To be a leading, thriving company, there is greater need than ever to redefine value creation and how businesses “net out” their impact. Leading organizations in the business for impact sector understand that what is now essential is giving people the right to be, act, and serve as changemakers for the common good in their everyday work.
As the shock of the pandemic subsides, we are beginning to understand how companies were impacted and how they responded to this unprecedented, definitional crisis. What is emerging is a world of polarization. A study we conducted in late April with 28 Ashoka corporate partners showed that 70% of companies, and their respective industries, fall starkly in the extremes: struggling to survive, or thriving. Deeper analysis is being conducted, by us and others, but the near even divide we saw emerging seems to be holding.
For those in the Business for Impact space, one thing is clear: for thriving companies, there is greater need than ever to redefine their own value creation and how they “net out” their impact. The moment we are facing is similar to when companies responded to the digital revolution a decade ago, and an increasing number of companies agree that the need to embrace this mindset is now.
In February 2020, we conducted a study on the Business for Impact movement in partnership with the French Institute for Public Opinion (IFOP), including interviews with over 300 CEOs in France, Spain and Germany. In that study, 95% of interviewed corporate CEOs asserted that “To ensure the sustainability of its activity, the company must always consider both its economic performance and its societal and environmental sustainability.” In other words, identifying and articulating impact goals related to the core business of the company — and working to align culture, governance, value creation, and operations — is no longer optional.
Companies engaging with us and other leading organizations in this space understand that what is now essential is giving people the right to be, act, and serve as changemakers for the common good in their everyday work. The first step toward demonstrating real commitment is empowering employees to make the world a better place through their daily jobs, then measuring what percent of their activity is linked to projects with an explicit connection to social and environmental outcomes. Companies that engage with us become pace-setting organizations that act as a driving force for positive social change and environmental sustainability.
By engaging with the world’s most impactful individuals. In our case, that is Ashoka’s carefully selected, systems changing, social entrepreneurs who drive solutions to the worlds hardest problems. Through supporting, engaging, and learning alongside these individuals who commit their lives to durable systems change, corporate workforces can deepen their ability to incorporate common-good thinking into their core activities and company culture. Our study with IFOP confirms this. 65% of CEOs interviewed have already worked with social entrepreneurs in a meaningful way.
Engaging with a diverse set of players is key to fostering an insightful understanding of this larger system of “externalities” that companies affect, interact, and in many cases, sustain. Social entrepreneurs and company executives both benefit from this exchange of knowledge, and from co-creating solutions. A partnership through the Changemaker Companies program uniquely enables this opportunity at scale, allowing companies to drive real, systemic, and mutually beneficial outputs and outcomes.
This interaction similarly enables corporate employees to develop a set of essential soft skills that we call ‘Changemaker Skills’. These include, but are not limited to; empathy, self-management, collaborative leadership, opportunity recognition, flexibility and the ability to compromise, creative resource mobilization, and the ability to galvanize others. We have seen a demonstrable change, in that, after integrating this type of programming, companies see these skills incorporated into their people development strategies. This is a differentiating and tangible way to align incentives and bring purpose, culture-shift, and lasting innovative values for the common good into every-day work.
To manifest this values-forward, solutions driven version of capitalism, we need companies to evolve from the inside out, bottom up, and top down. Further, we need to accelerate this growth to meet the urgency of today’s call to action. We are thusly investing in helping to create the backbone for the global Business for Impact (BFI) movement, aiming to connect solutions and build a unifying community to drive this work forward.
“Business for impact” concerns all actions carried out by profit-generating organizations with the goal of having a positive impact on society and the environment. The organizations and individuals who do this work are aiming to ensure compatibility between the pursuit of profit and creating value to people and the environment. This movement is for all of us who work in this space, whether we are inside companies or in organizations dedicated to doing this work.
We are launching a global observatory to understand how business leaders understand the role of business. The observatory will measure and compare the current state of this sector in different countries (by analyzing regulation, the number of players, company commitments, etc.). The Business for Impact movement remains mostly unknown: 50% of our interviewed leaders have heard of BFI versus 40% who do not know about the movement at all. Worth also noting that 90% of them, once they were explained this trend, assert that “following it as a company in today’s world” is important”.
We know that by enabling practitioners in this space to join forces, we will be able to support each other as well as internal champions leading this work in companies. We are increasingly joined by diverse practitioners in this space, such as the OECD Trust in Business, B Lab, Utopies, Corporate for Change, MySézame, Leader’s Quest, the UN Science, Policy, Business Forum and many more. Amplifying each other’s solutions will help companies identify the best solutions to enhance their impact goals, accelerating our collective impact towards redefining the role of business in society.
As part of this effort, we invite you to share your favorite practices of this work, or examples of how companies are “walking the talk”. We want to surface these best practices to connect local networks, small and big organizations, and all internal and external corporate transformation champions.
First Published on Medium