November 22, 2014

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8 Ways to Create Social Value: Lessons from Verizon, Campbell Soup, Ford, Roshan & More

Social value is as important as economic value for companies. Here are eight ways to create it.

Submitted by: Guest Contributor

Posted: Mar 21, 2014 – 09:00 AM EST

Tags: social value, verizon, campbell soup, ford, roshan, csr, innovation, design, green products

 
Kiser_and_leipziger

By Cheryl Kiser and Deborah Leipziger

Pioneering entrepreneurs within companies are creating social value alongside economic value. We have followed the journey of intrapreneurs like John Viera at Ford and Dave Stangis at Campbell Soup Company who've brought valuable lessons from the trenches about how to create social value and promote social innovation.

What is social value and how can companies create it? From our decades of experiences with leading companies, large and small, we distilled the following lessons:

1. Social Value Creation is about Design

Social innovators need design to implement their vision – whether it is a new product, a new business or a shift in their sourcing policies and practices.

Preserve has designed a system for sourcing raw materials to manufacture its toothbrushes and food containers, which, in turn, become the raw materials for other products. Ford is manufacturing its cars from green materials and green-Fordmaking them more fuel-efficient. Target has re-designed how it sells certain products in order to prevent crime and drug abuse.

2. Social Value Creation is about Co-Creation

Companies do not create social value in a vacuum. To use the language of Indian conglomerate Tata, companies “co-create” social value.

Unlocking social value is a process of co-creation between society, stakeholders and company leadership. Companies can create social value by considering the economic, environmental and social aspects of their impact as well as how to increase well-being and development.

3. Social Value Creation is about Accessibility

Social innovators find ways of bringing the disenfranchised into the business model. Verizon has done this by making mobile devices accessible to people with disabilities.

Roshan brought women into its workforce in Afghanistan, where few women are employed outside of the home.

4. Social Value Creation is about Leveraging Business to Address Social Issues

From obesity to corruption and road safety, pioneering companies are using social problems as a starting point for new products and new businesses.

Greyston seeks to combat poverty in the local community of Southwest Yonkers through its Open Hiring policy under which Greyston hires chronically unemployed people and provides access to low-income housing and quality 1.1 childcare.

IBM promotes leadership skills among its executives by sending them to emerging economies such as Brazil and Nigeria, where they provide technology and assistance to address social problems such as traffic congestion in sri-shellmajor urban centers and inefficiency in hospitals.

5. Social Value Creation is about Transformation

Whether companies are involved in nation building, as in Roshan’s case, or changing the sector or the community they operate in, social value creation is about deep, long-term change.

We examine how companies launch new products and business models, such as BiddingForGood’s game-changing transformation of how non-profits raise funds.

6. Social Value Creation is about Developing Infrastructure

In order to enter new markets, companies may need to develop the necessary infrastructure. In Afghanistan, Roshan promoted infrastructure around health and water and assisted with the construction of airports.

7. Social Value Creation Requires Training

Whether it is to raise awareness within a sector or to prepare employees, SVC requires extensive training to allow for change. Nearly all of the companies we studied invest heavily in training.

For example, Verizon, Greyston Bakery and IBM demonstrate the need to invest in their employees. Capacity building for suppliers is also a mechanism for creating social value.

8. Social Value Creation is about Re-Imagining the Purpose of Business

To create social value, a company may need to re-imagine its purpose and structure. Ford now sees itself as a company providing mobility solutions rather than manufacturing cars.

It may be necessary to re-imagine the business model to create lasting social value. New business structures, such as Benefit Corporations and Certified B Corporations, are part of this emerging landscape.

How Can Companies Create Social Value?

There are several mechanisms, including social innovation, social entrepreneurship, policies and core competencies. For example, the leaders we profiled Creating-Social-Value-coverhave created social value through:

  • Development of new products and sourcing of raw materials:  Preserve
  • Innovative ways of hiring:  Greyston
  • Products that address unmet social needs:  Verizon
  • Creating new forms of leadership development:  IBM
  • Creating new markets for fundraising:  BiddingForGood
  • Nation-building:  Roshan
  • On-shoring:  School House
  • Partnering with a competitor:  Target
  • New products and systems:  Campbell Soup Company
  • Sustainability systems:  UPS

Corporate Social Innovation

Intrapreneurs are deploying Corporate Social Innovation to create social value, a strategy that combines a unique set of corporate assets (innovation capacities, marketing skills, managerial acumen, employee engagement, scale, etc.) in collaboration with the assets of other sectors and firms to co-create breakthrough solutions to complex economic, social and environmental issues that impact the sustainability of both business and society.

Social innovation differs from corporate responsibility in significant ways. It is strategic and it leverages a wide range of corporate assets and core competencies.

What makes Social Innovation different?

Traditional CSR

Social Innovation

Philanthropic intent

Strategic intent

Money, manpower

R&D, corporate assets

Employee volunteerism

Employee development

Contracted service providers

NGO/government partners

Social and eco-services

Social and eco-innovations

Social good

Sustainable social change

This post is based on Cheryl Kiser and Deborah Leipziger’s book, Creating Social Value, A Guide for Leaders and Change Makers.

About the Authors:

Cheryl Kiser is the Executive Director of the Lewis Institute and the Babson Social Innovation Lab. Deborah Leipziger is the Senior Fellow in Social Innovation at the Lewis Institute at Babson. Their book, Creating Social Value, A Guide for Leaders and Change Makers, is due out in March 2014.

Deborah Leipziger is an author, consultant and professor in the field of social value creation. She is a Senior Fellow at the Lewis Institute at Babson and serves as Adjunct Faculty at the Simmons School of Management. She advises companies around the world on human rights issues and played a key role in the development of several key standards, including Social Accountability 8000. She is the author of several key books in the field of CSR and Sustainability, including The Corporate Responsibility Code Book.

The opinions, beliefs and viewpoints expressed by CSRwire contributors do not necessarily reflect the opinions, beliefs and viewpoints of CSRwire.

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