Social innovation is an emerging and important area that brings the two worlds of business and society together. It enables organisations to convert their purpose into reality. This is done by aligning core assets and expertise to a common goal that is both good for business and society.
Companies globally including Unilever, Google, Barclay’s, Nestle, Enel and others are starting to create cohesive strategies that create social value with a range of tools, expertise and resources, beyond just traditional philanthropy.
We define social innovation as an overarching enterprise strategy that seeks to sustainably solve complex social issues using 3 key enterprise tools; Philanthropy, Corporate Social Responsibility (CSR) Programs and Shared Value.
Let’s have a look at the toolkit and the functions they play at an enterprise level to drive social and business value.
Above: Plotting tools on the value matrix.
See Tools and Resources for a ‘How To’ guide to plotting a value matrix.
1. Philanthropy
Using corporate funds and/or through a foundation and/or employee giving scheme to donate to social issues.
Example: Corporate Foundation, employee volunteering
Business value: Low
Social value: Very High
2. Corporate Social Responsibility (CSR) Programs:
Programs that seek to solve a social issue by using corporate resources and receiving no commercial benefit. These programs are done with the intention of improving society and therefore a commercial benefit is not a core driver. However, CSR programs are often used in branding and marketing to promote a company’s values.
Example: Student education programs, tree planting programs.
Business value: Low/Medium
Social value: Medium
3. Shared Value
A strategy that seeks to solve social issues whilst maintaining commercial returns for the company. This style brings improving society into core strategy development which promotes longevity of solving social issues. Check out our Shared Value 101 article here.
Example: Clean energy financing, ecotourism, sustainable supply chain transformation.
Business value: High
Social value: High
Key enablers:
- Measurement: Defining and measuring metrics that show social and business value is critical to the success and growth of social innovation strategy. They are often not the most exciting part of development, however, it is the most important. See Tools and Resources for an incredibly helpful metrics framework called the Theory of Change.
- Partnerships: Expert consultants and NGOs who are also seeking to solve the same social issue can provide an important perspective and knowledge of the market. Partnerships are a critical step to developing market credibility as well as accelerating the launch of new products, services and programs due to their connections and experience.
The success of a social innovation strategy requires:
- Active leadership endorsement
- Strong employee engagement
- Strategic partnerships
- Cohesion and synergy of 3 enablers
- Measurement of both business and societal value
- Effective use of corporate resources
Key takeouts
- Effective social innovation strategy involves using resources cohesively across philanthropy, CSR programs and shared value.
- These enterprise tools can become more effective with external partnerships that also seek to solve social issues.
- Measuring social and business value is important as it proves the impact and performance of initiatives which can lead to more investment and stronger social outcomes in the future.
Act Today!
- Download the Value Matrix in Tools and Resources and map your company’s current resources and tools with some colleagues.
- Identify gaps and research opportunities to develop further.