• by Craig Bida , July 30, 2012

There’s something radical going on in the C-suite lately. Business leaders are acting in bold ways—showing increased impatience with the status quo and taking action against pressing societal issues. This is driving an increased focus on corporate cause and social impact programs, as companies commit more resources to drive positive change.

A great example of a CEO leading this charge is Howard Schultz of Starbucks. For July 4, Schultz penned a letter titled, “How Can America Win This Election?” Calling on Americans to push beyond partisanship, Schultz wrote, “Please don’t be a bystander. Understand that we have a shared responsibility in solving our nation’s problems. We can’t wait for Washington.” 

Under Schultz, Starbucks is deepening its societal investments. To support its Create Jobs for USA program, the company is selling cause products (coffee, mugs, bracelets, etc.), donating millions of dollars, building factories, sourcing products here in the U.S. and partnering with companies like Google and Citibank. 

And Schultz is not stopping there. He reportedly tracks down fellow CEOs personally to goad them into action. Last year, to protest partisan gridlock, Schultz led a campaign to stop corporate contributions to incumbents in either party. One hundred and fifty CEOs have since signed on.  

Schultz is evolving quickly into what I call an “activist CEO”—a business leader personally committed to change and unafraid of using his or her company as a bully pulpit. Schultz is not alone. At my firm, we are increasingly coming across C-suite players on a similar journey. 

For some, this means undergoing a personal/corporate vision quest to find the right issue. As the CMO of a $10 billion global retailer recently said, “We want to help save the world. We just don’t know how.” Others are already laser focused. I recently attended an under-the-radar gathering of major CEOs that had the righteous, electric feel of a church gathering. United around a common mission of workforce resilience, these CEOs are working to ensure America will have the diverse, educated employees needed to compete in the global marketplace. 

The idea of business leaders tackling societal issues is certainly not news. There have been visionary, status-quo-disrupting CEOs out there for a long time—think Ben Cohen and Jerry Greenfield, Anita Roddick, Yvon Chinouard or Jeff Swartz. What is new, though, is the widespread scope of this next generation of C-suite engagement—from family-run businesses, to private equity-led global companies, to CPG giants. 

What do these companies have in common? The way they are being impacted by pressures from a broad array of stakeholders, coupled with the accelerating influence and the real-time transparency of social media. As one CEO put it, “The spears are now pointing from every direction.”  Shareholders, business partners, procurement people, employees, financial backers, the media—even spouses and kids—are pushing for change. And consumers? Completely on board. Research by my firm shows an overwhelming 94% say companies must change their business practices to deliver positive impact.  

To ensure success, there are a couple of caveats that CEOs must keep in mind. First, approach social investments with an ROI mindset. Making social commitments “because it’s the right thing to do” can feel good and inspire followers but become an unsustainable drain if not linked to driving business objectives. 

Take a lesson from P&G. In its purpose statement the company loftily talks about “improving the lives of the world’s consumers, now and for generations to come.” It is making deep investments in driving positive social impact through award-winning initiatives like Pampers One Pack = One Vaccine, Tide Loads of Hope, Dawn Saves Wildlife, Pantene Beautiful Lengths and Duracell Power Relief. Yet P&G is driven by an absolute focus on ROI that Damon Jones, P&G global external relations director, summed up at the recent 2012 Corporate Community Involvement Conference as, “This is business, not philanthropy.”  

Second, companies need to focus on impact. With countless issues to take on and nonprofits needing support, CEOs—especially the activist kind—must be careful their aspirations don’t overreach their means. Smart companies are picky about which particular piece of the larger societal puzzle they will solve. 

Consider the example of a major financial services company that realized—after decades of spreading millions across multiple issues—that they had spent a lot but hadn’t delivered many tangible results. The company is now working to consolidate philanthropic giving within a clearly defined area.  When it comes to cause and social impact, less really is more.   

There is a growing recognition that companies control enormous amounts of society’s resources, creating an opportunity, and some would say an obligation, to lead societal transformation. Looking ahead, expect to see more change-agent behavior in the C-suite as CSR continues to mainstream into the heart of business strategy. Business leaders at all levels will need to be ready to answer one key question, “How activist are you?”