Smart Business, Good Deeds, and Innovation: The Next Frontier in Social Impact
Many of the decisions we make every day in business can have a positive impact on our community. The practices we use to innovate—design thinking, experience research, and new project management techniques—are also the tools we use to make a difference in the world. And doing good in the world can contribute to doing well in business. In fact, the data shows that environmental, social, and governance practices improve company performance across business metrics like stock price and cost of capital, along with improved operational efficiency and brand value.
In what ways might doing good be good for business?
In the last few decades, the role of corporations in our society has changed as consumers seek out brands with track records of doing good in their communities. In response, Fortune Global 500 companies invest more than $15 billion a year on corporate social responsibility initiatives. One way these companies have responded is by contributing increasing amounts of money to social causes. Consumers can now choose their favorite brands that give back through
local community donations, global profit sharing, and buy-one-give-one campaigns such as Starbucks’ Ethos Water Fund, which donates a portion of sales of their bottled water to support water, hygiene, and sanitation programs.
From the operational perspective, accounting methods that take into account the externalities of business, like the Triple Bottom Line framework (people, planet, profit), have been around for decades. Today, more and more companies are both growing their corporate social responsibility efforts and being more transparent about it. From 1999 to 2017, the number of the world’s largest 250 companies that include corporate responsibility data in their annual financial reports climbed from 35 percent to 93 percent.
In the latest shift we’ve seen, people now demand more than just transparency and mitigation efforts from corporations—they also want action to respond to the great global challenges of our times. Companies are stepping up by contributing to society in deeper ways. For example, athletic apparel maker Nike and bathroom fixture company Kohler are examining their business operations and designing waste out of their products. Pushing the stakes even higher, Cisco’s recent $50 million commitment to helping to end homelessness in Santa Clara county set a bar for Silicon Valley companies putting their resources toward challenges facing our own neighbors. Cisco also continues to increase its use of renewable energy to 80 percent worldwide and slash greenhouse gas emissions by 60 percent by 2022.
In my own role with Cisco CHILL, an innovation catalyst for Cisco and our customers, I’ve been involved in innovation initiatives with both social and business impact. For example, Transparensee is a project that grew out of our “Securing the Digital Supply Chain” living lab. It creates a platform both to support the mining communities where our products begin, and to fulfill regulatory requirements by keeping conflict minerals out of our supply chain. Circle Of is another example where doing good is also good business. A startup born in a CHILL lab, it provides a collaboration tool for caregiving communities to help people with chronic health conditions—and helps enterprises reduce absenteeism and improve productivity along the way.
These are examples of how Cisco’s core technologies like connectivity, collaboration, and security, can have tremendous impact on tackling challenging global problems. And yet there is still room to grow the social contribution most companies are making. What kind of business design would get you there? In part 2 of this article, I’ll dive deeper into the critical success factors for both innovation and social impact.