To create greater social impact, focus on the impact, not the social
Last week I attended the Intrapreneur Lab in New York. The Lab is the brainchild of Milan Samani, and acts as an accelerator for Social Intrapreneurs — a term that describes individuals within big companies that are working to develop profitable innovations that create social impact.
The Lab offers participants practical support and candid advice from experts with experience in the innovation trenches. One such expert is Erik Simanis. Erik is the Head of the Frontier Markets Initiative at Cornell University and a serial Social Intrapreneur, having worked with a number of multinationals to develop and launch new businesses in frontier markets.
Here Erik offers his thoughts on how to drive greater social impact within large companies.
Make it part of your core business
To fully harness the unique resources and capabilities of a global corporation to make the world a better place, one thing must happen: visions of social transformation have to be translated and embedded into core business operations — that is, into the Profit and Loss (P&L) side of the company responsible for innovating, making, and selling products on a daily basis.
Products have the greatest impact
Products are the primary medium by which corporations bring value into the world. Whereas discount retailer Walmart creates tremendous social impact as the world’s largest employer, with 2.1 million people globally on its payroll, that impact pales in comparison with the more than 200 million weekly customers who can stretch their dollar and do more for their families because of Wal-Mart’s lower prices.
Unleash the social intrapreneurs within your business
Top management needs to activate the sense of social purpose that already resides in the managers, the product developers, the shop ﬂoor employees, and the sales people that make up the core business. The goal is to surface ideas that address societal issues that inspire individuals to action, and where the functionality of the company’s products can play a hand in solving it. Banking giant Barclays, for example, launched an internal £25m “Social Innovation Facility” that funds precisely such proposals by its employees.
Set up an internal accelerator
An internal accelerator or corporate-level business development support team can provide valuable direction to employees in translating visions into pragmatic investment opportunities that align with the strategic priorities and investment horizon of a given department or business unit. Global cement manufacturer Lafarge’s Affordable Housing program, for example, works closely with country office managers to innovate and launch profitable ventures that get the company’s high-quality cement into the homes of the poor.
Demonstrate the value
Importantly, these “social” ventures must demonstrate the potential for value creation equal to or greater than alternative uses of the department’s capital and be held to the same rigorous performance standards as any other investment. Lacking that discipline, they will surely backslide into one-off sustainability projects dependent on internal donations.
Ultimately, it’s only by making social impact about business as usual that corporations will align impact with profits and fully harness the potential of their people, their resources, their routines, and their capabilities to make the world a better place.