Global responsibility: What it takes to get it right

Global ResponsibilityWhat It Takesto Get It Right

L I a • VOLUME 29 , NUMBER 6 • jaNUaRy/fEBRUaRy 2010

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T

Being a best-in-the-world organization is no longer enough in today’s

business environment; global citizens and stakeholders are now

demanding that organizations also be the best for the world. In response,

more and more organizations are embracing the practice of global

responsibility. But to do so, they must meet a set of challenges, nurture

certain mind-sets, and take specific actions.

b y L a u r a Q u i n n a n d E l l e n V a n V e l s o r

he urgent issues of our time are global. Failing business models, climate change, and the increasing disparities between rich and poor are brought into instant awareness by rapid and interconnected communica-tion. People everywhere are revisit-ing the role of business in society because business, unlike government, is itself global, with unprecedented reach and influence. Business organi-zations are being asked, and increas-ingly required, to operate in more globally responsible ways—paying attention to not only their financial but also their social and environmen-tal impacts. Taking on this broader focus demands a systemic, long-term view, and a new understanding of both organizational leadership and business operations.

There are many ways to describe global responsibility (sustainability, corporate social responsibility, corpo-rate citizenship, community relations, corporate stewardship, and triple bot-tom line, for example). In this article we use the term global responsibility (GR) in a broad sense, encompassing the ideas of globally responsible lead-ership, social responsibility, sustain-ability, and corporate social respon-sibility. Businesses that intend to practice global responsibility must be more than just profit-seeking entities; they have an obligation to benefit society, limit the detrimental impact of their operations on the environ-ment, and demonstrate leadership in accordance with those principles. The idea of global responsibility sug-gests that businesses care for and are

accountable to all of their stakehold-ers in all aspects of their operations at all their locations around the world.

Operating globally requires orga-nizations and leaders to work across cultures with different value systems and across nations with different legal systems, political priorities, social issues, and languages. What one soci-ety sees as social or environmental responsibility might not be understood or permissible in another. Or what one culture sees as tradition might be illegal elsewhere. This complexity has great potential to overwhelm even the best-intentioned organization.

Furthermore, not much is under-stood about how organizations and individuals develop to deal with the expanded and integrated principles of leadership and sustainability in the context of global responsibility. GR increases levels of complexity in leadership roles. The broad calls for greater GR rarely acknowledge the leadership development work needed to make an organization globally responsible. Often the organizational culture needs to change as well.

To take on a GR agenda—setting the direction, creating the alignment, and maintaining the commitment to sustainability and other social issues—most business organizations must transform themselves from orga-nizations that prioritize short-term financial goals and shareholder returns into ones that balance the need for financially robust operations with care for the environment and for the inter-ests of a wide variety of stakeholders: employees, nongovernmental orga-nizations, and the local communities in which the businesses operate, for example. This kind of transforma-tion requires leadership development at both the organizational level (the development of a GR culture) and the individual level. Although many organizations may start with individual leader development or assume that the problem to be solved is a lack of individual leader capacity, developing individual leaders is neither sufficient

nor necessarily the best starting place for creating the organizational-level transformation needed for GR.

Although the capabilities required for leader effectiveness in global roles are certainly relevant and appli-cable to GR, our emphasis here is specifically on responsible leadership applied globally rather than on global leadership more generally. Moreover, we want to learn how to best develop both individuals and organizations to operate and lead in a way that produces positive financial, social, and environmental results around the world. And, of course, responsible leadership has both global and local aspects, in that what is effective prac-tice is frequently nuanced by local customs and values, religious tradi-tions, varying economic and legal structures, and interaction with a wide variety of social institutions.

THREE CHALLENGESLeadership development in the con-text of global responsibility is more specifically focused on creating organizational cultures that support financial, social, and environmental responsibility than are some well-known frameworks for developing what is commonly called global leadership. So in addition to the chal-lenges of global leadership—which include working across multiple time zones, country infrastructures, and cultural expectations—organizations trying to develop globally responsible business practices face the following three unique challenges.

Building and Maintaining Commitment to GR This is an ongoing challenge for organizations and for leaders, and yet it is the basis on which the align-ment of systems, processes, and priori-ties must be built. Although organiza-tional commitment to GR often comes initially from the CEO and the execu-tive team, the reality is that even when top-level commitment remains strong, the commitment of others to the impor-tance of globally responsible operations

often varies across an organization, from individual to individual, group to group, and one level to the next. It also varies over time depending on other contextual aspects such as economic conditions or competing priorities. Business downturns, for example, make it is easier for managers throughout the organization to conclude that the most important priority for decision making is short-term profitability rather than longer-term costs or other kinds of risk. So compounding the challenge of securing widespread commitment to the idea of socially responsible operations, another commitment is also required: a commitment to the hard work of bal-ancing competing priorities and accom-plishing other changes that must take place across the organization.

Embedding Globally Responsible Action into Business Operations Worldwide Fully implementing a globally responsible business strategy often means changing how the busi-ness works—its policies, systems, and processes—as well as how deci-sions are made, what takes priority, and what people understand about how they are to go about doing their jobs. To move GR strategy into the


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Laura Quinn is portfolio man-

ager at CCL’s Colorado Springs

campus. She holds a Ph.D.

degree from the University of

Texas at Austin.

Ellen Van Velsor is a senior

fellow at CCL. She holds a Ph.D.

degree from the University of

Florida.

A B O U T T H E A U T H O R S

everyday work of each organizational member, into each system and each process, into the organizational cul-ture, and into the very business case on which the organization operates, several things have to happen, each one presenting its own set of chal-lenges across an organization:

The implications of GR vision • and strategy must be understood through the lens of each business unit, function, location, system, pro-cess, team, and individual. Every employee needs to know what being globally responsible means in his or her own work. Organizations often encounter a series of challenges around communication on this issue.

People must be comfortable • and skilled at working across internal

boundaries of level and function, per-sonal boundaries of social identity, and external boundaries of organization, country, and region. In enacting GR, employees must deal with different standards of fairness or honesty, dif-ferent environmental regulations, and different social problems and so must be able to share best practices across boundaries of function, level, and region. In addition, both managers and employees need to feel empowered to act in the service of GR.

Management, and particularly • top management, needs to be seen as providing a sustained base of support for decision making that gives weight to GR. Whenever it becomes clear to

employees that the GR strategy is more talk than action, the commitment to GR organization-wide is diluted. This is true even in times of economic down-turn—a time when top leaders have a unique opportunity to demonstrate how important the GR strategy really is.

The organizational culture (col-• lective beliefs and practices) needs to be developed so as to enable genera-tion of direction, alignment, and com-mitment to GR across the board.

Developing an Organizational Culture That Supports GR Developing GR usually involves some degree of understanding and often transforma-tion of organizational culture (that is, of collective beliefs and practices) and also change in the beliefs and practices of individuals in the culture. As this suggests, change in beliefs and practic-es may be required of both leaders and those who may not be seen (and who do not see themselves) as leaders. In fact, one of the goals or outcomes of successful transformation may be that every employee sees himself or her-self as having a leadership role in the organization when it comes to global responsibility.

Beliefs about facts are important because they often drive behavior or leadership practice more strongly than do the facts themselves. And both individual and collective beliefs are important because although the beliefs of an individual employee will drive what he or she does in a particular sit-uation, collective beliefs are the basis for organizational norms about what kinds of decisions and actions are seen as reasonable and right.

The challenge of developing employee empowerment is closely connected to the challenge of develop-ing culture. It is not simply a matter of building the decision-making skills and confidence of individuals. It is also a matter of building a culture that seeks and rewards empowered behavior, and it takes time for people to gain faith that new practices will be sustained and rewarded. Yet


when employees do see that they are rewarded for, say, working in their day-to-day jobs to reduce a company’s environmental footprint, or becoming involved in a visible project with posi-tive social or environmental impact, the culture will change.

Each of these three main chal-lenges poses both a threat and an opportunity to an organization moving toward greater global responsibility. And it is clear that these challenges are themselves interrelated. But what is encouraging is that in organizations having good track records for balanc-ing people, planet, and profit, each of these complex issues has been effec-tively addressed by way of the beliefs and leadership practices that form the basis of a GR culture.

GR MINd-SETSCertain attitudes and personal phi-losophies play a significant role in creating or defining a culture of global responsibility. To some extent, individuals’ attitudes develop as a result of being in a GR-oriented company culture, and to some extent a predominance of individuals with GR-oriented belief systems creates the kind of culture that supports globally responsible operations. The individual and collective beliefs about GR support and inform the leader-ship practices that work to create the direction, alignment, and commit-ment that effectively integrate social and environmental responsibility into business operations. It is important to recognize these supporting belief sets so they can be further cultivated in organizations. Following are some examples of these mind-sets:

An Ethic of “Perform, Don’t Advertise” This is the belief that one should engage in responsible leader-ship with respect to social and envi-ronmental issues because it is the right thing to do and not primarily for the reputational benefits it provides. This belief also pertains to the idea that global responsibility is or should be at

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Certain attitudes and per-

sonal philosophies play a

significant role in creat-

ing or defining a culture

of global responsibility.

the core of every organization’s role in the world; it is a taken-for-granted aspect of how to run a business.

Seeing GR as a Powerful Idea and an Opportunity Most of the organiza-tions we have worked with feel they started their GR activities before the idea of socially responsible business was highly visible in the business or popular press. Most see themselves as organizations that have demonstrated care, particularly for employees and the local communities, from the time of their founding. So although most had long believed that corporate social responsibility is or should be the core of any business, once they became aware of a GR framework, they came to see that these are pow-erful ideas that could help them con-ceptualize and communicate about what they had already been doing and could form the basis for more focused action going forward.

Best-practice organizations see GR as an opportunity that can lead to strategic competitive advantage. Although an obstacle to GR culture change can be the belief that activi-ties of this kind are a cost rather than a potential source of anything benefi-cial for the business, in best-practice organizations, GR is believed to be a source of many important ben-efits (for example, reduced costs, new revenue streams, and improved employee recruitment and retention) and a catalyst for innovation, par-ticularly over the longer term. These organizations believe that because global responsibility asks them to see things differently, it also gets people thinking of their day-to-day work in a new light, often resulting in innovative products or services and improved systems or processes for the organization or industry.

Seeing GR as an Ongoing Process Requiring a Long-Term Perspective This mind-set is espe-cially important in facing the chal-lenge of managing priorities that may seem to conflict in the shorter

term. When making financial deci-sions and trying to decide between quarterly profits and the right thing to do, organizations that can take a longer-term view seem more likely to be able to use practices that reflect a both-and versus an either-or option. This kind of open-ended thinking catalyzes innovation of new products and services or of internal systems, processes, and business models.

Believing That GR Doesn’t End When You Leave Work for the Day In the organizations we have worked with, we have been impressed with the extent to which most individu-als, employees and managers alike, take seriously the need for personal commitment to global environmental and social change. People in these organizations believe that global responsibility (caring about one’s own environmental footprint and con-tribution to social justice) should be a part of one’s home life as much as it is part of one’s work environment. Indeed, a large proportion of people in these best-practice organizations believe in and practice recycling and energy conservation at home, mak-ing fair trade purchases, and making financial contributions to or doing volunteer work for local, national, or international causes.

ACTION STEPSAlthough mind-sets are important, the actions of leaders and organizations to create the direction, alignment, and commitment needed for global responsibility are even more impor-tant. Following are some of the most prominent practices that are helpful in addressing GR.

Support from Top Management The CEO is often the driver of GR efforts. This means that in the most sustain-ability oriented companies, he or she, along with the top management team, plays a central and active role in making global responsibility vis-ible, raising awareness about GR, and

exhibiting personal commitment to this agenda. Some of the specific prac-tices employed by these CEOs, chief operating officers, and other top lead-ers include introducing internal written and spoken communication channels that demonstrate their commitment and raise employee awareness, provid-ing special or targeted resources (such as money, staff time, and expertise) to projects that create social good either locally or nationwide, and creating or approving a formal GR position or group to spearhead or consolidate work in this area and to keep a strong focus on these goals. The creation of this position is often seen as a mark of the organization’s commitment toward sustainability and as an indica-tor of the seriousness with which GR is being pursued. In these cases, the position itself, as well as the person occupying it, is seen as a key driver of sustainability efforts. And finally, top management support is also shown through articulating a vision for what the globally responsible organization will be and creating strategies in sup-port of that vision and policies that are well aligned.

Creating and Aligning Vision, Strategies, and Policies Although articulating a vision along with a sup-porting strategy and policies is not always a first step in a firm’s journey toward sustainability, such state-ments create a foundation from which communications can be consolidated and activities already under way can be seen as important and as having executive and organizational support. Therefore, developing vision, strategy, and policies in support of sustainabil-ity is a key element of success. Having a clear vision for sustainability, devel-oping a clear sustainability strategy, and developing long-term sustainabil-ity goals that can be further specified in the shorter-term goals of divisions and units paves the way for smooth implementation of GR.

In best-practice companies, goals and strategies set from the top of the


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GR issues, most of these companies allocate resources to translate all GR materials (communications, policies, and strategy) into the languages most appropriate for the regions where these companies operate.

The ways in which messages about GR are framed and delivered are key to the idea of sustainability taking root in these organizations. GR leaders describe the recipe for good commu-nication as threefold: using a positive and compelling delivery, relating sus-tainability to the language of business, and relating the message to employees’ interest in meaningful work. Many managers view the way in which the message is delivered as particularly critical and believe it is important to use vivid examples, emotion, and creativity in order to communicate effectively.

Developing and Empowering Employees Employee empower-ment is either an explicitly stated core value or implicit in the culture, sys-tems, and leadership practices of best-practice GR organizations. In both cases, it is a value that is put into practice in decision making at the local level and within teams and that is also important for the idea genera-tion necessary for facing many of the challenges in implementing GR.

Empowerment is also an active focus for employee development in these organizations. In best-practice companies, mentoring, coaching, and training activities contribute to the responsibility efforts by providing not only the basic understanding neces-sary for empowered decision making but also technical training for spe-cific areas of operation and help and advice when obstacles are encoun-tered or energy for the work begins to fade. In addition to working on the formal and informal development of sustainability, employees are asked to contribute ideas for GR projects and processes and are allowed the author-ity to make decisions with respect to how to implement sustainability poli-cies into their regular work.

audits, certifications, and reporting are in place and active at the orga-nizational level. Business units are required to have clearly stated sus-tainable working procedures and stan-dards incorporated into unit goals and based on high standards set by senior management. The balanced scorecard is a tool often used toward this end.

In addition to having clear goals, units and unit managers are provided ample feedback with regard to their performance in implementing sustain-able practices and business operations (practices and operations based on consideration of people, planet, and profit), and managers receive periodic reports on their own progress as well as on company progress overall.

One example of accountability is an organization’s formal reporting of its sustainability efforts. Many organiza-tions develop annual reports and use the standards developed by organiza-tions such as the Global Reporting Initiative. These standards require that corporate global responsibility reports address the materiality, transparency, reliability, context, and completeness of the information reported.

Communicating GR Communication is a major contributor to the success of GR efforts in best-practice organiza-tions. The focus of GR communication in these companies is both internal and external and is often both top down and bottom up. Processes are in place for frequent senior management com-munication about the importance of social responsibility, current related activities, and progress on GR goals. Communication about global respon-sibility crosses all organizational levels and is incorporated into the regular orientation processes for new employees. And related to the fact that employee empowerment is valued and actively developed, employees are seen as an important stakeholder group and are actively involved in develop-ing sustainability in company opera-tions. To facilitate understanding and two-way communication about critical

organization, particularly with regard to environmental action and employee relations, typically go beyond com-pliance or what is required by law. Some strategies, for example, enable both business opportunity and social good. Organizations often implement these strategies by small steps toward major goals, making efforts that are consistent and frequent. The align-ment of vision, strategy, and policies in support of GR plays out in prac-tices such as investing in businesses or working with suppliers that sup-port a sustainability approach, using the balanced scorecard to chart and track sustainability goals, and build-ing the sustainability approach based on the core strengths of the business and the demands they face from both internal and external stakeholders.

Implementing GR Organizations incorporate sustainability principles into the day-to-day development and production of goods and services, the ways resources and waste are handled, stakeholder engagement, and the ways they think about and execute projects having to do with commu-nity, service, and corporate giving.

Practices that work to further inte-grate GR into the business include specifying actions or setting a spe-cific direction at a local level (rather than dictating a detailed plan from headquarters), so that socially or environmentally sensitive business plans and policies make local sense and have the greatest possible impact. It is critical to use processes for the discovery of stakeholder needs and to take those needs into account in plan-ning and implementing GR efforts and operations.

Accountability for GR Performance To make certain that GR efforts are continuous, the most successful tactic is to take substantial action in the areas of performance development and accountability, for individuals, business unity, and the organization as a whole. In successful GR orga-nizations, goals, formal measures,

L I a • VOLUME 29 , NUMBER 6 • jaNUaRy/fEBRUaRy 2010 L I a • VOLUME 29 , NUMBER 6 • jaNUaRy/fEBRUaRy 2010

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leaders is critical. Developing leader-ship for GR goes far beyond simply setting direction toward GR with a provocative vision and the corre-sponding mission and goals; it must also include actions to create align-ment and maintain commitment to the efforts, such as aligning resources, developing supporting policies, implementing globally responsible decision-making criteria, setting per-sonal examples, engaging with stake-holders, and developing a globally

responsible mind-set. The great thing is that there are also unintended ben-efits from pursuing globally respon-sible efforts: an increased sense of meaning, purpose, and energy instilled into the organization, as well as enhanced innovation and reduc-tion in waste (and therefore costs). In today’s environment these are critical, and not easy to come by.

The world is at a crossroads on many important matters, and one of them is leadership and how to run an organization that makes the world a better place for all. There is now a path for organizations to follow to do so: the path of global responsibility. And although this path will have con-tinuous and new challenges, facing such adaptive challenges is what leadership is all about, and indeed it will be one of the greatest opportuni-ties of this century.

across the organization or over time) highlights weaknesses and knowledge and skill deficits; it also points out the need for innovation and change. Of course, not all challenge is planned; it sometimes just happens and does not necessarily result in development. When it comes to developing GR and strategically using challenge to fur-ther the organization’s GR capabili-ties, a number of steps can help:

Inclusion of GR in recruitment • and selection processes

Inclusion of GR in educational • systems (such as employee training and development programs)

Development of GR goals and • objectives

Inclusion of GR in performance • and evaluation processes (employee and operational)

Development of GR decision • criteria

Development of special proj-• ects and assignments related to GR (linked with organizational goals)

Each of these activities will serve to advance an organization’s GR strategy while pushing the organi-zation out of its comfort zone of accepted processes and practices.

dEVELOPING LEAdERSBeing a best-in-the-world organiza-tion is no longer enough in today’s business environment; global citizens and stakeholders are now demanding that organizations also be the best for the world. Many firms and their lead-ers are now repurposing themselves as globally responsible operators in the worldwide economy. Leadership plays a significant role in how an organization comes to be globally responsible, and yet the connec-tion between leadership and global responsibility is barely understood.

CCL is addressing this gap, and much of what it has learned is shared in this article. A major conclusion is that leadership for global responsi-bility is different, and therefore the development of globally responsible

Acting Ethically Supporting ethical action practices is often understood by members of best-practice organizations as a display of individual and organiza-tional behavior that is in line with the company’s GR vision, values, strategy, and stated goals. Many leaders in these organizations exhibit GR behaviors at work and at home (for example, recy-cling and doing more with less) and are seen at work as being consistent in their words, decisions, and deeds.

As an organizational practice, sup-porting ethical action can take the form of using participative processes for decision making. Although not necessarily ethical in themselves, participative processes are a tangible demonstration of valuing employee empowerment. The process also pro-vides access to the widest set of views, particularly important when operating far from a company’s home base. In addition to participative processes, in some of these companies there is an explicitly stated triple-bottom-line criterion to which employees and managers can refer in making almost any operational decision. This works to ensure that the principles of GR are kept front and center so as best to support ethical, globally responsible decisions when priorities may become unclear or a situation is complex.

SUPPORTIVE CULTUREClearly the many challenges compa-nies face play a role in the develop-ment of global responsibility. Having to overcome obstacles on the way to more globally responsible business operations helps an organization learn best practices and processes for creat-ing and maintaining a culture sup-portive of GR. Just as with individual development, events can challenge organizations to reexamine well-worn practices and beliefs and catalyze organizational action. Challenge in the form of punctuated events (such as environmental accidents or ethi-cal breaches) and obstacles to change (such as commitment that varies

The ways in which mes-

sages about global

responsibility are

framed and delivered

are key to the idea of

sustainability taking

root in organizations.

Global responsibility: What it takes to get it right

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