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Too often, executives have viewed corporate social responsibility (CSR) as just another source of pressure or passing fad. But as customers, employees, and suppliers—and, indeed, society more broadly—place increasing importance on CSR, some leaders have started to look at it as a creative opportunity to fundamentally strengthen their businesses while contributing to society at the same time. Theyview CSR as central to their overall strategies, helping them to creatively address key business issues.
The big challenge for executives is how to develop an approach that can truly deliver on these lofty ambitions—and, as of yet, few have found the way. However, some innovative companies have managed to overcome this hurdle, with smart partnering emerging as one way to create value for boththe business and society simultaneously. Smart partnering focuses on key areas of impact between business and society and develops creative solutions that draw on the complementary capabilities of both to address major challenges that affect each partner. In this article, we build on lessons from smart partnering to provide a practical way forward for leaders to assess the true opportunities of CSR.Mapping the CSR space
There is no single accepted definition of CSR, which leads to plenty of confusion about what constitutes a CSR activity. We can begin to develop a working definition of CSR by thinking about its dual objectives—benefiting business and society—and the range of potential benefits in each case (Exhibit 1).

Many businesses pursue CSR activities that can best be termed petprojects, as they reflect the personal interests of individual senior executives. While these activities may be presented with much noise and fanfare, they usually offer minimal benefits to either business or society. In the middle are efforts that can make both sides feel good but that generate limited and often one-sided benefits. With philanthropy, for example, corporate donations confer themajority of benefits on society (with potential but often questionable reputational benefits to the business). Similarly, in what’s best referred to as propaganda, CSR activities are focused primarily on building a company’s reputation with little real benefit to society. Some cynics suggest that this form of CSR is at best a form of advertising—and potentially dangerous if it exposes a gap betweenthe company’s words and actions.
None of these approaches realize the opportunities for significant shared value creation that have been achieved through smart partnering. In such ventures, the focus of the business moves beyond avoiding risks or enhancing reputation and toward improving its core value creation ability by addressing major strategic issues or challenges. For society, the focusshifts from maintaining minimum standards or seeking funding to improving employment, the overall quality of life, and living standards. The key is for each party to tap into the resources and expertise of the other, finding creative solutions to critical social and businesses challenges.
 
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  | Addressing rural distribution challenges in India |   |
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So how does this work? The examples in the two accompanying sidebars (see “Addressing rural distribution challenges in India” and “Ensuring sustainable supplies of critical raw materials”) illustrate smart partnering initiatives at Unilever. Both address long-term strategic challenges facing the company and help to build creative partnerships that accrue significant benefits to both sides. 
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  | Ensuring sustainable supplies of critical raw materials |   |
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Initial questions for any leader should be, “Where have you focused CSR activities in the past?” and, more important, “Where should you focus them for the future?” All organizations have to balance limited resources and effort, so the challenge is how best to deploy yours...