Is Social Responsibility a Part of Your CX Strategy?

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I teach a global operations strategy graduate course at the University of Minnesota’s Carlson School of Management. Each semester I set aside one of our sessions to discuss corporate social responsibility within organizations especially as they pursue globalization of their products and services. The lively discussion among students usually centers on which comes first, corporate profits or social responsibility? This semester’s discussion prompted me to question if as professionals, we are advocating for social responsibility and incorporating it into our CX strategic design. The definition of corporate social responsibility can vary depending on the organization, author, or source.

The International Organization for Standardization (ISO), perhaps best known for its ISO 900 quality management certifications, released a definition of sustainable development and social responsibility. The organization eliminates the word “corporate” from the definition of social responsibility noting that “its guidance is applicable to all types of organizations and not only to industry or private companies”.

The standard provides a clear and detailed definition of “social responsibility” to prevent misunderstanding: Responsibility of an organization for the impacts of its decisions and activities on society and the environment, through transparent and ethical behavior that:
 Contributes to sustainable development, including health and the welfare of society;
 Considers the expectations of stakeholders;
 Follows applicable law and consistent international norms of behavior; and
 Is integrated throughout the organization and practiced in its relationships.

In Dan Pontefract’s article, Stop Confusing CSR with Purpose, Forbes, 2017, he states, “The Financial Times defines corporate social responsibility as “a business approach that contributes to sustainable development by delivering economic, social and environmental benefits for all stakeholders.” He emphasizes, “The key point is sustainable development.”

Alternatively, authors Roger Schroeder and Susan Goldstein* define a “triple bottom line” of sustainability that goes beyond environmental sustainability alone. Schroeder and Goldstein add social (hiring a diverse workforce, ethical practices, providing equal opportunity and safe working conditions) and economic (making a sufficient profit for firm survival into the future) sustainability to create this triple bottom line for companies seeking to tie investments in sustainability to financial results.

For the time being, I’ll set aside the debate about what comes first social responsibility or profit as well as whether there are benefits of social responsibility for stakeholders. Instead, I’ll focus on how as practitioners and consultants we can incorporate any organization’s social responsibility commitments into the design of the customer experience.

What organizations are already doing this well? Brands that embody social responsibility include Patagonia, Warby Parker, Toms, Bombas, IKEA, Legos, Cisco and Baxter International to name a few. Social responsibility is in their DNA. It’s not layered on for publicity or created as an after thought to their brand or in response to current trends or consumer expectations. These organizations give back and are involved in their communities be they global or local. Their brand, their reputation and their customer experience are inextricably linked as one cohesive strategy.

How do we ensure the customer experience strategy we design is aligned to the brand reputation assuming social responsibility is part of the culture of the organization? Keep in mind that some organizations lack a clear, concise customer experience strategy even if they have established an overall brand strategy. Furthermore, customer experience strategies tend to focus on improving the experience with corresponding metrics. They rarely reflect specifics about how organizations deliver their experience in a socially responsible manner. Where in an NPS score can you find a measurement for how well an organization’s experience delivered on its social responsibility commitment? It can be argued that customers make the decision to buy from a company because they have a reputation for social responsibility. While that pre-disposition to purchase might be reflected in the ratings customers provide on satisfaction surveys, we cannot be 100% sure that it is a contributing factor in the purchase decision or ratings results, at least not via the NPS score itself.

Conversely, if social responsibility is not a priority of an organization, is it possible to have a customer experience strategy that does reflect it despite the lack of an overriding brand strategy?

These are complex questions to address for leaders and especially CX professionals seeking to incorporate social responsibility into their design of experiences for clients and customers.

Perhaps the following suggestions will help you design a more comprehensive experience strategy. A strategy that draws attention not only to the ease of doing business with you but also to implementing social responsibility elements deemed important by your customers.
• Have you had a discussion among your leadership team regarding social responsibility and how it aligns to the organization’s brand, vision, mission, and values?
• For organizations with a Corporate Social Responsibility Officer, have you engaged her/him in the CX strategy discussions to link the two visions to one another?
• Does your CX strategy reflect the organization’s social responsibility commitments both in words and in actions taken to execute the strategy?
• Does your strategy reflect your customer base in areas such as culture, ethnicity, geographic and social-economic diversity?
• Is your employee experience reflective of both your brand’s commitment to social responsibility and the experience your customers have with your products and services?
• Like your CX strategies that need to be well-defined, clearly stated, measurable and specific, does the same criteria apply to your social responsibility strategies.
• Have employees been given the necessary training, including behavioral expectations that reflect both the CX strategy and the social responsibility linkage?
• Does your organization live your social responsibility values every day? Is it part of the DNA of the organization? Do they “practice what they preach?”.

Creating a CX strategy aligned to your organization’s social responsibility might be simple compared to having to execute it. Even so, I think it is a business imperative that an organization integrate the two. A strategy aligned to the brand, to create an environment in which employees can thrive and customers can take comfort in knowing they are buying from an organization they can trust to do the right thing when it comes to social responsibility.

Perhaps the next time you have a conversation about improving a process, increasing customer satisfaction and loyalty or what is necessary to drive better revenues and profits, you’ll include a discussion about how best to integrate your customer, employee and social responsibility experiences into a brand image, all stakeholders can be proud of.

*Roger Schroeder & Susan Goldstein, (2019). Operations Management in the Supply Chain, Decisions and Cases (8th Ed.). New York, NY: McGraw-Hill Education

8 COMMENTS

  1. Bob: thank you for this excellent article. Much to comment on, but for brevity, a couple of observations. We’re dealing with the fallout from Milton Friedman’s essay titled, The Social Responsibility of a Business Is to Increase its Profits. It’s what I was taught as an undergraduate, and I don’t remember much debate over it. It was the ’70’s, and the term CSR hadn’t entered the conversation.

    The unintended consequence of Friedman’s ideology is a separation fallacy – the belief that business decisions should be made independent of ethical concerns. That has led to an onslaught of short-term thinking by senior executives, self-satisfied that they are making the best decisions because they are preserving the interests of the only stakeholders that matter to them: their investors.

    A more critical analysis of Friedman’s ideals reveal that his assertion was more nuanced. He probably would not be supportive of predatory marketing, and the erosion of safety for employees, customers, and the communities where they live and work.

    Today, I believe the perceived bifurcation between profitable revenue and ethical conduct is a false choice. Purchasing decisions increasingly weigh a manufacturer’s environmental, social, and governance practices. Accordingly, when appropriate, CSR should be part of a company’s brand strategy. Yet, it’s illusory to believe there are “simple” choices. An organization’s initiative to engage in “responsible” supply chain sourcing (however that might be defined) could negatively impact its revenues, or increase its costs. Would other stakeholders such as customers and employees be disadvantaged as a result? It’s important to ask what is fair.

    Perfect harmony between business goals and ethical standards is an unattainable goal. Unethical and deceitful choices are always among the possibilities for executives deciding on strategies and tactics. An ongoing challenge for management is building and maintaining a culture where goal conflict between profits and ethical conduct is minimized, and employees are encouraged to speak up without fear of retaliation when their personal values are confronted. My upcoming book about sales and marketing ethics covers this topic.

  2. Thanks for your comments Andrew. Interesting that you mention Friedman’s purpose of business. That’s a debate I have yearly with my students at both the undergraduate and graduate levels. It’s fascinating to hear their perspectives which are never the same from year to year.

  3. Hi Bob, thanks for your excellent article. I especially like your linking CX strategy with social responsibility. It’s fresh, thought-provoking, and necessary.

    Take income inequality as an example.

    After COVID-19, since interest rates in most countries are close to zero or have become negative, the only major measure to deal with the current challenges is another round of large-scale quantitative easing (QE). The side effect of QE is the sharp rise in asset prices like stocks and real estate. For those who have no assets (such as the lower middle-class and the working class), as their real wages have stagnated, their real purchasing power has declined. Income inequality worsens.

    If Jeff Bezos were a country, he would have been the 56th richest one. His wealth is greater than the GDP of the poorest 48 countries combined (see https://timesofindia.indiatimes.com/business/international-business/if-jeff-bezos-were-a-country-his-wealth-would-make-him-the-56th-richest/articleshow/65041147.cms).

    According to CBS News, Amazon paid an extremely regressive tax rate 1.2% for its profits of over 10 billion in 2019, while Fortune 500 companies pay an average tax rate of 11.3% (see https://www.cbsnews.com/news/amazon-taxes-1-2-percent-13-billion-2019/).

    IMO, this is one of the reasons why Amazon is so cash-rich and can make irresistible offers like Amazon Prime to customers; and treating warehouse staff like robots helps drive their unparalleled effortless experience; rarely any rivals can match Amazon’s tech capabilities. Despite many customers may not like the status quo, they are still slaves to convenience.

    According to Statista, Amazon’s market share of the U.S. e-commerce retail market (See: https://www.statista.com/statistics/788109/amazon-retail-market-share-usa/):

    2016: 34%
    2017: 37%
    2018: 41%
    2019: 45%
    2020: 47%
    2021: 50% (projected)

    The CX industry has been tirelessly preaching effortless experience and now the digital transformation. As a result, most monies flowed into the pockets of tech giants like Amazon, and income inequality aggravated.

    My question is: Should the CX industry be socially responsible and stop promoting effortless experience and digital transformation?

    P.S. Yes, government antitrust regulations and corresponding legal and tax reforms may help, but they are slow, weak and unreliable.

  4. Sampson, thanks for your comments and analysis. I’m not sure I agree that the CX industry promotes effortless experience and digital transformation on its own – CX professionals should be reflecting what an organization’s customers want and in turn respond to it with an appropriate strategy. Because customers want, and perhaps are demanding both of these, my hope is that CX professionals are building strategy based on that voice and without the intent of accelerated the flow of monies into tech giants. Those tech giants aren’t going away nor is the customer’s desire for what they deliver – perhaps we can learn from them and accelerate our own transformation. Granted, I tend to be an optimist!

  5. Bob, thanks for your prompt reply. I do agree with you, because “fast and easy” is an important need of customer, so CX professionals are working hard to meet this need through support (if you don’t like ‘support’, please use any suitable and comfortable terms) effortless experience and digital transformation.

    However, driving effortless experience will drive income inequality. Income inequality is one the most concerned issues for everyone and every citizen (including customers). Should CX listen narrowly to the voices of customers and ignore the broader and louder citizens or people? Remember, the topic of your article is about the connection between CX and “social responsibility.”

    My question again is: Should the CX industry be socially responsible and stop ‘supporting’ effortless experience and digital transformation?

  6. Hi Andy, I chose economics as my university major because I was deeply interested in the idea of free market. Things that once seemed right, such as “The Social Responsibility of a Business Is to Increase its Profits” may now be wrong.

    I’m glad to hear that your next book is about sales and marketing ethics, because it is related to the question I want to ask:

    Should we only meet the most critical needs of our customers and ignore the social impact it will bring? Or, let me put it this way: Is it unethical to meet the most critical needs of customers while harming the interests of most citizens and people? (You may also want to answer my question to Bob Azman.)

  7. Hi Sampson: thank you for both of these questions. Ignoring negative social, environmental, and economic impacts is a risky approach for companies today – especially when those outcomes are significant. Walmart and other clothing retailers learned this when their quest for inexpensive apparel caused them to source from factories in Bangladesh that were basically human deathtraps. In 2013, the Rana Plaza factory building in Dhaka collapsed, killing 1,132 people, and injuring 2,500. Prior to that catastrophe, Walmart’s customers – along with most of us – devoted little time to thinking about where their sweaters and hoodies were made, or whether the people laboring to produce them were being exploited. At the time, I doubt that Walmart paid much more than lip service to the conditions in the factories that supplied their stores. When the revenue and profit figures on the spreadsheets are meeting target, why rock the boat? One could argue that Walmart was simply giving their customers what they wanted, which was cheap clothing of acceptable quality.

    But we are learning as a society that in many instances, the consumerism that we enjoy comes at a great cost to others. The child labor used to source of cocoa for chocolate manufacturing is a contemporary example. As consumers, we are increasingly cognizant of the environmental, social, and safety issues surrounding our purchases, and, based on how we are directing our purchase dollars, we are taking action. Companies understand that CSR – or at least creating the illusion of it – creates opportunities for differentiation. I think the honest effort for CSR (not the illusion part) is good for business.

    Still, there are no easy answers. The expression “luxury of being principled” has entered our discourse. While some people might eschew products that were allegedly made in sweatshops, or shrilly refuse to buy anything that isn’t “union made,” others can’t do that because their lower disposable income doesn’t allow them to pay 20% or higher for their food and clothing purchases. I can’t judge who is “right.” And maybe wondering who is right is the wrong question to begin with. Maybe the better question is how can we manufacture products that benefit consumers, while ensuring safety and well being for society and the planet? That involves making trade-offs, which is the fallacy of striving to be “100% customer-focused.” It makes nice marketing hype. Execution is another matter.

    We need ongoing discussion on the questions you posed, and inevitably that means asking more questions before we can posit answers. It may not be PC these days to admit to tuning out the opinions of others, but whenever I hear “the answer is simple,” (the most dangerous phrase in the English language next to “studies prove . . .”), I usually ignore whatever follows.

  8. Well stated Andrew and Sampson. This is a discussion that must be ongoing and part of our discourse on customer experience. And perhaps it should expand to include the employee experience as well. The challenge is how we continue that dialog among CX professionals. Last year a large group of CEOs made a commitment to social responsibility. What has been accomplished by these CEO’s and organizations since then? Maybe a lot but I haven’t heard much about the execution (to Andrew’s point). Their announcement was a good start – but now what?

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