Work, business & professional services

Corporate social responsibility gets serious

The term, corporate social responsibility (CSR), has been around a long time. But it has had many faces, in some cases, looking more like public relations or greenwashing than a genuine desire to operate conscientiously. The fact remains a corporation is not a person so it is very difficult to reconcile being profitable with being human. Even so, companies have invented their own ways of being socially responsible within their remit.

The Economist mentions three buzzwords that stand for CSR these days: “sustainability”, “innovation” and “sharing”. Sustainability is considered to be the key to competitive success, according to 67% of managers in a study by MIT and BCG. This makes sense as it uses resources more wisely (more cheaply) and focuses on so-called lean production (fewer employees). It certainly makes the companies themselves more sustainable, but that’s probably not what they meant.

Innovation is similar as it finds cheaper ways to offer something similar or better. Nike makes clothes out of polyester from recycled bottles and encourages customers to return their shoes for recycling. Meanwhile, “sharing” means collaborating with rivals, eg, Starbucks coffee cup summit, or Nike sharing its Materials Sustainability Index with members of the Sustainable Apparel Coalition (its members are 30% of the global market).

Similar to CSR, but no less tricky, is reputation management. This is where companies “leverage” their “reputation” as a “strategic asset” in the “reputation economy”. They understand, if you don’t like them, you won’t buy their stuff. This doesn’t always apply. People don’t like Ryanair much but still fly with them and they don’t like tobacco companies but still smoke their cigarettes.

Perhaps companies should concentrate less on reputation and more on being good at what they do, as Amazon, Zappos and Southwest Airlines have. On the other hand, it is difficult to trust a company that will not provide its basic details. Many do not even provide their legal name, official address, incorporation date and status online or allow access to them.

OpenCorporates, a British lobby group, gave Greece, Brazil and Spain zero for transparency and even in Britain, you still cannot get details of directors, shareholders and company accounts. What are they trying to hide? It makes CSR seem like a waste of time and money.

Ref: The Economist (UK), 21 April 2012, 'Light and shady.' Also What’s in a name. Schumpeter.
The Economist (UK), 19 May 2012. Good business; nice beaches. Schumpeter.
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Search words: Ethical Fashion Initiative, corporate social responsibility (CSR), greenwashing, sustainability, lean production, Nike, Materials Sustainability Index, innovation, sharing, GreenXchange, public relations, reputation, strategic asset, Reputation Institute, old-economy, new-economy, Ryanair, Zappos, Open Government Partnership, transparency, Brazil, Greece, Spain.
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Ageing and still working

What is the biggest threat to Britain’s economic health? According to the Office for Budget Responsibility, it is an ageing, unproductive population. Since we cannot do much about ageing, it is up to us to become more productive.

To that end, many older workers are staying at work. Some 63% of workers over pension age have been with their employer more than 10 years and over two thirds work part time in the role they used to do full time. Over half of them work for businesses with fewer than 25 people.

Smaller businesses find it cheaper to hang on to their older workers than to spend money recruiting and training younger ones. Since the recession began in 2008, 597,000 16-24 year olds have fallen out of work and 240,000 over-65s have work.
However, anecdotal evidence in Australia suggests large companies prefer to employ young people. In Britain, workers over 50 who are made unemployed find it harder to get work with bigger companies, presumably because they can pick and choose.

While older people are feeling the pinch from lower interest rates, lacklustre stocks and the end of many defined–benefit pension schemes, they are also likely to be healthier and living longer than their counterparts in the past. Work gives meaning and it would be a pity if older people only kept working because they needed the money.

Ref: The Economist (UK), 4 August 2012, 'Sticking around.'
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Search words: state pension, retirees, recession, British workforce, Centre for Research into the Older Workforce, recruitment, Germany.
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Japan looking more industrious

Japan has been under fire, or should we say water, for falling behind its rivals in South Korea and China in manufacturing. It has suffered for its aversion to risk, clunky decision-making and focus on market share rather than profitability. Now people accuse Japan of reacting too quickly to the earthquake, tsunami and nuclear tragedy. Seems like it can’t win.

About 20% of Japan manufacturing takes place outside Japan, 30% in electronics and more than 50% in cars. But Japan has suffered less manufacturing unemployment at 10% than America, at 20% and Britain, at 25%.

Both a high yen and doubts about electricity are damaging for the future of manufacturing. Its overriding problem is a strong yen, which consistently bucks the weak economy. Sony, for example, has had to increase the proportion of its dollar-based costs to manage the problem.

Japan also has problems with electricity generation since it closed all nuclear facilities in response to the earthquake. Nuclear used to generate 30% of its power, and was supposed to generate 50% of Japan’s power by 2030. Now only two reactors are open and there is now considerable political pressure on the Japan Atomic Power Co to shut a reactor found to be on a fault line.

While manufacturing could be moved to China, there are lingering doubts about its suitability with rising labour costs, security of IP and the recent slowdown in activity. Thailand is another possibility, but it faces its own instabilities including the chance of more floods.

Some companies may decide to keep manufacturing in Japan, for example, Toyota’s Mr Toyoda promised to “make Japan healthy and make Japan smile” by keeping his highly skilled Japanese workforce. While Japan cannot compete well in DVD players or tumble dryers, it is better placed in high-tech materials, chemicals and components. This is tantamount to moving up the value chain and is what Japan has always been advised to do.

Competitiveness is one thing; the aging population is another. By 2050, if the birth rate remains the same, 30% of Japanese will be over 60. As early as 2020, Japan could be more dependent on a shrinking workforce than any other industrialised power.

Ref: The Economist (UK), 9 June 2012, 'The hollow men.'
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Search words: Japan, economy, risk management, tsunami, industrial decline, yen, electricity, population, China, Thailand, floods, Toyota, uncompetitive, high-tech materials.
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The careless joy of not thinking

Many of us think too much, and we know it, but can we grasp the value of unthinking? Unthinking means we have had these thoughts before, but we don’t need them now. Typically, a sportsperson who is incredibly skilled has learned everything she needs to know but, when necessary, she becomes unthinking. If an athlete starts thinking at a crucial moment, he becomes too self conscious and is liable to ‘choke’. Too much thinking impedes physical grace.

One psychologist, Gerd Gigerenzer, says most of our behaviour is based on heuristics, or rules of thumb. We know what usually works and what does not instinctively – this is very difficult to program into a robot. He says to make good decisions, you need to be skilled at ignoring information. For example, when he asked people in the street to pick a portfolio of stocks, it did better than one chosen by experts. All the public did was pick names they had heard of.

Unthinking is “the ability to apply years of learning at the right moment by removing your thinking self”. A fine musician will do the same thing in the middle of a solo, so the music takes over from thinking about the chords played. One’s thoughts can often drown out common sense.

Unthinking is not complete ignorance, but just switching off a thought you have had in the past. Performance anxiety is a sign of overthinking. When a group of African Americans was given a test to measure their intellectual ability, they performed worse than when they were told it was just a preparatory drill. We overthink when we get into self-analysis.

The best cure for overthinking is enjoyment. Sounds easy, but many people who have become very skilled at a sport or a musical instrument have lost the love and enjoyment that first attracted them. It is time for some careless joy.

Ref: Intelligent Life (UK), May/June 2012, 'Non cogito, ergo sum.' I Leslie.
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Search words: choking, self-conscious, thinking, unthinking, shopping behaviour, heuristics, prior knowledge, expectations, performance anxiety, achievement gap, self-analysis, enjoyment, self-reflection.
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Children can wreck your career

Women are still not fairly represented in top jobs, in spite of being highly educated and more self-sufficient than ever. They held only 14.3% of executive positions at Fortune 500 companies at the end of June 2012 and only 16.6% of board seats. Nearly 28% of companies had no women serving in high-ranking roles. What are we to make of this?

The Economist says there are several hindrances. Not many study science, engineering or maths; few demand to be promoted; sexism persists albeit more hidden; and well, children can wreck your career. A few high profile women recently stepped down from their roles because they could not combine the competing demands of a corporation/politics and a family. Strangely enough, studies support this thesis! So what is the answer to this structural inequality?

One is a more human working culture – reduced and flexible hours, and more balanced expectations. Unilever wants 55% of its senior managers to be women by 2015, so it supports women in working where and when they like to get the job done and discourages travel (the great consumer of time). McKinsey allows consultants of both genders to work fewer hours for less pay – but they can still go for partner.

Credit Suisse Research Institute found companies perform better when they have women directors. Shares of companies valued at more than $10 billion with female board members outperformed by 26% comparable businesses with all-male boards worldwide over six years. But companies with one female board member are more likely to recruit a woman than companies with all-male boards.

Sheryl Sandberg, CEO of Facebook, leaves the office at 5.30 every day since she had a child. Marissa Mayer, who used to boast of working 90 hours a week at Google, now has a newborn and works for Yahoo!. These high profile women are not representative of the rest of us – they are business celebrities.

Change is slow, which begs the question whether women actually want top jobs. Perhaps it’s lonely for the women who are at the top.

Ref: Business Insider (UK), 11 December 2012, 'Here’s why Marissa Mayer and Sheryl Sandberg are so remarkable.' B Sutherland.
The Economist, 25 August 2012, The mommy track. Schumpeter.
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Search words: women, senior management, McKinsey, science, computing, promotion, sexism, children, human resources, PR, Unilever, travel, hours, flexitime, Yahoo!, Fortune 500, boards, profitability, executive, gender gap.
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