Balancing profit and purpose: Why social impact needs to be a company-wide initiative and not just a tick in the box
Written by Natasha Mudhar, Global CEO of Sterling Group and The World We Want
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.
According to a global study by the SEFORIS project (the world’s largest study of social enterprises to date), companies 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 both quantifiable business outcomes as well as 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 organisation that is both profit and purpose-driven provides mobility to its employees and resources in a way that is incomparable. Companies need to do well by doing good.
Companies must 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 within the public and makes the company attractive to prospective employees but also results in more engaged employees, 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.
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 make a positive impact in the workplace. Studies have shown how corporate social responsibility has been highlighted as one of the key 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. The combination of public, private and social sector collaboration can address complex social challenges by pulling resources from various players. Too often, public, private and social sectors are segregated and siloed, with their resources fragmented, when 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, prioritising 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.
Companies 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 of doing so can be profound.