Be careful whose example you follow
Date: 22 Jan 2014
Back at the turn of the century, all the talk in business circles was of 'the war for talent'. Indeed, for those of us that were involved in the promotion of corporate social responsibility, the war was particularly interesting - since if the 'talent' concerned was committed to values not just to money, then the adoption of CSR could easily fit into this new mindset and gain strength from it.
The truth was more brutal, and more misguided. At the centre of the War for Talent idea - promoted by McKinsey & Co - was that companies had to promote their most 'talented' people aggressively and cut loose the bottom ten percent. "Move up or move out" logic.
It celebrated a number of excellent companies that were thriving by doing just that. Well known companies that were competitive giants. Like Enron, for instance.
But it was all a mirage. According to Duff McDonald, who wrote a book on 'The Story of McKinsey and its Secret Influence on American Business', a review of those early 'War for Talent' champions finds precious few are now successful. And indeed, those that most aggressively followed the formula - and won the highest praise at the time - are the least likely to still be alive or at least doing well.
Why? For one thing, the sample of companies that were picked out for the original War on Talent book had, surprise surprise, a very high percentage of McKinsey clients. And the original author stated that the research was not based on a data set of genuine high performance. As McDonald drily notes: "If you're going to ask someone why they're so excellent, you probably want to make sure that they actually are excellent."
I think it's time to be honest and acknowledge that the same applies to a good many case studies of best practice in corporate social responsibility.
Where do we get CSR case studies from? Let's put to one side top level academic cases for this discussion - because when people in business are looking for ideas of what they might practically do next, that's not often where they look.
We tend to get them from membership organisations and awards programmes.
Awards programmes can be a great source of genuinely interesting and innovative practice, but it depends on a few variables that may not be obvious at first glance.
Firstly, the criteria for the awards need to be robust - genuinely focused on what makes a good programme, and well-informed by a genuine knowledge of quality in execution. Panels of judges should be of high calibre in terms of knowing good practice.
Secondly, the awards should be sufficiently well regarded that they attract a good pool of entrants. If judges are left choosing between the best of a bad lot, and they are not given the option of not granting an award, then the one that heads the list may not be one you would want to copy.
The other source - membership organisations - depends very much on the integrity of the organisation concerned and the perverse incentives it has to reward its members by citing them as an example of best practice, even though that might only serve the purpose of keeping that company happy enough to stay a member.
If an organisation's CSR case study list reads like a sizeable subset of its membership list, then you should approach those case studies with a degree of critical caution. Those case studies may not have been produced with the aim of finding the best examples of great performance - but to find something, almost anything, that each member might be able to be recognised for. And that's just not the same thing.
The thing is people respond better to stories than anything else - and there is a greater need right now for good stories of fantastic companies than ever before. We could really do with some rigorous sorting out of what are the approaches that make this particular minefield navigable. The question is who will take it on.
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In a recent article, the BBC's economics editor Robert Peston highlighted the fact that in 2012 the chances are that the economy - punch drunk as it is from the various flavours of debt crisis it has been pummelled with over the course of the year - will be hit by the collapse of a major bank and / or government.
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