Why pay and perks are king, company intrapreneurs and integrating external engagement

Note to recruiters: forget sustainability and stick to perks

There’s a widespread belief among corporate responsibility departments that flagging up their company’s social achievements will attract the best employees. This fascinating paper goes in search for some empirical proof by assigning a marginal value to the responsibility issues in job applicants’ decision-making. The researchers give a dollar estimate to three types of reputation (relating to the company’s general brand, to the workplace and to social responsibility directly), and evaluate these against more utilitarian factors, such as pay, travel and promotion opportunities.

The findings are stark. Presented with hypothetical job offers, a control group of MBA students attributed only 7.5% of the value of a job contract to a company’s corporate responsibility reputation – equivalent to £5,585 in cash terms. Non-MBA workers attribute just 2.6% value of a contract to social reputation, while the value granted by under/unemployed workers amounted to 2.4%.

The conclusion for employers, lamentably, is to stick to age-old themes of pay and perks. From a pure recruitment perspective, it makes little sense to chase a high position in corporate responsibility rankings. “Having a ‘good enough’ reputation for social responsibility may be sufficient to play effectively in the war for talent.”

Auger, P et al. (April 2013), “How Much Does a Company’s Reputation Matter in Recruiting?”, MIT Sloan Management Review, 54 (3): 79-88.

Seven habits of intrapreneurship

Change happens in many ways. There’s the Big Bang approach, where an exogenous shock turns everything on its head. In business, that role has traditionally fallen to inventive entrepreneurs.

As changemakers within organisations, intrapreneurs come at things differently. They may have an inside track, but instigating change is no easy ride. Risk aversion, cynicism and bureaucracy are just some of the obstacles corporate culture throws in their way. Creating an enabling environment is key to overcoming these internal impediments, according to this occasional paper from the Doughty Centre for Corporate Responsibility.

The authors outline seven “habits” that, if encouraged, could lead companies to develop a more intrapreneurial bent. Some are commonsensical. Intrapreneurs, like entrepreneurs, need to network. Cross-border, cross-sector, cross-department: whichever way, opportunities to build alliances across and outside the business are essential. As is the time and space to throw ideas around – what the authors temptingly term cultivating a “café culture”. Likewise, learning through doing – defined rather conventionally as opportunities to volunteer and mentor – is key to building intrapreneurs’ confidence and skills. Other proposals are more process-orientated, such as instituting flatter hierarchies to reduce bureaucracy and encourage innovation, or introducing social and environmental measures to assess a project’s value (not merely economic).

Habits Six and Seven, if taken on board in full, are where the big leaps forward lie. The former calls on companies to introduce experimental pilots. Intrapreneurs typically beaver away on their ideas in their own time. Google, with its “20% time” policy, is a rare example of harnessing this creative energy. The final habit gets to the heart of the business: namely, structuring corporate strategy around the inspirational goal of “wider societal purpose”. Nail that and intrapreneurs will start popping out of the woodwork for sure.

Grayson, D et al (April 2013), “Creating Sustainable Businesses through Social Intrapreneurism”, Doughty School for Corporate Responsibility, Occasional Paper.

Beyond corporate responsibility  

As chief executive at BP, John Browne famously pointed the UK oil major on a trajectory Beyond Petroleum. He’s now looking to do the same for corporate responsibility. In this provocative essay, the former BP head calls on companies to integrate stakeholder interaction into all levels of decision making. The first and most obvious question is “why on earth?”. The answer, according to Browne and his McKinsey co-writer Robin Nuttall, is simple. Businesses don’t operate in a vacuum, the argument goes, so they need to engage their “external environments”. Knowing and interacting with your stakeholders offers key insights that will benefit your business, whether that’s anticipating the next piece of legislation in the pipeline or second-guessing the new consumer trend.

The much more taxing question centres on the issue, “how in hell to do it?”. What’s clear to the authors is that current approaches fall far short. Among the reasons cited are narrowness of scope (corporate responsibility teams not engaging widely enough), narrowness of vision (only looking to limit negative stakeholder responses rather than encourage positive ones) and narrowness of horizon (responsibility initiatives are too often short-lived and dependent on a single executive’s whim).

Browne and Nuttall propose four responses: define what you contribute, know your stakeholders, apply world-class management, and engage radically. The paper discusses each in turn, but it’s the last that stands out. Three pieces of advice emerge: “sit down with your stakeholders early and often”; negotiate, don’t preach; and don’t fret if you can’t please everyone. Peppered with plenty of real-life case studies, this is a stimulating read, if not exactly the last word on the subject. 

Browne, J & Nuttall, R (March 2013), “Beyond corporate social responsibility: integrated external engagement”, McKinsey Quarterly, Spring.  

Campus news

The Higher Education Funding Council for England plans to invest £5m in a fund designed to prioritise sustainability in higher education institutions. The Students’ Green Fund will be managed by the National Union for Students.

The management education networks AACSB and EFMD are joining forces with the educator-led Globally Responsible Leadership Initiative. The long-term partnership aims to promote responsible

Academic news  Business School Bulletin  Oliver Balch 

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