The strength of an integrated structure is dependent on a shared commitment to, and accountability for, the citizenship strategy by all leaders and business units across the company.
By Tom Knowlton and Nadia Gomes, TCC Group
In our first post we introduced a framework for successful corporate citizenship containing four key elements: culture, engaged leadership, integrated structure, and citizenship strategy. After exploring strategy, the first of the two “fundamental” elements, we'll now focus on the second fundamental of integrated structure.
The Internal Value of Integration
In our previous post, we discussed the importance of building a citizenship strategy that is driven by the expectations of stakeholders. To understand these expectations, leaders must engage with stakeholders directly and identify and prioritize the issues to be addressed, and then effectively leverage the company’s resources through a responsive citizenship strategy.
To build and implement the strategy, the fundamental element of designing an integrated structure should center around ensuring that all levels of the business, from the C-suite to department managers to business and regional unit leaders, understand the value of the citizenship goals to both the company as well as their respective unit or department. When a citizenship effort is successfully integrated, collective value can be realized internally in the form of:
- Commitment: From all units that play a role in the implementation of the strategy from procurement to recruitment
- Results Accountability: From all those required to meet standards and attain results in order for citizenship goals to be met with specific indicators
- Sustainability: The shared sense of commitment and accountability links to an understanding of the business value of the initiative, creating the rationale for its longevity if implemented successfully.
To build integration, company leaders must also work with human resources to ensure that expectations are communicated clearly and continuously across the company, and that job descriptions are refined to include the implementation of, and accountability for, citizenship strategies and their goals.
Three Building Blocks of Effective Integration
Three facets of integration are necessary in order to realize the values of commitment, accountability and sustainability.
- First, it is critical that each internal stakeholder understands her role within citizenship, specifically the tasks she must deliver and maintain.
- Second, accountability for goal delivery, particularly against standards and metrics of the citizenship strategy, is key.
- Finally, in order to assume an integrated role in the strategy, each unit must understand the value its unit can realize through the initiative – through quantitative returns such as cost-savings or new potential revenue, or qualitative returns such as meeting stakeholder expectations and developing strong relationships and building trust with key stakeholders.
The clarity of each internal unit’s goal, accountability and value, as illustrated above, shows the shared commitment throughout the company. Most importantly, as the strategy’s alignment with the business becomes clear, the CEO and C-Suite leaders' buy in and agreement with the strategy becomes obvious – a crucial driver for further buy-in at lower levels.
Alignment with the Existing Structure
Leaders, now clear on their roles and accountability, can develop committees and teams to ensure the full implementation of the strategies, as well as a reporting process that tracks progress towards goals and informs and educates all on the progress.
Companies with effectively integrated structures have corporate citizenship committees on the company’s Board of Directors and, most importantly, a senior executive heading up the citizenship department who has direct access to the CEO and C-Suite. Further, the citizenship executive should have the ability to engage with all leaders throughout the company to communicate their value in the citizenship effort, ensure their involvement and engagement, and leverage the appropriate resources of all units throughout the company.
Integrated Structure Snapshot: Medtronic
Medtronic, a medical device company headquartered in Minneapolis, has a mission-based culture and a long history as a leading corporate citizen. The company engages leaders throughout the company at different stages of its citizenship strategy development and integration with engagement increasing as priority citizenship goals develop and prioritize, and an overarching strategy is formed.
Corporate citizenship core and leadership teams were first developed to help in order to ensure a coordinated process. However, Medtronic later discovered that engaging leaders individually to identify their challenges, priorities, and primary stakeholders increased effectiveness.
To accomplish this, the corporate citizenship team conducted interviews with senior leaders, and will soon initiate a materiality assessment to pair the findings with a set of long-term corporate citizenship goals, key performance indicators, and metrics. This proposal will then be presented to the Executive Committee members for approval.
While a coordinated citizenship strategy continues to evolve at Medtronic, the company has successfully managed to engage leaders on specific issues. For example, a management structure for Global Inclusion, Diversity and Engagement (GIDE) was developed to integrate diversity and engagement efforts into individual business units and employee groups and to secure their commitment and accountability to goals. Now, a second group is in formation to focus specifically on sustainability issues related to products and packaging.
As these teams each develop a clear role to play, accountability for specific goals, and a clear understanding of the value they can realize from corporate citizenship, Medtronic’s citizenship strategy will mature and benefit from the collective sense of sustainability.
Part II: Successful Corporate Citizenship: Building an Effective Stakeholder-Led Strategy
Part I: Why Strong CSR Programs Don’t Always Lead to Successful Corporate Citizenship