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The case for CSR: Doing good is good for business

Some companies could use a little psychoanalysis

James Hurman

[Strategy]

In a charmingly lucid translation of Freud, 60s shrink D Bannister described the human personality as “basically a battlefield … a dark cellar in which a well-bred spinster lady and a sex-crazed monkey are forever engaged in mortal combat, the struggle being refereed by a rather nervous bank clerk.”

Bannister was characterising Freud’s Id, Ego and Super Ego, the three components of our personality that develop in the early years of our childhood. We’re born into the world with only an Id, the part that tells us to gratify our base desires at any cost. We puke and shit and scream when we’re left wanting. We are gratuitously selfish. Gradually our Ego develops, enlightening us to consequence and teaching us that if we choose to poop in the potty then we avoid an unpleasant sensation and an irate Mother. Then as our parents instil in us politeness and values, the Super Ego settles in our conscience, guiding us toward a higher moral plane.

Freud proposed that the Ego’s role was to balance the Id and Super Ego. Too much Id and you’re selfish and uncaring. Too much Super Ego and you’re an inflexible, self-righteous old prig. The most successful, well-rounded people tend to be those with a competent Ego.

In the late 1800s, the United States began to legally count corporations as ‘people’. The recent film The Corporation concluded that as ‘people’, businesses behave exactly like dangerously destructive psychopaths without conscience. Freud, to twist a cliché, would be having a field day.

Consider the collapse of Enron. Similarities between Enron’s executives and Bannister’s sex-crazed monkey aren’t difficult to spot: Enron was a corporation devoid of any concern for moral or consequence, whose Id was left alone to ruthlessly gratify the corporate desire for profit. As Freud would have predicted, this personality was doomed to failure.

Enron’s collapse came as researchers catalogued the trend of consumers favouring companies who display evidence of a moral conscience. Here in New Zealand, AC Nielsen’s ‘Good is Gold’ study found that 65 percent of people would pay more for a product whose manufacturer supports a worthy cause. Suddenly corporate charitability was fashionable—a tidy way to buy customers. In 2004, US retailer Target gave US$88 million to charitable causes. Super indeed.

But to rest back on our Freudian thesis, it’s just as vain a pursuit to blindly follow one’s Super Ego as it is to be ruthlessly Id-driven. Freud may instead have favoured a third approach: that the corporate Ego find a way to quiet both Id and Super Ego at once.

In Built to Last, Jim Collins and Jerry Porras noted that phenomenally successful businesses frame the purpose of business in a way that enables them to make a social contribution. Hewlett-Packard: to make technical contributions for the advancement and welfare of humanity. Wal-Mart: to give ordinary folk the chance to buy the same things as rich people. Walt Disney: to make people happy. These companies had “outperformed the general stock market by a factor of 12 since 1925”. It seems there’s a better future in giving back through the way you make money.

Camper shoes shows how a business can contribute socially without blind financial charity. Camper makes shoes with eco-friendly materials and practices, but its real contribution is the mantra of “walk don’t run”, which offers people “an alternative to the Anglo-American model of globalisation and consumption”. Through shoes, its ‘Walking Society’ and eco-hotel and restaurant chains, Camper brings calm to a world weak with hurry-sickness. Camper today has revenues of over US$180 million, seven percent year-on-year growth and one of the most loyal followings of any brand.

Tea brand Dilmah’s ambition is to “dramatically improve the life of tea pickers in Sri Lanka”. With the exuberant assistance of winemaster Bob Campbell, Dilmah classifies its Watte range the same way a vineyard would classify wines. Dilmah remains the fastest-growing tea brand in the world and a genuine contributor to Sri Lankan wellbeing. I’ve a feeling Freud would have approved.