New Ideas in Corporate Social Responsibility Capture Top Honors from McKinsey

An important set of new ideas in managing corporate social responsibility crossed sectoral lines and took top honors in the 48th Annual McKinsey Awards according the Harvard Business Review, April 2007. The awards recognize articles "most likely to have a lasting influence on management," not least because they "simultaneously expand the thinking on a topic and inspire action."

The article, "Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility," is the latest from the team of Michael E. Porter and Mark R. Kramer, who are well known in the Nonprofit Sector not just for their breakout management articles but, increasingly, for the innovative work being done by their organizations, FSG Social Impact Advisors, and Center for Effective Philanthropy. It’s a great service to our sector to have the quality of thinking and work that can compete at the highest levels of management thinking. Here’s what HBR says about the winning article:

Corporate social responsibility has become an inescapable priority for business leaders across the globe. Governments, activists, and the media now hold companies accountable for the social consequences of their actions, and favorable publicity is often bestowed on companies with prominent CSR programs. Yet for all the hype surrounding CSR efforts, they are frequently counterproductive.

Michael Porter and Mark Kramer propose a new way to view the relationship between business and society that allows companies to make valuable contributions to social welfare without sacrificing corporate success. They introduce a framework that companies can use to identify the social consequences of their actions, determine which problems to address, and find the most effective ways to do so while simultaneously strengthening the competitive context in which they operate. By analyzing their opportunities for CSR using the same guidelines that direct their core business decisions, companies will discover that CSR can be much more than a cost or constraint – it can be a potent source of innovation and competitive advantage.

One hopes this signals a new flow of activity and resources into the Nonprofit Sector as more companies pursue Porter and Kramer’s ideas. Perhaps more potent, however, according to many top players who are working on these issues, is the potential that the "Third Sector" will be the most significant source of innovation for business growth across all sectors in the coming decades. As the boundaries between the sectors continue to dissolve, the doors for innovation have been blown wide open.

Carla E. Dearing