21. 05. 2015 Corporate responsibility

Business with added value for all

Collaboration of business and social entrepreneurs guarantees break-through innovations.

This borehole provides a community water source in Sérihio, Côte d’Ivoire © Nestlé/flickr.com

The community wellbeing naturally affects the competitiveness and success of the business. This idea being the building stone of the Creating Shared Value concept has in practice been followed mainly by social entrepreneurs who are driven by visions of economic inclusion, effective healthcare,education and healthy ecosystems. Nowadays, many “ordinary” businesses want to participate in solving profound social and environmental challenges, as well. What makes companies more caring for the outer world and who they partner with to make an impact?

Broken systems and rigidities in the public sector are barriers to social innovations

Social entrepreneurs and non-profits have long been inventing solutions to problems that governments or businesses were unable to tackle. Some of the major limitations are the rigidities of public policy and industry norms. Wide deviations can be seen especially when compared with dynamic of market system’s and supply chain’s development that by interlinking are developing effective and very extensive networks. Why is the public sector considerably lagging behind the private sector?

In order to deal with current social as well as environmental problems it is necessary that government identifies the origin of so-called broken systems. Problems with law enforcement, unequal citizenship, corruption, rigid labour law are the main factors which do not allow the public sector to adapt to complex and rapid changes in nowadays world. A radical rethink of antiquated status quo is needed so that social and economic innovations can meet their objectives. One of the first steps is the necessity to look at current global and local problems beyond the traditional public (social, non-profit) and private (business) sector divide.

“The private sector has been the missing player in the evolution of social entrepreneurship,” says Stephanie Schmidt, Managing Director at Ashoka Europe, for Forbes magazine. “Its potential has largely been untapped. Philanthropy and CSR are only a drop in the ocean when it comes to the actual potential a company has to change the world.” Companies should understand the needs and problems of the society and address them by their business. Almost 60% of the 150 most important economic entities in the world are business companies, not countries. With such impressive influence and success, they have got a lot to teach social entrepreneurs.

Companies must demonstrate their interest in their near environment otherwise they do not survive

For many years it was major and generally accepted goal of the companies to maximize their profits which unfortunately was leading to the ignorance of the interests of their wide environment (suppliers, employees, shareholders and others). This system is, however, no more sustainable in today’s interconnected world and the future of the strongest companies can be fragile if they continue to operate in a weakened environment.

“It is a common sense observation that no living organism can grow and develop in a deprived environment or a desert. It is in a company’s best interests to take good care of its economic and social environment, in one word, its ‘ecosystem’”, said Danone CEO Franck Riboud in the middle of the economic crisis. How to ensure that environment around businesses is not deprived?

Team up with social entrepreneurs

Social and business sector should learn how to work together and share their knowledge and experience. Especially in times of crisis, social entrepreneurs have demonstrated their capacity to successfully solve market failures and turn traditional business logic upside down.Their success can be seen in effective cost reduction and innovative and high-impact solutions operating on a shoestring budget and on their sometimes extreme emphasis on the needs of each client. All of these things could be very valuable for companies and are in today’s world very missing.

“Seen from a business perspective, social entrepreneurs focus on market failures. They create products, services, and solutions for people who are not served by traditional markets: from people with disabilities to the aging population to women outside the workplace”, writes Danielle Batist in Forbes.

According to Danielle, low economic growth and high unemployment have led companies to look for ways to remain competitive and find new growth opportunities. Co-creating products or services together with social entrepreneurs could allow them to detect market failures quicker and to accelerate the search for creative ways to not only address them, but also to find new opportunities for future growth. Companies can thus overtake the competition and at the same time, it´s also a great way how to motivate and engage their employees. Involvement and interactivity in fact increase their loyalty to the company.

Crucial is true collaboration between partners. “To stay ahead in today’s world, astute companies and individuals must make the hunt for new ideas continuous and relentless. Collaboration has to become a way of life, not an occasional experiment”, says Bill Fischer, co-author of the book “The Idea Hunter”. He believes that cooperation with multi-stakeholders enlarge the idea pool, control costs or ensure that projects get done on time.

Autistic programmers and women sales promoters

The inspiring example is the foundation operating in Denmark, Specialist People Foundation, which cooperates with a leading IT company. This non-profit organization helps to employ people with autism, who havea unique talent for coding and programming. 

The next company with initiative ideas is Danone. Danone addresses the issues like malnutrition, access to water, sustainable resources management, and sustainable supply and value chains, says Forbes. In Spain, company runs a Social School for Women Empowerment helping abused women in partnership with the Ana Bella Foundation. “The women benefit from personal coaching, social workshops, and professional training. With the aim to become financially independent, they are offered job opportunities by Danone Spain as sales promoters for the Group’s brands in supermarkets,” explains Jean-Christophe Laugée, Social Innovation and Ecosystem Fund Operating Director with Danone.

Focusing on individuals who stand in the often invisible background of large organizations is the main objective of the Ashoka Foundation, which brings together up to 3 000 leaders in social entrepreneurship operating in 70 countries around the world. These so-called Ashoka Fellows are trying to cover all areas of human needs where organizations fail. They demonstrate unrivalled commitment to prove that collaboration, compassion, daring ideas and creativity are tremendous forces that can change the world. 

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