Its been an interesting year. so far. In just a few months two large companies have faced the wrath of customers, activists, regulators and shareholders. The customer is taking control. No longer just passive consumers, the customer expects a dialogue, specially when it comes to socially responsible activities. The brand is no longer what the company defines it to be but what the customers understands it to be – largely derived from their unique context and how the brand gets delivered to them.
The two trends of reputation and disruption are shaping Indian business today. The social risk of doing business is likely to increase as reputation and responsibility converge in a world of demanding customers. On the other hand material shortages, climate change and an ever polluted environment are driving most industries towards game-changing transformation. Renewable energy sources, reuse and recycling of waste as well as technological disruption are making companies rethink ‘business as usual’.
Businesses operate at any of the three levels of CSR. One, a reactive response to challenges from business environment; Two, proactive response to supply chain impacts and Three, strategic CSR that leverages capabilities to operate in competitive markets. While the journey towards transformation is at different stages in different industries, one thing is very clear – business needs to coexist with society and set new priorities for long term growth which positively impacts the world around us.
This is an opportunity for companies to develop new customer experiences, integrate newer technologies and build a world with minimal environmental impacts.
An analysis of CSR reports of over 200 Indian companies highlights an insufficient focus on customers. Employees, communities around factories and broad social goals like health and education get an increasing amount of focus.
According to the Global Reporting Initiative (GRI), material issues are those that “have a direct or indirect impact on an organization’s ability to create, preserve or erode economic, environmental, and social value for itself, its stakeholders, and society at large.” Best practice is to not only report on what is material to an organization, but to explain why it is material or relevant. Customer health and safety is a key area which is mostly given less attention.
This trend is common across almost all consumer facing industries. To begin with telecom, pharma, automotive and consumer goods. have several areas that need urgent attention:
Food Safety – The recent events have put the spotlight on concerns regarding what we eat. Nothing seems to be above board, fruit, vegetables, meat, poultry and packaged food all seem to be sub par. Fresh fruits and vegetables seem to be increasingly pesticide laden and packaged foods seem to have excess sugar, sodium, salt and other high impact ingredients. Milk allergies are seen to be on the rise, so are gluten and egg allergies. These can be attributed to two factors – lifestyle changes and ingredients that are now found as a result of food processing practices.
Food producers clearly have a responsibility to ensure that stringent tests are conducted on all inputs at all stages of the food items entering the value chain. And this push needs to focus on two key areas – trust and traceability.
Trust – to be confident that one’s consumption is safe. Traceability – to be able to verify the history and location of the food chain. This involves building supply chains that are transparent and provide an easy way to assess where contamination is occurring. Traceability improves product sourcing, reduces costs and ensures a healthy output.
However food labelling and packaging is an equally important yet unfulfilled promise by most companies. Food labels hide more than they disclose and packaging increasingly factors in plastic and non degradable material. The Indian consumers’ increased focus on health and wellness requires that food labels focus intensely on nutrition and increased product safety.
Road Safety: A rash of high profile automobile accidents has put the focus on automotive safety as well as raised a debate on how to improve road safety. Poor driving habits, drunken driving, unsafe road behaviour, talking and texting while driving and road rage are some of the key causes of our roads being unsafe. One of the major factors is the behaviour of road users – motorcyclists, pedestrians, cyclists and other three-four wheeler users. Given the fact that there is very low level of awareness on safe driving skills, a lot needs to be done in terms of training and educating users of our roads- right from the school children to senior citizens. In addition, Road Signs, Pavements, Crossings and Street furniture need a complete revamp in terms of design and applicability.
There is a bigger role that automotive companies can play in terms of how they educate, empower road users to practice and drive safely. Also, telecom and alcohol companies can become equal partners in solving the problem. One sees sporadic programs but no significant / measurable long term program has been seen. As part of our research we have noticed that a number of automotive companies advertise in a manner that compromises road safety. Also alcohol companies seem to advertise only during festive seasons about road safety. Onground action by most is missing. It is evident that road safety is a missed opportunity that needs urgent attention.
Patient Care – The context for CSR is incredibly complex in healthcare, because of the nature of the industry. While the industry seeks to cure illness, thoughts and actions of healthcare players need to be for the betterment of human health and wellbeing. Since the industry is intrinsically committed to doing public good, society has many expectations of a healthcare firm.
The expectation of trust is foremost. People expect effective, high quality medicines, attention and care at hospitals, absence of spurious drugs, ethical dealings and honesty. But is that all? As important as all the other aspects, customers also expect affordable health products and services. Unlike other businesses where price is set by the ability to pay, for the healthcare industry, price at times is subservient to public good. In a country like India where income disparities are large, social insurance limited and an increasingly polluted environment, public good comprising of access to medicines and care, affordability and ethical marketing rests at the heart of patient care.
It is well known that just providing private managed care is not the answer. Even when insurance steps in, it becomes prohibitively expensive to actually avail of it. The solution lies in the creation of models which have long term care at the centre and socially responsible practices that make it all happen.
A Culture of Safety and Privacy : Women’s safety, children safety, data protection, personal privacy, responsible driving are all ways in which corporates can set standards for employees and the way they interact with customers.
Take the case of personal information. It is a reality that it is available everywhere – with the pizza company, the e-commerce company, the utilities provider or even the courier who brings documents and products home. The risks are many – identity theft, fraudulent credit card purchases, money laundering with your PAN number and many more. Customer data protection and security becomes critical in a range of industries that acquire and manage customer personal information and most often employees and faulty processes cause data breaches.
Employee behaviour within corporate premises and outside plays a significant role in building the corporate brand. Companies are expected to be at a higher standard. The bigger the company, the higher the expectation. Safety, behaviour, data protection, privacy are some of the obvious blindspots. Employees need to be the flag bearers of these higher standards. In the event of an incident involving an employee or otherwise, it is now almost impossible for the company name to be hidden. PR activities are not enough to keep reputations intact. A culture of socially responsible behaviour needs to be the norm rather than the exception which is how CSR will actually become ingrained within a company’s DNA.
Flattening the Interfaces to Find Solutions
While problems seen unsurmountable, technology pervades everything from health to transport to manufacturing and agriculture. Mobile phones have connected everyone and tons of data is being generated every second. Could this power be harnessed for social good? Can the power of location, mobile, crowdsourcing and large data be used to flatten the interface between the citizen, the consumer, the company and the authorities? Trust that grows within the system because services, people and the providers are all interlinked in a ever evolving harmonious stream.
In the inevitable ingredients questions, about the food one eats, cosmetics and lifestyle products products that are consumed every day, a dynamically available information resource that informs a consumer about the health and environmental impacts of consumer products and companies is the need of the moment. Can one bring the power of sensors ( or the soon to be ubiquitous Internet of Things) to provide the information at every point and to every end user. Their context and their needs specific! The choices for healthier ingredients will be driven by the information that one has on our finger tips. A consumer push for products with less toxins and more healthy ingredients will propel companies to create better products. At the same time consumers could also lodge complaints, request for more information or quality testing.
Trust the consumer to make the right choices based on information. Flatten the interface to break barriers to information and choice.
Building transparency around the healthcare system is increasingly being considered as a powerful way to improve delivery and reduce costs. While information exists in silos in our vast health infrastructure most people dont know, the emergency services numbers, details of hospitals and doctors, pricing of services, numbers of blood banks. In some locations people don’t even know whether the medicine they have purchased is genuine or spurious? If they are doubtful they don’t know who to contact. The list is endless. A simple application that makes health information universally accessible on the mobile phone could go a long way in solving many of our information related needs around healthcare. Public health services in India are woefully short of reaching the urban poor let alone the vast rural population. While institutional health frameworks for urban poor and rural poor exist, they could greatly be strengthened though this simple mechanism.
The problem of road safety is not just one of poor driving but poor design and the inability of the everyday use to connect with anyone who might help. Safety on Indian roads requires a two-pronged intervention keeping the user at the centre. It entails the user becoming more informed and responsible, and at the same time assertive about making informed demands for a more efficient and sensible ground reality, i.e. the plan, design, maintenance of the roads as well as the policies that regulate public participation on them.
The overflowing drain, the dislodged stone, the non functioning street light could all do with a helping hand if one could just take a photo, check-in the location and more. This could be utilised by the company, the utility or anyone focused on related services. Rather than an adversarial approach that citizens and municipal corporations seem to be adopting we all need to recognise that at the end of the day we are all using the same roads and transportation mechanisms. Building trust and transparency is key to better cities and safer roads.
In conclusion, Corporate responsibility begins with simplifying the customer experience and creating safe guards at every step where the customer takes centre stage. A materiality assessment which includes a customer view would help companies in creating a CSR strategy which is both effective and impactful.
Brand Dashboards need to move from conventional thinking that track active trends, brand conversations to real time interfaces of service and information delivery. The customer need not worry about departments, designations and right email ids. There is a need for a simplicity project to flatten the many interfaces and focus on what is material to the customer. Brands that survive in this century will need to be trusted and social responsibility is integral to their actions.
Trust, Materiality and Responsibility can be a powerful combination in creating power brands of the 21st century. By making these core, CSR as we know it can actually become far more than lip service.
Article coauthored with Prof Utkarsh Majmudar and originally published in Economic Times – CSR Compendium