Embracing the Principles of Best Practice

Best practice is often misunderstood, as what’s best for you is constantly developing and changing over time. What is best practice today won’t be best practice tomorrow. Also best practice for one organisation won’t necessarily be best practice for another, so it isn’t just about copying what everybody else is doing; but is about identifying your organisations specific needs to get you from where you are today to where you want to be tomorrow.

I often tell clients that you can find many reasons why you shouldn’t do the right thing in business; the trick is to find the one reason why you should. Best practice only appears daunting because we allow it to be, we create negative images in our head of unachievable goals and create unrealistic expectations and happily reject a solid business principle based on our uncertainties and fears. However best practice, when implemented correctly will;

 keep your organisation focused on realistic goals and objectives,
 have realistic timeframes for implementation, (that you’ve agreed),
 will take your organisation on a journey of incremental improvement and sustainable growth,
 will be ‘enjoyable’ and enhance job satisfaction as all employees will be contributing to organisational efficiency and improvement.

Deciding to adopt a best practice approach to business is not a difficult step and can start today. In its simplest form, adopting a philosophy of best practice, is asking you and your organisation if there are ways to improve your approach to business. In fact, best practice asks;

 Do you have a best practice culture, where the organisation looks beyond just continuous improvement to improvement via best practice;

 Do you fully understand and engage with your customers (and do you engage with those who aren’t your customers, but could be);

 Have you developed the optimum strategy for your organisation, and in doing so considered all the potential strategic options;

 Is your strategy being implemented in the most efficient and effective manner;

 Have you identified a credible and sustainable competitive advantage that is understood by the whole organisation;

 Have you the right people in the right positions;

 Are your leaders effective and leading and developing your leaders of the future;

 Are your business teams working efficiently together, at all levels, where the
focus is on the organisation rather than the individual;

 Do your systems, processes and performance measures support your strategic objectives;

 Does your organisation have a solid business foundation for it to grow.

So as 2011 approaches, decide that it is going to be a year when you and your organisation challenge your business principles and practices to become the best that you can be.

References

Brownbill, N. (2009). Be the Best in Business. Advanced Corporate Concepts: Cape Town

Defining Corporate Social Performance.

As the year comes to an end much has been written about corporate social responsibility, with many organisations adding socially responsible statements to their websites and mission statements. Some organisations have even established ‘high level’ positions, accountable for developing their socially responsible ‘footprint’ and then a few, a very few, have truly integrated corporate social responsibility into their organisational strategy and culture; and are year on year making a real difference. But how many organisations are actually measuring their contribution to social responsibility?

The essence of corporate social responsibility isn’t about the talk or the plans, but the continuous improvements generated through corporate actions, where corporate social responsibility is defined as actions and activities that improve and/or protect social welfare on a local or global level; and where corporate social performance is the ‘measurement’ of the organisations overall performance in improving and protecting social welfare compared to their leading competitors in the industry, measured over a period of time, (Luo and Bhattacharya, 2009, p. 201)

In their 2009 article Luo and Bhattacharya take the time to explain the difference between corporate social responsibility and corporate social performance, where “corporate social responsibility initiatives are related to but different from corporate social performance in several aspects;

First, the former refers to firms’ programs and investments in responsibility and/or sustainability, while the latter represents stakeholders’ assessment of the overall quality of those programs and investments (McWilliams and Siegel 2000).

Second, the former captures the noncumulative, one-time involvement in corporate pro-social behaviours, while the latter can be a proxy for a firm’s cumulative, historical involvement in these behaviours (Barnett 2007, p. 797).

Third, the former is a non-competition based construct, while the latter is relative to the competition in the industry. While firms invest in corporate social responsibility initiatives; corporate social performance, as the measure of firms’ aggregated historical social performance relative to competition, is what stakeholders reward the firms for and, therefore, what is potentially linked to firm financial performance”, (p.201).

Organisations need to take the next step in 2011 and not just make statements about what they’re doing and how much they are investing in social responsibility projects, but actually show how they are performing year on year. In this way, social responsibility performance can become a meaningful measurement of organisational performance and continuous improvement along with the other core performance metrics.

It’s no good organisations ‘promising’ social responsibility initiatives that aren’t congruent to their own business success, just to get on the social responsibility band-wagon, as this will only be a recipe for disaster. In fact Luo and Bhattacharya highlight that “too often, executives pursue a corporate social responsibility agenda without prudently considering broader contexts of the firm. Disconnected responsibility initiatives not in synergy with firms’ marketing strategy instruments can obscure many opportunities for companies to benefit society and can even lead to more harmful, unintended stock risk (good intentions end up with bad numbers; Porter and Kramer 2006)”, (p.210).

Organisations need to spend the time integrating corporate social responsibility into their formal strategic development processes – identifying the opportunities, the strategic options and the long-term benefits for their social focus and their organisational growth. As part of their long-term focus corporate social performance needs to become a key business indicator, not just for the strategic leadership but, for their stakeholders and their customers as well; as it won’t be long until both investors and customers are asking organisations to prove their achievements, in a meaningful, quantified and sustained way.

Finally, Luo and Bhattacharya “urge firms to conduct rigorous research to determine stakeholder perceptions of firm actions and more precisely map how corporate social performance and firm strategic levers interact and align before settling on the appropriate corporate social responsibility initiatives. In doing so, managers may build a more resilient firm that can leapfrog the competition and better ride out economic downturns”, (p.211).

References

Luo, X. and Bhattacharya, C.B. (2009). The Debate over Doing Good: Corporate Social Performance, Strategic Marketing Levers, and Firm-Idiosyncratic Risk. Journal of Marketing; Vol. 73, Issue 6, p.198-213.

The Gender Imbalance: Why Aren't There More Women Executives?

In an excellent Harvard Business Review article in March 2010, entitled ‘Women in Management: Delusions of Progress,’ Nancy Carter and Christine Silva mention that, “the accepted message on gender disparity in the workplace has for the past 10 to 15 years been one of acknowledgment and reassurance: Yes, women represent just 3% of Fortune 500 CEOs and less than 15% of corporate executives at top companies worldwide, but give it time. It’ll change. After all, women also make up 40% of the global workforce, with double-digit growth in certain countries. They’re earning advanced professional degrees in record numbers and in some areas surpassing men. Companies have implemented programs to fix structural biases against women and support their full participation in leadership. Women are finally poised to make it to the top, the argument goes. Not yet, but soon,” (p. 19).

Shareholders and other corporate owners should start demanding fully diversified boardrooms and executive teams, so that they can reap the strategic and performance benefits.

Robbie Melton, Chairwoman of Women in Bio, believes that “women and men need to do more to educate business leaders and stockholders that a diverse workforce affects the bottom line to the positive. There have been studies that show this to be true, but who is paying attention? Marc Pritchard, president of Global Strategy at Procter & Gamble, spoke at a global businesswomen’s conference about how a diverse workforce has increased P&G’s profits. He needs to tell this to groups of male CEOs, not women. Men need to speak out on behalf of women; only then will the paradigm shift,” (cited in Ibarra and Hansen, 2010, p.14).

Organisations shouldn’t pay lip service to the principles of effective talent management and should be looking for the best talent to take the organisation forward into the future It’s no good asking for the best talent to step forward and then saying, ladies where do you think you’re going..

A 2009 article by Susan Adams, Atul Gupta and John Leech, reports on a study of 61 female CEO’s between 1992 and 2004 that found, “women continue to be under-represented in the senior ranks of corporate executives, and the literature documents a variety of barriers to women’s advancement in the corporate hierarchy. These realities, combined with recent findings suggesting that women leaders are more willing to take risks than men, suggest that women may self-select into leadership positions at firms in precarious financial health. If true, such self-selection would increase the likelihood of ‘failure’, in that successful leadership outcomes are less likely at firms in precarious financial condition, and provide another possible explanation for the under-representation of women in the senior ranks of corporate executives. In their attempt to find any chance to move up, such less risk-averse women leaders may in fact be hurting themselves,” (p.10).

Anne Mulcahy (Xerox chairwoman) proposed a simple test for companies to see if they have systemic bias; “take the resumes of the last 100 people hired, remove the names, do an assessment of where the hires should be positioned, and compare that with where they were placed,” (Carter and Silva, 2010, p.20). Anne Mulcahy’s statement is true for all kinds of bias and possible prejudice and one would hope that this process is being carried out as part of the HR department’s internal audit on a regular basis – as this should be a requirement of good governance and compliance within all organisations.

Carter and Silva (2010) highlight how, “research shows that diverse talent supports innovation and business success, yet organizations underutilise and undervalue their highest-potential female talent. Given the commonly held misperception that the talent pipeline is robust, companies are at risk of allowing complacency to inhibit their competitive advantage. While progress has been made in many firms, more work clearly needs to be done,” (p.21).

References

Adams, S.M., Gupta, A. and Leeth, J.D. (2009). Are Female Executives Over-represented in Precarious Leadership Positions? British Journal of Management; Vol. 20, Issue 1, p.1-12.

Carter, N. M. and Silva, C. (2010). Women in Management: Delusions of Progress.
Harvard Business Review; Vol. 88, Issue 3, p.19-21.

Ibarra, H., and Hansen, M.T., (2010). Women CEOs: Why So Few?: Interaction. Harvard Business Review; Vol. 88, Issue 3, p.14-15.

Are Leading Organisations Effectively Using Social Media?

A 2009 study found that the CEO’s of top U.S. companies tend to avoid social media, according to UberCEO.com. The study found that most of the Fortune top 100 CEO’s were markedly absent from the social media community, including Facebook, Twitter, LinkedIn, and Wikipedia. The study specifically revealed that;

1) Only 2 CEO’s had Facebook accounts;
2) Only 13 CEO’s had profiles on the professional networking site LinkedIn;
3) Three-quarters of the CEO’s had a Wikipedia entry, but nearly a third of these had limited or outdated information; and
4) Not one Fortune 100 CEO had a blog.

But what is social media? Professor Nora Barnes highlights six prominent social media tools, (2010, p.9);
1) Blogging;
2) Podcasting;
3) Online Video;
4) Social Networking;
5) Message Boards; and
6) Wikis.

This list includes the micro blogging service of Twitter and the popular social networking sites like Facebook, LinkedIn and MySpace.

Looking at the Fortune 500, research has shown that 16% of the Fortune 500 companies were blogging in 2008, double the figure for 2007 which was only 8%, (cited in Barnes, 2010, p.10). Yet, Jose Esteves writes in the 2008, Business Strategy Review, after analysing the blogging strategies of the companies in the Fortune 500, that “blogs have moved from being sales support tools to becoming essential elements in brand advocacy and communication. There is no longer any question that corporate blogs have become a channel to engage brand enthusiasts (rather than simply engaging in light dialogue with consumers: ‘thanks for your feedback’ and the like) and a communication tool for stakeholders and potential investors,” (p.65).

Barnes highlights how “the adoption curves for different social media technologies are not the same. Interestingly, while social networking and blogging have enjoyed growth in actual adoption, the use of message boards, online video, wikis and podcasting has levelled off or declined. The addition of Twitter (considered both a micro-blogging site and a social networking site) in the latest study showed that 35% of the Fortune 500 are already using this tool for their business. In addition, as they ramp up their usage, companies are also seeking to protect themselves legally with 22% of the Fortune 500 companies having implemented a formal policy concerning blogging by their employees,” (p.13).

Some still believe that CEO’s aren’t embracing social media enough and Sharon Barclay states that “it’s shocking that the top CEO’s can appear to be so disconnected from the way their own customers are communicating. They’re giving the impression that they’re disconnected, disengaged and disinterested. Barclay said many CEO’s are cautious about social networking because of regulations, such as the Sarbanes-Oxley Act. However, she says the ones who are not involved in the rapidly growing form of communication are missing a great opportunity to connect with customers and raise their company’s profile.” (cited in IM, 2009, p.10).

In her 2009 article Lyne Noella, gives 10 simple tips to raise your visibility in social networking (p.17);

1) Join several networks;
2) Get a great head shot;
3) Create a compelling message;
4) Make invitations a habit;
5) Join special interest groups;
6) Update your profile regularly;
7) Share knowledge;
8) Use you network as a resource;
9) Stay alert to opportunities;
10) Engage.

Though maybe considered obvious by many, the tips above also highlight the need to invest quality time in developing ones social media activities. The underlying business principles are similar to talent management, in that you want to attract and retain the ‘best talent’ to your social networks, where this talent should be both current and future focused.

Finally as Barnes mentions, “the continued steady adoption of blogs and the growth of Twitter among Fortune 500 companies demonstrates the growing importance of social media in the business world,” (p.13). “In his own blog, Jonathan Schwartz, President of Sun Microsystems says that we’ve moved from the information age to the participation age, and trust is the currency of the participation age,” (cited in Esteves, 2008, p.65). Esteves concludes that “at best, corporate blogging is about leadership, visibility and conversion in the digital world. It is an excellent way for CEO’s to express their opinions and visions about their companies and about topics such as corporate social responsibility, diversity, market sector evolution and even crisis management,” (p.67).

So how social media savvy are you and your organisation?

References:

Barnes, N.G. (2010). Tweeting and Blogging to the Top. Marketing Research. Spring, p.9-13.

Editorial. (2009). CEO’s Cautious About Social Networking. Information Management, Vol. 43 Issue 5, p10-11.

Esteves, J. (2008). Where is your blog? Business Strategy Review. Vol. 19, Issue 4, p.62-70.

Noella, L. (2009). Ten Tips to Raise Your Business Visibility Through Social Networks. Financial Executive. Vol. 25, Issue 9, p17.