Hindustan Unilever's Shakti Programme
Ideas for Leaders #071

CSR: Creating Value through Partnerships

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Key Concept

Corporate Social Responsibility initiatives have overcome the stigma of being a distraction; something to be suffered. Smart companies now recognise CSR as an opportunity to significantly strengthen their businesses – while building and renewing human, social and natural wealth. Finding the right partner is absolutely critical to the success of a CSR strategy; and there are steps that can be taken to ensure a partnership co-creates value for both business and society.

Idea Summary

Most companies now understand the importance of corporate social responsibility (CSR) and recognize it as a tool to strengthen their businesses while contributing to society at the same time. The challenge they now face is how to deliver CSR strategies and create real value.

This Idea offers suggestions to help executives move towards policies that truly co-create value for their business and society. However, there is no simple formula or easy answers on what to do or how to do it; rather, a step-by-step approach following guiding principles should be taken.

Take, for example, Hindustan Unilever Limited’s Project Shakti; they overcame the challenge of reaching and serving India’s rural markets by actively seeking to understand critical societal and organizational needs. They partnered with three self-help groups that appointed female entrepreneurs in chosen villages. Their success was evident by 2008, when Shakti had provided employment for 42,000 women entrepreneurs covering nearly 130,000 villages and 3 million households every month. In the same year, the company’s sales through the project approached $100 million. Another example is of Unilever’s Lipton unit, which initiated a pilot program in 1999 in Kenya to apply company sustainability principles to the production of tea.

Partnering is key to CSR strategies. They must be grounded in mutually-beneficial value-creation potential, just like any other strategic initiative. Both the Unilever examples demonstrate this: short-term (in the case of Shakti) and long-term (in the case of the tea project). 

Business Application

Three guiding principles to create value through CSR:

  1. Concentrate your CSR efforts: the greatest opportunities will come from areas where the business significantly interacts with society
  2. Build a deep understanding of the benefits: be open enough to understand issues both from a business and a societal perspective.
  3. Find the right partners: those that benefit from your core business activities and capabilities, and that you can benefit from in turn.

The Perfect Partner: If you are struggling to identify the long-term or tangible benefits of a partnership, or if most of the benefits are one-sided, then you must go back and ask if significant mutual value creation is going to be possible through this opportunity. The following dimensions should be considered: time frame; nature of benefits; and benefit split.

These are the critical questions that will need to be asked:

  • Do we have a clear understanding of the entire array of benefits and the associated business case, on which we can focus, assess, and manage the potential CSR activity?
  • Does the activity focus on fundamental value creation opportunities, where we can really partner with society to realize simultaneous benefits?
  • Are the opportunities significant, scalable, and supportive of our overall strategic priorities?

In order to ensure that the hard work involved in planning a partnership, establishing trust, assessing benefits, etc - is all worth it - executives must go in with a long-term commitment, engage the entire workforce, and lead by example.

The latter starts at the top: taking action, rather than speaking about it, and keeping up the momentum even when targets are far in the future.

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Authors

Institutions

Source

Idea conceived

  • 2009

Idea posted

  • January 2013

DOI number

10.13007/071

Subject

Real Time Analytics