in csr, nike just does it

Nike recently released their “Corporate Responsibility Report FY07-09” and I was so impressed by it, I just had to share my thoughts about it.nike_logo

Many of you know how big of a Nike fan I am, so it’s probably not surprising that the report resonated so strongly with me.  But actually, I don’t think my positive brand bias has much to do with my reaction to the report.  After all, I take a very skeptical stance when it comes to corporate social responsibility because many companies’ CSR efforts lack integrity the way their brand efforts do – they emphasize the saying vs. the doing.

Clearly Nike is giving CSR more than lip service.  Although the report itself is an impactful document (it’s a well-designed, well-written 176-page piece), it’s what it relays that is so impressive.   Here are 3 remarkable things Nike is doing:

1. Connecting vision and execution – Nike has a compelling vision for their CSR efforts – “to bring people, planet, and profits into balance for lasting success.”  It’s crisp, memorable, and inspiring.

And while many other corporations have similarly lofty aspirations, Nike’s vision is clearly only the beginning for them.  They have crafted specific strategies to fulfill the vision, specific goals for each strategy, and specific plans for each goal. This planning infrastructure increases the likelihood of actually achieving what they dream.

Furthermore the tactics they’ve undertaken demonstrate they’re breaking down their plans into digestible chunks and incremental steps.  Sometimes even small-sounding changes – like using a single shoe lace woven between parts of a shoe to eliminate the need for adhesives and allow for easier disassembly – has moved them one step closer to their vision.  It’s clear they understand the Thomas Edison adage “vision without execution is hallucination.”

2. Seeing it a business issue – CSR at Nike isn’t about being politically correct or improving brand perceptions.  Yes, those may be outcomes but Nike is doing this because it matters to their business.

Nike explains, “The cost of competition for resources will increase as [natural] resources become increasingly scarce.  Coupled with emerging trends – such as customization, a push to be closer to multiple markets and shifting labor markets – we see a new opportunity to create business growth for the future.

This business orientation is evidenced in that they are pursuing new business models, not simply new programs.  The report repeatedly states that “sustainability is a route to future profitability” – and explains why they believe that.  They tie their CSR results to business performance (It’s remarkable that the first pages of the report include a Business Overview. )

3. Leveraging core competencies – Many companies seem to struggle to implement impactful CSR because it requires them to adopt new skills and perspectives that are counter-intuitive to their m.o.

A fast food burger chain which usually runs ads that exploit women suddenly adopts breast cancer as their CSR cause; an investment bank which caters to high net worth individuals trying to connect with local communities through food drives and homeless shelter donations – these efforts are doomed to fail because they don’t make sense to the company’s customers and don’t leverage the strengths of their stakeholders.

Nike’s CSR work, on the other hand, involves what Nike does best – design, innovation, and brand-building.  They’ve attacked the problems of resource scarcity, workforce abuse, and social injustice with the power and prowess that comes from these core competencies and thus have been able to make real progress.

solid business principles

Beyond these smart approaches, Nike’s CSR report outlines how they’re using the business principles that characterize any effective corporate undertaking:

  • proactive stance – Although Nike may have started down this road reacting to criticisms about labor conditions in the company’s supply chain, they’re now taking a proactive approach.  The report declares, “Waiting means we risk facing a forced requirement to shift on someone else’s timeline. For us, the choice is clear. We are always on the offense.
  • address root causes – Similarly, Nike’s first steps in addressing labor conditions were in monitoring and policing, but their approach has evolved to diagnose and solve the root causes behind the problems they experience.  They’re focusing on training factories in Human Resource Management so that the factories implement environmental, health, and safety practices because they’re valued, not because they’re required.
  • organizational alignment – They’ve increased the traction of their CSR efforts by reorganizing the functions responsible for driving them — and integrating “dedicated sustainability specialists” into operational parts of the organization such as retail, logistics, and information technology.
  • political insight – Pushing for legislation and cooperation through advocacy groups and world stages demonstrates Nike’s savvy.  Indeed, everything is political.
  • collaboration – Nike acknowledges that they will be able to affect real change only by working with others, so they’ve partnered with other companies to improve conditions in their shared supply chain through the International Labour Organization’s Better Work program, and to build GreenXchange, a digital platform that enables companies to promote sustainability innovations, for example.

Mark Parker, Nike’s President and CEO, provides the best summary of the company’s CSR efforts with a short-list of “lessons learned”:

Transparency is an asset, not a risk.

Collaboration enables systemic change.

Every challenge and risk is an opportunity.

Design allows you to prototype the future, rather than retrofit the past.

To make real change, you have to be a catalyst.

While I’ll let other people provide a reality check on whether the information in Nike’s report is fair and accurate, I’ll tell you why I’d be willing to bet it is.

First, it relays failures as well as successes. For example, Nike admits that one of their strategies has been derailed, and they concede they haven’t made as much progress as they would like in some areas.  Sure, there’s a positive spin to the entire report, but how many other companies are willing to publish and widely promote a document that outlines that they missed their targets?

Secondly, Nike employees attest to the success the company has achieved. The report includes findings from an employee survey which their full- and part-time employees voluntarily completed.  78% of employees agree with the statement, “I am satisfied with the actions my company is taking to be socially responsible,” and 74% with the statement, “I am satisfied that my company is responding appropriately to address the impact of our business activities on the environment.

A company’s employees are in a great position to evaluate the veracity of corporate claims.  They know first-hand whether or not if the company is doing what it says it is.  If they’re satisfied, it gives me reason to be as well.

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  • Mark Anderson

    Timely posting considering our recent communication Denise. My compliments to your supportive point of view. As a prior VP/GM of NIKE Swim and NIKE Inneractives (intimates – Brandy Chastaine – world cup), I can tell you that NIKE practices what they preach and they were on the sustainability bandwagon way before it was the popular thing to do! They did it a long time ago because it was the right thing to do – not because it would make them look like a participant to their consumers. NIKE doesn’t just promote sustainability issues – they invest in it – considering it their responsibility and they employees are inspired by the commitment that they witness day in and day out. Mark

  • Denise, great piece and I give Nike credit for doing a shoddy activity in a most responsible way. But I still don’t buy it (it’s still marketing hype). The reality of its business model is

    1. Producing products in Third World factories is cheaper than doing so in factories closer to the markets it serves. This is because of wage and related costs, so no CSR standards can overcome the inherent inequality in those relationships. If Nike cared about doing the right thing it would make gym shoes in Maine (or something), but that would never happen.

    2. Shipping products around the world, which is probably one of the most environmentally wasteful/damaging activities any company can do. Add to the fact that lax enviro polices are usually a factor that keeps production at far-away plants so cheap and you get a picture of a very unsustainably responsible business view.

    3. So do Nike employees (not to mention all of the outsourced people who don’t qualify for the label) get better health care, wages, on-the-job support services than the competition? No number of partnerships with special interest or single-issue pressure groups erases the simple fact that doing the right thing is about business practice, not how Nike chooses to narrate it.

    I know this sounds negative and perhaps Nike has been very successful at convincing its consumers that it cares about doing the right thing. But it seems to me that the right thing is synonymous with telling people just about anything in order to get them to buy stuff. Ultimately, that’s not a particularly sustainable strategy.

  • Reality is the name we give to our disappointments.