Corporate social responsibility pays

By Stan Litow

IBM has been going through some changes of late. No longer is International Business Machines simply a manufacturer of computer products, now it wants to change the world. With the launch of its Smarter Planet initiative in late 2008, IBM signalled a dramatic shift towards becoming a provider of solutions, creating interconnected technology to make roads, cities, healthcare and communications more intelligent. Not only was this a major change in business priorities, it was also a clear signal that Big Blue wanted to be seen as a force for social good rather than just as a corporation. This is reflected in the growing focus on corporate responsibility and philanthropy efforts that have gained significant momentum in recent years.

Such a dramatic shift clearly has big implications for IBM’s people. Stan Litow is President of the IBM International Foundation and Vice President of Corporate Citizenship & Corporate Affairs. He oversees a range of initiatives that more closely resemble those of a charitable NGO than a Fortune 500 company. Perhaps the most significant is the Corporate Service Corps, which tasks high performing employees with finding solutions to real-world problems all over the globe.

“They spend about two and a half months working online as a team, building their work and learning about the project,” Litow explains. “They spend one month together on the ground working on the problem, delivering results on the ground.  Then they spend the next two and a half months working together in their post-work phase, finishing off the project, and then mentoring the next team that goes in. In a geography like Nigeria for example, you could have two or three corporate service corps teams coming every three or four months, maintaining the continuity of the project. So for example a team could set up the equivalent of an entrepreneurship program for women in Ghana. They could help develop a plan for a tax-exempt zone to grow the tourist industry in Tanzania.”

While work on a project might not be completed by a single team, over the course of a few years the application of IBM’s expertise leaves capabilities on the ground where perhaps none existed before. Naturally, this all sounds fantastic for the communities and individuals that benefit. However, it’s hard not to wonder exactly what is in it for IBM?

“Not only have we seen improvement in the skills of the people who work for us, but we’ve also been able to document a significant amount of improvement in the skills of the people in the community with whom they work,” Litow explains. “We like to describe the program as having a triple benefit.  There’s the individual benefit of the most extraordinary leadership development program, which many describe as the experience of a lifetime. There’s a benefit in the community, the equivalent of hundreds of thousands of dollars worth of business consulting services and each engagement really helping people solve problems, grow jobs, and improve their economy. Finally, there’s a benefit to the company in growing a generation of leaders who have a much more grounded understanding about growth markets and culture in the communities where we see our future.”

Viewed as a leadership development tool, the CSC makes a great deal more business sense. Litow is in no doubt that the participants’ experiences are invaluable in making them more capable businesspeople. “First of all the skills they acquire, develop or enhance match up to the critical skills that are required within the company,” he says. “But increasingly we see that people who participated in this program are more flexible, more culturally adaptable, they’re better at teaming projects, they’ve improved their personal networks of people on a global basis within the company. They’re not only uniquely valuable for their Corporate Service Corps assignment, but they improve their capability in their day job on a regular basis.”

So the CSC is a vital spoke in IBM’s strategy to build a workforce ready for the challenges the 21st century is bringing. As business gets ever more global and new markets open up, companies like IBM are going to require a whole new breed of leader, one who is comfortable operating in ways executives of yesteryear simply wouldn’t recognize. “It’s vitally important because it’s connected to how you grow your next generation of leaders in the company,” Litow confirms. “A corporate service corps – and yes we do characterize it as a corporate version of the Peace Corps – is fundamentally about leadership and leadership development. We have seen a shift in our business model to become a fully globally integrated enterprise, and what that means is there’s a greater premium for people operating on a global stage.  You’re doing business with people in cultures and communities different from your own, so where you are physically located doesn’t mean where you spend your business day interacting with people, clients, government leaders, community leaders. To do that you need a much more sophisticated understanding of the relationship between the public sector, the private sector, and the voluntary sector.”

Retention

Aside from developing the leaders of tomorrow, programs like the Corporate Service Corps also help IBM hang on to these high performers. Litow tells us of an independent evaluation carried out by the Harvard Business School, in which 100 percent of CSC participants stated that their involvement had increased the likelihood that they would complete their careers at an IBM. In an age where the concept of a job for life seems like a quaint anachronism, such loyalty is extremely eye-catching. “If you talk within HR departments not just at IBM but in most companies, your top performers who have been with a company for seven or ten years are those that you’re most at risk of losing if somehow they don’t feel excited and motivated about their work,” says Litow. “Nothing could be more exciting or motivating to a young emerging IBM leader than participation in the corporate service corps.  So it’s not only been a way of training your best leaders but retaining your best leaders.”

In addition to motivating and engaging the people that IBM already has, potential involvement in the CSC is also a potent recruiting tool for high performers yet to enter the workforce. “I talk to business schools and computer science departments and universities all the time and I explain that if you came to work at IBM you could conceivably apply for and gain acceptance into this program,” Litow continues. “I think it motivates people to want to choose IBM as a place where you could combine an exciting business career and not have to put your social values aside, where most people think you have a choice to make.  You could decide to work in a community or a not-for-profit organization and then you could get the joy of contributing to making your community stronger and more effective, or you can make an economic choice to pursue a business career, but I think what we’re saying is that you can combine both.  You can be more effective at your job, more effective in the community, and you can help build a smarter planet.”

There can be little doubt that social responsibility is becoming a bigger issue in a wider cultural sense. As consumers increasingly consider an organization’s CSR bona fides when choosing where to spend their money, it is little surprise that the same is true of potential employees when evaluating their career prospects. “They’re interested in a company that has a strong citizenship profile,” Litow confirms. “They’re interested in sound environmental practices. They’re supportive of efforts around business ethics and other sustainability questions. They’re very engaged in their communities. To give you some evidence, we have a little over 400,000 employees worldwide and about 140,000 of them regularly do community service, so if you’re looking for evidence of interest by our employees and their communities, that’s a good example.” 

This statement is backed up by the numbers of IBM staffers who try and get involved in the CSC. To be accepted, potential candidates need to have been identified as a top performer, have prior experience of community service and receive strong recommendations from local management. Despite these exacting criteria, the response has been striking. “In the first year almost 25,000 people applied for the first 100 or 200 places that were available,” Litow explains. “It continues to be a very competitive process. So we look for the best of the best.”

This includes business consultants, researchers, software developers, marketing officers, communications specialists and finance people, a cross section of high-level employees with critical skills that cut across the whole organization. “A recent team that just came back from Ghana, were able not only to address the problems that were presented to them, but they had so many nuanced skills that they were able to solve problems that people didn’t even know could be solved,” says Litow. Clearly, this blend of capabilities allows brings big operational dividends.

For a company of IBM’s size, using corporate responsibility initiatives on a global scale to build and maintain talent pipelines is an achievable challenge. However, for smaller organizations could such efforts be realistically accomplished? “Obviously 500 people a year covering 14 different countries with economic value of the teams in the neighborhood of $14 to $15 million a year, is something on a size and scale that a small or medium sized enterprise might not be able to do,” concedes Litow. Nonetheless, he believes that similar efforts engaging smaller numbers of people for shorter amounts of time are within the reach of companies further down the corporate food chain. “Small and medium enterprises are already engaged in one-year or two-year assignments, which is the more common model for replacing a skill that you think that you don’t have in a geography,” says Litow. “The Corporate Service Corps compared to that is a much more economical and lower cost model.”

That reference to cost raises an interesting question. How exactly can ROI be measured on initiatives like the CSC?  “There are some basic business metrics and measurements to determine the value of corporate citizenship,” Litow says. “First and foremost there is talent. You use these programs and use this capability to recruit and retain, the best top talent that you can, because that’s a differentiator in the marketplace. We develop pretty good return on investment measurements that demonstrate that the scope of all the programs that we’re doing helps us to recruit and retain the best talent.” In addition, much of the Corps’ work centers around technological innovation, ensuring that IBM social responsibility and business goals can effectively intertwine. Litow gives examples such as using the company’s automatic language technology to create bilingual email technologies which bridge cultural divides as well as employing business analytics technology to help clean up polluted river systems.

It seems the benefits of IBM’s social responsibility efforts flow in wide range of directions, making big impacts both inside and outside the organization. For Litow though it all comes back to leadership. “Leadership is not just about doing but it’s about collaborating and listening,” he says. “It involves not just identifying something that is an example of excellence but being able to roll up your sleeves and work with people on their own terms to be able to spread that example into other cases and other communities. That’s what real leadership is all about.”

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International rescue

A few examples of the Corporate Service Corps’s global activities

Vietnam
Producing a program plan for small and medium enterprises in order to strengthen community and economic ties to enable global growth

Tanzania
Formulating growth strategies and management plans for the Africa Wildlife Foundation, Tanzania Association of Tour Operators and KickStart, a nonprofit that develops and markets new technologies in Africa

India
Working with government agencies, local NGOs and institutes of higher education addressing various business and technical constraints

Brazil
Working with six different NGOs addressing community involved education in under served areas, diversity in entrepreneurship, violence prevention, promoting scientific education, digital inclusion, and digital entrepreneurship

China
Assisting governmental agencies, chambers of commerce and small business owners on topics ranging from logistics infrastructure to workforce development

Romania
Collaborating with the Romanian Center for Entrepreneurship and Executive Development to help develop employment opportunities in a global marketplace

It’s not where you’re at, it’s where you’re from

Litow explains how his background offered the ideal preparation for life at IBM

I spent time in all sectors of the economy. I worked in government for the Mayor and the Governor.  I ran a think tank in the voluntary sector and did a lot of community organizing and social enterprise activities from the voluntary sector.  I’ve taught at a university level, so I’ve had a lot of different kinds of experiences that help me.  I was Deputy Chancellor of schools in New York City, which is the largest school system in the United States, so I had a lot of understanding about how the public and the voluntary sector approaches a lot of problems. 

What was clear to me at IBM is that we had some unique capabilities, and again our innovation and our technology, but then clearer and clearer to me it was our people, the talent within our company, the people who had significant amount of engineering talent, business consulting talent, software developers, researchers, and that was really a unique capability that could be coupled with innovation and technology to bring about substantive change.  I like to think that my background helped prepare me for this work in a way that people who perhaps had spent their entire career in the private sector might not have been as connected to the people at the grassroots level who you’re really looking to serve.