Customer Reviews

What Matters Most: How A Small Group Of Pioneers Is Teaching Social Responsibility To Big Business, And Why Big Business Is Listening

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This review is an adaptation of my review published in Personnel Psychology, Winter 2004 issue.

As one of the pioneers in the corporate social responsibility (CSR) movement, Hollender is evangelical about promoting the implementation of CSR "in all of its forms." I'm not sure I know what he means by that. As he acknowledges, it's in the "mind of the beholder" because there's "no firm consensus" about what CSR means. I certainly can't criticize him for not pinning down the concept. Professor Ronald Sims (2003), in his own book on the subject for instance, has offered five different definitions. I think Hollender equates CSR with the idea of a triple-bottom line of responsibility and accountability for fulfilling what he thinks should be the financial, social, and environmental obligations of a corporation.
Margaret Mead once said in effect that social change always starts and can only start with a small group of people. The small group identified in the book as pioneers in the CSR movement include small business entrepreneurs like Ben Cohen and Jerry Greenfield of Ben and Jerry's Ice Cream, socially responsible investment funds like the Calvert Social Investment Fund, and a host of advocacy groups or non-governmental organizations (NGOs) like the activist group, Greenpeace, and the more reserved Businesses for Social Responsibility (BSR) that was conceived as sort of an alternative Chamber of Commerce.
The book gives an interesting account of the different ways in which these pioneers promote CSR among big corporations. One way, for instance, is non-confrontational and educative in trying to "bring big business [no matter how socially irresponsible] to the table and then move the table." For example, BSR works closely with big companies to promote a set of best practices that hopefully will not only further the CSR progress of those companies but also entice other companies not to be left behind. Another way is confrontational, involving pressure tactics and sometimes law suits. Greenpeace, for example, gradually succeeded in pressuring Royal Dutch Shell to choose a more environmentally responsible way to dispose of an obsolete oil storage tanker and loading platform in the North Sea.
As you can well imagine, the notion of CSR is controversial and fraught with issues. The authors clearly know that and for the most part deal with the issues relatively well in my opinion. I'll mention and discuss a few of the issues.
Perhaps the biggest issue is over what should be the legitimate purpose of business. Hollender, understandably, totally rejects what he considers to be the "hysterical" opinion of conservative economist Milton Friedman that CSR is "fundamentally subversive" and that the only legitimate responsibility of business is to make an honorable profit. To Hollender, CSR "in all of its forms" is the legitimate purpose. Thus a corporation that seeks to ameliorate public problems not of its own making is a more socially responsible company. He cites Coca Cola as an example of a company persuaded by activists to modify its operations in ways to further the prevention and treatment of AIDS among its employees and those of its bottlers and suppliers.
Three related issues are over who should be the public corporation's legitimate stakeholders, for what should it be held accountable, and over what period of time. To people in Friedman's camp, the issues are no-brainers. Shareholders are the only stakeholders, the corporation is only accountable for maximizing their wealth and doing so through legal means, and time is marked in quarterly returns. This view is basically that the conventional bottom line is the only one that must matter. To people like Hollender, the issues are also no-brainers. Absolutely everyone and everything, including the environment, along the company's long value chain from initial product resources to product disposal are the company's stakeholders, the company must be held accountable through full and transparent cost accounting to every one of those stakeholder interests, and time is marked in the long run. The conventional bottom line is thus immensely modified quantitatively and qualitatively.
I found the authors a bit lax in relying on several of their sources about one important matter bearing on those three issues. The sources were quoted as claiming that boards of directors have a statutory obligation to maximize shareholder wealth in the short term. I questioned that claim, and one of Hollender's spokespersons acknowledged that it was a mistaken claim. But this nevertheless doesn't negate the immense pressure CEO's are under to hit the numbers each quarter. This pressure comes primarily from institutional investors who might as well be surrogates for a statute. It takes a morally courageous CEO and a sustainable company to resist that kind of pressure. In an article featuring Hollender and Bill George, the recently retired CEO of Medtronic, the latter commented that he would say at every annual shareholder meeting that the company was "not in the business of maximizing shareholder value," and he believed he "got away with that because the results were so good" (Kelly, 2004).
Another related issue is over how much self-disclosure there should be of a firm's CSR performance. Hollender proposes full "transparency," yet acknowledges that it can make the company squirm, as his did, over risking the possibility that full disclosure may end up making the company legally liable for a product shortcoming that might not otherwise ever be known. He agonized, for example, that while one of his products was more "natural' than that of any of his competitors, he was sure some of his customers at least presumed that his product "was a bit better than it actually was." Not being a fanatically unrealistic CSR advocate, he decided to put a "product self-critique section" on his company's Web site instead of putting a disclaimer on the product's packaging. It's a compromise, yes, but far more responsible than the values held and practiced by a baby food maker I remember as once having been charged with diluting its product.
Another related issue is whether to take a public company private to escape Wall Street analysts and record-keeping requirements. More public companies are apparently going private, and Hollender himself is a case in point. He took his firm private, and that is what it still is today. He points to the private outfitter, Patagonia, as being able to take socially responsible actions much more easily than if it were traded on Wall Street.
Yet another issue addressed, and the last one of theirs I'll mention, is over whether a small, socially responsible company should "sell out" to a larger corporation. An advantage of doing so besides making a lot of money from the sale is the prospect of a responsible product being introduced to a much larger market. But a disadvantage is that the seller risks seeing its values and practices diminished if not overturned altogether by the larger corporation. The authors describe how Ben and Jerry initially felt they had negotiated a deal with Unilever, the buyer of their company, to preserve the values the two pioneers held dear, only to learn later of some actions taken by Unilever incompatible with the values.
The authors claim that the CSR movement has become a "contagious trend." I think that's a bit exaggerated, and the authors offer little hard data to back up their claim. I think it is true that CSR is becoming a more popular topic, but I suspect, and the authors acknowledge, that it lends itself to tokenism or lip service for the sake of appearances or reputation. That's why incidentally I chose to mention the authors' examples of Shell and Coke. Shell reportedly regards the North Sea experience positively and claims there is now "increasingly open and honest communication with the communities," yet we read recently that its two top executives were forced to resign after lying for several years about the company's oil reserves (see, e.g., Timmons, 2004). As for Coke, it's frequently in the news for its "cozy ties to strong arm dictators and rogue bottlers" and for other alleged wrongdoing (see, e.g., Klebnikov, 2003). I could also have mentioned wrongdoing by some of the other companies the authors cite as making progress of one kind or another in their CSR performance. My point is that with so much harmful wrongdoing being committed by public corporations, I would far prefer to see a relatively more restrained movement, one that "simply" calls for public corporations to operate "harmlessly." Achieving that standard would be a quantum leap from prevailing corporate behavior, and I think corporations should direct their resources to taking that leap and not diverting them to the solving of problems not of their own making or to giving guilt gifts through philanthropy or to offering isolated token efforts.
The book is intended for a wide audience, including business leaders, employees, and NGOs. I personally think it deserves to be on a best seller list and should be read by the CEO of every public corporation who has yet to decide where to position his or her company on the CSR spectrum. I also think all thoughtful citizens should read this book. It matters a lot.

REFERENCES

Kelly, M. (2004). Conversations with the masters: Two of the great CEOs talk about the pressures of managing with values. Business Ethics, 18, 4-5.

Klebnikov, P. (2003, December 22). Coke's sinful world. Forbes, 86-92.

Sims, RR. (2003). Ethics and corporate social responsibility: Why giants fall. Westport, CT: Praeger.

Timmons, H. (2004, March 04). Shell's top executive forced to step down. The New York Times.

This book provides evidence for those trying to promote socially responsible business practices, hope for those feeling disillusioned and inspiration for those trying to put the business community back on to a sustainable foundation. It is comprehensive, informative, and a great book for anyone looking to "green business" as a way of working all the time, not just an ideal to be gabbed about at cocktail parties.

Hollender identifies the real heroes and heroines of today's CSR movement - those people taking strong stands, putting their wallets and mouths where they claim their values to be.

If you have any interest in changing the way business relates to the rest of society so we all can see a better future, get this book!

- John Renesch, author, Getting to the Better Future

This is corporate social responsibility up close and personal.
Through the experiences of real executives and entrepreneurs,
Hollender and Fenichell show that social responsibility is not just a slogan but a way of doing business. The authors are clearly sympathetic to their subjects, but they do not blanch when it comes to controversy and debate. Readers will appreciate their realistic take on the challenge of merging financial success with social commitment in today's global economy. A good read with practical lessons for anyone in business.
Prof. Lynn Sharpe Paine - Harvard Business School

In a readable and optimistic manner, Jeffrey Hollender defines the need for both small businesses and large corporations to practice social responsibility. Then, he takes the next step in offering practical ways to reach this goal.
Nell Newman, Co-founder and President of Newman's Own Organics

This is an important book, not only because Jeffrey describes the shift going on in society making responsible corporate behavior an imperative, but why it is that consumers, employees and non-profits play a critical role in keeping corporations "honest" - this book is a must read, for the business person as well as the consumer - governments will never do this because they are economic governments, businesses will never do this on their own because they are incapable of truth, it is the ethical consumer, the vigilante consumer, that will make this happen. This book is really really relevant.
Anita Roddick - CEO The Body Shop

Our environment is a direct result of how we design our things and how we get them. Without leadership and social responsibility from business, we will fail in our efforts for a better environmental future. Jeffrey Hollender represents the next wave of environmental leaders - people who produce visible examples of how we need to do things and show artistry in pointing the way to better design.
Peter Bahouth - former Executive Director of Greenpeace

In What Matters Most, Jeffrey Hollender and Stephen Fenichell persuasively demonstrate that it is not only possible to run a profitable and socially responsible business, but that it is vitally necessary for the future of our planet
Tensie Whelan - Executive Director, Rain Forest Alliance

Jeffrey Hollender has been a pioneer in the world of environmentally proactive business for over 15 years. . He has shown that doing the right thing does pay off both in terms of building a brand that generates great customer loyalty and a business that has consistently generated superior growth. Now if I can only get my supermarket to stock the seventh generation line.
Ben Cohen - Ben and Jerry's

I just received a copy of What Matters Most. I must admit I was skeptical that it would be a good read, as much of the CSR literature strikes me righteous and irrelevant. I have to admit I was wrong. I loved your book! I really like both the effort you made to talk directly with so many key players, and your analysis of each interview. Even if the latter is usually "yes and no," I got the sense of a serious and consistent analysis. I got a good sense of business people really struggling with difficult questions. I also carefully noted mentions of the interplay of business and government, which were interesting and enlightening to my interests.

I've read a number of visionary business books now -- including Cradle to Cradle, Natural Capitalism and Midcourse Correction. They are excellent books on the nuts and bolts of innovation, but leave me feeling, How are these lovely ideas going to be implemented society-wide? I got more of a sense of the big picture from your book.
Bill Sheehan Product Policy Project

Another leader of an iconic "green company", Jeffrey Hollender - founder and CEO of Seventh Generation (yes, I use their laundry detergent exclusively) discusses the challenges of running a business with high integrity and full disclosure. In particular, Hollender recounts Seventh Generation's stint as a publicly traded company and posits that public ownership inevitably leads to an erosion of core values by the pressures of the markets. He cites also the example of Ben and Jerry's take-over by Unilever. I personally believe that positive social change can be wrought through the public securities markets and that values driven investing is the most significant tool available.

I appreciate What Matters Most as a cautionary tale keeping me alert to some of the perils of my chosen approach (Socially Responsible Investing as a vehicle for change). I had the privilege of hearing Jeffrey Hollender speak at a Working Assets brown bag lunch lecture. He is a forceful presence and very inspiring in his forthrightness in answering questions probing the gray areas that an ethical company must struggle with.

P.S. A recent addition to my review: The Resources section at the back of the book is very well researched and thorough. It would be worth buying the book merely for that appendix.

As a professor management who is interested in corporations acting more responsibly, I have just begun to use this book in my senior strategic management course. Hollender is a thoughtful and insightful proponent of socially responsible business. Each chapter covers a specific characteristics of SRB (accountability, transparency, sustainability, etc.).

He recognizes that running a company using these principles is not easy but definitely worth it.

He covers most of the pioneers in the field (Roddick, Cohen, Anderson, Chouinard) and their struggles to live their corporate lives in a responsbile way.

I highly recommend it.


Dale Fitzgibbons

This is an insider's stroll through the confusing and ominous woods where the beasts of economic reality meet the lambs of social responsibility. Author and corporate survivor Jeffrey Hollender (who wrote this with scribe Stephen Fenichell) clearly admires the cast of socially responsible companies, such as Ben & Jerry's and The Body Shop. He covers the informal history of the Corporate Social Responsibility (CSR) movement and his own troubling experiences as chief of a company that saw itself as socially responsible. His presentation is heartfelt, if short on rigorous logic. He candidly discusses having his ideals challenged and trying to justify his compromises. The book labels some behavior socially responsible and some socially irresponsible, but its yardstick is not clear. For example, it condemns the use of child factory labor in developing countries, yet never expresses awareness of the lack of practical alternatives for those children - perhaps starvation. The book explores both the value of the Corporate Social Responsibility movement and its uncomfortable contradictions. We recommend this trip inside the hard work of melding social responsibility with business.

The CEO of Seventh generation, Jeffrey Hollender, pens this book on responsible business. I came across this book because Seventh Generation recently decided to sell their wares through Target instead of Wal-Mart. Most small businesses would love to be courted by the Wal-Mart retailing giant but Jeffrey Hollender felt that Target agreed more with Seventh Generation. In this book, Jeffrey discusses his thoughts on running a responsible business.

The opening chapters were somewhat difficult to get through. Perhaps it just took several pages for me to get used to his prose?

The underlying message I felt was that having a socially responsible business is possible but will require a lot of work on everyone's part. Everyone is so connected to each other now. Perhaps an environmental conscious entrepreneur decides to open a chain of organic restaurants and ensures that farmers are paid a fair price. But what if the restaurant hires an exterminator that uses a toxin that ends up contaminating the soil for generations?

The idea is to have a closed-loop business model ... that leaves things in the same condition as when the company began. For example, think of the credo of camping sites. Moreover, the closed loop business model is more than just your business but includes your suppliers and customers. Specifically, there are hidden costs to disposal of things like electronics and the ubiquitous clear plastic bags. Of course, we every day consumers can throw them in the trash for someone else to deal with. But someone does deal with our trash and there are some real costs. The book gives a story of a putrid land in China where a lot of our electronic waste goes.

I have always loved companies that are transparent with their business models from a financial perspective. Transparency is about communicating to shareholders, consumers, and employees. Transparency is about being candid and introspective on dealings and reasoning for decisions.

There are a mixed bag of corporate stories mainly with Ben & Jerry Ice Cream (who is now part of Unilever) and Seventh Generation. There is of course some mention of Johnson and Johnson's Tylenol case and also on electronic companies like Hewlett Packard and Dell. There is some applause for British Petroleum for a decision to put no money to politics and Shell who compromised with Greenpeace on an issue in Africa.

Surprisingly this is a well thought out book that doesn't get hysterical. It's honest, transparent and I recommend it.

After surviving a year like 2008, where irresponsible and unaccountable actions by corporations and individuals alike, have left us with a financial nightmare, the message of this book should ring in all of our ears loud and clear!
The irony is that you can run a successful, profitable business, and at the same time make the world a better place to live. Companies that practice the message of this book, will become known for the good they do for society, and in turn this will become their best marketing feature.
It may sound idealistic, but think about your own life as a consumer: you are contemplating purchasing two different products from two different companies, the products are of equal quality, however one company is socially responsible and one is not. You would make your purchase from the company socially responsible, wouldn't you?
After two years of research for my own book on this topic, "Virus" I think the message of "What Matters Most" is more important now than ever before.
Rebecca D. Turner author of Tattoo and Virus[...]

I found the book to be uplifting. It is nice to see this type of behavior being practiced. We have entered a time in our existence where we have to start thinking of how we operate as an industrialized country.

Chris Ortiz, author of 40+: Overtime Under Poor Leadership