Where business profits by solving social issues

Finding purpose and making a contribution to society should not be limited to charity. Government, charities and foundations fill the gap and deliver services to those that cannot afford to pay for them. But, we need to consider if the services are being delivered as efficiently and effectively as possible?  Greater scrutiny and governance is already influencing where donations flow so perhaps there is a role for business here.  Businesses prosper and earn profits when they create additional value from the resources they employ and the user recognises this and pays for it. The winners do so with great discipline utilising resources more and more efficiently and productively.  Surely it makes sense in a world of limited resources to utilise this skill of careful stewardship to address social issues.
This should in no way undermine what NGOs have achieved – especially when responsible for developing the last mile to the end user. Rather, through collaboration, businesses can expand their customer base, by meeting the needs of the underserved or neglected, by creating a new service or product.  This may (though not always) require reconfiguring the value chain to deliver at a much lower price point perhaps by introducing a new distribution channel, or by reengineering the product.  Alternatively, businesses can collaborate and make collective impact through clusters and addressing the eco-system of suppliers by investing alongside others and securing supply for the long term.
Creating Shared Value is the overlap.  Where strategic alignment of profitable business development also has social impact.  Big business brings scale and sustainability – surely these are what we need in terms of solutions for social issues.  Why should businesses bother?  Because there is plenty of evidence already that it brings competitive advantage and this translates into stock outperformance.  Social enterprises may be the exciting start-up sector, but it is within large leading companies with resources both human and capital to be leveraged that production, marketing and distribution already have the scale to impact with discipline and skill.

SUBSCRIBE TO OUR NEWSLETTER