Customers have power over firms – in highly competitive markets sector, customers have the option to switch suppliers.
The customer is King! All businesses recognise this, especially in the construction industry where margins may be slim at times. Thus a key part of the business’s internal operations and potential profit will be spent demonstrating that the business and the organisation are a responsible and trustworthy (considerate?) alternative to competitors.
One of the best business cases for Responsible Management (also termed Responsible Leadership) is its influence and control over Corporate Social Responsibility (CSR) activities. As a management parameter, it can help safeguard the social and environmental governance issues that arise with businesses growth and development.
Clients are consumers as well, and consumers want to feel good about what they purchase. Even amongst the most hard-bitten procurement specialists and contractors, there is a clear preference for companies with strong social values and behaviours. Clients reward such behaviour with loyalty to their products and services.
For this reason, no growing SME construction business can now afford for its leadership team to be perceived as lagging in its social awareness, governance and responsible management activities. Not to be viewed as half-hearted in their enactment on site. A growth focussed Boardroom and its members are now expected to have an understanding (and business justification) in how:
The potential benefits to a construction SME if its local reputation and future workload can be significant when these factors and recognised within its client base. Having worked in the public sector for many years, word of mouth recommendations are asked for and start to circulate around regarding the best firms to partner with. Similarly, such communication channels can work in reverse when a company’s own practices or those of its employees, contractors & suppliers begin to be called into doubt or question.
So, what first steps can an SME construction company take towards building up its responsible management practices, and starting to apply them through social value without draining its limited resources?
In the UK there is a high correlation between companies being perceived by the public as socially and environmentally responsible and being viewed favourably overall.
Consumers increasingly value businesses that are believed to act responsibly and will reward such behaviour with a greater sense of loyalty and commitment to its products and services. For this simple marketing reason, no company can now afford to be found wanting in fulfilling its legal obligations to society on health and safety, the environment, human rights, race, gender or disability? The potential damage to a business, its reputation and its sales is now at greater risk if its own practices and behaviours (or those of its suppliers or subsidiary companies) are found to be wanting.
One of the biggest mistakes a business can make is to forget that its employees are its key intellectual and physical resources. Experienced employees with their on-site experience, specific trades and the experience to manage complex issues quickly and efficiently are always a bonus. Their individual actions can maintain construction progress and therefore the route towards ‘profit’ and ‘efficiency’. Success can often be defined not by the management team activities, but by the relationship between the firm’s leaders, their key employees, and the mutual regard both parties have for each other.
When chasing business success, construction firms need to attract and retain the best people locally to work for them. Respect for people, their skills, diversity and their need to achieve a good work-life balance is an important aspect of socially responsible business practice. Firms that fail to improve their attitude and performance towards their employees, will often fall into capacity or delayed delivery problems through a lack of skill and experience. The message can be simple – retain the skills – retain the experienced.
The building and construction industry has generally a poor record on employment issues and under-performs in many surveys when it comes to diversity and employee satisfaction scores. Companies can either follow the pack or differentiate themselves by demonstrating that:
For this reason, the industry’s own Movement for Innovation recommended that firms of all kinds and sizes should commit to achieving the standard of Investors in People as the most effective and most systematic means of developing and demonstrating respect for people. Furthermore, people want to work for socially responsible businesses that respect not only their own workforce but wider societal values. Survey after survey consistently finds that when asked for their opinion, they believe that a company that supports society and the community for example, by establishing links with local or national charities, schools or other local groups is a good company to work for.
Trust is an important influencer in the way employees, clients and the wider community judge or value a business. To create trust, a company needs to operate honestly and openly across all business relationships and with its wider stakeholder community. Trust is one of the hardest elements for a business to build and one of the easiest elements for a business to lose!
Although there is no legislative requirement to report on social responsibility. Companies that do so, or who report on elements of social interest on their websites, are perceived better by stakeholders. Reporting and communicating the impact on society helps to demonstrate openness and transparency about their operations, a willingness to be accountable for their actions and their seriousness of intent regarding community and social responsibility, thus developing confidence in their business.
Reporting is, however, not an end. The public rapidly see through cynical reporting and any attempt to be politically correct for its own sake. Companies need to demonstrate that their leadership and commitment is real and produces real results.
The principles of community and social responsibility need to be embedded into the overall business conduct of a company and become part of its core values and objectives. A badly targeted approach will be ineffective, and companies need to identify the actions that will have the most impact on them, manage them in a professional way and communicate to their stakeholders what they are doing. Without effective communication, no one will be aware of their work. Without awareness, there will be no benefits to business standing or reputation.
As for any other commercial project, it is first vital to secure the commitment of senior management and the allocation of adequate resources for developing a community and social responsibility strategy. Then, by reviewing current policies and performance, you can identify the issues of most relevance to your company and develop an effective strategy and action plan. The process should be iterative, with a review of progress leading to an adjustment of the strategy and continued business improvement.
Increasingly SME companies within the construction sector are seeking to build in business strategies that, through choice or through client requirements, that build in Corporate Social Responsibilities (CSR).
Leading Green can provide strategic and operational support to Boardrooms & senior leadership teams on topics such as Responsible Management, Sustainable Construction, Governance and CSR that are essential on BREEAM and LEED registered projects.