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Shifting the Burden of Proof
I’ve heard it countless times: my CEO (CFO, COO, board, etc) won’t support our corporate responsibility program unless it improves the bottom line. And with that bit of intimidating logic, we’ve all run off to come up with “business cases” to demonstrate the value of responsibility.
Now I’m all for intellectual rigor and I believe in the merits of proving one’s case -- financially or otherwise. But I’ve increasingly come to view this “show me the bottom line” attitude as a case of intellectual dishonesty and bullying. The finance jocks push the responsibility nerds off the swing set and we’ve bought their “logic” hook line and sinker. Here are the flaws in this argument...
First, pretty much every best-in-class example of corporate responsibility actually started the other way round. The leading corporate citizens decided to do the responsible thing because it was the right thing and then they figured out how to make it pay.
Walmart didn’t decide to source locally because it saved them money. They did it because they wanted to support their local communities and then they figured out how to implement it in a way that oh-by-the-way reduced transportation costs, improved inventory turns, and cut pollution. UPS didn’t decide to stop making left turns because it saved them money. They did it because it saved lives (most accidents involving a UPS driver that resulted in injury or death occurred when the driver made a left turn). Then they figured out how to use advanced planning software to do it in a way that saved time, money, and pollution.
Second, why is the burden of proof on the corporate responsibility professional or initiative? Let the experts do what they do best. Rather than shooing the CRO away telling him or her to come back with the business case, that’s the CFO’s job. Let’s have an adult conversation about what we value as corporate citizens and how we want to show up in the market and then have the financial pros figure out the business case. The key to making money off of a responsibility initiative isn’t just in picking the initiative. It’s in the execution. The financial and operational experts need to do that.
Third, this argument, of "show me the business case first," has bothered me for some time and I could never quite put my finger on why until now. CEOs or CFOs who raise this objection really want to say one of two things; either, "go screw yourself," or "I will only do what's in my self interest." Either way, that's not acting responsibly and it's certainly not being a good citizen. Even the king of self interest, Adam Smith, recognized the value of selflessness and that capitalism needed tempering by -- in his case -- good Christian values. St. Augustine warned against the excessive influence of libido, by which he meant "self-love". Self interest becomes selfishness when it blots out the needs of others. And this blind insistence on a "business case" can quickly turn into selfishness. We can't wrap ourselves in a demand for "hard data" and think we're acting with integrity.
The bullying has to stop and we have to stop it. The burden of proof doesn’t rest on proving that the responsible thing should have an ROI. The burden of proof lies on figuring out how to do the responsible thing in a way that makes the company money.
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