Saturday, December 26, 2009

what are csr consultants good for ?

You are about to develop, or rethink your Sustainability strategy. You are about to devise a program for advancng women in your business. You are about, finally, to write your carbon management policy. You are about to conduct, for the first time, an encompassing stakeholder engagement and dialogue process. You are pouring over your materiality analysis and wondering how to pioritize all those issues that came up. You are responding to queries from the CFO regarding the return on investment of the Company's community involvement program. You are wondering what the competition are doing in the CSR and sustainability space. You are contemplating a cause marketing campaign to boost sales and help the community. You are about to write your first CSR report. Or your second, Or your third. Or your thirteenth. Any of these hit home?  Because the next question is tougher. Should you hire a consultant?

After almost twenty years as a practitioner, I have now been a consultant for the past 5 years. Actually, I never held very high views about the contribution of consultants. You know, like the jokes.For example: Consultants are like people who borrow your watch to tell you the time and then walk away with it. Or the one where the consultant starts off to help become part of the solution and ends up being part of the problem. So why did I become a CSR consultant? I won't bore you with the biographical details, but now that I am one, I believe I add value. In fact, my clients believe I add value. Recently, a potential new client, a CSR Manager, asked me to help formulating a response to internal challenges such as: What do you need a consultant for? Why can't we do CSR in house? Prove that we need a CSR consultant!!

Hidden in these challenges are basic questions (doubts?)  about the value of consultants in any business activity, but also the view of CSR as a profession in its own right with specific areas of expertise. CSR is not something people do because thay have nothing else to do. Or because they are altruists. It's a profession like any other. Developing and evolving, but it is a profession.

Here is my take on CSR consultants and why they add value. Of course, there are CSR consultants and there are CSR consultants. Good and bad, as in any profession. How you select your consultant is another thing altogether. But let's assume, for the purpose of this exercise, that we are talking about  highly professional, competent, skilled, amicable and ethical consultants. (Oops, did I  blush?)

Use your internal resources  for core activities.  Consultants provide expertise which is not present in the organisation. It doesn't need to be present in the organisation. No CSR Manager of any business can be an expert in everything that is going on in the world of CSR, and doesn't need to be. The CSR Manager should be driving assimilation in the business, using a range of tools (which may include external proceses). The CSR Manager's job is about building CSR capabilities in the business. This needs different knowledge, skills and competencies than those a consultant brings to the table. Consultants are focused in their area of expertise. If they are good, they spend almost as much time maintaining their knowledge and updating their frames of reference as they do imparting it to clients.That's their core business. In the field of CSR, this means keeping abreast of daily developments and changes in the CSR/Sustainability landscapes, understanding the latest revision of the AccountAbility standards, knowing the content of the latest ISO26000 draft revision, knowing which Sector Supplements the GRI has issued, knowing who won the CRRA 10 reporting awards (ha! Gotcha, the voting is still on),knowing the EICC exists for relevant clients,  or the UNPRI, or the Equator Principles, or the UNGC, CEO Water Mandate, knowing who tops the CDP list, knowing which conferences are happening , knowing the outcome of COP15,  and its potential impact on business and the low-carbon economy (ok, that wont take long) knowing which are High Purpose and which are Vanguard Companies, knowing the state of upcoming green legislation in your country, and knowing what's trending and  how to leverage what's trending . And more. This reminds me of Malcolm Gladwell's brilliant book, The Outliers. The idea is that you dont get to be top in class at something because you were in the right place at the right time.  You get to be an outstanding achiever because you invested hours upon hours of developing your knowledge and skill. That's what a good consultant does, so that she can quickly understand your needs and make the right associations from the wealth of information overload that is floating around the CSR ecosystem, quickly analyse what's relevant for your business and make appropriate observations and recommendations. Why would a CSR Manager want to do all this? And how could a CSR Manager do all this without diverting her own attention from the core of improving business CSR capabilities. My clients, and I suspect my colleague consultants' clients, know that this high level expertise is worth budget, but not capex. Why buy the Chunky Monkey Machine when you can buy the Chunky Monkey? This, of course, assumes you want to deliver a good product - a good strategy, a good policy, a good program, a good report. Each organization has to judge to what extent this external expertise is necessary for them to achieve their objectives.

Save time not reinventing the wheel. CSR consultants have methodologies and tools and process which save time. I am working on producing a Communications on Progress for the United Nations Global Compact right now for four different clients, each with a different core business, a different need to communicate and at a different stage in their overall CSR Activities. Each facing different dilemmas and holding different hopes about what such a Communication process will do for their organization. Whilst the style, tone, content and length of each communication will be different, my base methodology and approach saves each client a significant amount of time. Same goes for Sustainability reporting. I hear many Companies who embarked on their first reporting process describing months and months of activities, some even more than a year. Consultants can, and I can prove this from experience with my own clients, reduce the lead-time for the reporting process, precisely because they have done similar work several times over and know the process, pitfalls and opportunities. Recently a client asked me to produce an analysis of various sustainability metrics for SRI Indices. I was able to do this in a few hours because I am so familiar with the tools involved. A newcomer to the field would probaby have taken twice the time.

Don't expect to see everything from the inside. CSR consultants are able to spot things that are dissonant within the organization that might not have picked up. A recent example is a client of mine who has outstanding "green" credentials, adherence to leading "green" standards, great green technologies and excellent tracking of all environmental metrics which show strong reduction of environmental impact over time. This, however, is not leveraged by the marketing function, and appears nowhere in the Company's marketing literature, product information or website. A clear instance of internal silos which a professional on the outside looking in can clearly see. I did so and pointed this out to the marketing team, and I will bet any money that this will be addressed in the coming months. No-one wants to waste an opportunity. Of course, this could have been spotted internally. But, it wasn't. I could offer many more examples from the the last few years and several clients. The plain fact is, that it's hard to see everything from the inside.

Sometimes, someone else needs to say it. Having been on the "inside" in global businesses for so many years, you just have to realise that sometimes, the internal voice is not the strongest one, no matter how right it is. Sometimes, the divergent (did someone say political?) forces in an organization prevent the right recommendation from winning the day. Sometimes, the perceived authority of an external expert is what it takes. This is why, for example, I was the one  to deliver training in sustainabliity to the Board of Directors of a leading financial services group, and recommend a Board procedure for CSR leadership, which the Board then adopted. Coming from the internal CSR Manager, this might have carried less weight. 

External reality is on the outside. CSR is about direct and indirect impacts. Direct impacts need to be managed internally, they are about how the organization behaves. Indirect impacts are the things an organization does that carry its influence  well beyond the scope of its internal actions. How does an organization know what impacts it is having? How does an organization know the context of the external reality that is is competing in? Dialogue with stakeholders, sure, but which stakeholders? What issues?  What questions? How can the organization know what it doesn't know? A good CSR consultant will have the answers to creating the picture of this external reality. A recent project of mine for a global client was to map the entire social media landscape for CSR communications in Europe and recommend a social media approach in Europe for their business. I knew how to do this. I spend half my life in social media and CSR. I knew what they didnt know and where to look for it. I could bring them their external reality. In other cases, and this is particularly relevant when we are writing CSR reports, clients sometimes need to be aware of competitive activity in the CSR field, because reporting naturally is an opportunity for someone somewhere to create a benchmark. We never start a report without first mapping all the relevant sector reports and listing all the material issues that show up. Of course, that could be done internally. But when the CSR Manager is spending all her time looking for and reading reports, she is not advancing CSR in the business.

Leave time to go to the beach. How much can an internal organization handle? A business has two choices, Resource up for all the internal needs to do any job, not just CSR related work. Or have a lean team focusing on the core value adding work and use external experts to provide what is not-core and / or is overly time-consuming. When all is said and done, work-life balance is part of CSR and if your CSR Manager needs to do everything in -house, unless she has a very large team, she may just not have time to go to the beach.

It's cheap. It's cheaper than getting it wrong (I was recently approached by a Company who write their first CSR report internally. The report is bad. They are now looking to hire a consultant to clean it up, correct it and upgrade it). It's cheaper than maintaining an expanded team. It's targeted expenditure to deliver improved business results over time. A good consultant should contribute more than the value of his or her fee, though sometimes this is hard to quantify with precision.

So there you have it. This is a totally subjective view. Bit like asking Santa what he thinks about Christmas. (note: seasonal flavour for this Boxing Day post).

Use of a CSR consultant should be a balanced decision based on:
  • Company CSR needs and objectives
  • Levels of familiarity with leading CSR practices and CSR expertise
  • Size of the CSR team
  • Lead-time for the CSR assignment or ongoing requirements on a retained basis
  • Budgets
  • Complexity levels of internal (CSR) processes.

Oh, and a good CSR consultant also tells his/her clients when they don't need him/her any more. Because you won't need your consultant forever. Which is one of the reasons you hired him/her in the first place..

elaine cohen is the joint CEO of BeyondBusiness, a leading reporting and social-environmental consulting firm . Visit our website at: www.b-yond.biz/en  

10 comments:

Fabian Pattberg said...

Hi Elaine. Thank you for this interesting post. I really enjoyed reading it.
Choosing a consultant can be a very difficult decision and I have found that most companies either go with one large consultancy ( the big 4) or a smaller one which has the "extra factor" in terms of specific sector expertise or network.
Is this your experience as well?

elaine said...

Hi Fabian, thanks for your comment Glad you enjoyed the post.

Yes, there is a clear tendency for large companies to select large-company consultants. Often because they think bigger equals better, or bigger equals safer. You and I know this is not the case. Often, the smaller consulting firm has a much stronger level of specific professional expertise, greater flexibility and attentiveness to client requirements, greater continuity over time, and higher value for money contribution. Of course, I am not objective, as i am often frustrated by the tendency of larger companies to pick what they feel is a safe consulting option, instead of truly picking the option that will deliver best overall value.
elaine

UKati said...

Hi Elaine,
Good post! What I see in Hungary is, that companies either go for big, or "international" consultants, or they go for NGOs. For some reason in CSR consultancy being an NGO is already adding some extra points to your chances of getting the job. No matter what the experiences or knowledge is behind. Maybe it is trendy to work with an NGO, or more probably it is the VERY LOW price for what NGOs give the same type of services. We see this a big problem in Hungary. An other problem is, that companies are not critical enough with the consultants. They get a document, and they accept it, they pay without question, and then tell us for example, that they do not like to work with consultants, because they cannot use the materials they get... And at that time they might have a new on-going contract with the same bunch, because they have the "name". It is very frustrating, I can tell you. We thought that good quality work will bring us more work. but sometimes I feel that companies only care about the price, and that they can say, they have done the project. They do not care wether it was bringing the advantages or not. One of our clients said at the project evaluation meeting, that they did not expect such deep auditing of their report, and that they have realised real benefits. That does feel good!
I also agree with you Elaine, that a good consultant tells the company if she feels, they are not needed anymore, or with this specific issue. Teaches the company how to fish, instead of giving them fish. We try to live according to this, and propose mentoring and coaching type of services rather than "fully consultant done" Projects. and of course trainings!

elaine said...

hiya Kati, thanks for your comment, NGO as consultants is a growing trend, i agree, and needs to be addressed with caution - the NFO must be professionally capable of providing the correct advice without conflicting interests getting in the way. And I agree selection of consulting "brand" names rather than quality is a frustration. Well done though on getting positive feedback. Hopefully they will tell their friends!
elaine

Bibhu Prasad Mohanty said...

Hi Elaine
You are absolutely right. But in India CSR consultants face several problems too. Their advises and ideas are usally not responded positively or recognised by coporates. Corporates usally are not aware of standards too. It is a different situation here.
with regards
Bibhu

108csr said...

Hi Elaine. I really enjoyed reading it. CSR is really important thing to do

Harsha Mukherjee said...

Very well written and I highly admire the knowledge transferred through the blog. As Bhihu mentioned, CSR is perceived very differently in India majorly towards "Philanthropy and NGOs". The need of CSR Consultants has to be understood by the companies rather than just trying to do everything internally. Presently, here the CSR reporting, Susainability and related terms are at a very nascent stage specially in Mid-Sized Companies which are widely present in India.

I aim to pursue Doctoral studies in CSR, what is the scope after that?

elaine said...

Hi Harsha, first, good luck with your Doctorate. I am sure that even in the Indian market, oppportunities are developing. Most markets start off with corporate philanthropy as one of the early manifestations of a CSR approach. But they have to mature. Just as Microsoft is now requiring companies to report, and P&G asks suppliers to fill out a Supplier Sustainability scorecard, so Indian companies wishing to compete in a global market must move forward with sustainability. And leading companies will raise the standard for the entire market.
Best, elaine

mr hegade said...

Hi elaine, i agree with you there is lots opportunities in Indian market.
India’s healthcare expenditure is considerably low as compared to other developed and similar emerging economies. Statistics state that this figure is less than half of the global average in terms of percentage, when calculated on GDP basis. In a bid to boost this number, the Indian government has passed a new set of guidelines for public sector undertakings under corporate social responsibility (CSR) activities as a major motivator. In India, the regulation of CSR is governed by clause 135 of the Companies Act, 2013, which was passed by both houses of the parliament, and had received assent by the President of India on 29 August 2013. As per the act, the CSR provision is applicable to companies with an annual turnover of INR 1,000 crore or more, or a net worth of INR 500 crore or more, or a net profit of INR 5 crore or more. The new rules will be applicable from the year 2014-15.

elaine said...

Thank you Mr Hegade for your comment. I think we are already seeing the development of the Indian market in terms of CSR, both through regulation and also throuh the realization that it's a way to create sustainable value. This post was written quite some years ago but it's still true today.

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