Net Impact: Ways to Profit From Social Change
This weekend at the Net Impact national conference, I had the opportunity to listen to Jason Saul CEO of Mission Measurement LLC, and author of Social Innovation, Inc.: Five Strategies to Drive Business Value through Social Change. He proposed a few concrete methods for businesses to create a robust revenue stream by creating powerful social change.
According to Saul, there are “ferocious profits” involved with making social change the basis of a corporation’s business. “The fundamental ’aha’ is not about philanthropy,” he explained. “The economy is now valuing social outcomes!”
Instead of donating a few million dollars to charity, he challenges big business to use its multi-billion dollar mainstream business to affect social change. He proposes that we follow a Simple Definition of a Social Innovation:
1. It is an intentional business strategy, not a retro-fitted business justification.
2. It leverages the core business.
3. It creates economic value.
4. It creates positive and powerful social change.
For example, he references Tonik, a health insurance provider that astutely tapped into the under-served market of the “young invinsibles,” between 19 and 29 years of age.
He also lays out Five Strategies for Market Entry:
1. Backdoor Market Entry
2. Pipeline of Talent
Custom-educate your future workforce-train people for your business. It’s good for society and good for HR.
3. Sub-market Products
Create affordable products to address unmet market needs, like the BoP strategy.
4. Emotive Customer Bonding
Engage customers by determining what is important to them. Pampers initially tried offering a 7-cent charity donation per box of diapers sold. The initiative failed. When the company instead offered a vaccine to a child in the developing world per box sold, customers latched on to the idea immediately – though each vaccine only cost 7 cents.
5. Reverse Lobbying
Make government your business partner instead of looking for favors. When McDonald’s went into China, it found that many girls and disabled children were orphaned due to the One-Child Policy. To help the government solve the crisis, McDonald’s created foster homes for the children. In turn, there is now a McDonald’s at every government gas station.
Finally, Saul proposes an easy 4-step formula to create business strategies for social change:
Step 1: Identify the high value business outcomes
Step 2: Research the social change that will influence these outcomes
Step 3: Analyze the company’s assets/core competencies
Step 4: Innovate business solutions to social problems.
I was impressed by Saul’s passion and vigor in driving businesses to put social change in the front and center of their agendas. The actionable steps, in particular, are imperative to assisting businesspeople in creating real social value-a concept which will surely become a staple of business in the coming decade.