By Alberto Bozzo, corporate vice president and general manager, AMD, Europe Middle East and Africa.
Throughout the 1990s and 2000s, there was a growing movement within businesses, both big and small, to develop an element of corporate responsibility within business practices.
For many, this was largely a brand reputation imperative. It was important to be seen to be responsible member of the global community and to not just ‘take’ from customers, suppliers, and society. However, over the course of recent years, it’s become clear that what once started as primarily a branding imperative is now simply good business practice. As a result, at the start of a new decade, are we now at the stage where corporate responsibility has matured from a peripheral program into the very core of how a business is managed.
The elements that typically constitute corporate responsibility guidelines are how businesses treat the environment, its customers, and society. More and more, there’s an increasing body of evidence that doing ‘good’ in those different areas has a tangible, positive impact on the bottom line, and shouldn’t be done solely because of a sense of moral imperative. In other words, effective corporate responsibility could be described as enlightened self-interest. While it would be presumptuous for AMD to comment on other industries, we can examine the technology industry and our own business practices as a case in point.
Over the last couple of years, the buying patterns in computing have shifted pretty dramatically. Where once most technology companies were in a race to create something more powerful and faster, the trend is now is all about power efficiency and cost-effectiveness. The reason why is that most companies now realise that they don’t necessarily need all the extra power, and that it’s actually costing them a lot of money. A good example is companies that run large data-centres. In a large data-centre, the electricity to power and cool the servers is the single biggest operating cost. Recently we went to visit Strato’s data centre.
As the world’s largest web hosting company, the power consumption in its data centres is of the upmost importance. The company recently deployed several six-core AMD OpteronTM 4100 Series processors. Running Strato’s own evaluation software side-by-side with a rack of servers featuring Quad-Core AMD Opteron processors, we got to see firsthand the benefit delivered by more real cores in terms of a 25% drop in power consumption per request due to the extreme power efficiency of the new processor and server platform.
Corporate responsibility can also be inward facing. Treating your employees well, and engaging them in your company’s responsible practices can have a direct impact on the bottom line. Gallup, the organisational consultants, have been studying human behaviour for the last 40 years and have been able to show that there is a link between engaged employees and business outcomes.
In 2007 Gallup analysed data from 332 organisations (more than 4.5 million people) to calculate the link between employee engagement and earnings-per-share (EPS). The research showed that public companies ranking in the top quartile of employee engagement had EPS growth of 2.6 times the rate of those that were below average. Is this correlation or causation? We may never know, but it is common sense that motivated employees lead to a real return for investors.
Supporting the community around you can also be good for business, and not just the image of the company. In the past, community engagement projects conducted by companies were often chosen because it was a hobby or passion for employees. Supporting the arts, individual charities or other foundations is an admirable thing to do, but truly effective and sustainable community support projects should be closely aligned to the business. At AMD, we have a long-running programme to support STEM (science, technology, engineering and mathematics) education through our AMD Changing The Game initiative.
While the programme was been instrumental in positively impacting the lives of many young people and we’re very proud of that, it’s also a way for us to ensure that we’re helping to develop the next generation of engineers who will be critical for driving technology innovation. As a result, what’s good for the community is also good for our business.
Overall, there is a growing body of evidence that corporate responsibility initiatives are not just activities that create a feel-good factor around the brand, but rather they drive real business outcomes. This is true whether it’s through product development, the way you treat your employees, and the way you engage with your community. As a result, when we AMD publish our 16th consecutive Corporate Responsibility report in 2011, AMD will not only build on our legacy but also help lead the new path forward where responsible business practices are more than a ‘nice to have’ -they are a core part of a successful business.