Social Impact Purchasing

Changing the World, One Purchase at a Time

“The way we spend our money is one of our sources of power, as an organization and as individuals.”

In the Summer of 2021, I was hired by Greater Good Studio (GGS) as a Social
Impact Business Fellow, a position created to help GGS better align its
purchasing with the firm’s mission and values. This meant identifying positive
relationships and opportunities for change and pointing to where we might
create shared value through purchasing. As I reflect on the unique challenges
and opportunities in social impact purchasing, I am happy to share some of
what I learned and what helped me along the way.

Human-Centered Design Graphic created by https://dalberg.com/ and adapted by Taylor Lay*

As our understanding of social impact purchasing continues to evolve, a particularly useful source for us was the British Columbia’s Ministry of Social Development and Social Innovation brief on Social Impact Purchasing (SIP) Guidelines. This brief gave us the foundation we needed to set the stage at the firm. The Ministry of Social Development and Social Innovation defines SIP as the process through which organizations assess monetary value and social and environmental impact when purchasing goods and services.

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We uncovered several tools to help measure, track, and evaluate suppliers and vendors. Below we share some that guided our approach this summer and may be of use as we grow in this area.

• Carter’s 10 Cs of Supplier Evaluation informed our primary research and interview activity with staff and the pre-workshop survey.
• Additionally, we received thoughtful advice from Dr. Mathew Liotine, Clinical Professor and Director of the Master of Science program in Supply Chain and Operations Management at the University of Illinois at Chicago. Dr. Liotine’s detailed suggestions included decision models and supplier appraisal criteria.
• In keeping with tools to help measure, track, and evaluate vendors and suppliers, the Vendor Assessment and Evaluation Simplified article explains why vendor assessment is vital for a business. The authors provide several useful templates on risk mitigation and vendor assessment. For example, The Risk Assessment Matrix Template allows you to list each risk and determine its likelihood and severity. A list of five standard methods to conduct vendor evaluation was provided by the authors as well.
• We also took an interest in the Kraljic Vendor Segmentation Matrix designed to help effectively segment vendors. Kraljic argued that supply items be mapped against risk and profitability. Each of the boxes in this two-by-two matrix represents a different buyer-supplier relationship type and suggests a set of distinct sourcing strategies. Using the matrix can help the operations team be more strategic in maximizing supply stability and lowering costs.

Gathering primary research to understand the team’s thoughts and needs was key to identifying the best tools for them. We collected data from surveys, one-on-one interviews, an office hour, and an interactive SIP workshop.

We derived immense value from incorporating Carter’s 10 Cs in our first survey and one-on-one interviews. We sent the survey to staff along with their most recent expense report. In it, we asked the team to reflect on 1.) their purchasing process, 2.) aspects of the purchasing policy that work well for them and those that can improve, and 3.) what comes to mind when they hear “social impact purchasing?” Additionally, we used Carter’s 10 Cs to probe for the top 3 criteria staff care about most when choosing a vendor or supplier for products. Then we asked, “how closely do you feel your purchasing aligns with the GGS mission?”

We found nearly everyone approached purchasing with a personal process, whether it be for considering the project needs or what lunch called for that day. An outlook shared by all was a desire for optimization; team members sought to understand current needs and then tended to make decisions based on affordability and convenience. When reflecting on purchasing alignment, team members acknowledged there was room for improvement. Fortunately, there was widespread interest in pursuing SIP.

In addition to the team’s curiosity in SIP, they courageously acknowledged a discrepancy between where we were currently and where we wanted to be. The journey toward SIP encompasses many factors. Our primary research revealed nine overarching themes.

Much of our process toward SIP included discussing perspectives and acknowledging internal struggles that staff felt. For instance, many staff members wrestled with their reliance on dependable and efficient vendors whose practices have both positive and negative externalities. One theme that captured numerous layers of concern was convenience. The team explained the role convenience played in maintaining the workflow. Convenience was internalized as the ease of acquiring the necessary products and/or materials to perform and efficiently deliver high-quality work to clients. For example, a team member shared, “our current purchasing processes reflect our busy workdays and default to convenience.” Similar sentiments were felt by others who shared:

“The way we work necessitates convenient purchasing. We often make purchasing decisions moment-to-moment.”

“We are willing to make changes toward SIP. Still, convenience and saving time must be factored in.”

“We now recognize our purchasing has an impact.”

There is now firmwide agreement that purchasing is an area of impact. Across the firm, there is momentum to partake in SIP. Staff also believe that adopting SIP means being more intentional, and remembering to continue being persistent in striving for positive long-term positive impact. They articulated what this looks like for them, sharing:

“Being intentional means we must acknowledge that purchasing will take much more time.”

“We must be more intentional about what we are doing if we want to live our values.”

Based on the team’s input via survey responses, interviews, and the workshop, we identified growth areas where we can truly align SIP to the firm’s mission and values. Our new firmwide definition encompasses all three.

Social impact purchasing at GGS refers to recognizing our money as a source of power to create positive change.

SIP at GGS is grounded in a vendor’s demonstrated commitment to social change. More specifically, this means that a vendor meets one or more of the following criteria:

1. They provide livable wages and safe working conditions to employees
2. They are committed to environmental sustainability and
3. They do work in humane manufacturing locations and/or are rooted in Chicago.

Moving Toward SIP has resulted in mutual impact. The team continues to prototype tools and brainstorm solutions that will hold them accountable. After our SIP workshop, one hundred percent of the team intends to think about purchasing more often and nearly all say that their interest in SIP has increased. Perhaps most importantly, there is unanimity. Everyone agrees the way they spend money as a firm gives them the power to make choices that empower others, support practices aligned with their values, and challenge the status quo.

Reflection

I appreciate George Aye (and the entire team) welcoming me last summer to Greater Good Studio (GGS). He told me to ask questions, make suggestions, and think of everyone as colleagues that I’ve known for years. This advice allowed me to bring all of who I am, roll up my sleeves and immediately learn and collaborate with the team. Working on this project was extremely rewarding personally and professionally.

While working at GGS, I was also enrolled in Leadership, Operations Management, and Strategic Management summer courses for my MBA program. In one of my course books, Leadership on the Line, Ronald Heifetz and Marty Linksy write “Leadership helps us answer: Of all that we value, what’s really most precious and what’s expendable?” The team at GGS wanted change and allowed me to urge them to identify what is most precious to them when it comes to using the firm’s capital for good.

I also found that human-centered design is empowering; it allows people to be adaptive problem-solvers where designers guide clients to solve problems with their own insights. As a Fellow, I found myself leaning into the design process. This involved using empathy to guide my questions and working with differences, passions, and perspectives in a way that constructively harnesses the energy exchanged to generate adaptive change. Heifetz and Linsky share that this approach helps people feel acknowledged by speaking to their fear, disorientation, and loss. After bringing the team’s concerns to the surface, I was able to reconnect them to their shared values and locate them in an arc of change.

Among my learnings is a debriefing session Christina Cosío and I shared, where we agreed that “money can be emotional” given that we all have different experiences with and feelings toward money. This conversation inspired me to contribute to fostering an environment of understanding where the team could feel safe sharing how they felt about the firm’s spending and the SIP initiative. Priya Sarran, Delia Clark, and Kathy Mendonca highlight the importance of psychological safety in their Change Management Toolkit. They assert that to set a team up for success, it is necessary to be attentive to the emotional stage everyone is experiencing and adjust accordingly. I used this suggestion when digging in deeper to uncover the history behind existing behaviors, which we acknowledged as “the current state” of the firm. I also had to be attentive to my own emotional state; I made sure to address my bias and emotion. I let go of premature assumptions or ideas I held of what would be transformative and the best course of action. I learned that human-centered design is not about the designer choosing the best outcome, rather the solution is shaped by the people who need it most — they are the real heroes of change. Simon Sinek writes in his book Leaders Eat Last that the true price of leadership is the willingness to place the needs of others first. The privilege to lead comes at the expense of self-interest.

Finally, my last takeaway is to hold space for mourning loss (i.e., “the way things used to be”). Adaptive leadership may be demonstrated through compassionate disruption, where moving with people toward the change they desire, occurs at a rate they can absorb. For GGS, this meant appropriately pacing the SIP initiative. It was important to hold space for the team to voice their desire for change, take ownership of the direction of change, and continue holding space for them to voice their temporary loss of feeling comfortable and safe.

Creating lasting change can happen when everyone is included, feels heard, seen, and validated. It was a pleasure learning more about human-centered design and working with the team on such a special project.

Deepest gratitude to the team at Greater Good Studio (in particular Christina Cosío, Chavie Cramer, Sara Cantor, and George Aye, for your guidance and feedback throughout my fellowship).

*Graphics digitized and refined by Hannah Martin.