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RE: “Doing good is good for business.”

December 8, 2011
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Yes it is.

Ever since IIConline.org launched back in November 2010, we’ve brought the concept of doing business, doing good to the real estate industry. Why? Well, like most, we believe in doing right by our community. We’re also friendly Midwesterners. But most importantly, we know from experience that doing good is just good business.

Branson's Virgin Group recently acquired Northern Rock and is resurrecting the troubled bank as Virgin Money

But don’t take our word for it. Really, don’t. In fact I would much prefer if you took Richard Branson’s word for it. Or maybe Colin Dyer’s. These guys know a thing or two about business. The founder of Virgin Records, Virgin Atlantic Airways, Virgin Mobile, and the much-hyped Virgin Galactic (yes that’s on-demand space travel) among others, Branson is worth around $4.3 billion.   Dyer oversees the second largest publicly traded commercial brokerage firm in the world – Jones Lang LaSalle – with over 40,000 employees in 750 locations across 60 countries.

Both are on record with very public declarations that social responsibility is  good business.

In 2010, Dyer released a white paper titled The Business Case for CSR in which he provides bottom-line arguments for JLL’s commitment to socially responsible business practices. He frames the company’s six pillars of corporate social responsibility (CSR) in the context of competitiveness, market opportunity, efficiency, enterprise risk, and reputation – metrics that even “the most single-minded profit-oriented shareholder” can endorse.

And recently, Richard Branson sat down with The Telegraph to discuss the upcoming release of his book, unpoetically titled Screw Business as Usual.

Okay. We’re Listening.

The them of the book is that doing good is good for business. Sound familiar?

In the article, Branson argues that business leaders not only have an obligation to move the world beyond financial crisis by acting as a force for good, but that those companies which do so stand to excel financially. His book cites various companies that have prospered by leading their field with responsible business models and initiatives, including Marks and Spencer in the UK, General Electric, and Ben and Jerry’s.

Corporate Ethics and Community Investment

Corporate leaders have embraced sustainability initiatives for their clear bottom-line benefits: cutting waste and saving energy also saves money. But broader social responsibility initiatives that incorporate corporate culture and the community  can also drive real financial return.

For example, a strong commitment to ethics and authentic community engagement helps recruit, retain, and motivate employees – which enhances corporate performance and brand perception. According to Dyer, top-tier talent “prefer to work for a socially responsible company” and are “increasingly sophisticated” about avoiding those that are not. To attract and retain the best and the brightest JLL must cultivate a corporate culture that is  ethical and locally engaged. Corporate leaders must set and adhere to the highest standards of transparency and integrity. Leadership must also empower employees by accommodating their community engagement commitments, and supporting those commitments with locally specific corporate giving.

The payoff?  Branson argues that companies will reap a competitive advantage from a committed, energized workforce. “If companies become a force for good, the people working for them will be that much more motivated and their brands will shine brighter amongst others.”

Companies that support local engagement and a culture of integrity also stand to boost business and lower risk. Dyer notes that authentic community engagement often produces new business relationships. The CEO of Pratch & Company, Leslie Pratch, sums up the value of integrity simply: “Markets run on trust.” In the Journal of Private Equity, Pratch explains that qualities such as integrity and transparency lower transaction costs and allow corporate leaders to behave in ways that maximize shareholder wealth without “exposing companies to the consequences of behavior that would be sanctioned.”

There is some data to back these assertions up. The Telegraph article cites a survey by Leap CR that found 75% of employees want their firm to balance commercial success with social responsibility. Another conducted across 10 of the world’s largest countries (by GDP) found that 93% of consumers say they would buy a product because of its association with a good cause. Finally, Dyer notes that Ethisphere’s list of the world’s most ethical companies consistently outperform the S&P 500 Index.

Market Opportunities

Finally, there are market opportunities within CSR challenges, and smart business leaders find them. For example, commercial real estate accounts for over 40% of green house gas emissions in developed countries – a potential CSR liability for JLL, which manages over 1.6 billion sq. ft. of commercial real estate. Rather than run from the responsibility to address climate change, JLL developed profitable, in-demand energy management and sustainability services for their clients – boosting the bottom line while benefitting the environment simultaneously.

Meanwhile, Branson is taking his Virgin brand all the way to the bank…literally. “Absolute greed has come close to bankrupting the world,” he says, and as a result, “ people are crying out for a different approach to banking.” With the recent acquisition of Northern Rock Branson intends to shake-up the financial industry by launching Virgin Money – a bank whose stated aim is to “make everybody better off.” While other banks try to buy their way out of the bottom of the public opinion barrel with glossy PR campaigns, Virgin Money will actually behave differently, lending more, supporting entrepreneurs, and foregoing risky investment activities to focus on retail banking.

They Get It

What Branson and Dyer understand, is that businesses thrive when the communities they serve are thriving, and when their personnel are engaged, empowered, and proud of their employer.

IIC Member Michael Pink donates to Thousand Waves Foundation as a result of Urban Partnership Bank's real estate transaction

At IIC, we are living proof of the power of responsible business. If doing good wasn’t good business, IIC wouldn’t exist. IIC is actually the result of a highly successful business practice, initiated in 1995, that was based on doing good.

What’s the model? Well, imagine you’re a real estate broker. Replace your standard business development costs – like advertising, referral fees, and lead generation fees – with more affordable philanthropy. But the philanthropy, 10% of a commission, only applies to additional business – deals you wouldn’t otherwise have. Now, let your client direct that philanthropy and boom – you’ve got a cost-effective tool to win new business. You’re better off, your client feels great, and society as a whole benefits.

Imagine that: real estate as an engine of social good that makes everyone better off. Sounds like something Richard Branson might get behind….

One Comment leave one →
  1. December 8, 2011 10:27 pm

    Love this and the philosophy behind it. Richard Branson appears in our film Opening Our Eyes as he visits Oasis Youth Network in Sydney, Australia.

    Gail Mooney
    http://www.openingoureyes.net

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