Richard Branson started talking about “doing good by doing well” years ago and multinationals across the globe are finally getting on board.

Not because they suddenly grew a social conscience, but because it pays.

CSR or Corporate Social Responsibility has gone global, with companies across the spectrum.

But increasingly, it is what investors, customers, employees and other stakeholders have come to expect and demand. Millennials — industry’s new and future customers — cast a particularly keen eye on companies’ commitment to social impact.

Microsoft, Disney, Gap, JP Morgan Chase, Mattel, Coke, Pepsi, India’s Tata Group and Suzlon Energy, Chinese battery maker BYD, Brazil’s Natura Cosmeticos.

“The better CSR programs, either in emerging multinationals or developed-country multinationals … are not just philanthropy, they’re strategic.”

Internally CSR attracts customers and investors, can be used as a recruiting tool and beefs up retention.

And keep in mind that corporate social responsibility isn’t just for big, wealthy companies. SMB and even solopreneurs are in a position to make a difference, especially in their own local community.

Read the article for ideas.

Look around for a project that excites you and all your stakeholders.

Then do it.

Talk and planning don’t count.

Flickr image credit: JustyCinMD

Lot’s of talk about creating a culture of innovation, but often that’s all it is—talk.

The most important factor in a culture of innovation is the ability to fail.

India’s Tata is a leader in creating a culture of innovation and Sunil Sinha, an executive in Tata Quality Management Services, discussed its approach recently at Harvard.

Sinha described a culture of innovation at Tata that includes employee-awards programs for both successful and unsuccessful ideas. What’s important, Sinha said, is that employees feel comfortable in bringing forward ideas, even ones that don’t pan out, and that they feel they work in a place that values fresh thinking.

The innovation culture has produced several notable products, he said. One is a water purification system that costs just $20 and produces enough water to keep a family of four supplied for more than a year.

Not only that, but in 6 short years, from the time its CEO publicly mentioned the idea in 2003, Tata Motors produced a $2500 car for sale in developing worlds; it’s a small, two-cylinder car that gets 55 miles per gallon and meets all of India’s vehicle emissions and regulatory requirements.

Done in spite of all the global pundits who said it couldn’t be done.

I speak with managers all the time who talk about their desire to enable a culture of innovation and when it doesn’t happen, whether through laziness, benign neglect, or more active negativity, take no responsibility and place the blame squarely on their people.

A culture of innovation starts not in talk or even actions, but in MAP (mindset, attitude, philosophy™) and its willingness to change.

Flickr image credit: http://www.flickr.com/photos/zedbee/103147140/ and Tata Motors

How profitable can a company be that takes social responsibility to its extreme?

What kind of corporate social responsibility is possible if Wall Street isn’t breathing down your neck?

For answers you need look no further than India’s Tata and America’s SAS.

I’ve already written twice about SAS, its amazing culture and the lengths they go to to take care of their people.

And then there is Tata, where Ratan Tata, Chairman of Tata Group, built a culture of innovation after India dropped its trade barriers.

… for his companies to survive and thrive in a global economy he had to make innovation a priority—and build it into the DNA of the Tata group so that every employee at every company might think and act like an innovator.

Notice it says every employee, not just the stars, designers or engineers.

Obviously good culture and good business, but not really extreme.

Extreme social responsibility follows a different path. In 2000 Tata Tea Ltd. purchased Britain’s Tetley Tea Company and shortly after sold the vast plantations in an economically underdeveloped community where it had been the largest employer for a century.

But the transaction was anything but routine. Instead of working out a lucrative deal with eager investment bankers, bribing local politicians to mollify them, laying off workers, and selling to the highest bidder, as some other Indian companies shedding a moribund business might have done, Tata Tea sold 17 of the 25 plantations to its own former employees. Layoffs were generally limited to one per household, and Tata gave a group of voluntary retirees enough cash to buy equity in the new company that was formed. (That company, Kanan Devan Hills Plantation Company [KDHP], still operates as an employee-owned enterprise.)

Although Tata Tea would henceforth maintain only limited business interests in the area (including some equity in KDHP), the company continued its active social role there. It still subsidizes a range of social services and KDHP employee benefits, including free housing for plantation workers, a private school, an education center for disabled children and young adults, and the newly renovated Tata General Hospital in Munnar. Tata still remains a major customer of KDHP, which helps guarantee a stable supply of tea at competitive prices.

Tata’s extreme culture is simple.

Since its founding in 1868, Tata has operated on the premise that a company thrives on social capital (the value created from investing in good community and human relationships) in the same way that it relies on hard assets for sustainable growth.

And at $70 billion it certainly is thriving.

Extreme culture is long-term and looks well beyond the next quarter and short-term profits.

Extreme culture is successful, but not in the US—Wall Street would never allow it.

Flickr image credit: Tata Group

Innovation is far more than the flavor du jour of the media world; it is the lifeblood of our planet. It is only through innovation that we will find the solutions to feed the hungry heal the sick and save the planet. And by “we” I mean the human race, not just Americans.

Today I have three fascinating articles on innovation that kick off a week of commentary on the subject.

Let’s start by looking at how Ratan Tata, Chariman of Tata Group, built a culture of innovation after India dropped its trade barriers. “… for his companies to survive and thrive in a global economy he had to make innovation a priority—and build it into the DNA of the Tata group so that every employee at every company might think and act like an innovator.” Notice it says ‘every employee‘, not just the stars, designers or engineers.

No matter the product or service, all companies are composed of two parts, one creative (informal) and the other operational (formal); this is also true for micropreneurs’ thinking even when they have no employees. Keeping the two functions equal so that one doesn’t dominate the other, whether in thought or resources, is a difficult balancing act—but one absolutely critical to innovation.

Last is the story of Symphony Services, an outsourced software developer who is taking the risky approach of outcome-based contracts. “Typically, clients pay Symphony a percentage of the contract upfront—the amount is negotiated based on their needs and circumstances—but withhold a percentage based on the outcome. This usually means delivering the promised product, in addition to other results such as improved efficiency, profits, and margins. As an incentive for the vendor to deliver the product on time, on target, with the promised effect, the partners might share the financial benefits, such as savings or profits, after the project is completed.” A gutsy, innovative approach, to say the least.

Be sure not to miss Monday’s post on IBM’s extreme innovation gamble.

Image credit: MykReeve on flickr

I read an article by Dev Patnaik that talked about the success of innovation with empathy vs. innovation without it. I found the examples used (Microsoft’s XBox and Zune) to be unimpressive in getting the point across, but it reminded me of two old (2006 and 2007) posts of mine.

Patnaik writes that “empathy is the ability to see the world through the eyes of another person. Unless new products or services connect with the lives of real people, design or marketing can’t do much to make them succeed.”

I’m always behind on trendy terms such as empathy, so I looked at the same issue through the lens of assumptions.

Here are both posts…

Assumptions are bad

Assumptions. They’re bad for your health, wealth, business and all human interactions. I’ve previously written about how they influence the workplace, but I saw a story this morning that really tickled me as proof of how costly assumptions are to businesses and entire industries.

The article is about how the bike industry found a way to revitalize a falling market with bikes that automatically shift gears. Here’s what caught my eye, “Shimano spent several years figuring out why ridership has decreased, and realized people wanted to ride for fun…The company was shocked to realize its efforts at making newer, more high-performance bikes weren’t winning over new riders.”

“We come to find out these people not only don’t want high performance, they don’t even care about it.”

Notice the final words, “they don’t even care about it.”

The assumption that high performance was critical came from people in the industry—people most likely to be classed as avid cyclists and to whom performance was a key issue, and that assumption was generalized to the entire population.

It’s always that way. Every time someone finds that their belief/attitude/assumption isn’t held by everyone, or at least by the specific group they’re focused upon, they are amazed and even shocked.

How many times have you read an article, such as the one above, and your reaction was, “Well, duh!” That was my reaction to the amazement expressed when performance didn’t matter to the general public.

“Duh,” is my reaction to my own assumptions when they get in the way of my human interactions.

And “Duh,” is my very silent reaction to many of the assumption-based management quandaries I deal with every day—also the managers’ reaction, not silent, once they identify it.

Assumptions And Innovation

Following up on my previous post about how the assumption that performance was the most critical buying issue in cycling helped flatten an industry, comes yet another example of how assumptions lead astray.

The new generation of game consoles from Sony and Microsoft focused on the brilliant graphics demanded by game enthusiasts, but Nintendo is creaming its competitors by looking past graphics and focusing on fun. “Jesse Sutton, interim president and chief executive officer of Majesco, says Nintendo is targeting its hardware at the fastest growing audience in the games business — “casual” gamers who are more interested in fun, simple games rather than the deeply immersive titles that most hard-core gamers prefer.”

Hmm, sounds similar to the people who want to have fun riding bikes.

The car industry is learning the same thing. First, when Honda’s Element and Toyota’s Scion, designed as inexpensive first cars for teens and 20-somethings, got snapped up by their parents, who wanted inexpensive, fun transpiration, instead of performance and mind- and wallet-numbing electronics.

That challenge is being upped again by India’s Tata Motors, which plans to bring out a $2500 car in 2008. And this isn’t just about lower income, emerging markets. “To automakers’ astonishment, cheap cars are also proving to be just as popular in established markets as they are in the developing world…The new generation of cheap cars will be sturdy and reliable and will appeal to Western consumers who want to spend money on things other than transport… The shift to cut-rate wheels is jarring for an industry that has fixated for at least a decade on premium cars…”

The same awakenings have happened/are happening in consumer products, such as soup and cleaning products.

Other industries are climbing on the bandwagon. Even software companies are recognizing that most of their customers aren’t twenty-something programmers and that they don’t want to “work under the hood,” they just want to do whatever it is that they bought the program to do.

What these stories have in common are the assumptions that guided product development came from industry/product aficionados—hard-core devotees who designed products for people like themselves—and ignored the rest of us.

Finally, companies are figuring out just how large the so-called casual market is, how much money it has to spend, and that it’s a giant market anywhere you look for it.

For managers, the lesson is to avoid assumption-myopia by building a team with different backgrounds, varied experience from different industries, and a solid generational mix.

Do that and you’ll have a lot more innovation outside the box.

In times of economic chaos such as now, it’s a wise company not only listens to its current customers, but also broadens its focus to include the “casual” part of its market.

Image credit: flickr

Following up on my previous post about how the assumption that performance was the most critical buying issue in cycling helped flatten an industry, comes yet another example of how assumptions lead astray.

The new generation of game consoles from Sony and Microsoft focused on the brilliant graphics demanded by game enthusiasts, but Nintendo is creaming its competitors by looking past graphics and focusing on fun. “Jesse Sutton, interim president and chief executive officer of Majesco, says Nintendo is targeting its hardware at the fastest growing audience in the games business — “casual” gamers who are more interested in fun, simple games rather than the deeply immersive titles that most hard-core gamers prefer.”

Hmm, sounds similar to the people who want to have fun riding bikes.

The car industry is learning the same thing. First, when Honda’s Element and Toyota’s Scion, designed as inexpensive first cars for teens and 20-somethings, got snapped up by their parents, who wanted inexpensive, fun transpiration, instead of performance and mind- and wallet-numbing electronics.

That challenge is being upped again by India’s Tata Motors, which plans to bring out a $2500 car in 2008. And this isn’t just about lower income, emerging markets. “To automakers’ astonishment, cheap cars are also proving to be just as popular in established markets as they are in the developing world…The new generation of cheap cars will be sturdy and reliable and will appeal to Western consumers who want to spend money on things other than transport… The shift to cut-rate wheels is jarring for an industry that has fixated for at least a decade on premium cars…”

The same awakenings have happened/are happening in consumer products, such as soup and cleaning products.

Other industries are climbing on the bandwagon. Even software companies are recognizing that most of their customers aren’t twenty-something programmers and that they don’t want to “work under the hood,” they just want to do whatever it is that they bought the program to do.

What these stories have in common are the assumptions that guided product development came from industry/product aficionados—hard-core devotees who designed products for people like themselves—and ignored the rest of us.

Finally, companies are figuring out just how large the so-called casual market is, how much money it has to spend, and that it’s a giant market anywhere you look for it.

For managers, the lesson is to avoid assumption-myopia by building a team with different backgrounds, varied experience from different industries, and a solid generational mix.

Do that and you’ll have a lot more innovation outside the box.