Everyone in business is busy - they have to worry about customers, staff, cash flow and doing some long term planning.
Why then would a business include a social mission, or doing something good for the community to its very long ‘to do’ list? Does having a social mission give a business a competitive advantage?
Research seems to indicate that it does.
Social Innovation has become a keen area of research for institutions including Harvard and Stanford Universities and they have found that more and more corporations have decided to include a social mission to their business charter. The research has also found that being a ‘for profit’ organisation does not negatively impact on the ability of these organisations to engage with customers who want to make a difference with their purchasing power.
Not so long ago people would have said that this was a naïve and a costly ‘feel good’ approach to business, but now a social mission is seen as an effective way of creating a point of difference in a competitive business climate. A social mission can provide tangible advantages in a number of ways, including the retention of staff, growing the value of the brand and increasing customer loyalty.
Much of this comes down to staff and customers being connected and committed to a product or service if they believe that they are doing something good for the broader community. Staff are more driven to find the next customer and drive sales, while customers become more engaged and connected with the brand.
How does this work? According to the research:
- People talk – customers speak to each other, suppliers talk to each other, as do competitors and in some cases the media (or at least social media) if they believe in the cause you are supporting. This becomes invaluable word of mouth marketing.
- Many, if not, most customers prefer companies that make a positive impact on the world. In 2014 Nielson research reported that 55 percent of global online consumers across 60 countries said that they were willing to pay more for products and services provided by companies that are committed to positive social and environmental impact. The Asia Pacific accounted for the second highest rating. The biggest impact appears to be in the 21 – 34 age group. This group is also known to be trending towards a community based on sharing and better use of resources.
- Customers are also of the view that companies that have a social mission are more innovative in the way they use resources and engage with them and staff. This becomes another motivating factor for engaging with the brand.
- Staff want to feel like they are contributing, and not just to the bottom line, and that their work makes a difference. Happy workers are also the best advocates for a company. These companies have a strong inherent culture which can make them an employer of choice.
- An indirect benefit is thought to be better risk management. If a company is tuned in to the needs and expectations of their customers and stakeholders, it is better positioned to safeguard against any shifts in the market. A company gets its best market intelligence by engaging with its customers.
So if a company decides that it wants to follow this path, how does it find a social mission that fits its business model? The key thing to avoid is anything tied to short-term political policies, niche causes or those associated with one person or celebrity. To truly become part of a businesses persona, the cause has to be long term and something that management and the staff are truly passionate about. It should not be a PR stunt or lip service.
The best place to start is with a company’s brand and what the company stands for and offers. Spanning out from there allows a company to find a cause, foundation or idea that aligns with the core business offering. The social contribution can be in a number of forms including a percentage of turnover going to a particular cause or foundation, or it can go into a pool of funds that a range of causes can apply to. It could also be the provision of goods and services to identified causes or staff volunteering their time.
Whichever form or cause a company chooses to support, having a social mission can clearly provide a competitive edge.
If you would like to find out more, the Festival of Ambitious Ideas: Social Innovations on Thursday 18 August will showcase 12 speakers from a range of different sectors, exploring opportunities, innovations and issues associated with funding and supporting these bigger social solutions and how government, the not-for-profit and the commercial sectors can work together to make them sustainable.
About Lighthouse Business Innovation Centre
Lighthouse has a strong track record of supporting entrepreneurs, researchers and inventers on the path from concept to commercialisation. Since July 2008, Lighthouse has worked with over 990 distinct enterprises and provided group and peer based services to over 3400 enterprises and individuals. For over five years Lighthouse has successfully delivered business advice, education, mentorship and networking opportunities to help these businesses commercialise their ideas and grow their companies. Lighthouse also delivers programs such as the ACT Microcredit Program for the ACT Government. Visit www.lighthouseinnovation.com.au for more information.
