"In order to stay competitive and meet stakeholders’ expectations (and in some cases demands), leaders need to rewire the corporate system, beginning with their own organisations."
Our new discussion paper offers a Transformation Framework for Leaders to transform their Business into a Force for Good. YSB's projects with corporate partners always aim for two kinds of impact: to create local social impact, improving access to resources for marginalised groups, and to contribute to transforming global companies into a Force for Good.
We know from experience that it is not easy to radically redesign “business as usual”. We also know that it is not only possible but a tremendous opportunity to go beyond mitigating social and environmental problems which are otherwise perceived as risks for companies. Leaders can actually contribute to creating solutions that have a positive benefit on society, the environment, and their organisations as well.
We like to lead through action.
Together with our partners at INSEAD and Porticus, we wanted to better understand how other business leaders unleash the potential for their organisations to solve some of the world's most pressing problems. To find out, we turned to the ones who are already leading in the space - the likes of Paul Polman, business leader, campaigner and co-author of "Net Positive"; Birgit Valmüür, founder and Managing Director at London-based sustainability consulting firm TitanSwan; Nicolas Chretien, Senior Vice President and Head of Sustainability & Environment of Airbus; T.V. Narendran, CEO & Managing Director of Tata Steel and many more.
Before, during and after the global pandemic we have led conversations with C-level executives and shareholder representatives. We have talked about the “purpose” of (their) businesses, the ongoing shift from shareholder to stakeholder economy and the challenges and opportunities this emerging paradigm represents. We have asked leaders about their best practices and examples for corporate transformation. These dialogues form the basis for the insights we outline in this paper. We have seen that as a starting point for transforming their company into a Force for Good, leaders should (re-)define their company’s core to align their business and impact models with its purpose, its reason for being in and contributing to the world.
We then note three key perspective changes that signal the evolution from a shareholder to a stakeholder economy, namely:
1. Internalising the negative as well as the positive impact a company creates along its entire value chain.
2. A focus on long-term value creation and lasting commitments.
3. A holistic systems-thinking approach to operate within and actively shape an ecosystem of different stakeholders.
Our Transformation Flywheel offers an overview on how to integrate these perspective shifts into different corporate functions. Leaders can start their company's transformation at each point of this Flywheel, ideally tackling several critical levers at once or after each other.
As an organisation, we deeply believe that it is possible to combine purpose and profit. Our model of doing just that is social business. The growing number of leaders who want to transform their companies into a Force for Good can find inspiration with the business and impact models of social businesses. Leaders can create a virtuous circle by collaborating with social businesses - they can contribute to their impact with financial and non-financial support. Corporations can invest in social businesses and support them with their expertise; incorporate social businesses into their value chain through social procurement; or start their own (joint-)social ventures. In turn, corporate leaders can learn from social entrepreneurs and apply their insight at scale. They can leverage their companies’ impressive capabilities, their employees’ diverse expertise and their multinational networks to contribute to the United Nations 17 Sustainable Development Goals.
The potential is huge.
It is our hope that this paper contributes to the ongoing discussion of the role of business in a changing world. Throughout this process, we have learned that the most important part of transforming companies into a Force for Good is the first step which goes from intention to action. Fortunately as we have found, many promising corporate leaders are already well on their way.
By leveraging the power of their people and their commercial acumen, Reckitt's objective with the accelerator is to scale innovative, locally designed approaches in Brazil that enable better access to health and hygiene by collaborating with social businesses.
Alexandre Furlan, CEO of Instituto Muda, has been building his business since he finished college 12 years ago. São Paulo generates 20,000 tons of waste on a daily basis. Yet only 5% of the residential buildings have public recycling collection service - the majority of it goes to landfill. Instituto Muda tackles the problem by picking and sorting recycled waste and donating it to waste