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CORPORATE PHILANTHROPY AT WORK

From the boardroom to the shop floor

By Professor Robert Hooijberg and Jan van der Kaaij - December, 2007

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The themes of philanthropy, sustainability and corporate social responsibility have penetrated most boardrooms. But how do you transfer social responsibility from the boardroom to the shop floor? And how can you communicate top management’s vision and intentions to the groups that matter: employees, people living in the surrounding area, consumers, shareholders and NGOs? Below you can read how TNT tackled the issue.

The product of a merger, TNT had a company culture that was not uniform. There were significant differences between the former civil servant work ethic of PTT and the Australian go-getter mentality of TNT’s express and logistics arm. In addition, the three company divisions were like silos and parochialism was predominant. In 2002, it became clear that Peter Bakker, TNT’s CEO, had to act.

Then, during a long flight to Singapore, Bakker read an article in Business Week. It spoke about the poverty and despair in the world and asked readers what they planned to do about it. This provoked Bakker to take immediate action. Market leadership also meant social leadership, which meant that he and his company should take up their responsibility and demonstrate their social engagement. TNT could work on good causes to help the poor and at the same time benefit from an enhanced company culture and improved company image.

Bakker considered the challenges his company was facing. How could he – the newly appointed CEO of a public company with 160,000 employees – make his company more competitive and more agile? And how could the creation of a corporate philanthropy program contribute to this?

A different CEO
Peter Bakker became CEO of TNT, one of the largest companies in the Netherlands, on November 1, 2001. He was a modern global manager, very approachable and an alleged workaholic known for sending a huge number of e-mails. Bakker also had a way of surprising his audience. His first media lunch as TNT’s CEO was highly unusual – he made his entrance to the beat of U2, the Irish rock band.

Bakker wholeheartedly believed that there was nothing wrong with the current company mission and vision. TNT aimed to become a global leader in the distribution of goods and documents by instilling employee pride, creating shareholder value and sharing responsibility for the world.

However, within TNT, there still seemed to be a big cultural difference between the incumbent culture of the mail division and the challenger culture of the logistics and express divisions. So one of his major tasks was to forge a single company from the separate divisions and acquired companies with a modern, non-incumbent management culture.

The creation of a corporate social responsibility (CSR) program could be a useful tool to achieving a clear leadership style that fit with TNT’s slogan of “delivering more”. In an interview with the Financial Times Bakker clarified his choice:

“You grow your profit in a service company by making your customers happy. The best way is to make sure your people are motivated. One element of motivation is pride in the company for which they work.[1]”

Selecting the right partner
The first step was to draw up a list of selection criteria for the potential partners. The partner had to be a neutral body with an excellent reputation, a global reach, a compatible culture and a need for TNT’s logistics skills. After discussions with five potentials, it became clear that World Food Program (WFP) would be the best partner for TNT.

As the logistics arm of the United Nations, WFP plays a significant role, providing a total of 3.7 million tons of food. WFP faced the huge challenge of getting this food to where it was needed. Following a successful presentation to the board, the decision was made to go ahead with the program with WFP as a partner. The objective was to demonstrate TNT’s market leadership and to obtain the leading position regarding social engagement in its industry.

James Morris, WFP’s new executive director, also had a vision and commitment that suited TNT. He had a profound understanding of business-NGO partnerships partly due to his corporate experience. Being ambitious to take WFP forward, he was more than willing to help get this partnership on the road.

The partnership began December 19, 2002, when TNT and WFP launched a long-term partnership with the aim of helping in the fight against world hunger. TNT offered to support WFP with expertise as well as funding for at least five years, with €5 million being directed to WFP in the first year. The company hoped to tap the proven dedication of its three divisions and the enthusiasm of all its employees to take on the greatest logistical challenge of all: Helping to feed the world. The initiative was internally baptized “Moving the World”. During a meeting between WFP and TNT, five areas of cooperation were defined:

- School feeling support
- Private sector fundraising
- Emergency response
- Joint logistics supply chain
- Transparency and accountability

In 2007, the two organizations celebrated the fifth anniversary of what has turned out to be a highly successful partnership.

Professor Robert Hooijberg teaches on the following programs: Advanced Strategic Management (ASM), Low Cost Competition (LCC), Program for Executive Development (PED) and the Orchestrating Winning Performance (OWP).

Jan van der Kaaij is co-founder of Between-us; a 10 year-old management consulting company active in the area of effective corporate responsibility. He has written several cases for executive education on corporate responsibility and is a frequent guest speaker at IMD. He can be reached at jan@between-us.nl .

This article is based on the authors' chapter in the recently published IMD book "Anticipating the Future", edited by Bettina Büchel, Benôit Leleux and Anna Moncef.

 

[1] Maitland, Alison. “Mailman with a Hunger to Help.” Financial Times, September 1, 2004.



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