Walking the Talk on Corporate Social Responsibility (CSR)
Cool Companies magazine 2007 Vol 2 Issue 1
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We know that companies that are mission-driven and have a triple bottom line (people, profits, planet) behave differently than if they were just profit-driven. Now it’s time to walk the talk. We asked some Canadian entrepreneurs who describe themselves as Corporate Socially Responsible (CSR) to give us examples of how their CSR thinking impacts the decision they make on a daily basis. Here are 5 stories.
Being honest and open in a lawsuit
Desire2Learn Inc of Kitchener-Waterloo, Ontario (desire2learn.com, 150 employees, founded 1999) develops and markets e-learning software that facilitates teaching and learning in academic institutions, governments, healthcare and companies. In July 2006, Blackboard Inc., who is a much larger competitor from the US, filed a patent infringement suit against Desire2Learn. Since the patent covers a large portion of e-learning, it has been brought into question whether it should have been granted in the first place. As Michael Geist, law professor at the University of Ottawa, has pointed out, “while from a purely financial perspective, it is clearly in Desire2Learn’s interest to settle, the broader negative implications of a settlement would extend to the entire online learning market.” In other words, if Blackboard wins, it will have the right to sue every company in the e-learning space, including open source initiatives. Desire2Learn is fighting at significant cost.
However, Desire2Learn is a company with values in line with corporate social responsibility. Here, Desire2Learn’s Founder, President and CEO, John Baker, outlines his company’s values and communication strategy and shows us how this has shaped his approach to challenging the lawsuit:
“I think, for starters, you have to have a clear purpose. Our primary purpose isn’t to make quarterly financial objectives, and we make that very clear with our clients and staff. In our case, we are in business to improve teaching and learning worldwide. And if we do a fantastic job at enabling client success as our #1 priority, growth and profit will fall out of that.You need to make your values very clear. In our case, our values are innovation, relentless improvement, passionate spirit, and collaboration – not only collaboration internally, but collaboration with partners, clients, and others within the industry to continuously improve; we are not looking o create technology in a vacuum. When we list our values for our stakeholders we also put our clients first, employees second, community third, and our shareholders follow [thereafter]. We state clearly that we place tremendous value on the output we create for our clients as well as our participation in the communities in which we work and do business.
We actually laid out our philosophy in how to communicate. For example in the patent suit, the first thing we did was inform our staff the next morning [John was notified the evening prior] about the situation and how we were going to deal with it. From there, we immediately went out and communicated with our clients.
One of the unique things about Desire2Learn is our open communication. We are honest and we don’t run away from an issue. We tackle issues head on, and with a lot of force. And that makes us unique, I think.
It’s been going very well. It’s always a risk when you open yourself up. Many people would be, “Oh no. Our clients are going to run screaming to the hills.” In our case, we don’t believe that. We feel that we have built an open and honest relationship with all of our clients and with our staff. Then when there are problems that arise, the more they (our clients and staff) know about them, the more supportive they are going to be helping us through those issues. This relates to our value of collaboration.
We’re working with clients, partners, competitors, and with the entire education sector to resolve this patent issue. What we are really trying to exemplify here is the fact that we are using this [being open and honest] as an opportunity not only to defend our position but also to demonstrate who we are as an organization. I think even in your personal life, you know, you stand up for your principles. We are doing the same as an organization, standing up for what we believe in. [Desire2Learn also has a blog for their community about the patent lawsuit http://www.coolcompaniesmag.com/www.Desire2Learn.com/PatentInfo.]
You can’t change your personality or what you stand for overnight. In our case, we’ve been very deliberate in who we’ve been hiring and the approach we’ve been taking in business. Open communication is how we operate. For example, a few years ago a client’s server went down as the result of an ice storm. Before the client even knew their server was down or that there was even a problem, our staff had called to make them aware of the situation and were working to understand and communicate the issue to their end users. That openness is important. Even if the problem was our mistake, we’d still say, “This is what happened and here is how we are correcting the situation.” And that’s the only way you can learn from the situation and move forward. As an entrepreneurial company, you have to do that. Your clients have to be able to trust you. One of the key elements of trust is open communication.
We are seeing tremendous community support [in fighting the lawsuit]. It’s because of who we are that we’re receiving this support. Every client or potential client we’ve run into has said, “We support you.” We haven’t seen any negative impact on our business [because of the lawsuit]. We’ve seen lots of new clients come on board.
I think for any entrepreneur, the lesson to be had here is that if you are going to be faced with big challenges, don’t look at it as a challenge but rather an opportunity to demonstrate, in our case, what we’re made of as an organization, what we believe in and value, and how we will continue to work with our clients.”
How CSR influences new product direction
Quantiam Technologies Inc. of Edmonton, Alberta (quantiam.com, 14 employees, founded 1998) develops and commercializes new products based on nanoscale technologies aimed at enhancing the properties and performance of materials in extreme environments. Quantiam’s catalyst coatings for petrochemical furnaces have the potential to reduce energy requirements and greenhouse gas emissions in the manufacture of the world’s largest group of petrochemicals (olefins) for making plastics by 10% to 30%. Dr. Steve Petrone is Quantiam’s Founder, President and CEO:
[Are you a socially responsible company?] “Oh, absolutely. No, it’s not in our mission statement. I think it’s just ingrained in our culture. If you look at everything we try and do, the underlying commonality of making materials last longer, reducing costs to operate, reducing energy, and reducing emissions. In other words, trying to do things in a more clever, brighter manner so that yes there is an economic gain from the provision of that solution, but there’s a huge environmental impact that goes along with it.
In terms of how we treat employees, we think we are leading-edge within knowledge-based industries; our employees have excellent salaries and benefits, and unparalleled opportunities for equity participation in Quantiam and our spin-offs. Providing our employees the opportunity to truly share in the upside of whatever they create is very important to me.
[Can CSR be faked?] It’s convenient to be environmentally conscious, socially responsible and that. There is the element of convenience and then there’s walk-the -talk. We prefer the latter.
The technologies we develop can also be construed as platform and the applications we could pursue could take us into a broad range of industries. We will often look at some new applications and assess them from a social responsibility or environmental responsibility perspective. On many occasions we’ll say “Yeah, OK, the money there is good and it’s a pretty low hanging fruit [easy to do] but it’s not right.” And one doesn’t have to point too hard on what industry sectors are not exactly in the environmentally friendly space.
On the social side of it, we also run into the Canadian view of the world and shy away from aggressive military applications. Right now at our size we can comfortably decide to do that but if you take the technologies that we are bringing to market and then look at the lack of capital to exploit them fully – well, someone else’s money may have a different comfort zone on social responsibility. We also recognize that most of our people [employees] are Canadian. For me to pursue military applications that are offensive versus defensive, I would have a tough time with some of our scientists. I would not be surprised if some of them would leave the company. So I need to be cognizant of that.
[On CSR] It’s not in our mission statement, but it’s there [in our culture].”
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