Sustainable Public Financial Management

1st Aid Blog Forum: Corporate Social Responsibility

Doug Hadden, VP Products

“Corporate Social Responsibility is here to stay. It’s part of the global humanitarian context, for better and/or for worse. As humanitarian relief and development professionals we have to deal with CSR.”

The Talesfromthehood humanitarian aid blog (@talesfromthhood)

Is CSR a fad?

These are early days for corporate social responsibility. Some businesses are seeking new ways of philanthropy. And some are leveraging CSR as marketing. Cynics either view CSR as an unneeded cost for shareholders or as another way business pulls the wool over our eyes.

Fake CSR and philanthropy are first phases of the maturing of corporate social responsibility.

Holistic CSR: CSR as Important Outcome

Businesses will move from “feel-good” philanthropy to where CSR will be an important business outcome. The bad news for humanitarian aid professionals: businesses will demand output and outcome reporting. Things that can be scorecarded, charted and presented in the annual report. Data that can show improvements on a quarter by quarter basis. This isn’t going to be pretty because humanitarian work does not easily operated on a quarterly basis. Outcomes are especially hard to measure in humanitarian aid as it is with any social impact.

The good news is that businesses will begin to see CSR in a more holistic manner. Businesses as an actor in society. My sense is that business will see humanitarian aid as one pillar to a more holistic view that includes:

• Leveraging business innovation to develop products and services designed to enable humanitarian aid, give early warning or help eliminate conditions that generate crisis
• Global supply chain concerns that will move beyond fair trade to supporting innovation in developing countries that improve the cultural understanding by businesses
• Networking with like-minded organizations where businesses will leverage core competencies

CSR as Business Model

The CSR discussion is somewhat dominated by large businesses. This phenomenon can hide the impact of a fundamentally new model – the social enterprise. For profit social enterprises are less risk adverse than traditional non profits. And, these businesses are driven to innovate in order to compete globally. Profit acts as validation as one pillar of triple bottom line reporting.

FreeBalance is a social enterprise bringing good governance to governments around the world. CSR is our business model. And, we have traditional CSR activities as well – primarily the support of SOS Children’s Villages and World Read Aloud Day in the countries where we do business. We also hire locally to build capacity in public financial management.

So, FreeBalance is not specifically in the humanitarian aid business. Public financial management assists in country development. Good government fiscal management can help governments to mitigate social issues and respond more effectively to disasters.

Our lessons for those businesses looking to assist humanitarian aid is:

• Lead from the top, listen to the bottom. Senior management must set the stage for social responsibility and then get out of the way and listen to employees.
• Consider aid organizations and aid recipients as customers. Leverage business techniques for customer innovation and customer support that have helped your organization to succeed.
• Build the multicultural footprint of your company. People from different cultures and backgrounds will help build your business globally and provide you with better perspective on how you can truly help.
• If you are a traditional business, consider building an innovation centre to re-purpose your products and services for humanitarian aid.
• Use social media – it’s the best learning tool.

by James Elrick

FreeBalance just signed on to this year’s World Read Aloud Day on March 9, 2011. World Read Aloud Day is a global event created by LitWorld to promote community bonding by reading aloud together. This event brings attention to the importance of literacy for human development.  

As the LitWorld website says: “With this global rally we show the world that the right to read and write belongs to all people and we lend all our voices to the Global Literacy Movement. Let the children of the world know we believe in the power of words and stories to change their lives. Visit www.litworld.org for great ideas on how to participate in World Read Aloud Day or how to create a special fundraiser to contribute to the mission.”

Last year’s event was a huge success for FreeBalance as numerous offices participated and read aloud at local schools, orphanages, community centres, and SOS Children’s Villages. FreeBalance offices that participated included: 

• Bishkek, Kyrgyz Republic
• Dili, Timor-Leste (East Timor)
• Guatemala City, Guatemala
• Kampala, Uganda
• Lisbon, Portugal
• Ottawa and Montreal, Canada
• Prishtina, Kosovo
• Ramallah, Palestine
• Ulaanbaatar, Mongolia
• Washington, D.C., United States

Timor-Leste

So what are you waiting for? Register today on the LitWorld website. LitWorld offers many learning activities for all ages of kids.

And if you can’t read to a class, read to your children, read to your goldfish, read to yourself on March 9, 2011.

And LitWorld has another challenge: “Read with loved ones and new friends in honor of World Read Aloud Day from now through March 9 and tally your minutes to help us reach our goal of 774 million minutes in honor of the 774 million people worldwide who cannot read or write.”

Every bit helps. “Words Changing Worlds,” as LitWorld says.

Be a part of it on March 9, 2011

By James Elrick

Good news. FreeBalance President & CEO Manuel Pietra is an awards finalist for the OCRI Next Generation Executive Award. OCRI is Ottawa’s economic development agency. It is the rallying point to bring business, education, research and talent together to create the winning economic conditions that allow Ottawa’s knowledge-based companies to thrive locally and compete globally. OCRI promotes sustainable economic development to maintain Ottawa’s high quality of life.

This award recognizes an individual who has had a significant impact on the success and/or transformation of their organization as a direct result of their leadership. The winner will be announced at the OCRI Awards on April 7, 2011 at the Hilton Lac Leamy. Here are reasons why Manuel is an awards finalist:

Unique Approach
In 2006, Pietra brought international experience to FreeBalance and introduced a new management team. FreeBalance was restructured into a global customer-centric company with a focus on government financial sustainability. The company added new customers in Canada, Pakistan, Panama, Palestine, Uganda, Kyrgyzstan, Namibia, and Liberia.

Pietra developed a unique approach to involve customers in the product development process, including the FreeBalance International Steering Committee (FISC). The steering committee is all about the government customers. FISC is an opportunity for public financial managers to share lessons learned. To discuss emerging trends. And, to set company direction. This is necessary for a customer-centric approach.

With the introduction of a new business strategy and customer-centric approach, FreeBalance is growing at a rate of 18-20% per year. And, the third quarter in 2010 has been the best in the company history. Global employee growth has kept pace as FreeBalance has been actively hiring to support the growing customer base.

FreeBalance customers span the globe and the user community includes public financial management (PFM) professionals in 18 countries, including Afghanistan, Canada, Iraq, Kosovo, Mongolia, Pakistan, Panama, Sierra Leone, Southern Sudan, and Timor-Leste among others. FreeBalance has more than 60,000 users around the world. FreeBalance software manages a global civil service workforce of 1.5 million and also manages a quarter trillion ($US) annual budgets worldwide.

Organizational Results
Pietra realized that values were important to sustain long-term corporate success. Effective PFM transforms countries. He implemented the Corporate Social Responsibility (CSR) philosophy at the core to the company mission. Global citizenship commits FreeBalance to international country development, knowledge sharing and service improvement.

Technology Results
Since 2006, Pietra has ensured that FreeBalance offers leading-edge technology that uses sustainable and proven open-source middleware and modern component-level Service-Oriented Architecture (SOA).

Unlike competitors, FreeBalance does not hide old technology with a web “wrapper”. The FreeBalance Accountability Suite is pure web. FreeBalance technology is optimized for government needs for scalability, usability and maintainability. FreeBalance software is built with reusable PFM components. This lowers total cost of ownership (TCO) for government customers and makes the technology more extensible. FreeBalance leverages technology best practices to achieve technology leapfrog over our competitors. FreeBalance offers full support for any commercial technology stack, so FreeBalance can support customer requirements with both open source and commercial technology.  

A year-end look at the “big picture” on technology-driven transformation of government

Doug Hadden, VP Products

Technology transforms the nature of government. From the phonetic alphabet through Web 2.0. From ‘yellow journalism‘ to Wikileaks. Transcending short-term news-worthy fads.

It’s an era of seemingly different and overhyped stories about government.  So many technologies over such long periods that we fail to notice the transformation.  Or the pattern of technology-induced transformation.

(For those of you unfamiliar with this notion of technology changing the nature of government, consult the work of Harold Innis, who described how the medium used for writing determined the nature of ancient empires, and Marshall McLuhan, who described the effects of technology on society.)

2010 exposed three interrelated government transformation trends:

1. Change of the government to citizen power relationship though increasing mobile, Internet and social networking usage
2. Global re-alignment, known as the “new normal” enabled through improved automated governance tools and ICT for Development (ICT4D)
3. Devolution of the nation state partly as a consequence of social networking and DIY content 

1. Government – Citizen power relationship

Key concepts:  privacy, transparency, data-based journalism, governance, surveillance

Key technologies:  Government 2.0, mobile, social media, encryption

Key stories:

• Wikileaks releases US government secret information
• Mark Zuckerberg of Facebook becomes Time person of the Year
• Perennial Internet transparency and privacy debates
• Research in Motion and encryption in India, and the UAE
• Bloggers take on governments in the Middle East
• Use of mobile technology to monitor elections in Sudan
• Impact of social media on the 2010 US Mid-Term elections
• Little Brother is Watching: Government 2.0 and Transparency

As the Las Vegas Sun reported, 2010 was a very digital year: “Ecuador’s president announced a state of emergency because of civil unrest via a tweet… People were engaged through social media, connecting to politicians, charities and causes. The American Red Cross raised nearly $33 million for the earthquake relief effort in Haiti via text messaging.”

Will Social Networking Transform Government?

What this means

1. Citizens can band together for social change or monitoring governments using untethered mobile technology leveraging existing civil society networks or self-organizing through social networking. Citizens can track even opaque governments meaning that transparency becomes the only way to present the government view: the emperor has no clothes.
2. Surveillance technology has become affordable and is starting to bridge a different digital divide. The gap between government and citizen surveillance capabilities will continue to narrow especially as citizens gain asymmetrical advantages. This will create more focus on performance in government. Long-term prediction: the debate over government size and cost will transition to the value of government. Dogma and opinion will be replaced by data and facts.
3. Technology generates more concerns over balancing privacy, surveillance, security and transparency. Should anonymity be promoted to encourage freedom of expression or should radical transparency, following the Facebook ethos, be used to encourage thoughtful debate? Is Julian Assange a hero for transparency or a criminal?
4. Slow migration from the “command and control” efficiencies from the analog world to improved efficiencies and effectiveness of the network model. Government organizations will continue to adopt Government 2.0 technology to improve internal processes and engage external citizens.

2.  Global Re-Alignment of the “New Normal”

Key concepts: technology leapfrog, governance risk & compliance, financial crisis, currency wars, aid effectiveness, ICT4D, globalization, competitiveness

Key technologies: mobile, aid management, government resource planning, transparency portals, government 2.0, government performance management

Key stories:

• Explosion of social networking in Africa
• Investment in technology clusters, particularly in the European Union
• Increasing impact of BRIC and emerging countries in international organization governance
• Recognition of the impact of ICT for Development
• Technology leapfrog in developing countries
• Increased focus on technology for transparency in developing countries
• Transparency and the “new normal” driving public financial management reform in developing countries
• Emerging economies driving global growth
• Push for aid effectiveness through aid transparency
• Government 2.0 as driver for economic innovation
• Currency wars as countries attempt to pump domestic growth
• World Bank opens up development information

Governance Matters

What are the incentives for government transformation? Globalization. Competition. Good governance. Transparency and accountability have become a competitive value. It’s part of the Global Competitiveness Report. Governance  and ease of business indicators are published by the World Bank. Transparency International Corruption Perceptions Index is highly publicized. The Millennium Challenge Corporation uses indicators to track effectiveness at meeting the Millennium Development Goals.

What this means

1. International organizations will be further re-aligned to reflect the growth in developing countries. (And, the ability for business to rapidly support the global market will be a competitive advantage.)
2. Governments will continue to focus on technology incubation to improve economies.  At the same time, governments will increasingly release government information to encourage economic activity as described by Tim O’Reilly as “government as platform”.  The impact of releasing government collected data to economic development cannot be understated. O’Reilly has pointed out the impact of GPS as an incubator for private sector innovation. There will be a gradual move away from traditional manufacturing incubation in developed countries.
3. Governments will become more transparent. There will be a higher adoption of budget plans, budget execution, civil service spending, civil service recruitment and procurement portals. Governments will leverage more transparency and accountability to become more efficient and effective. This will improve stability.
4. Technology will begin to bridge the information gap between producer and speculator. The farmer in the field will have the same commodity price information that the trader has.
5. There will be increased use of using country systems by donors in order to improve aid effectiveness. The pressure for transparency will increase on donors and citizens demand better results.
6. Government performance management will become a competitive advantage. The ability to achieve desired results, not just spend money on programs, will become a key element in political debate. This will transcend the dogmatic cleavages we see in many countries.
7. Information systems used by government will change to something that works rather than what vendors say works.  Governments will increasingly recognize where government-specific solutions should be used.

3. Evolution of the Nation State

Key concepts:  devolution, sovereignty, global village, corporate social responsibility, zombieconomy, old media

Key technologies:  Web 2.0, international public sector accounting standards, IPSAS, XBRL

Key stories:

• Eurozone crisis, yet Estonia joins Eurozone
• Croatia close to EU Accession
• Tea party impact on US Midterm elections
• Support of XBRL by governments like around the world
• Rise of the networked non-profit
• Trends in decentralization continue
• Kosovo declares independence
• Increasing importance of sustainability to consumer buying decisions
• Backlash to bonuses in the financial sector and to high CEO pay
• Maturing of Corporate Social Responsibility
• IPSASpalooza at the ICGFM Winter Conference

How Far Will Government Transform?

What this means

1. Continued evolution of the nation state

Marshall McLuhan predicted a global village created through an always present electronic age.

The printing press enabled mass production of books and newspapers in national languages. Languages were standardized. This technology led to the creation of the nation state. Radio, a “hot media”, enabled radical nationalism. Digital technology enables self-organizing. It enables political devolution and decentralization. It also provides the ability to manage at the supranational level. This supports the economies of scale for freer trade and regional organizations. Despite the current Eurozone crisis, countries continue to move towards EU accession and adoption of the Euro.

This global village with DIY organization will change the nature of government and the nation state. It’s still early days. Perhaps government become a competitive provider of services in the physical and virtual worlds as envisioned in the science fiction classic Snow Crash.

2.       More rapid impact on business and non-profit

The impact on the for-profit and non-profit world is more apparent. Non-profit NGOs with hierarchical structures are getting dis-intermediated. Networked non-profits and methods for direct donation from individuals to recipients are rises. Meanwhile, the concept that “the business of business is business” has been wildly refuted.  Business has come to recognize the need to have sustainable customers to have a sustainable business. Business also has become to understand the impact of practices on society. (Kind of a corollary to the impact that government has on business.)  New business models that focus on sustainability and real value, rather than what Umair Haque calls the “zombieconomy”.

Red Herrings

These represent a few elements of discourse that can distract us from what is really going on.

1. Outsourcing. Outsourcing could be a seen as an expression of the centre-periphery model in operation. Yet, effective use of outsourcing has been shown to have economic advantages in the short term to developed countries. In the long run, outsourcing increases stability in developing countries, raises living standards and, ultimately, will provide a more equitable environment. Salaries will increase in developing countries.
2. Globalization radicals. There is some validity that developed countries have exploited trade negotiations. Technology and transportation has created a global environment. The cat is out of the bag.
3. Tablets. Tablet, eReader, netbook and smart phone wars are unimportant in the big picture. These technologies reduce costs, reduce the digital divide and make citizens more agile. (In some ways, the real takeaway is that usability can dramatically improve adoption.)
4. Cable News. The increasing sensationalism of cable news is indicative of the loss of television impact on citizens. It’s the last desperate moves of an industry in decline.
5. Cloud Computing. Cloud computing is about deployment, agility and does not appear to have any material impact except as an enabler of citizen surveillance and Government 2.0.
6. Government will never Change. Lack of apparent Government 2.0 uptake and prevailing view that government culture  will never change suffers from a very short term
7. CSR Backlash. This backlash to CSR with the notion that it reduces profit or a scam are criticisms of the early days of a broad trend.
8. Donors and Country Systems. Donors will transition from thinking country systems are, as Richard Allen calls “courageous”, to realizing that this will reduce high transaction costs and encourage capacity building and anti-corruption. Also, many of the country systems have better use of public financial management good practices than donor systems.

James Elrick, PR Specialist

Have you heard the one about the socially responsible bank?

FreeBalance is a For Profit Social Enterprise (FOPSE) contributing to improved governance and development outcomes. We also hire locally to ensure independently sustainable implementations.

So it’s always interesting to see another company that adheres to FOPSE values.

And the surprising thing is that it’s a bank. I never thought that a bank could be a FOPSE, open and transparent. But Banca Civica proved it can be done.

Banca Civica was founded as a Spanish savings bank. In Spain, savings banks are private financial institutions organized as foundations. Banca Civica is concerned on savings, focuses on the poorer classes, concentrates in a geographical area, and allocates its profits (Banca Civica allocates 30 percent) to social and charity projects. Download the brochure >>

Banca Civica promotes a type of banking known as “civic banking”. Civic banking turns traditional banking on its head as it places the customer at the center of its business practices. Civic banking gives customers rights and in the process creates duties for the bank to follow.

At Banca Civica, customers have five core rights:

1. The Right to Know.
   Customers know how much Banca Civica earns with them.
2. The Right to Decide.
   Customers choose what social projects they will earmark 30% of the profits generated through the business they conduct with the bank. In 2009, over 6,500 non-profits and community-based organizations received more than $130 million. Banca Civica has a web portal that enables customers to pick social projects.
3. The Right to Accountability.
   The non-profits and community-based organizations explain to Banca Civica customers what they do with the money they receive.
4. The Right to Participate.
   Customers are able to support their social projects as volunteers.
5. The Right to Traceability.
   Customers know where their savings are being invested.

I can’t imagine customers at a bank in Canada determining the social project that bank profits will be used to help. I know Canadian banks have social projects, which I do value. But the bank chose them, not me, not the customers. Banca Civica listens to its customers and then does what they want. A true FOPSE with CSR as core.

Banca Civica even helps banks and businesses incorporate the principles of Civic Banking. They offer programs which provide those organizations with the benefits of the Civic Banking model adapted to social and entrepreneurial reality. Experts from Banca Civica work with other businesses in the implementation of advanced CSR systems, which combine economic profitability with social benefits. So not only does Banca Civica practice CSR, they also enlighten other organisations about the benefits of CSR and how to become a CSR. Very impressive.

The good news is that Banca Civica is opening branches in the USA. You can learn more at http://www.bancacivica.es/ (Spanish website currently).

Doug Hadden, VP Products

FMI PD Week ends today. As always, interesting. And, a signpost for change in the Canadian Federal Governments. Here are some observations:

• The theme of risk and control generated many interesting discussions. The increase in financial control was sited by many speakers as limiting innovation and improvements in productivity.
• FMI did not tweet this year because of the lack of uptake last year. That didn’t stop us from tweeting and creating a hash tag #fmipd10.
• Government 2.0 was not a major topic of conversation. (Perhaps this explains the lack of interest in Twitter.) Nevertheless, my presentation: The Emperor has no Clothes: Risk and Results in an Increasingly Transparent Government 2.0 World was well-attended. (The presentation uploaded to Slideshare was a daily favourite and had some retweets).
• The development of a performance culture in government and the use of performance management techniques was very evident this year. Many public servants found lessons learned to be valuable. Although, based on my presentation last year, there does not seem to be a recogntion that Government 2.0 is critical for Government Performance Management.
• There were many excellent keynote speakers. Senator Jacques Demers, a former hockey coach, had attendees spellbound with his lessons on leadership, constant learning, growth and team building. Robert Blain of Cirque du Soleil had compelling thoughts of how Corporate Social Responsibility and strong values can lead to growth and profitability.

FreeBalance President and CEO, Manuel Pietra, has been nominated for the for Peter Brojde Award for Next Generation Executive Leadership by the CATA Alliance.

How has Manuel achieved profitable and responsible growth for FreeBalance? Manuel has 3 lessons learned:

1. Decision-making tools
2. Customer-centricity
3. Social responsibility

Decision-Making Tools

FreeBalance leverages the “Six Thinking Hats” approach developed by Edward de Bono. The company was organized like most software companies when Manuel joined in March 2006.  The organization structure needed to adapt to better serve the market. And, the company needed to make numerous strategic decisions. Manuel assembled the management team. He provided training materials on the technique. He described some high level objectives. Then he left the room. Manuel believes that executives gain more control by relinquishing control.

The 6 Hats technique is used throughout the company and with customers. Members of the FreeBalance International Steering Committee leverage the technique when prioritizing product roadmap items.

Customer Centricity

Most software companies are not customer-centric.  Manuel realized that traditional operational processes used by software companies can result in inferior service and put barriers between  company and customer decision-makers. We reorganized the company and provided customer metrics as the main dashboard for success. We’ve written a lot about customer-centricity in the past.  Initiatives such as the FreeBalance International Steering Committee (FISC), support SWAT Teams and the FreeBalance Customer Exchange have improved support and products. This has aided our growth.

Social Responsibility

Many traditional business leaders believe that Corporate Social Responsibility (CSR) is company cost. Companies that engage in CSR risk profits. Manuel advocated the move to a For Profit Social Enterprise (FOPSE) where CSR is core to company decisions. We’ve talked about the benefits of this approach. We’ve even published a white paper on how to become a FOPSE.  The business media has been interested in this approach Manuel has explained how FOPSE companies are able to effectively achieve social goals and achieve growth.

Manuel Pietra outlines business case for establishing corporate social responsibility as the core of the enterprise

FreeBalance, a For Profit Social Enterprise (FOPSE) software company that helps governments around the world to leverage robust Government Resource Planning (GRP) technology to accelerate country growth, today announced the launch of a whitepaper titled “How to become a For Profit Social Enterprise (FOPSE)”. The whitepaper provides the business and ethic case for making Corporate Social Responsibility (CSR) core to company strategy.

The genesis for the FreeBalance paper was a series of oversubscribed articles from the FreeBalance Sustainability Blog. The FreeBalance Sustainability Blog, articles received substantial interest and attention from social enterprises and the broader public financial management community. The FreeBalance whitepaper outlines the FOPSE business model and identifies the critical factors to transform an existing enterprise to a FOPSE. Companies who become FOPSE commit to CSR as core to their business models.

“Building socially conscious organizations is a business imperative with global consequences. This type of social entrepreneurship amplifies the impact of corporate social responsibility,” said Manuel Pietra, President & CEO of FreeBalance. “FreeBalance is dedicated to helping governments around the world accelerate country growth with sustainable GRP technology. Good governance and achieving development goals directly impacts local economies and the lives of each citizen. Social responsibility is integral to what we do. That’s why we operate with a customer-centric approach.”

FreeBalance has successfully transitioned to a FOPSE by directly impacting the civil service and citizens in customer countries. FreeBalance GRP solutions are now used by 25,000 civil servants in Canada and 35,000 civil servants internationally. FreeBalance software solutions are being used to manage a global workforce of nearly 1.5 million civil servants and a quarter trillion dollars in annual budgets worldwide. The FreeBalance Accountability Suite has now been implemented in 18 countries across 15 different time zones and in more than 200 government entities at the national and sub-national level.

FreeBalance contributes to customer country economies by forming local partnerships and hiring citizens ensure independently sustainable implementations. FreeBalance GRP technology accelerates country growth and helps improve governance, demonstrate accountability in public finance and bolster citizen confidence through transparency. Public financial management reform is a key element of good governance and sustainable development. FreeBalance is also committed to supporting children’s programs in the developing world. FreeBalance has established partnerships with organizations such as SOS Children’s Villages to directly impact the lives of thousands of children. FreeBalance recently had a unique opportunity to make a difference in the lives of 1,283 school children in Timor-Leste.Under the leadership of Manuel Pietra, President & CEO of FreeBalance, the company delivered 1,283 packages of school supplies to the Escola Primária de Fatuada in Dili.

FOPSE embodies the FreeBalance commitment to international development, active participation in the global community, and social responsibility. There has been a major shift in business thinking over the past decade. Today’s businesses have a global impact and should be stewards of social responsibility in the countries where they conduct business. CSR is at the forefront of the minds of executives, entrepreneurs, professors and students. Diana Middleton of The Wall Street Journal published a comprehensive account on grassroots social conscience mandates of future executives around the world in an article titled “M.B.A.s Seek Social Change.”Harvard professor Daniel J. Isenberg recently published a critical study which defines how FOPSE extends CSR to the core of the enterprise and distinguishes FOPSE from traditional for-profit company programs.

FreeBalance has embraced FOPSE and published this whitepaper to encourage entrepreneurs to consider this approach.

FreeBalance_FOPSE_2009

About FreeBalance
Founded in 1984, FreeBalance is a For Profit Social Enterprise (FOPSE) software company that helps governments around the world to leverage robust Government Resource Planning (GRP) technology to accelerate country growth. Proven FreeBalance GRP products and focused methodology supports financial reform and modernization to improve governance, transparency and accountability. Good governance is required to improve development results.

FreeBalance is headquartered in Ottawa, Canada, with sales and support offices in Washington, DC (United States), Lima (Peru), Lisbon (Portugal), London (Great Britain), Pristina (Kosovo) and St. John (Antigua and Barbuda). FreeBalance solutions have been implemented in countries across the globe, including Canada, United States, Sierra Leone, Guyana, Pakistan, Mongolia, Afghanistan, Antigua & Barbuda, Timor-Leste, Republic of Kosovo and Panama.

by Doug Hadden

VP Products

Sponsors are abandoning Tiger Woods. Sports pages, gossip magazines and the blogosphere are full of Tiger stories. Most observers seem to agree that personal morality should play a part in corporate advertising. Few seem to question whether it was appropriate for companies to pay Mr. Woods for advertising in the first place. This exposes a lack of thinking about Corporate Social Responsibility (CSR) with many companies. Do these companies consider CSR when marketing?

Profit, People and Planet

Companies should consider profit, people and planet in marketing. There are situations when choosing a sports celebrity to promote company products and services is justified. The celebrity can attract new customers to help increase company profits. The celebrity can enhance the lives of the disadvantaged. And, the celebrity can help to promote environmental sustainability. I don’t know whether the advertisers for golf and tennis professionals consider the “Triple P” approach. CSR in marketing should ask these questions:

Does the sport directly attract customers?

There is a clear linkage between a sports and the manufacturer of sports equipment. Is it responsible to sponsor a yachting event if the company is not involved in boating? Is there a linkage between golf and automobile manufacturing?

Does the sport positively affect the disadvantaged?

One can make the case that golf and tennis are pass-times of the elite, despite programs to encourage wider adoption. It’s clear that Right to Play provides a value to children in developing countries. That organization does not appear to be handing out golf equipment.

Does the sport positively affect the planet?

Golf courses were originally created in coastal areas where the land had little value. Farmland has been converted to golf use. Desert courses require significant use of water and other resources to operate. That’s why there has been a movement to more sustainable golf courses.  This appears to be an exception in the golfing community. The Tiger Woods Foundationdoes promote “sustainable programs emphasizing education, youth development, leadership and financial literacy.”  It’s interesting that environmental sustainability is not described on the Tiger Woods main website or the Tiger Woods Design website.

CSR as Secondary?

Tiger Woods sponsors and the Tiger Woods group of companies have CSR programs. These programs appear to be silos. Of secondary importance. Neither sponsor nor celebrity seem to be considering social responsibility as operational imperative.

Focus on Wicked Problems

In his book, “The Designful Company“, Neutron President Marty Neumeier recommends that companies should focus on “wicked problems”. This advice is particularly apropos for companies looking to enhance Corporate Social Responsbility (CSR). Certainly very important for For Profit Social Enterprises (FOPSE).  A Neutron and Stanford University poll uncovered the top ten “wicked problems” faced today. Mr. Neumeier defines “wicked problems” as ”problems so persistent, pervasive, and slippery that they seem insoluble.”

It should come as no surprise that “Combining profitability with social responsibility” was found to be one of the wicked problems. Corporate Social Responsibility should take on difficult problems in order to rally staff to the important cause.