Authentic Engagement, Truly

A consulting firm's formula for taking on social problems in a competitive—and ultimately profitable—business context would merit Peter Drucker's blessing

By Rick Wartzman

Whenever something is labeled "authentic," it's a good bet that it's anything but.

Nevertheless, every manager would be wise to consider what FSG Social Impact Advisors, a Boston organization co-founded by Harvard Business School's Michael Porter, is calling "Authentic Engagement." The idea is for companies to take on social problems but in a competitive context—to look for ways to contribute to the larger community while tackling key business objectives.

"Many progressive companies…are seeing social issues through this new lens," FSG reported in its latest newsletter, citing a number of examples, including Toyota's (TM) targeting "zero emissions mobility," Unilever's (UN) promoting good health practices through its Lifebuoy soap, and the fragrance and flavor giant Firmenich's working with poor vanilla farmers on sustainable growing techniques.

One can easily imagine what Peter Drucker's response to this flash would have been: It's about time.

In his 1973 book Management: Tasks, Responsibilities, Practices, Drucker urged companies to see social ills "as major sources of opportunity." What's more, he counseled them to make sure these opportunities were "built into the strategy" of the enterprise, not viewed as some philanthropic afterthought.

The Ultimate Responsibility

Yet it was even earlier, in 1954's The Practice of Management, when Drucker began to argue that meeting a corporation's mission and helping to transform society positively are not only compatible but also mutually reinforcing. "It is management's…responsibility to make whatever is genuinely in the public good become the enterprise's own self-interest," he wrote.

Drucker didn't view this as some quixotic exercise. Indeed, he believed it essential that a seamless blending of public and private gain become a common feature of corporate life. "In this lies the real meaning of the "American Revolution" of the 20th century," Drucker declared. "That more and more of our managements claim it to be their responsibility to realize this new principle in their daily actions is our best hope for the future of our country and society, and perhaps for the future of Western society altogether.

"To make certain that this assertion does not remain lip service but becomes hard fact," he continued, "is the most important, the ultimate responsibility of management: to itself, to the enterprise, to our heritage, to our society, and to our way of life."

Ersatz Engagement

A half-century later, we can only shake our heads and wonder what went wrong. That we now feel compelled to use a term such as "Authentic Engagement" is a measure of just how far from Drucker's original vision we have strayed.

To start with, there is an awful lot of ersatz engagement out there. For many companies, invoking "corporate social responsibility" has become a halfhearted statement of noble intentions or, worse, a PR stunt.

Tellingly, the marketing firm TerraChoice announced last April that companies were guilty of some form of "greenwashing," or misleading the public about their environmental qualities, in 98% of the 2,219 products it had examined.

In addition, too many executives have become focused on doing well, with little regard for doing good—a mindset that helped trigger the global financial crisis that continues to hurt so many people.

Some theoreticians and practitioners contend that the persistent pursuit of maximum profit will, in the end, accrue to everyone's advantage. But Drucker held this Gordon Gekko-like logic to be nonsense, dangerous even.

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