled products.

Why so much difficulty in figuring out where to use the IoT in processes?

  • No two industries use the IoT in the same way. An energy company might leverage asset-management data to reduce costs; an e-commerce manufacturer might focus on metrics for customer fulfillment; a fabricator’s use of IoT technologies may be driven by a need to meet exacting product variances.
  • Even in the same industry, individual firms will apply and profit from the IoT in unique ways. In some plants and processes, management is intent on getting the most out of fully depreciated equipment. Unfortunately, older equipment usually lacks state-of-the-art controls and sensors. The IoT may be in place somewhere within those facilities, but it’s unlikely to touch legacy processes until new machinery arrive. 

Where could your company leverage the IoT today? Think strategically, operationally, and financially to prioritize opportunities:

  • Can senior leadership and plant management use real-time process data to improve daily decision-making and operations planning? Do they have the skills and tools (e.g., business analytics) to leverage IoT data?
  • Which troublesome processes in the plant or front office erode profits? With real-time data pushed out by the IoT, which could be improved?
  • Of the processes that could be improved, which include equipment that can – in the near-term – accommodate embedded intelligence, and then communicate with plant and enterprise networks?

Answer those questions, and you’ve got an instant list of how and where to profit from the IoT – today.

Stay tuned for more information on how IoT is developing and to learn what it takes to be a manufacturing IoT innovator. In the meantime, download the report “Catch Up with IoT Leaders.”

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Tanja Rueckert

About Tanja Rueckert

Tanja Rueckert is President of the Internet of Things and Digital Supply Chain Business Unit at SAP.