HIGH-IMPACT BUSINESSES: What it takes to make an impact and how to achieve it as an organization.
Today I would like to talk about one of the things that, even though it is not intentional, most surrounds my entrepreneurial actions: Impact!
find it in portuguese at Grand Designs Blog
More specifically, designing high-impact solutions and/or businesses. What would it be? Of course, I’m not going to answer like that, “right away”, ok? But I will try to show my vision of what impact is and, mainly, what it would mean to make an impact in a “sustainable” and cyclical manner.
Since I started my life in entrepreneurship, almost everything I did was initially “for free”, that is, I started without the direct intention of making money, but rather with the intention of verifying that what I was trying to do, in the way I was trying to do it , made sense. As I am a person who does not like “wasting resources”, if I am going to do something “for free”, let it be with something that has meaning for me and, mainly, for those who were receiving the fruits of my free services.
So what would be the impact? What would some experts say about the topic and, mainly, what would these high-impact businesses be? Let’s address them one by one, ok? Then let’s see if we have anything new about these high-impact businesses and, most importantly, how we can deliberately try to create them and what is known about tools and methods that we can take advantage of.
The concept of “impact” in business refers to the effect that an organization’s activities or products have on society, the environment, or specific stakeholders, beyond financial profitability. It can encompass several aspects, including social, environmental and economic outcomes. “Impact” can be positive and negative, and the term is often associated with socially responsible and sustainable business practices.
Well, knowing the concept of business impact, it is no surprise how some terms have become increasingly relevant in this world. Terms like ESG (Environmental, Social and Governance) are on everyone’s lips. In fact, the concern about the impact has become even greater, due to factors that are already clear, especially the importance that the end consumer himself places on the sustainability of initiatives.
Therefore, we already know that impact is very important for business, but what are high-impact businesses?
As always, I will explain it to you but not in a traditional way, so let’s first show you what should not be considered Impact Businesses…
As mentioned before, initiatives such as ESG are very common in these “traditional organizations”, demonstrating the interest in the impact topic. However, according to Marcos Pinheiro (2023), “ESG is not synonymous with sustainability”. Furthermore, ESG does not direct the traditional organizations focus to impact, but, initially, seeks to help the organization not to “stop looking” at the elements that composes this acronym.
The author also states that the focus of “ESG strategies is on the Social, Environmental and Governance risks of the business”. Furthermore, the motivation is, initially, the longevity of the business, that is, the company at the center. Therefore, when brought to the organization’s risks, ESG concerns its strategic themes, unlike “sustainability, which is associated with much more external and global interests”. Finally, a point that apparently ends this discussion is the decision-making itself, within an organization that uses ESG strategies, stakeholders (and their interests) are consulted as a “best practice”. The Sustainability ones are associated with the SDGs (Sustainable Development Goals) from UN (Pinheiro, 2023).
Unlike what we see for “traditional organizations”, in high-impact businesses the impact must be the focus. In the other hand, we cannot affirm that traditional organizations are not concerned with impact… they do [a lot].
It looks like the same thing but it’s very different. Don’t you think?
So, what would these impact businesses be?
According to Copolla and Sant’Ana (2019), so-called “impact businesses differ from traditional economic activities because they are not only focused on profit, but rather because they are structured based on principles and objectives that go beyond return on capital invested.” Some features such as:
- Must have a mission explicitly aimed at generating positive socio-environmental impact.
- Must have processes to constantly measure the impact they are capable of generating.
- Must be considered as businesses, that is, economic activities that generate income through the sale of goods and services, therefore, “being different from philanthropic activities”;
- Must have a decision-making process (governance) that balances the interests of investors, customers and the communities affected by its economic activities (Coppola et al., 2019).
Kerry Siggins (2023) emphasizes that the first step is to have a clear and meaningful purpose for individuals and companies. However, that’s not all! According to the authors, high-impact businesses are those that prioritize a clear and meaningful purpose, aligned with their values, and focus on making a positive impact not only in financial terms, but also on employees, customers and society as a whole. These companies seek to create a better world through their actions.
A great example of this behavior in the world of organizations, which has become even better known in recent times, is Patagonia. As much as it has clothing products, “Patagonia’s main purpose is to help save the planet from the effects of climate change”. Therefore, the company is actively involved in environmental preservation and restoration, committing a portion of its sales to do so. The company’s employees are deeply motivated and inspired by this mission, which has contributed to its success.
So, how do you “design” an impactful purpose?
Kerry outlines the steps to developing a greater purpose within a company:
- Define the positive impact the company wants to make.
- Align the company’s purpose with its core values.
- Engage stakeholders across the organization, including employees and customers.
- Continuously communicate the company’s purpose through various channels.
- Lead by example, incorporating the company’s purpose into daily actions and decisions (Siggins, 2023).
PS. “Myself, as a high impact business designer, I would suggest to check if this positive impact defined could be somehow responsible to lead to any negative ones…” [It is always important to remember that any action or solution could lead us or other people to go into another problem].
For those who don’t know many tools, I suggest combining these two: Massive Transformative Purpose (MTP) by Salim Ismail (2014) and Golden Circle by Simon Sinek (2011).
In his book “Exponential Organizations” (2014), Salim Smail states that MTP is the first step towards an exponential organization, bringing it as the company’s highest aspiration, bringing together head and heart, inside and outside the organization .
What do you have that no one else has?
Therefore, try to define it clearly and, above all, in as many hands as possible…
Simon Sinek states in his book “Start with Why” (2011) that great leaders inspired people to take action through a simple concept that he called “Golden Circle”, where you should basically start any “discourse” about the value proposition of your initiatives with the “why”. It seems simple, but it completely changes the way your words reach your audience’s ears.
Ok, we already know how to create or recognize the purpose of our initiatives, but it doesn’t take a genius to understand that the success of these initiatives goes far beyond the purpose for which we created them, right? As my grandmother said: “hell is paved with good intentions.”
How to design high-impact solutions and businesses?
It is possible to mention several programs and methodologies for high-impact solutions, ranging from those from companies like IDEO and Unreasonable Group that try to build frameworks and communities among entrepreneurs, institutions and investors, to MIT (Massachusetts Institute of Technology) that has an acceleration program for high-impact businesses.
IDEOU
As we know, IDEO is one of the main organizations responsible for disseminating the Design Thinking methodology, at least in the way it is mostly known. [I swear I won’t go into the merits of how much we can trust the results of such a methodology, as well as how fair and effective these “human-centered” approaches really are] :/
It is impossible not to recognize that there are positive points, especially in the way such approaches have proven to empower individuals and small groups to seek to design their innovative businesses… and, why not, impactful ones?
To achieve this, IDEO brought IDEOU, an online learning platform that offers a variety of courses and resources related to design thinking, innovation and creativity. Although IDEOU primarily focuses on design and innovation education, it may offer courses related to social business and social entrepreneurship, given IDEO’s extensive experience in design and its applications in various fields.
IDEO has a reputation for developing innovative solutions and applying design thinking principles to create social impact. Although IDEOU itself is not a specific methodology for designing social businesses, it provides educational resources and courses that can help individuals and organizations learn and apply design thinking and innovation techniques to address social and environmental challenges.
If you are interested in using design thinking and innovation methodologies to design a social business, you can find relevant courses and resources on the IDEOU platform that can guide you through the process. IDEO’s approach often involves human-centered design, empathy for users, prototyping and iterative problem solving, which can be adapted to the context of social entrepreneurship and business. It is a valuable resource for anyone who wants to apply design thinking principles to social impact initiatives.
Unreasonable Group
The Unreasonable Group is a company that focuses on building a community among entrepreneurs, institutions and investors to address and solve pressing global problems. Their goal is to create profitable solutions to these challenges through their network and support. With their main mission to drive scalable and profitable solutions to urgent global problems, they seek to bring together a diverse community and facilitate connections and collaborations.
For Unreasonable Group, Scalable Change is associated with innovations and ventures that have the potential to make a significant and widespread impact on the challenges they address. Therefore, the Unreasonable Group collaborates with corporate partners, including notable names like Barclays. These partnerships often involve large companies working together with entrepreneurs and startups to develop innovative solutions to global problems.
So, if you are an Entrepreneur, Investor, Student, Mentor, Executive of a Company etc. you will probably find a way to interact in a positive way with this initiative from Unreasonable Group.
MITdesignX
MIT is known for its innovative, research-driven approach to solving complex challenges, and MITdesignX aligns with this tradition, offering support and guidance to those interested in designing and launching impactful initiatives, which can include social enterprises. The methodologies and approaches used at MITdesignX can vary based on participants’ specific projects and goals, but are often based on principles of design thinking, entrepreneurship, and technological innovation.
It is important to note that MITdesignX is not a methodology, but rather an innovation accelerator program at the Massachusetts Institute of Technology (MIT) that focuses on entrepreneurship, innovation and design, including social business and entrepreneurship. It was designed to support students and researchers in realizing their innovative ideas, whether related to social impact, technology or other areas.
Although MITdesignX does not define a specific methodology, it provides a supportive environment for individuals and teams looking to develop and scale their projects, including those with a social or environmental focus. Participants in the MITdesignX program typically have access to resources, mentorship, workshops, and a network of experts and entrepreneurs to help them refine their ideas, develop business plans, and create prototypes or pilot projects.
PS. [I am a Learning Facilitator invited by the MIT Professional Education program to help students looking to learn a little more about how to design high-impact solutions. I accompany participants weekly through mentoring and try to contribute in a way that increases the absorption of this valuable knowledge, as well as helping the potential of the businesses created throughout the program. It is necessary to remember that this program is not the same as the Acceleration one mentioned before, but a training online course that aims to help professionals to learn how it works].
If you are interested in leveraging MITdesignX to design a social business, I recommend visiting the official MITdesignX website for the most up-to-date information about their programs, initiatives, and methodologies you can use to support social entrepreneurship and innovation.
I have tried to bring some information about a fresh start for those who want to create or learn how to turn a traditional business into a high-impact organization. In my next post I will put some of my observation of how I like to do this and show to you my own method to design these high-impact solutions through expansive design. I hope you have enjoyed this piece of content and somehow this was useful to you.
REFERENCES
- de Sant`Anna, Diogo and Coppola, Beatriz. (2019). “NEGÓCIOS DE IMPACTO E A ATUAÇÃO ECONÔMICA DAS ORGANIZAÇÕES DA SOCIEDADE CIVIL. BOLETIM DE ANÁLISE POLÍTICO-INSTITUCIONAL” | N. 20 | june 2019.
- Pinheiro, Marcos. (2023). “ESG NÃO É SINÔNIMO DE SUSTENTABILIDADE!”. LinkedIn. [LinkedIn post].
- Kerry Siggins. (2023). “How to Create a High-Impact Company With a High-Impact Purpose.” Entrepreneur, Feb 17, 2023 [Entrepreneur.com].
- Ismail S. Malone M. S. Geest Y. van & Diamandis P. H. (2014). Exponential organizations : why new organizations are ten times better faster and cheaper than yours (and what to do about it) (First Diversion books). Diversion Books.
- Sinek S. (2011). Start with why : how great leaders inspire everyone to take action. Portfolio / Penguin.
