Natasha Mudhar, MD and CEO of Sterling Media discusses the importance of being aware of corporate responsibility and why this area of business is something all SMEs need to take into consideration
Why is corporate responsibility such an important things for SMEs to consider?
For too long, responsibility for our environment has been left to multinational corporates to handle. They have bigger turnovers and are more high profile, so naturally their ability to change their surroundings is more significant. However, with SMEs accounting for 99.8% of businesses and almost half of the UK economy, it is vital that SMEs recognize that they need to play a bigger part in helping to deliver social return.
Once more, your business will only have a winning formula if your product or service is sustainable and incorporates strategies focused to the customer, society and the business. Therefore, CSR must be inherent to your business plan, and central to your business strategies.
In September, the world’s leaders will be announcing 17 Global Goals for sustainable development at the United Nations, with aims to eradicate extreme poverty, tackle climate change and end gender inequality. Without the help of SMEs, which have such wide networks at a grass roots level and have the potential to reach large numbers of people, these goals will not be achieved.
How do you think SMEs should define their corporate responsibility criteria?
CSR for SMEs shouldn’t be a tick box operation. For CSR strategy to really mean something, it must tie-in with the core purpose of your business and set obligations which are reflective of what your company is trying to achieve. Companies should choose CSR causes that are close to their customers’ hearts – in other words: who will care about this cause and how much? For this, it is essential that a company understands who its customer base is and what really matters to them. Meaningful engagement is key.
Directors and CEOs need to ensure the company’s CSR strategy adds value and meaning, can last, is effective and has the potential to grow and develop.
How should this be communicated to staff and suppliers – and how should it be monitored?
A good CSR strategy is able to engage and inspire employees; it leads to innovation and collaboration, and in turn this is translated into further growth. But the most important by-product of a good CSR strategy is that it can make businesses more approachable and human to those who work for them; companies turn from ‘them’ to ‘us’ entities. CSR can sometimes require actions to be taken by your staff, which they are not used to, so it’s vital to inspire and encourage participation at every opportunity.
To do this effectively, you must reach employees through every communication channel possible. The more knowledgeable your staff are of the problems you are trying to tackle, the more receptive they will be to changing their behaviour and getting on side. Whether it’s via your internal newsletter, posters in the staff room, washrooms or even car parks, sustainability and responsibility should be fully integrated into your corporate communications. Here, showing employees signs of progress in a particular area of CSR will help reinforce the belief amongst your staff that your CSR plan is achievable.
Most of all, it’s important to recognise engagement and creativity by a particular person or department in your CSR plan and harness their energy to bring CSR to life amongst staff at a ground level.
Why should corporate responsibility be considered an essential part of business strategy?
Every company needs to have a link between its corporate strategies and giving back to society because every company makes an impact. To advance CSR, we must root it in a broad understanding of the interrelationship between a corporation and society. Ultimately, a healthy society creates expanding demand for business, as more human needs are met and aspirations grow. Any business that pursues its ends at the expense of the society in which it operates will find its success to be illusory and ultimately temporary.
How should SMEs go about setting up a corporate responsibility plan?
How a company practices CSR is ultimately decided on its values and its relationship to the society it is part of. However, there are some actions SMEs of all shapes and sizes can take to ensure your strategy is implemented.
Corporate responsibility requires the establishment of targets, identifying methods of how you will reach them, and regular investigations into the progress made in achieving those targets.
A CSR plan will require resources, so be prepared to dedicate man-hours and company profits to support it. Having a champion of CSR will help ensure your strategy is cohesive and that your plan has continuity, so that programmes are seen through start to finish. In regards to the rest of your workforce, training programmes will ensure that employees are informed of your goals from the word go.
Also remember that CSR is an ongoing process. There will be areas that are more successful than others, but you should not be discouraged. Understand why other areas are progressing faster, and adapt your plan to incorporate new methods for achieving your goals.
What are the barriers preventing such plans and how should businesses overcome this?
Sustainability is often pitted against profitability. Whilst SMEs should never lose focus of the fact that business value is vital for any company, they shouldn’t view corporate responsibility as a cost, a constraint, or a charitable deed—it can be a source of opportunity, innovation, and competitive advantage.
On the contrary, the introduction of a corporate responsibility plan can help achieve long term goals, such as efficiency savings, improve the productivity of your business and help shape your environment to suit your strategy for growth. Corporate responsibility is all about adding shared value for the common good and so, if your values are grounded from the start, it shouldn’t come into conflict with your aims to make money.