Drucker in practice

- Draft  January 15, 2007 -

Making and following through on a commitment to social responsibility requires an explicit strategy that span's the whole of the organization's value chain or business system.  It also requires engagement of all of the organization's members and stakeholders.

Below we suggest a way of thinking about the potential overall indicators of an effective, successful social responsibility strategy.  In addition, we provide a list of Drucker-type questions as a suggested tool to use in beginning to craft a social responsibility strategy.

Potential Indicators Of An Effective Social Responsibility Strategy

Our research and investigation suggest that the following are typically strong evidence that an organization has an effective social responsibility strategy in place:

1. Strategically Aligned Initiatives
   Social responsibility initiatives are elevated to the same importance as business plans rather than considered to be merely charitable projects.
    
2. Transparency
   Reporting follows the guidelines of the Global Reporting Initiative (GRI) and receives a grade of A or A+ (See GRI Website for a description of reporting guidelines).
    
3. Performance Measurement
   Social responsibility targets are set and performance on them is measured against competitors and benchmark companies - such measures would typically include the following:
    
   Economic Indicators that measure the direct economic value generated and distributed by an organization, including revenues, operating costs, employee compensation, donations, and other community investments, retained earnings and payments to governments and providers of capital
    
   Environmental Indicators that measure the inputs, outputs, and modes of impact an organization has on the environment, as well as the actions an organization takes to manage its environmental performance.  Energy, water, and materials represent three standard types of inputs used by most organizations.
    
   Human Rights Indicators that measure the impacts an organization has on the civil and political human rights of its stakeholders, with a focus on how the organization maintains and respects the basic rights of a human being.
    
   Labor Practice Indicators that measure the quality of the work and the working environment.  They include scope and diversity of the workforce, the approach to dialogue between the organization and its employees, the physical protection and well-being of people at work, and the scope of employee benefits.
    
   Product Responsibility Indicators that measure the effects of products, services, and information management on customers and users.
    
   Society Indicators that measure the impacts organizations have on the communities in which they operate, and how the organization's interactions with other social institutions are managed and mediated, including compliance with laws and regulations other than those related to labor and the environment.
    
4. Organizational and Operational Permeation
   Sustainability is passionately incorporated into how business is done everywhere everyday.  It is not discrete one-off projects.

Drucker-Type Questions As A Tool For Getting Started

The following questions should be a useful starting-point tool for organizations seeking to develop and execute a successful total responsibility strategy:

How did your organization perform on the GRI

does your organization's performance compare to that of both competitors and other companies that are considered to be outstanding as regards to social responsibility?
By completing a GRI report (global reporting org) and comparing it to those filled by competitors and other organizations considered outstanding in social responsibility, you will be able to highlight those graded areas in which your organization is outstanding, on par with others, and/or deficient.  These reports should all be audited from the outside (with the integrity of financial reporting).  They may shift what is being measured - Key Performance Indicators (KPIs).

What are the sources and dimensions of the gaps your organization faces?
Determining the reasons behind and the magnitude of any gaps your organization faces will help to size the opportunities and challenges and to identify potential areas of focus?

Which gaps should your organization fill?
Establishing a set of evaluation criteria should help your organization determine the priority areas of focus.  Basic evaluation criteria might include:

How should your organization best fill priority gaps for those areas of focus that your organization has determine to be our social responsibility priorities based on your evaluation criteria, how do they translate into specific goods, ideas for related initiatives, which initiatives should you pursue, what results will you expect and when?

How can our organization ensure a successful implementation and any necessary course correction?

What measure will be used to monitor overall progress and performance against targeted results?  What resources will be allocated to the implementation and are they the right and best resources?  What regular feedback will be reported and what mechanisms will be put in place to enable rapid course correction if necessary?