The Price of Profit by Jason Wicks is an essential read not just for corporates, but any business (be that for profit or not-for-profit). As the title suggests, Wicks pushes readers to consider the impact business operations have on the wider community. He provides an accessible introduction to the ideas that are going to separate businesses from being good and great in the future economy.
Wicks proposes that CSR efforts have ‘suffered from a lack of education’ (p29). He continues that this has been stunted by an over-intellectualisation of literature, leaving businesses stuck on how to effectively implement CSR. At the core of The Price of Profit is a straightforward triage framework to help businesses start to shape successful CSR efforts.
By way of introducing this framework, he adopts the mindset that ‘stakeholders are anybody who is affected in anyway by the operational activity of an organisation.’ As such, CSR efforts are not just about what is publicly visible, but also internal company culture. He provides the example of the pay gap between a CEO and employees and the alternative model being an employee-owned business that redistribute profits.
Ultimately, CSR 2.0 is about aligning the operational and publicly facing aspects of a business with social objectives. CSR 2.0 is ingrained in company culture rather than it being an afterthought, which has come to be associated with traditional CSR.
The components of Wicks’ framework include: targeted, integrated and communicated efforts. He believes that effective CSR relies on coordinating the three into one strategy. This means:
- Understanding context in the market. What does this imply about the issues consumers expect a business to be doing social good in?
- Ethical supply chains. A business doesn’t have to give back if it hasn’t taken in the first place.
- Sharing the story. Marketing is at the core of Wicks’ thesis and he urges businesses to get comfortable with sharing their good work. He provides additional frameworks for how this could be generic or targeted; reactive or proactive, each with their own implications.
Wicks’ proposes that success is when this strategy is a part of the business’ identity and they able to sustain both the social and organisational benefits. However, the ideas presented in The Price of Profit need to be understood in relation to the distribution of power, which Wicks touches on. By that, I mean:
- the corporate power to influence social good,
- consumer power – the intention to spend ethically versus possessing the capital to do so and the demand for transparency through digital technologies; and
- the role or extent to which the government can regulate such activity.
Wicks’ triage framework for successful CSR hinges on skills in market analysis and effective storytelling that is underpinned by company values. Approaching this text with a background in social enterprises, I couldn’t help but question my own thinking. Is the emphasis on being a social enterprise and the added props of B-Corp certification simply a collective marketing approach for a wave of businesses leading with social impact strategies? Especially when at the end of the day, if the financial model isn’t right a social enterprise fails to sustain both its enterprising activities and social impacts objectives…
With the global rise of the purpose economy, business cannot afford to ignore growing market demand for CSR 2.0. Wicks’ book provides an accessible foundation for businesses to start thinking about embedding purpose in their business.
You can grab a copy of Jason Wicks’ book here.
NB: I received a free copy of this book in exchange for an honest review.