Social Impact: Shared Value for Business and Society
What to consider
Social impact can appear tangential to core business operations and too political or confusing to engage with as a business. Yet, we know that effective social impact initiatives enhance consumer living standards, promote resource sustainability, and stabilize the climate. And, when done well, social impact delivers substantial business value through decreased legal, financial, and operational risks.
Companies shape societies through products, services, and engagement with their stakeholders (employees, suppliers, consumers, and the local community). Stakeholders influence business performance through multiple touchpoints – buying services or products and working for/supplying to/investing in businesses An investment in stakeholders is an investment in business growth.
At Cicero, we uncover the strategic benefits of social impact and guide businesses through a step-by-step journey to create shared value for business and society. We focus on core business strengths and what is meaningful for both the business and its stakeholders.
Investing in Stakeholders is Good Business
There is growing evidence that every stakeholder category increasingly cares about and will reward business investments in social and environmental impact, as depicted in the below figure.
Envisioning these benefits—and how to achieve them—is challenging. At Cicero, we help clients identify what components best relate to the business brand and its stakeholders, what organizational capacity and expertise to leverage, and how to achieve excellence in the space. Here are some insights derived from real-world examples of work undertaken by Cicero clients Guardian and Prudential, amongst others. We used these experiences to create a customized approach to social impact that is based on the core business model and brand.
Choose the Area of Excellence and Expertise
What’s impactful for a business and its stakeholders differs based on the brand and business model. For some, investing in the environment and securing equitable access to resources for future generations can be a great way to reduce operational risks. For others, strengthening the health and safety of employees can be a sound investment. Find what works. And do it really well.
Designing a comprehensive monitoring, evaluation and learning (MEL) framework around the business and stakeholders, helps prove, improve, and share social impact. This process is underlined by the same principle that guides good business decisions: return on investment (ROI).
Below we describe the stages of moving from reactive to deliberate approaches to social impact:
Five states towards embedding impact into business operations:
- Minimal and ad-hoc:
- Status: Implementing mandated compliance requirements with little to no intended or realized business value in social and environmental impact.
- Results: This stage has significant reputational risk due to lack of community engagement and no deliberate or measurable social impact.
- Intentional and emerging:
- Status: Giving monetary or product donations to charitable organizations and engaging in service activities/volunteer time. The business can highlight commitments and basic activities, and opportunities emerge opportunistically.
- Results: There is not a clear articulation of focus and desired results. Funding and activities are not targeted and can be perceived as disingenuous, damaging the perception of the brand in the process.
- Established and strategic:
- Status: Promotion of a specific cause or charitable organization, with emerging efforts to create business value through philanthropic activities. Minimal engagement by the business, but there is evidence generated for business co-benefits of social impact investments.
- Results: Measurable and meaningful impact in strategic focus areas. Minimal reputational risk and ability to pre-empt and respond to critics; emerging reputational upside.
- Integrated and effective:
- Status: Deliberate and intentional pursuit of social impact as a way to create additional business value. Leveraging of staff and resources to achieve targeted social outcomes.
- Results: Create both through philanthropy and business assets/activities; emerging scale and leadership in focus areas. Social Impact becomes a true reputational differentiator for internal and external stakeholders.
- Systemic and transformative:
- Status: The business is founded (or transformed) and run to achieve a social impact. Impact considerations are a top priority for all business units, creating new and significant business value firmwide.
- Results: Distinctive, game-changing, and/or innovative approaches to large-scale and/or systemic impact. Receive widespread recognition as a leader in both social impact and business, attracting significant positive attention and few vocal detractors.
Doing Good, Well
Not all businesses need to go from state one to five. Ensuring the state the business is in is done well is what matters most. This requires evidence generation to prove the business and social benefits of an intervention. Small experiments create proof of concepts of impact initiatives that lead to measured but consistent changes in company culture and processes.
At Cicero, our mission is to help our clients embed this thinking into routine business activities by overcoming barriers to each of these stages. Cicero helps businesses internalize the benefits of creating shared value through powerful narratives for each phase of the transition.
For information on how we have helped our past clients through their social impact journey, please contact Jacob Allen.