Saturday, July 29, 2006

Civic Involvement As A Corporate Asset

From Otis White's Urban Notebook at He is featured weekly on our syndicated radio program Smart City:

Not all things were better in the past, but one thing in cities was genuinely better 30 years ago: business leadership, particularly among big companies. Alas, today’s cities are filled with branch offices of large corporations that never participate in chambers of commerce, rarely offer more than token support for United Way campaigns, and never, ever dirty their hands with local politics. So it’s surprising to learn that there are a few large corporations that actually push their executives to participate in civic work. Even more surprising: IBM is one.

Why is that surprising? Because IBM has every excuse for distancing itself from the communities it does business in. It is a multinational corporation without ties to any particular region of the country (it is headquartered in suburban New York but has operations everywhere). While it does business with lots of governments, it isn’t primarily a government contractor, so it has little need to curry favor with localities. Nor is it part of a regulated industry, like a bank or utility, and thus dependent on the whims of politicians.

And its executives, like those of most large companies, are a nomadic lot. (The old joke was that IBM stood for “I’ve Been Moved.”) Add it up: No close ties to any region, no need to curry favor with politicians, a peripatetic group of executives, and you’d figure IBM would be among the least involved of companies. But you’d be wrong.

According to IBM, 60 of its executives in the U.S. are on United Way boards and 53 are on local or statewide chambers of commerce. Subtract community relations and government affairs officials, and you still find a surprising number of what corporations call “business-unit executives” (those who run departments related to services or products) on community boards (50 on United Way boards, 36 on chamber boards). Example: Lee Torrance, top executive in the Atlanta office, is on the Atlanta chamber and United Way boards and involved with Habitat for Humanity and the Atlanta Ballet. Another: Don Jue, director of operations for 20 Western states, sits on the Los Angeles chamber board, the Urban League board, the L.A. Sports Council and the Asian Pacific American Legal Center board.

This isn’t by accident, IBM officials say. The company has targeted 23 metro areas in the U.S. for local involvement by its executives, because these places have large company operations, a large group of clients or are seen as important future markets. (These regions range from Burlington, Vt., to New York.) The company requires top executives in these regions to be sure the company is represented on important civic boards and active in good causes. Finally, it makes “external relations” (translation: community involvement) part of these executives’ annual performance reviews.

But if the “how” of IBM’s community involvement is clear, the “why” is more mysterious. IBMers say it’s part of the corporate culture, something that goes back to its earliest days nearly a century ago. Employees like it, company officials say. And it’s good for business, part of the “base of integrity that gives people trust in doing business with IBM over and over,” says Ann W. Cramer, director of corporate community relations for North America.

Could other large companies do the same? Sure. Why don’t they? Because civic involvement isn’t seen as central to these companies’ business. Thus, when most big companies get involved in communities, they do so by sending PR executives or government-affairs people, officials whose work is seen as incidental to the company’s real business. This, then, is what makes IBM’s approach so remarkable. Its use of business-unit executives for most of its civic work shows that, to Big Blue at least, community involvement isn’t just marketing, it’s a corporate asset. And that’s an idea worth cheering.

1 comment:

Anonymous said...

Excellent article. My pet peeve: corporate marketing disguised as civic involvement or charitable giving. IBM does it the RIGHT way.