Being confined to the house and ruminating about the coronavirus has been very stressful for not only citizens in the U.S. but around the globe. One can’t help but see news updates on their phones or while channel surfing the cable channels. The entire world is tuned into the constant growing number of cases, death rates, lack of hospital beds for serious cases, and shortage of masks, ventilators, and other life-saving products. But with the news of numbers and statistics, unexpected silent heroes are stepping up.
During one of my binge watching sessions while confined to my home-prison, I saw an update on my phone that caused me to put my addictive, mind-numbing behavior on hold for just five minutes in order to feel my deep sense of respect and appreciation for Elon Musk and Tesla. Musk had Tweeted about the extra ventilators he wanted to donate to hospitals. Known primarily for his role as co-founder of Tesla, Musk announced free FDA-approved ventilators to hospitals around the world to help fight the coronavirus. In addition to the free devices, hospitals within Tesla delivery regions would receive free delivery. Just a week earlier, this man had donated over 1,200 ventilators to officials in California.
But despite my appreciation for Musk, I quickly began hearing even more stories of companies stepping up during this great time of need and showing their good faith through corporate social responsibility.
OK, So What IS Corporate Social Responsibility (CSR)?
A simple way to view CSR is as a business mindset that encourages business leaders to be socially accountable to its stakeholders and the public. By practicing corporate social responsibility, also called corporate citizenship, companies are becoming more conscious of the impact they have on society on economic, social, and environmental issues.
Through CSR programs, philanthropy, and volunteer efforts, businesses can benefit society while benefiting their brands.
Within the context of corporate social responsibility, philosophers distinguish between three different levels of moral responsibility, ranging from most to least binding or demanding.
- Obligation to cause no harm to others: Even when not a legal issue, ethics require leaders and others not cause avoidable harm. If an organization or its agents cause harm that could have been avoided by exercising due care and proper planning, organizations should be held liable according to ethics and the law.
- Obligation to prevent harm: An inclusive view of corporate social responsibility holds that organizations have the responsibility to prevent harm even though the organization itself isn’t causing the harm. Organizations and businesses that provide preventative medical care for free is one example.
- Obligation to make society a better place: Corporate giving programs (philanthropy) that support education, community health and other needs fall under this category. The example of Elon Musk and others (more on that below) are example of this CSR. This third type is what we are seeing today!
Heart Speaks To Brain
After weeks of hearing about the negative, this news bypassed my brain and any rational thinking and went straight to the heart. While doing Google searches for work-related content, I incidentally came across even more stories of companies taking initiative. Some might say that businesses don’t have to take care of social problems; they exist to make a profit for shareholders. But while that’s partially true, it’s also misleading.
Profits support the organization’s mission, vision, and goals. In order to accomplish these ends, companies must be productive, efficient, and innovative. During my years of research in the fields of emotional intelligence and leadership, I’ve opened my understanding to the power of positive emotions. When employees feel affective commitment, passion, companionate love, self-worth (appreciated), trust, and other positive emotions, they just function better, period. Companies are more productive and profitable. There’s hard proof to this but that’s for another blog.
CSR Creates Evokes Emotional Reactions
On a local scale, a Rhode Island manufacturer began retooling his production lines to produce hand sanitizer for local citizens and was giving away product, free of charge. LVHM also recently retooled its perfume facilities (high-margin products) to make disease-killing hand sanitizer.
While reading articles from Forbes, I found many examples of huge companies stepping up to help hospitals, healthcare providers, and citizens.
Serta Simmons Bedding also pledged to donate 10,000 mattresses to New York City hospitals and temporary medical facilities fighting the COVID-19 pandemic while calling on its peers to do the same.
Anheuser-Busch InBev, the world’s largest beer company, began making more than one million bottles of hand sanitizer from surplus alcohol at its breweries around the globe. Because of a massive shortage of ventilators, Dyson partnered with The Technology Partnership to produce a ventilator called CoVent, a bed-mounted portable ventilator that can run from battery power. With a grant from the United Kingdom, Dyson plans to produce 10,000 ventilators for the country and another 5,000 for donation.
In Italy, a nation that has been hit exponentially hard, saw big name companies of their own beginning to step up. Billionaire Giorgio Armani’s luxury fashion brand converted all production at its Italian factories to manufacture single-use medical overalls. Calzedonia Group an Italian retail clothing group owned by billionaire Sandro Veronesi, converted production at several plants in Italy and Croatia to manufacture masks and medical gowns, with initial production of 10,000 masks a day.
Meanwhile, when schools began closing and students were told they would need to begin distance-learning, technology companies began stepping up. Logitech began a program for K-12 teachers to receive free webcams and headsets as they transition to virtual teaching. Internet providers like Comcast are boosting speeds on their basic packages and offering free internet to low-income customers. Cox and Spectrum are also providing limited-time internet to families with K-12 students.
If you watch the advertisements on TV you will see the messages are changing, too. Ford, GM, Hyundai and others have created buying and/or assurance programs to make purchases possible through deferred payment programs and relief programs for folks who happen are affected by the coronavirus. The CEO of Rocket Mortgage delivered a message via a new advertisement offering a sense of hope and relief for the many unfortunate individuals who are struggling financially due to layoffs and/or temporary lack of work due to businesses shutting down.
What’s the Catch?
CSR efforts impact local communities where factories, retail stores, and/or offices are located. CSR has become a major factor in marketing and brand strategy; it’s valuable for a company. CSR activities can create strong emotional reactions such as gratitude, respect, and even love between employees, customers, and corporations. For many companies, morale and meaningful purpose help both employees and employers feel individual and cultural pride in seeing the social, psychological, emotional, and functional benefits of their efforts. Profits become a means for serving people. The industrial age mindset was efficiency and profits about all else. People were replaceable objects, just part of a machine with inputs and outputs.
No Market for Marketing
The basic marketing concepts have always been ‘give people a better value than the competition or they’ll go somewhere else’. The best combination of goods, services, customer experiences, and prices, for any given target market were always the primary focus of management.
Want a new car? Product comparisons, prices, and deals were (are) primary considerations for customers. Today the ‘expected product’ (i.e., minimum expectation) includes CSR programs. Customers, especially younger customers, want to know what you do for various causes: animals, the environment, cancer, and how you treat your employees are just a few examples. Is your brand inclusive and diverse? Customers, the public, the media, activist groups, and others will scrutinize policies, executive compensation, hiring practices, and the causes you support. If they like your SUV as much or more than the company that does a much better job at CSR, in their eyes, chances are you might lose the sale and long-term loyalty because your company is perceived as greedy, selfish, and lacking compassion.
Money or People – The Real Ultimate Value
When managers have to choose, which wins in the big picture? When hard times come, do managers give up bonuses or other financial compensation to help the cause or just expect employees to ‘take the hit’? Self-deception and rationalization are powerful forces that justify decisions.
Today, however, few escape transparency and viral word-of-mouth. Like it or not, right or wrong, equality, fairness, and unselfish character, not titles, get rewarded. Values have shifted and will continue to shift. Consumers are looking at who you are, not just the quality of your offerings. Corporate policies, political views, employees’ views, and executive behaviors (decisions) affect product sales, brand strategy, and emotional bonds. For some customers, their most loved brands can do nothing wrong and their least favorite brands can do nothing right! That’s when confirmation bias kicks in; they only pay attention to the good news regarding their beloved companies and the bad news related to companies they dislike.
Social responsibility touches hearts and influences thinking, beliefs, and attitudes. Emotions (conscious and unconscious) play a major part in most consumer decisions; even if people are unaware. The next time I go to buy a vehicle, I will remember Elon Musk and the ventilators he provided to hospitals that saved friends, family members, and strangers. I want to reciprocate. Doing good feels good for employees, managers, and customers (human beings). Money means very little without people, kind words, emotional connections, shared purposes, and a bright future filled with hope.