As the owners of a security consulting company, we are well versed in the struggles that face both the business owner in general, and the plight of the service support company in the security industry. We lovingly refer to these daily challenges as “The Grind”, as we face every morning with two repetitive questions: 1) How are we going to keep the lights on today? and 2) How do we add value to both our brand and our clients, as well as make a positive impact to our local/global community? This should be an all-too-familiar sentiment with our fellow Independent Security Practitioners.
Today, however, we want to concentrate on a topic that seemingly has nothing to do with the finances, administration, or operational minutia that comes with running a security company. We want to review the concept of Corporate Social Responsibility (CSR).
Many people do CSR-type activities in their personal and professional sphere. By definition, most
of us in this industry are drawn to contribute to the common good; whether that is through volunteerism, donating our time/money/expertise, or being more ecologically minded in our operations. There is DEFINTELY a “feel good” aspect to doing these types of activities. When we donate our time, money, or efforts to a charity or cause, there is a sense that we are being “good citizens” or “contributing members of society”. Most of the time, we do these types of activities, not expecting anything in return. We do “good” for good’s sake. This is appropriate and how it should be.
But is there a pragmatic business approach to these activities that can benefit from our charitable efforts? It may seem counter-intuitive, but there are a plethora of benefits that accompany these type of activities; some that even positively impact your company’s bottom line.
At 7Spears, we are constantly evolving our CSR program. The primary goal of our focus is obviously to improve the quality of service/support we are providing to those causes we choose to be involved in. But that is not the sole focus. We also keep a constant eye on improving the business case for these efforts. After all, few of us are in this game as a charity. The bottom line is that we cease to exist when we cease to make money. So, capitalizing on our altruistic endeavors only enables us to grow as a business.
Moreover, the better we can shape, define, and develop the business case of our CSR program, the more we can increase both the quality and quantity of our support to our local and global community through our CSR initiatives. The goal of 7Spears’ CSR program(s) is to create that win-win relationship; building a synergy that both helps the people/organizations/causes we support as well as our company as a whole.
In this article, we’ll outline the benefits of a well-crafted CSR program and attempt to provide real-world examples of how those benefits are realized. We hope that we will be successful in building the case of why you should design and incorporate a CSR program into your operations, whether you’re a company of one, ten, or thousands.
Let’s get started, shall we?
The goal of 7Spears’ CSR program(s) is to create that win-win relationship; building a synergy that both helps the people/organizations/causes we support as well as our company as a whole.
Quantifying the Data
Intuitively, we can articulate that our CSR program brings a myriad of benefits to our company. We can (and will) point out specific examples and correlate those directly to a business impact. But we’re just one company. In order to build a business case that is relevant to our wide readership, it is important that we be able to rely on research that is much broader. Research that is quantitative in nature and not just based on intuition or one specific example. To that end, we turned to the research of the Doughty Centre on Corporate Responsibility. They conducted a two-phase, multi-year research project of nearly 200 companies with the goal of defining and quantifying the benefits of social responsibility programs. Their findings match much of what we have realized here at 7Spears, but is based on a much wider sample pool. You can find their full research results here:
We will be referring to this report throughout this article. We will add unique case studies to prove the points contained therein.
The Primary Objective
As we began crafting this article we wrestled with the fact that we don’t want to lose sight of what is most important when it comes to charitable causes. The primary objective of any of these efforts is being able to help our fellow man, the planet, or a segment of society. As a business entity, we should look for those causes that resonate with us on a personal level. We should look at causes that parallel our company’s unique brand, values, or ethics. And then, we should do what is in our power to bring assistance to those issues.
For example, if you’re a veteran owned small business you may feel called to assist organizations that help veterans; your local American Legion, or VA office, etc. If you are a K-9 company, the causes of groups that help with animal rights issues may resonate with you. Maybe you operate in an area where pollution or clean water are issues that impact your company or the community you work in, so ecological and recycling issues are important to you. If you operate in an urban environment, the issue of homelessness may be front and center. There are ample organizations out there dealing with domestic violence, school shootings, workplace violence, etc.; all of which have a unique security component where you can bring value to the table. The list of causes is endless, but you get the idea.
One cannot escape the fact that there is a mutual, personal benefit to regular engagement in CSR-type activities. While we may give a small portion of our time, money, attention, or effort to a given cause or charitable organization, there is a ten-fold return on emotional investment. The ability to be something larger than ourselves and contribute to the “general good” is something that we are drawn to by our very human nature.
The ability to be something larger than ourselves and contribute to the “general good” is something that we are drawn to by our very human nature.
The important thing to emphasize right at the start, is that there is an emotional and philanthropic component that should be the primary objective of any CSR program. We do it because it’s the right thing to do. We do it because the cause/organization resonates with us as individuals or matches the goals/values/ethics of our company. We do it because, if not us…then who?
Building the Business Case
However, we want to ensure that we are able (from a business perspective) to continue or grow that support and effort to those causes that we are involved in. Central to this concept is the karma-like assurance that, “What you give will always come back for you to receive”. We must recognize that if our company cannot gain financial or intrinsic value from our CSR efforts – if, in fact, our CSR efforts come at a cost or drain on company resources – then our ability to continue that support will eventually diminish. It is therefore important that we craft our CSR efforts in such a way as to bring value to our company that enables growth. This growth, in turn, will increase our ability to sustain or expand our charitable efforts.
For the purposes of this article, we will concentrate on five core benefits to a business that is engaged with social responsibility efforts. Each of these benefits brings either an intrinsic or tangible value to the company that can be quantified and expressed in terms of real dollars. Those benefits are:
- Risk Reduction & Management
- Brand Value & Reputation
- Employee/Workforce Satisfaction
- Direct Financial Impact
- Business Opportunity
Let’s take a closer look at each of these.
Risk Reduction & Management
How ironic, that the first benefit of a well-crafted CSR program aligns with the core function of any security organization? If our altruistic efforts can contribute to the reduction and management of risk, it seems a no-brainer that we would concentrate some of our efforts to this end.
A thoughtful implementation of an effective CSR program will increase the level of goodwill and enhanced reputation of the company involved. This can assist in reducing the risk of boycotts, improve local population sentiment, and minimize negative press. Given the advent of the internet and the never-blinking, “news on demand” of the modern era, many companies face risk exposure from even the most casual of observer with access to social media. Now, more than ever before, risk management is irrevocably linked to reputational management.
If a company’s CSR efforts can enhance positive community relations, it will help decrease exposure to risk/conflict and protect its social contract (a company’s ability to operate in their given environment).
Additionally, we all work with customers/clients who have hired us to recommend ways to mitigate risk. It is therefore one of our core obligations to advise them on ways their own company can engage in CSR efforts to reduce their risk exposure. If our advice is implemented, it only makes our job easier.
Now, more than ever before, risk management is irrevocably linked to reputational management.
Case Study: 7Spears was contracted by a major oil exploration company to conduct a risk mitigation assessment to their operations as they explored entering into a new market in Nigeria. Other companies in that sector were experiencing high rates of kinetic incidents, kidnappings, and poor support from the local populace. Talking with the heads of security for these companies, we learned that they had attempted to reduce their risks by conducting their own version of CSR-type activities (digging wells, building schools, etc.) with limited results. Our assessment uncovered that the efforts of our client’s competitors were not addressing the negative perceptions associated with companies of this type, nor were they addressing the true grievances of the locals. We found that oil exploration companies were seen as “foreigners” who were exploiting natural recourses, destroying local commerce and agriculture, and irrevocably damaging the environment and ecosystem of the homeland of the local populace. Additionally, we were able to understand that these types of companies significantly disrupted the local business environment; especially affecting the local farmers and fisherman. This disruption had equated to a significant unemployed population that had all the time in the world to concentrate their negative sentiment on what they perceived was the root cause of their problems.
7Spears advised their client that successful operations in this environment were possible, and that their risk exposure could be significantly less than their competitors if they invested significantly in a two-pronged CSR program. First, they had to make a very public showing of reducing the environmental impact of their operations and build a marketing and branding campaign that supported this effort. Second, they needed to develop a program whereby they not only employed members of the local populace, but developed an internship/mentorship program that developed and trained local workers to assume leadership/management roles within their organization. Five years into this program, the client has a far superior reputation and brand management program with strong local populace support, their local intelligence network is vastly superior, and (most importantly) they have had significantly less security-related incidents than any of the other operators in the region. The money/time/effort spent by the client to develop and implement their comprehensive CSR program has impacted their bottom line in a positive way in terms of decreasing down-time (less incidents to recover from), their security program is much more efficient (increased intelligence, less incidents, zero strikes/walk-outs), and their global reputation has increased as an example of how to successfully operate in a high-risk area.
Brand Value & Reputation
Brand value and reputation are closely linked and often thought of as two sides of the same coin. In the Doughty Centre’s study, a company’s reputation was cited as mostly being useful for improving the value of the brand. Conversely, respondents stated that the main way to improve the value of the brand was through improving the reputation of the company through market differentiation, leading to customer attraction, employee retention, and advocacy of causes that resonated with the company’s customer base.
Attracting new customers is the life-blood of any successful business. Marketing efforts and sales departments exist with this singular focus in mind. It has been proven that a company with a strong identity in terms of values and standards helps strengthen the overall brand identity and attract customers who align with those values. This, in turn, leads to an overall increase in customer satisfaction, customer loyalty, and serves as a market differentiator among like competitors.
When your potential client/customer pool sees that you are not simply out to make a buck, but that you also contribute to causes that align with their values, there is a bond that is immediately formed.
A strong customer base and customer acquisition program has the compound benefit of attracting investors who see these factors as markers to economic success. Subsequently, a company with a strong brand, loyal customer base, and investor attraction is seen as more valuable than competitors in the same space, thus feeding back into the cycle to bring more customers…
But the cycle begins with a strong brand/reputation that is based on clearly identified values. One of the most efficient ways to identify those values is through the social responsibility projects that a company is involved in. When your potential client/customer pool sees that you are not simply out to make a buck, but that you also contribute to causes that align with their values, there is a bond that is immediately formed. That bond separates you from competitors who offer (in their perception) identical services.
Case Study: The tagline at 7Spears is Collaborative • Security • Solutions. We set out to build a brand based on a unified, “we’re in this together” approach to risk mitigation. The undercurrent of this concept is a strong sense of team and community, as we work together to solve a given problem. To that end, one of 7Spears’ CSR initiatives is the creation and implementation of a small business networking group for our local community. Humble in its origins, this community has grown to over 2,000 local businesses (from every sector and industry) who focus on mutual support, community engagement and service projects.
This networking group is facilitated by 7Spears’ Director of Operations. It includes quarterly networking events, fundraising activities for local families in need, and “RAK attacks” (Random Acts of Kindness) that support our local businesses, public officials, and first responder networks.
The financial investment in this group has been minimal, yet we have seen a marked improvement in our brand and reputation. Surprising even to us, this increase in brand value and reputation has expanded past our local community to our global clients. Our current clients love the fact that we are so involved locally. Feedback from them has shown us that our efforts to improve our local community resonate with them and show them that we truly value the collaborative approach that we advertise. This has proved itself in terms of customer loyalty, as our contract renewal rate has never declined. Our referral business has also increased. We have spent nearly nothing on marketing and customer acquisition, but acquire new customers based solely on the recommendations of current clients. This has a tangible increase to our bottom line that is rooted in our CSR efforts to our local community.
A primary cost center for any business is the acquisition, training, and retention of qualified talent. Any effort that contributes to making this process more efficient, adds to the bottom line. Effectively crafted CSR efforts enable a company to be more efficient in attracting and holding on to quality employees. This includes employee motivation, productivity, satisfaction, engagement and loyalty. What better ambassadors does a company have than a workforce who is passionate about the mission(s) – both business and philanthropic – of their employer?
The synergy created between shared values of an organization and its employees cannot be overestimated. When an employee has the opportunity to enact in their jobs in a way that is consistent with their personal values and ethics, there is a bond formed that surpasses the typical employer/employee relationship. An employee that is satisfied in this way is more efficient, more apt to bring new thought leadership to the table, and more willing to be an effective brand ambassador for the organization.
This concept is highlighted in the Doughty Centre’s research by two stunning statistics:
- 75% of employees who consider their organizations to be paying enough attention to issues that match their core values exhibit high levels of commitment. In contrast, 52% of those working for an organization who an employee believes does NOT have matching values (or possess inadequate CSR policies) demonstrate low levels of commitment.
- In a study of 40 global companies over 3 years, we found an improvement of more than 5% in operating margin and more than 3% in net profit between the companies with high employee engagement vs. those with low employee engagement.
The synergy created between shared values of an organization and its employees cannot be overestimated.
Case Study: At 7Spears, we find true enjoyment with the organizations that we connect with through our CSR initiatives, and the work that we do within those organizations. The values and ethics of our chosen CSR organizations resonate with us, engage us and keep us motivated to do great things for those we assist locally and globally. When one is anxiously and actively engaged in something greater than oneself, suddenly life goes beyond a small optic and opens up beyond a chair, a desk, a computer screen and 4 walls (or whatever work situation we may find ourselves in on any given day). When we are able to get outside of the “office” environment and feel the difference that a small kindness can make in the lives of others, it keeps us motivated to not only keep the 7Spears lights on, but to work even harder to retain our customers, work even harder to earn the funds that our clients pay for our work, work even harder to earn customer loyalty and work even harder to market ourselves in order to find new customers. The hard work is mutually beneficial to both 7Spears and our CSR organizations. Basically, we work hard so we can give. We give because we enjoy these connections. If work=giving, then we are in 110%.
Direct Financial Impact
Intrinsic value is great, and it is easy to see how everything we have discussed to this point adds value to a company’s bottom line, but nothing quantifies the case better than direct financial impact. This takes the form of lower penalty payments, proactive measures that lead to direct costs savings, improvements on investor relations (that lead to bigger/better investment), increased shareholder value, and sales/business increases directly attributable to responsible business practices.
Socially responsible investment is also leading to an improved access to capital from VC funding and support. This is an enormous growth market. According to the Doughty Centre’s research, 881 companies are now signatories of the UN-backed Principles for Responsible Investment (PRI). This indicates an increase of 30% in just 12 months and represents a whopping $22 trillion assets under management. This is something that investors and VC’s sit up and take notice of. It indicates that companies with strong CR policies will gain competitive advantage regarding international markets and access to finance.
CSR does not just deal with charities and causes. By definition, it also involves those actions that demonstrate a responsibility on the part of the company to do the morally and ethically “right” thing in their given market sector.
The Doughty Centre research further states that there is growing evidence that mainstream investors and financial analysts are paying greater attention to CSR-related issues and more generally to intangible assets and intellectual capital. This is likely to increase the profile of CSR issues in the financial valuation of enterprises.
CSR does not just deal with charities and causes. By definition, it also involves those actions that demonstrate a responsibility on the part of the company to do the morally and ethically “right” thing in their given market sector.
Case Study: 7Spears takes seriously its commitment to being compliant to ISO and industry standards regarding the operations of our company. Due to the lack of regulations governing the security industry, our compliance is not mandatory and strictly voluntary. We have made the financial and time investment to be ISO 9001 compliant. We ensure that we abide by relevant ASIS guidelines and standards, despite the fact that some of our competitors cut corners on these issues. We feel that it is the right thing to do and our customers seem to agree.
There have been several times that we have had a potential client referred to us that is attracted to our company’s service to a mutual acquaintance. Despite the recommendation/referral, the question is often posed, “What separates you from your competitor?” or “I am considering several companies for this job, why should I pick you?”. Not only are we able to outline some of the CSR initiatives we are involved in, we are able to articulate our voluntary compliance to non-mandatory standards and guidelines. Our experience has shown that this is an enormous market differentiator and, we suspect, has led to us winning competitive bids and contracts.
Adopting a deliberate CSR program can cause a company to re-think the role of their business in society, leading to a better understanding of impacts on, and from, issues previously seen as outside of their concern. Examples include poverty among a company’s customer base, climate change affecting supply chain, or an aging population affecting the acquisition of an effective labor workforce. Reconsidering such issues in light of what they mean to the business and how business impacts on these issues has uncovered new opportunities for all parties involved.
Re-analyzing your own company and brand in this light also leads to partnership and relationships that expand into previously unrecognized value spaces. For example, when two separate companies come together to engage in a CSR initiative that has mutual benefit, there is an aura of goodwill that can lead to further business ventures that had not existed previously.
Case Study: 7Spears’ most recent CSR initiative was our partnership with The Children’s Rescue Initiative (CRI) (www.thechildrensrescue.org). CRI is a NGO that focuses on the actual rescue of people involved in human trafficking and the sex trade. Yes, we contribute to this effort with actual human resources that augment the actual rescue missions, but we have also been able to contribute to the mission planning and command/control aspects of their efforts as well. Through this partnership, we have been exposed to personalities, entities, and organizations that we never would have had access to previously. There is a bond formed among these new associations that is born from a mutual respect and admiration of being involved in affecting such a global epidemic as human trafficking. We have also seen enormous business benefits in a myriad of other ways as well:
Through our partnership with CRI, we have recognized a 40% increase of those who follow us on social media. Our interaction/engagement rate through our social media platforms with our customer base is up 32%. Prior to this partnership, our largest exposure on these platforms had been a paltry 323. One notable social media engagement during our most recent trip with CRI netted exposure to nearly 10,000. Our website traffic/visitor-ship has increased a dramatic 68% during the time we advertised our efforts with CRI. All of this has allowed us to highlight our capabilities as trainers, protective intelligence experts, contingency planners, and command and control practitioners to an audience that was previously inconceivable.
This reputation and exposure value bore fruit significantly on a recent effort to procure funds to conduct an unplanned contingency operation for CRI. The local business network effort that we spoke of previously, who had up to this point only engaged with us on local issues, surprised us significantly with support on a massive scale to CRI’s global efforts. One of our CSR efforts was able to link up and support another CSR effort in an unprecedented way. This not only generated a large amount of market value and brand recognition for 7Spears, it was also an activity that generated a marked amount of goodwill and appreciation among all parties involved. Local members who had never been exposed to something like this were immediately impacted and got to feel that they were members of a global team accomplishing something that truly mattered. CRI was able to expand its exposure and donator base as well.
Our efforts with CRI have attracted a talent pool of highly-qualified candidates. During our initial interactions to them, we always ask, “How did you hear about us?” This new pool of candidates share that they heard of us through our efforts with CRI.
The reputation, exposure, and brand value of our efforts with CRI are assuredly going to mature in the next several months. More important, is the networking value we’ve gained by associating with organizations who share a common value and desire to do something about it. We’ve made more than strategic partnerships, we’ve made friends.
Most of us in this industry have an inherent draw to “do something good”, to be part of an effort that is bigger than ourselves. We can all agree in the emotional and kismet-associated benefits of engaging in philanthropy. At 7Spears, we truly believe that you receive back what you put out into the universe, both from a personal and a business perspective. We enjoy engaging in altruistic activities for the joy of doing them. For the ability to make a difference and be part of our local community or a solution that resonates with us, or matches our business values and ethics. We want to be involved in activities that mean something. At times, however it is difficult to quantify or justify spending the time, money, or effort to engage in these types of activities; especially when the very resources required are in such short supply. There is a business case for committing these resources to socially responsible initiatives. There are benefits to security and risk mitigation, brand management, workforce satisfaction, tangible financial value, and business opportunities.
Whether you’re an established business with dozens of employees and a large budget, or a solo practitioner wondering how to use limited time, money, and resources to further your brand-new start-up (or anywhere in between), we hope that you gained something of value in this article and look at CSR activities as a viable way to receive a tangible return on your investment…and hey, do a little good in the world while you’re at it!
- Doughty Centre Corporate Responsibility – The Business Case for Being a Responsible Business – the primary source for the statistics and concepts used in this article. https://www.bitc.org.uk/sites/default/files/kcfinder/files/Business_case_final1.pdf
- The Children’s Rescue Initiative (CRI) – an NGO dedicated to the rescuing and aftercare of victims of human trafficking and the sex trade. They have a need for qualified assistance in rescue operations, aftercare support, community awareness, and corporate sponsorship/donor acquisition. To learn more about this organizations or find out how you can help, visit thechildrensrescue.org.
“Securing the world through social and community engagement!”
P.S. We love collaboration! Please leave a comment, disagreement, or point of discussion in the comments below. If you liked this article, please feel free to share it on social media! If you need more detailed assistance on challenges specific to your family, group, or company, please contact us via the “Contact Us” link or email info@7SpearsSecurity.com. And don’t forget to subscribe to our blog to continue the collaborations process (just fill out the form on the right)!