Social impact: balancing profit and purpose
While most corporates and businesses have implemented a social impact strategy, many are typically incongruent with the company’s profitability and growth objectives, and are often rendered obsolete. Effective social impact strategies need to be ingrained in the very fabric of a company’s corporate DNA, and not just a tick in the box. Companies are still failing to grasp how having an effective social impact strategy is key to long term growth and viability.
CSR is a means for companies to bring benefit to themselves and employees whilst also benefiting society. While businesses are becoming increasingly aware of the benefits of having such a strategy, they are still lacking in awareness as to how deep a social impact strategy needs to be embedded in a company and why it needs to be embraced in this way.
A global study by the SEFORIS project (the world’s largest study of social enterprises to date) has revealed how companies delivering inclusive growth by implementing a social impact strategy are also seeing rapid growth in revenue.
Effective social impact strategies are designed to improve a company’s overall mission, not just its brand identity. Not to be confused with marketing or corporate philanthropy, social impact strategies provide a concrete plan that has quantifiable business outcomes combined with a measurable and definitive societal impact.
It is no longer enough to be just profit driven. What makes companies stand out is their ability to place profit and purpose alongside each other. In order for a company to truly thrive, it needs to be both profitable and purposeful simultaneously. An organization that is both profit and purpose driven provides mobility to its employees and resources in a way that is incomparable. For a business to grow, purpose needs to be embedded in its core. Companies need to do well by doing good.
In order to address this, companies must fully understand how their employees can be one of their biggest assets to expand their social impact footprint. Exhibiting a strong social impact strategy not only enhances trust among the public and makes the company attractive to prospective employees but also results in a more engaged workforce, geared to generate not only revenue, but valuable channels for marketing and public relationships. The people of a business provide the most genuine representation of a company’s brand and value, organizations need to remember this when considering social impact.
Employees are much more engaged and satisfied when given the opportunity to perform impactful work. This will result in a stronger feeling of fulfilment and purpose amongst employees and essentially enhance a positive impact in the workplace. Studies have shown how corporate social responsibility has been highlighted as one of the key most important drivers of employee engagement, and engaged employees are effective workers and drive results.
Weak outreach efforts to the community should no longer be acceptable and are not measurable against an embedded, well-implemented social impact strategy, focusing on the day-to-day contributions towards community engagement as opposed to the occasional donation or charitable event.
Scaling up social impact needs to be a multi-sector process. Effective cross-sector collaboration will enable new techniques and approaches to be deployed to achieve better social outcomes. The combination of public, private and social sector collaboration can address complex social challenges by pulling resources from various players to ensure the improvement of effectiveness and efficiency of the services companies can offer to the public through joint efforts. Too often public, private and social sectors are segregated and siloed, with their resources fragmented, they need to work together towards common goals and enable mutually desired social outcomes.
Who does the responsibility lie with? It is up to the company’s leadership to ensure that social impact is at the top of the business agenda. They must ensure that an effective strategy is embedded into the company’s day-to-day workings, prioritizing long-term value in a way that mutually benefits both employees and society at large. CEOs must outline clear objectives and purpose of the company beyond financial touchpoints, defining their values. It is important that these guiding values permeate every decision-making process, from environmental footprint to social impact to investment decisions.
Businesses must consider social impact as a company wide initiative and not just a tick in the box. Otherwise, they risk losing the trust of the public which can be extremely damaging in the long term. In this age of heightened transparency and increased accountability, companies cannot afford to leave this issue unaddressed. The consequences in doing so can be profound.