By Rajiv Tewari, Founder, Journos.in, based on a conversation with Anil Patni, Senior Expert, Public Diplomacy at DAI, working with the EU Public Diplomacy & Outreach in India and in the SAARC project. Anil started his career as a Journalist with the Times of India Group and subsequently moved over to work with the British High Commission, USIS, European Commission, Tata BP Solar and Bharti Walmart.
Business management as a discipline has always been evolving and there is a growing school of thought that businesses need to go beyond their day to day business to cater to the social needs of the communities in which they are situated. Even from a limited hedonistic perspective of the average business leader focused on the next quarter’s results, Corporate Social Responsibility (CSR) can do wonders to the revenues and profits of an organization besides of course giving it social status and respect. The trust factor generated through CSR can be far more effective than any other form of engagement with the target groups. What is more is that CSR generates a favourable word of mouth at a far lower cost than conventional advertising and promotional tools. So even from the cold calculations of the annual financial statements, CSR makes strong sense.
A growing tribe of CEOs and CMOs is realising that the trust factor attracts good clients who may be willing to pay a premium on services as they believe that their money is being spent on a dependable brand and the surpluses will be used for a good cause, or at least there is a feel good factor in getting associated with a do-good brand. Various reports indicate that the organizations with a good CSR programme are able to retain and attract better talent. Business associates trust such organizations and everyone associated with the brand communicates about their association with a sense of pride. It creates a win win situation for all.
“While working for the Tata Group, I noticed how our solar powered home lighting systems which could run one fan and two light bulbs were a bang on success due to the fact that we fulfilled a basic need of having electricity at home with an affordable solution. Certainly the image of the TATA group as a socially responsible company helped us all the way. Banks were willing to trust the Tata brand so they supported us through easy processes. The villagers in remote areas of UP, Bihar and Chhattisgarh trusted us for the quality and price so they bought from us in large numbers. The Government too came forward to support the initiative through subsidies” said Anil Patni. This initiative succeeded in creating a socially and economically sustainable model with a win win equation for all the stakeholders. “This was a for profit model of social enterprise with inbuilt elements of CSR for our company Tata BP Solar” remarked Anil Patni. What is important is that many companies picked up the idea of providing solar lights in rural areas through both individual home lighting systems and village level solar micro grids as a CSR initiative. This created a win-win outcome for all.
I had a similar experience at the Indian Express Newspapers, Delhi where in a single year 102 out of 110 large non advertisers began to patronize the newspaper due to a social campaign titled as “Why Position Your Brands in the Mind When there is Enough Place in the Heart”. Most of the non-advertisers and their advertising agencies believed that the Indian Express was a highly biased political paper. The campaign showcased a large number of stories on the girl child, old age, environmental issues, physically and mentally challenged to quote just a few examples. CEOs were invited to use free space for their brand advertising by picking up real stories from the Indian Express. They soon realized that the Indian Express was more of a social crusader than a biased political paper.
Realization of this fact created a huge change in the mind set and the conversion figures in terms of non-advertisers to advertisers was something none of us could have imagined.
Anil has observed this phenomenon across the continents while working for organizations like the European Union, British High Commission and USIS. He has observed how the differences of opinion melt away on causes that are universally accepted to be good for the society. An excellent example of this was the Bharti Walmart Training Centres which were set up in PPP mode with the State government in cities where Bharti Walmart set up its wholesale stores such as Amritsar and Delhi. The company invested its CSR funds in training the local youth (12th Class pass) in retail trade who then had the possibility to be absorbed by the company or another retail company. This initiative also helped the company in enhancing its reputation with the state government – who were partners in this enterprise since they gave space in the existing vocational institutes (ITI s). It also made available a pipeline of locally available trained youth for the manpower requirements of the company. This is another example of a win-win situation through CSR for all parties concerned which I experienced first-hand, said Anil, who was the General Manager Corporate Affairs for the company with direct responsibility to deal with the state governments for this activity.
MNCs entering India find it easy to consider partnerships with organizations which have social respect and are not just money making machines. This is yet another reason for the companies to adapt CSR as a central part of their strategic plans.
Imagine the impact corporates can create by effectively managing the CSR programmes, now also mandated by the government, in areas like education, healthcare, water conservation and so on. India has seen several successful social enterprise based revolutions. For example the National Dairy Development Board’s launch of the world’s largest social enterprise in milk production had converted India from a milk deficient country to the world’s largest producer of milk. Green Revolution led by the Government of India itself had made us self -sufficient in food. Corporate initiatives with the support of the Government can go a long way in social enterprises to flourish and grow to make the India story even more powerful.
Social Entrepreneurship is being talked about around the world as the right way forward. Blind chase for money has resulted in huge dis-balances in the society and has damaged the environment so badly that our very existence is being threatened. However, at the same time, it is heartening to note that the governments as well as the businesses across the globe have not only recognized the need for CSR but are aggressively pushing it too.
India’s Finance Minister, Arun Jaitley in his address to Rajya Sabha has recently shared that about Rs 6337 Crores were spent on CSR during the year 2014-15. This indicates that the companies are recognizing the values of engaging with all the stakeholders from a societal benefit point of view too. It is also very encouraging to note that technology is being used effectively for monitoring as well as for reaching out to remote areas geographically. This is important for ensuring that the private as well as public initiatives have transparency on CSR spends.