People, planet, profit: That is the alliterative refrain that has become synonymous with corporate social responsibility (CSR). But what happens when that third "P" begins to falter? Where does CSR fit when profits turn to losses?
AMD's third quarter financial results were disappointing. AMD's subsequent restructuring was decisive and necessary to compete effectively and improve our results goring forward. While these kinds of changes are always painful, they are a fact of life for many companies.
A challenge we face now, similar to what many companies face, is how to continue commitment to corporate responsibility with fewer resources? The answer lies in embedding CSR in everything you do.
More than Philanthropy
AMD has weathered tough economic times in the past and our commitment to responsibility has never wavered. The resilience of our responsibility programs can be traced in part to our approach. The pivotal paper "Strategy & Society," by Harvard business professors Michael E. Porter and Mark R. Kramer, summed up this approach very well: "The best corporate citizenship initiatives involve far more than writing a check."
Responsibility commitments must be baked into programs and policies. When corporate funds are donated, companies should concentrate on strategic investments that carry long-term benefits for both the company and society. Using this approach, corporate foundations can operate like a venture capital firms -- selecting the most promising early stage innovations.
Shared Value
This approach to corporate citizenship was outlined in another Porter and Kramer article, "The Big Idea: Creating Shared Value." The thesis of this article is that the most effective CSR strategies benefit both society and the company: "The concept of shared value can be defined as policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates. (Emphasis added)
Conversely, this article points out that some CSR programs: "...focus mostly on reputation and have only a limited connection to the business, making them hard to justify and maintain over the long run."
One example of the shared value approach is our efforts to eliminate so called "conflict minerals" from our products -- these are the metals originating in Central Africa that have been tied to war and human rights abuses.
As this issue emerged, we saw that eliminating conflict minerals is not only a moral imperative, it is important for our customers, our reputation and our shareholders -- truly fitting the definition of "shared value." By investing early, AMD is now among a handful of companies defining the solutions to this complex issue. As a result, a leading activist group monitoring this issue -- the Enough Project -- ranked AMD's conflict minerals programs ahead of companies with more than 10 times our revenues.
Similarly, our investments in science, technology, engineering and math (STEM) education are highly strategic. AMD's sustained competitiveness depends on skilled engineers to design our semiconductor products. Our investment in STEM education not only helps meet our demand for technically competent employees, but our flagship STEM education program -- AMD Changing the Game -- also leverages our technology.
Getting kids hooked on STEM education is only part of the solution. When we looked at what it takes to be a truly innovative engineer in our company, the list included more than just technical skills. The most effective engineers are those who understand their discipline and are able to collaborate and communicate effectively with others. This realization is why AMD has made strategic investments in college level engineering programs that teach a cross-disciplined curriculum. AMD sponsored a report from the National Academy of Engineers which highlights 28 leading programs using a cross-disciplinary approach to engineering education that are role models for others to emulate.
Early investments lead to long term benefits
These investments can be expected to produce returns for years to come. So, even during times when AMD will reduce direct giving, these initiatives can continue to benefit the company and the world around us.
But it does not end there. Because necessity is the mother of invention, AMD's corporate responsibility programs are becoming more innovative and effective. In October, AMD leveraged our convening power to bring together a "green army" of volunteers to help clean up an urban waterway in Austin, Texas. By mobilizing over 150 volunteers from the South by Southwest ECO conference, employees of local companies and the general public, the team cleaned up 20 city blocks of the creek and removed 114 bags of trash and recyclables that weighed about 1,300 pounds.
Three keys to CSR in tough times
Unfortunately, many companies view their CSR programs as expendable during tough times. While this downturn will result in reduced company giving, our commitment has never been stronger. The keys we have discovered to resilient responsibility are:
1. Embed CSR in your company's policies, programs and culture. This does not require a great deal of resources and, once accomplished, becomes standard procedure and thus is not dependent on constant funding. Adding responsibility to your company's business practices - for example: changing procurement procedures -- is not only sustaining but can produce large benefits to society.
2. When you do invest corporate money, chose innovative programs that are self-sustaining. These investments continue to provide benefit with or without additional donations.
3. Think outside the box. Even without a large philanthropic budget you can develop innovative ways to express your company's commitment to sustainability.
Tim Mohin is Director of Corporate Responsibility for Advanced Micro Devices (AMD) and the author of the book, Changing Business from the Inside Out: A Treehugger's Guide to Working in Corporations (Greenleaf and Berrett-Kohler). His postings and comments made in his book are his own opinions and may not represent AMD's positions, strategies or opinions. Links to third party sites, and references to third party trademarks, are provided for convenience and illustrative purposes only. Unless explicitly stated, AMD is not responsible for the contents of such links, and no third party endorsement of AMD or any of its products is implied. Follow Tim @TimMohinAMD and check out AMD's latest Corporate Responsibility Report - the summary is available as a tablet app.