Why Social Change is Good for Business

The most important thing I’ve learned over the last year is that social change has real business value. While corporations that are seen to be “responsible” benefit in many ways including improving reputation, attracting employees, and increasing market share, the real value goes to corporations that understand their social purpose and profit from making social change.

“We talk about the penetration of new markets that are profitable, we talk about saving money through energy efficiency and conserving resources, we talk about the markets for new products and services that can help solve social problems for others, and we talk about the importance of clusters like coffee growing and coco growing and other staples which have been grown tremendously inefficiently which leads not only to poverty for the people growing them but to a very fragile and unreliable supply for the companies that need it,” said Mark Kramer, Founder and Managing Director of social impact consulting firm FSG in an interview I had with him this week.

A good illustration is the work FSG has done with cocoa farmers in the Côte d’Ivoire that has helped increase yield by 300%. This is helping local people send their kids to school, access health care, and continue to grow crops on the same land without having to de-forest and to move to new land. It’s also creating significant benefits for chocolate companies who do business in the country. According to Kramer, 50%of the world’s chocolate comes from Côte d’Ivoire and, because it’s a very fragile crop, price can fluctuate hugely. A better yield helps to stabilize prices and results in significant business benefit.

In his recent book, Screw Business as Ususal, Richard Branson describes how Virgin Mobile built in a mission to tackle homelessness at the core of its business through RE*Generation USA. More than a marketing campaign, RE*Generation is a program done in partnership with Virgin Unite that has given Virgin Mobile’s millions of customers an opportunity to play a role in reducing the numbers of homeless youth through volunteering, donating, and even text messaging.

Social change is also central to Campbell’s social purpose. “Through Stamp Out Hunger, a program done in partnership with the National Letter Carriers Union and more than 1,500 U.S. Post Office branches across the country, our employees, customers and communities collect more than 75 millions pounds of food a year to help the millions of Americans who are struggling to put food on their tables every day. This is driving sustained benefit both in society and for our business,” says Dave Stangis, Vice President, CSR, Sustainability and Community Affairs at Campbell Soup Company.

In her book SuperCorp, Harvard Business School Professor Rosabeth Moss Kanter provides many more examples of the benefits companies derive from addressing social issues. These include “market entry (public goodwill and relationships before commercial transactions), learning and capability building for new or different markets, and innovation – creative approaches or technology that gets embedded in successful commercial products.”

According to FSG’s Kramer, “social change becomes part of the competitive equation – companies have to compete around their ability to improve social conditions and achieve social outcomes.”

What’s the best way for your company to have more influence on the social issues that are affecting its business?  Consider asking yourself these questions:

What social issues are most relevant to who we are and what we do?

What social issues are containing our growth or hurting our competitive positioning?

What issues can we address directly by improving what we’re already doing, and what do we need help with from NGOs, value chain partners, or government?

Are we able to measure our progress with existing metrics or do we need to introduce new tools and systems to track the relationships between business results and social outcomes?

And, perhaps my favorite insight from Mark: “Would we still do this even if nobody knew about it?”

This post also appeared on the Forbes Corporate Social Responsibility blog and can be viewed here.

Paul Klein founded Impakt in 2001 to help corporations become social purpose leaders and is considered a pioneer in the areas of corporate social responsibility.

Paul has helped Fortune 500 companies and other large corporations including BC Hydro, Canada Post, The Co-operators, De Beers, Hain-Celestial, Home Depot Canada, McKesson, Nestlé-Purina, National Bank, Petro-Canada, Pfizer, RONA, Shoppers Drug Mart, Starbucks, sanofi-aventis, and 3M to improve the value of their social purpose programs. Paul has also helped many leading non-profit organizations to build shared value partnerships with corporations.

Paul is a regular contributor to Forbes, has served on the Advisory Council of the Queen’s School of Business, and has been a featured speaker for organizations including the Aboriginal Human Resource Council of Canada, Association of Canadian Advertisers, Conference Board of Canada, Canadian Business and Community Partnership Forum, Canadian Stewardship Conference, and the Sponsorship Marketing Council of Canada.

Paul is regularly featured in the media as a corporate social responsibility source, was included in the Globe and Mail’s 2011 Leading Thinkers Series, and was recognized as one of America’s Top 100 Thought Leaders in Trustworthy Business Behavior.