Around the world there is a growing consensus that a company’s social role goes beyond meeting legal requirements, complying with ethical standards, creating jobs and paying taxes. Increasingly consumers believe that companies and brands must actively lead social change. And with the recent adoption of the Global Goals, the 193 members of the UN have made clear that the vision of a sustainable world requires everyone to do their part: governments, businesses and individuals.
In response to people’s changing expectations, the world’s most innovative companies are building social value right into their core business strategies, not only to address poverty and other problems in their communities, but also to improve workplace relations, gain market advantages and grow profits faster.
In my last social post, I explained how transformational companies are supporting social enterprises through innovative buying strategies to diversify their supply chains, unlock creativity and connect more closely with their customers. In this post, I focus on the importance of Social Innovation, the most transformative of the four core corporate strategies that I explore in detail in my Social Value Business Guide.
The business community has the unique insights, expertise and resources needed to create game-changing solutions for more inclusive and humane societies. They do so through a “social innovation” process that involves doing business in ways that create business and social value. Social innovation is when companies improve conditions and profits by applying a social lens to their business models, products, services, processes or relationships. It is a new approach to value creation in which firms bring their unique set of corporate assets (such as their entrepreneurial skills, business acumen, resources and ability to scale) to create solutions to complex social issues, linking the firm’s success with societal success. In tandem with social outcomes, these companies create new customer value propositions that their competitors cannot see, giving them a competitive advantage that reduces costs and increases revenues and profits. Some companies go even further on this continuum and become a social purpose company, coupling their growth with a commensurate increase in social good.
The challenge and opportunity for companies is to find social concerns that intersect with their core business functions and create collaborative partnerships with other companies, governments and like-minded civil society organizations in order to harness each party’s unique strengths and address issues together. It involves pivoting business competencies to test, prototype and scale new business ventures that generate social value for communities and the broader society such as reducing poverty, homelessness, underemployment, skill shortages, poor health and nutrition, obesity, income inequality and social exclusion.
In turn businesses gain a number of important benefits depending on the social issues and strategies they pursue. The range of business benefits may include improved productivity and brand differentiation, as well as new and deeper insights into customer segments, new products and services, secured access to supplies and resources, enhanced employee recruitment and retention, improved access to capital and increased market share through new and more loyal customers.
Social Innovation involves a shift in perspective in how a company contributes to community and social well-being. Whereas traditional companies contribute to social causes through donations and other charitable endeavours, social value businesses make investments in new ventures and enterprises that value social impact along with their bottom line. The most innovative businesses use Social Innovation to push these transformational practices further along the continuum of social business value, leveraging their business expertise and external collaborations to make a sustained systemic impact and drive business value.
Leading social value businesses work to identify and understand leverage points for social change along their value chain and develop win-win strategies for addressing community issues while generating business benefits. They use tools which predominate in technology development, such as design-thinking, rapid prototyping, big data, collaborative innovation labs and open innovation platforms.
The world’s most innovative and transformational businesses understand that their role in society has evolved. Leading companies harness the power of social innovation to create lasting benefits for their investors, their customers and the people living in their communities.
I encourage Chief Strategy and Innovation Officers to read my Social Innovation Guide, which examines how innovative companies around the world are using Social Innovation and other transformative strategies to address problems in today’s society while creating financial value for investors and shareholders. With input from a world-leading social innovation expert, Darcy Riddell, it is the first practical roadmap of its kind to help strategic planners, R&D managers, product developers and sustainability practitioners develop social innovation business models.
The research and strategies outlined in this guide will show you why social businesses are more profitable businesses, and how your company can become a change agent in the local community and a leader in the global marketplace.
I go to Coro when I need unbiased strategic advice and expertise. There are very few people in the sustainability sphere I can reach out to who can offer both strategic and practical guidance. Coro fills a pretty unique need. She is highly attuned to best practices in sustainability and provides important insight on where sustainability is going. She liberally shares her work and her network with me.
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