CSR Through an Entrepreneurial Lens: Q&A with Andrew Yang, Founder & CEO, Venture for America
Andrew Yang is the Founder and CEO of Venture for America, a nonprofit program that places our best and brightest at startups in emerging cities, helping build businesses, create jobs, and make an impact. He has worked in startups and early-stage growth companies as a founder or executive for more than twelve years. He was the CEO and President of Manhattan GMAT, a test prep company that was acquired by the Washington Post/Kaplan in 2009. He has also served as the co-founder of an Internet company and an executive at a health care software startup.
Andrew has been selected by the White House as a Presidential Ambassador for Global Entrepreneurship and a Champion of Change for his work with Venture for America. He is the author of “Smart People Should Build Things,” published by Harper Business (excerpts here and at Amazon). He was named one of Fast Company’s “100 Most Creative People in Business,” and has appeared on CNBC, Morning Joe, Fox News, TIME, Techcrunch, the Wall St. Journal, and more. A new documentary about Venture for America, Generation Startup, co-directed by Oscar winner Cynthia Wade, premieres this Fall.
Versaic: Why should companies invest in CSR?
Andrew: Wow, there are so many reasons. The first is that people really want to feel that their work is important. Of course, making a company profitable and successful is important. But most people need a sense of purpose that goes beyond dollars and cents.
I was with Howard Schultz yesterday, and he talked about the value to Starbucks of being authentic, which for them means providing health care for hundreds of thousands of employees and now even subsidizing workers’ college educations. He believes that customers know that Starbucks stands for something and that it informs their interactions with the company every time they walk into a location. Starbucks has had incredible growth and profitability for the past twenty years, which makes one feel that he’s right.
The reasons for CSR range from the practical – higher employee morale, better brand equity, more engaged and loyal customers – to the aspirational. What’s interesting is that people can generally pick up on why a company is doing something. Your biggest returns tend to be from when something feels the most genuine. But at the high end, being a highly responsible corporate citizen can generate incredible value and growth for a company.
Versaic: What brand and marketing value can CSR and Sustainability Initiatives bring?
Andrew: There are companies that we associate with certain values and priorities. We know that Starbucks and Google and Disney have certain things that they would and would not do. It makes us more likely to patronize them and give them the benefit of the doubt if something goes wrong.
CSR and Sustainability initiatives are a huge part of building that sort of brand and marketing value. There are costs associated with them, but in the right cases those costs are vastly outweighed by the brand boost and an elevated relationship with the consumer. Again though, if one were to adopt initiatives strictly based on economic benefit from brand uplift, people would pick up on that and the brand benefits would likely be limited.
Versaic: What advice do you have for brand marketers who are trying to make CSR or sustainability an essential part of the business?
Andrew: The big challenge is really leadership buy-in. If the CEO and senior management really prioritize it, it will become a core part of the business. If they don’t, it’s likely to be tough.
I heard the story from a major company CEO how, when he first became CEO, he wanted to adopt and invest in good corporate citizenship practices. But he wasn’t sure that was part of his job. He credited spending some time with some other CEOs at the Committee Encouraging Corporate Philanthropy for the realization that it was indeed a core part of his job. And he became a believer and now is a real role model.
People will respond to leadership from any level. If you do things that you sense are good for the business and act for the right reasons, people will respond to that. First they might take a wait and see stance, then they will be won over. Someone in CSR told me that they knew that they’d succeeded when others were trying to take credit for an initiative. It happens everywhere. You just have to lead them to that point.
Versaic: What are the unexpected benefits or outcomes that you have seen for companies that have implemented CSR Programs successfully?
Andrew: A lot of it revolves around talent. Again, people want badly to care about their work on a human level. Sometimes you’ll be working on a CSR initiative and you’ll wonder about the immediate impact. Then a junior employee will say to you privately, “This program makes me proud to work here.” That engaged employee can help a whole team or brand perform better. It’s the wins that aren’t always evident but add up. People do notice and appreciate when an organization tries to do something positive.
I’ve seen executives meet new clients through board relationships that arose out of CSR-related activities. That stuff happens all the time too.
Versaic: What are some of your favorite CSR brands and what makes their programs so effective?
Andrew: Two companies I’ve worked with - PwC and UBS - have very strong CSR programs. PwC has appointed a Chief Purpose Officer, Shannon Schuyler, as a sign of their commitment to high standards and being a leader in corporate social responsibility. They’ve also adopted Purpose Days which bring together thousands of employees to reflect on what makes them excited both in and outside of work. They’ve built up their Foundation’s resources and efforts. Their commitment is real and it shows.
UBS has originated a Revitalizing America program that invests in entrepreneurs of different backgrounds and helps businesses grow. That program was born out of feedback from clients as to what they cared about most. The program has been successful in large part because it’s tied to the business, and their Chairman, Bob McCann, is a Pittsburgh native who is genuinely invested. The message is that UBS cares about what their clients care about, which in this case happens to be extremely prosocial.
Versaic: What are the 3 most important ways companies measure the success and how does that lead to value in the business?
Andrew: Ideally, companies are in it for the long haul. The truth is that many of these programs and campaigns don’t have direct and immediate impacts on the business. You wind up with executives and sponsors feeling pressure to report on how great things went in a time frame that might not make sense.
To the extent that you can measure success, one is improved employee engagement. Did they enjoy volunteering and lending their time and expertise? Was it valuable? Did they interact with people from other parts of the business in a way that was meaningful and will build relationships? Do they feel more energized about their work and the company? Qualitative survey data can be quite illuminating and provide good feedback as to whether something was helpful and important.
The second would be improved external perception. Do people like the company more and see it as values-driven? Are customers and clients more highly engaged? Has the brand equity changed? Has social media engagement increased? These can also be measured via survey; most companies have existing means of seeing what people think of them.
The third would be discernible positive financial impacts. New client relationships, recommendations and referrals, lower brand switching, new related business lines, lower employee turnover. It’s often hard to suss out what resulted directly from a CSR initiative – why did that client not leave you? – but it is possible to measure and quantify results with some effort and time.
Versaic: How can companies truly differentiate themselves in how they communicate their CSR initiatives and results?
Andrew: A lot of it is who’s talking and how it’s being said. If it’s the CEO expressing it in a human way, that’s the most effective. When it’s the Foundation or a particular division of the company communicating CSR initiatives through press releases, it’s less effective. The more senior and human, the better. Also, organizations that are successful tend to repeat themselves a lot. A lot of work goes into aligning communications and seeing to it that everyone is amplifying and reinforcing the same messages.
Versaic: What tips can you share with companies who would like to increase the impact of their CSR programs?
Andrew: I’ve met many people who work in CSR and they strike me as internal entrepreneurs. For every 100 people who’d like to work in CSR, there are maybe 1 or 2 jobs. At the same time, there might be 1,000 or 10,000 employees for every CSR professional. For companies that want to be successful, I’d suggest elevating and empowering someone who makes it part of their job every day to push the ball forward. At the high end, it would mean either creating a C-suite position the way that PwC did or making commitment to certain values an aspect of how leadership is measured. And then give it time. Cultures aren’t changed quickly, and that can be what takes.
Versaic: Where do you see CSR going? What is going to be important 3 years from now?
Andrew: Millennials will make CSR an increasing part of what makes a company successful. I work with hundreds of young people and they want to reward companies that live their values. They crave authenticity and humanity. They hate boilerplate – they might not even read it. They think in images and they’re savvy. The standards for CSR are going to continue to rise in terms of both how it’s delivered and communicated. In my view, CSR is going to become an ever-more crucial part of keeping companies successful and growing.