How Companies Drive Social Change

During the Ebola crisis, a surprising leader emerged, and it was not Doctors Without Borders, the WHO or the Red Cross. Rather, it was Firestone—a company better known for manufacturing tires. What Firestone did was respond quickly and effectively to the first signs of the Ebola outbreak, put appropriate checks in place to identify potential cases among their workers, and set up its own medical clinic. As a result, few of the workers at the Firestone plant and few of their family members (in total, about 80,000 people live in and around Firestone’s plant in Liberia) ever contracted the deadly illness. Firestone’s response to the Ebola outbreak was an exemplary model of a company not only playing a part in solving a crisis—in this case a health crisis—but also demonstrating leadership skills and modeling how other organizations, even medical organizations, might handle the crisis too.

Collective Impact

mapAs observed by Mark R. Kramer and Marc W. Pfitzer in a recent Harvard Business Review article, in the past, “companies rarely perceived themselves as agents of social change. Yet the connection between social progress and business success is increasingly clear.” As an example, they observe that the first large-scale program to diagnose and treat HIV/AIDS in South Africa was developed by Anglo American, a mining company, to protect its workforce and reduce absenteeism. As Kramer and Pfitzer further note, “If business could stimulate social progress in every region of the globe, poverty, pollution, and disease would decline and corporate profits would rise.” Why? The reason is simple: Creating shared value or “pursuing financial success in a way that also yields societal benefits” is good for people and business.

At the center of the corporate contribution to social change is the concept of “collective impact.” Kramer and Pfitzer define collective impact as follows:

Collective impact is based on the idea that social problems arise from and persist because of a complex combination of actions and omissions by players in all sectors—and therefore can be solved only by the coordinated efforts of those players, from businesses to government agencies, charitable organizations, and members of affected populations. What’s needed is nothing less than changing how the system functions. Collective impact efforts have made significant progress on issues as diverse as education, homelessness, juvenile justice, substance abuse, childhood obesity, job creation, and pollution.

Managing Change

plant growing out of coinsTraditionally, governments and NGOs have been seen as the strongest catalysts of social progress. This, as noted above, however, is not always true. In part, this is because many governments in developing nations and NGOs simply lack the resources to drive social change on a large scale, or they have the resources but lack the human talent and management skills to carry out truly transformative projects.

Thus, while social change may rest at least in part on passion and hope, great management also need to be appreciated as part of the social change equation. Indeed, the only way to tackle a large-scale economic, natural or health crises is with great management on one’s side and this is where businesses have much to offer. Among other specific skills, large-scale businesses have the change management, supply chain expertise and financial management skills required to ensure that the work of NGOs has the biggest possible impact.

Change Management Expertise: Helping a community or nation in crisis move forward is about problem solving and in many cases, change management. It’s about finding new solutions to old problems and implementing new systems to bring about sustainable change.

Supply Chain Management: In many developing nations, NGOs are able to acquire resources (money, technology and food) but unable to get these resources to the people most in need. In essence, the problem is a supply-chain problem—an inability to move supplies from their point of origin to desired destination. Again, many large-scale businesses have the expertise to help oversee such work and even find ways to source resources from within rather than outside the region or nation, which is essential to driving local economies and creating long-term self-sufficiency too.

Financial Management: Perhaps one of the most important forms of expertise that companies can offer social change projects is financial management. While moving people to donate money is a first step that many NGOs are skilled at executing, managing donations is often where NGOs fail. Although a small number of NGOs simply mismanage funds, the majority simply fail to make the most of donations by overlooking the potential long-term gain of investments and/or by failing to assess the return on investment for projects initiated in the field.

September 24, 2016   Updated :September 24, 2016      

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