Social Responsibility 2.0 - Cisco & Doing Well by Doing Good

Can a company “do well by doing good?” Hi-tech behemoth Cisco Systems, which generated about $40 billion last fiscal year, thinks so. Carlos Dominguez, Senior Vice President, Cisco highlighted to me last week that corporate social responsibility (CSR) is part of the cultural aspect of Cisco.

At Cisco, CSR practices are governed through a partnership between the Sustainability Business Practices (SBP) organization and affected business functions. SBP provides shareholder feed back to the management team, as well as guidance on potential environmental, social and governance and employee-related initiatives. There are four aspects of how CSR business processes are reflected at Cisco.

First, business and CSR goals are becoming integrated at Cisco; both financial and non-financial issues factor into business decisions. This harkens back to the balanced scorecard approach, originated by Robert Kaplan and David Norton in 1993.

Second, cross-functional collaboration allows for greater business impact by actively engaging diverse points of view and incorporating CSR objectives into each affected business functions’ business processes. This is an inclusive approach that reflects a broad view of stakeholder theory.

Third, collaboration at the industry level is vital to understanding and effectively addressing emerging CSR issues and concerns. Cisco actively participates in various CSR working groups around the world. In other words, CSR is not treated like proprietary technology but rather an area where cooperation is view as part of the package.

Fourth, Cisco actively engages with global organizations that encourage cooperative engagements among corporations, governments and other stakeholders to proactively address global CSR issues (i.e. World Economic Forum, UN Millennium Development Goals). Dominguez notes that, “With respect to NGOs, Cisco can provide technology, people, ideas and support.”

But, is Cisco typical? Cisco may be at the head of the pack, but other companies are stepping into line, whether willingly or not. The Economist intoned earlier this year that, “Company after company has been shaken into adopting a CSR policy; it is almost unthinkable today for a big global corporation to be without one.” [“Do it Right,” January 17, 2008]

In fact, John Rugge of Harvard University’s Kennedy School of Government noted that, “’The theological question—should there be CSR?—is so irrelevant today. Companies are doing it. It’s one of the social pressures they’ve absorbed.”[cited in “The next question,” January 17, 2008]

Michael Porter and Mark Kramer, writing in the Harvard Business Review, called CSR “shared value”—benefits for both business and society. [“Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility,” Dec 2006]. Their framework shifts CSR from pitting business against society to one leveraging their interdependence. The bottom line with respect to CSR is that “few big companies can now afford to ignore it.” [“Just good business,” January 17, 2008]

As companies such as Cisco become more proactive with CSR, I asked how this impacts the role of charities? Dominguez explains that, “”companies will not take over the work of charities. Companies, however, are changing significantly how charity gets done.” Dominguez notes that, “the culture of a commercial organization is quite different than that of a charity.” Dominguez notes that, “Cisco is very entrepreneurial and always looking to leverage its core expertise.”

The world of CSR, and the interaction between companies and charities, is changing rapidly. Dominguez explained that “CSR is not just about giving dollars, but finding people that are innovative and who can bring entrepreneurial savvy to the table. We focus on helping these great organizations scale and build sustainable businesses.” The internet is facilitating change. Companies, from small to Cisco, are working to meet the challenge. But few question that this is a challenge that must be met. And more companies, like Cisco, realize that they can do well by doing good.