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How The Private Sector Can Drive Social Innovation

This article is more than 10 years old.

Written by Gabi Zedlmayer

Global citizenship today is at an inflection point. As the size and global span of corporations have grown over the years, so has the importance of their commitment to social good.

Out of the 100 largest economies in the world, about half are multinational corporations. Given their impact on global communities, it is becoming increasingly essential that these large corporations execute responsibility to society, rather than rely on governments and non-profits to address difficult social issues alone.

Evolving responsibility to opportunity

Much has changed since the term "corporate social responsibility" was first coined in the 1960’s. Today, the world’s largest companies are in a unique position to play a much greater role in driving social change than ever before. It’s clear that Fortune 500 companies are committed to scaling up their international giving and volunteering programs worldwide. Aside from pure monetary donations, however, is a new model that is transforming corporate philanthropy.

Increasingly, corporations are turning to a shared value model, in which companies work in alignment with society rather than against it, producing mutual benefits to both the community and the corporation. It evolves the traditional model of financial and material goods donations, to one in which corporations leverage a range of corporate assets including employee skills, business acumen and partner networks, to drive social change.

In this model, corporate success and social welfare are interdependent. The same passion, energy and culture of innovation that make a particular company successful are also used to make a profound and positive social impact in the world.

Adopting the concept of creating shared value requires an important shift in perspective, for employees at all levels from the CEO down. Here’s the shift: Instead of viewing it as our responsibility to drive business and social value, view it also a valuable opportunity to rethink existing practices.

The business case for social innovation

Global citizenship is not just about “doing good.” When corporate responsibility becomes an integral part of the overall business strategy, companies broaden their understanding and perspective, creating a virtuous cycle of business development. For example, by working with a non-profit organization, a corporation can demonstrate its expertise to a new audience, expanding its business network.

Additionally, collaborations can drive innovation through necessity. Non-profits work in extreme environments, faced with limited infrastructure, connectivity and staff. Operating in these situations exposes corporate staff to new sets of customer challenges, which can often deliver innovations in product design or services into the business.

In reality, there are a variety of benefits for an organization, from brand building, to staff retention, and even improved client stickiness. Shareholders and the investment community are also increasingly considering corporate responsibility when making investment decisions.

Increasingly, investors weigh environmental, social and governance  data when making investment decisions. While such data has been a benchmark for European-based companies for some time, we are now seeing a more global adoption and interest in this, which should be another forcing function for more corporations to act as good corporate citizens.

Applying social innovation in practice

It is essential to determine the synergies between a corporation’s expertise and the elements needed in a social development program before committing to corporate support. It’s not possible to address all challenges in a community, nor respond to all requests for collaboration with other organizations.

A good starting point is to assess the company’s available skills, expertise, partnerships against the touch-points the company currently has within a given community. From there, establish specific goals to achieve and a strategic plan to meet those goals.

Companies that have an expertise in technology, for example, can collaborate with non-profits or social entrepreneurs to provide the infrastructure backbone that turn their ideas into reality. With the social enterprise mPedigree Network, HP leveraged its technology expertise in cloud-based services to design and build an anti-drug counterfeiting service in Africa. Counterfeit medicine is a significant problem in developing countries, causing more than 700,000 deaths each year. The new service helps save lives by enabling patients to validate the integrity of their medicine by sending a free text message.

The ecosystem of both partnerships-- for social impact and for commercial collaboration-- is growing quickly.  When there are both business objectives as well as social impact objectives, the new model of shared value is much easier to demonstrate.

My experience in managing corporate citizenship programs has convinced me that creating shared value is a powerful way to motivate companies into taking and sustaining action that can change the world. Let’s shift the perspective from responsibility to opportunity, and let’s mark that change by innovating first in our own programs.

Gabi Zedlmayer is Vice President of Hewlett-Packard’s Office of Global Social Innovation.