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Creative Capitalism, a CEO's Viewpoint

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I had a pleasure of moderating a discussion with Arunas A. Chesonis, the Chairman, President and Chief Executive Officer of PAETEC, founded in 1998. I sought to understand why he -- as a CEO and business leader -- invests in the city of Rochester, New York, and why he has developed a culture of investing back into the community at PAETEC.

Chesonis, an MIT graduate and an entrepreneur, is a visionary who thinks outside of the box regarding how to build a business and how to build a community around him. He told the audience at the BCLC Corporate Community Investment 2011 conference in Philadelphia that one of his company's four guiding principles is "caring culture," a concept in PAETEC's objectives and a metric for performance evaluation.

Chesonis said:

"If you have two managers and both are very good, but one is involved in the community, he'll drive more business and will build more relationships within the company, outside the company, and with clients. That's the manager who will get the promotion. People like that get to move up in the organization because they're the ones who do business better."

Community involvement at the individual employee level, he said, not only helps managers excel -- their success helps to grow the business.

In our talk, he explained that PAETEC also uses the same criteria when considering procurement bids from his partners. With price being more or less equal, PAETEC wants to know how engaged potential business partners are in investing back in the community. He wants to know how they're investing in communities, how they're giving back, how they're making the country do better.

For Chesonis, corporate social responsibility (CSR) is a strategic weapon. He said that if you're not doing CSR, if you're not engaged in CSR, then you're not going to be as successful, you're not going to optimize your stock price, you're not going to optimize your performance, and you're not truly, fully engaged with all your team members. In short, it's better business to be engaged in CSR.

So how does Chesonis make sure engagement is constant and thorough?

First, he sees engagement in CSR as building an extended family among a range of stakeholders (even the name of the company stems from the first letter of the names of the Chesonis family). He said he came to Philadelphia for the BCLC conference to lend support to those who are in the CSR business. "Maybe," he said, "I'll give you some tricks that we've used to trick people within our ecosystem into seeing why this is important for all of us."

Second, engagement in CSR work should be decentralized. At PAETEC, Chesonis lets his community relations managers decide where to focus the company's CSR efforts instead of dictating what to do with a top-down approach.

"I feel like I'm the match.com for CSR at my company. It's my responsibility to connect my employees with our community," he said and noted that he wants connections to grow organically between his community relations managers and the local organizations. Building your own community is important, and connecting your community to other communities in common goals is the next step in building capacity.

Chesonis asked, "Wouldn't it be great if there were a BCLC in all communities?" Organizations that convene and connect, he said, are needed at the local chamber level so that local corporate citizens and community leaders can come together, learn, and expand their capacity. Having a network of local BCLC-like organizations, he said, would encourage public-private partnerships.

Chesonis said:

"It's hard for SMEs to travel to national conferences and major events like this -- that makes local collaboration level so much more needed. People could develop their own approaches at the local levels and decide what fits best with their communities and businesses."

While his community relations managers guide the company's strategy, the Chesonis family is building its own legacy in environment and energy research -- the need for intense research in these fields is astounding, he said. With the belief that researchers should be allowed time to fail and experiment to find the best, most innovative solutions, Arunas and his family are funding long-term research spots for post-grad MIT students. Most Nobel Prize winners in science, he noted, made their discoveries at the age of 28:

"We need to be funding young, energetic people who have time and inspiration to immerse themselves in their research 100 hours per week."

He ended the thought that corporate responsibility should be a strategic priority for all companies. "Don't be a 'dumb philanthropist' and just write checks," he said. "Work on the strategic piece-what's good for a company can be good for a community and vice versa."

For those in business still sitting on the fence, this is a good piece of advice.