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How Corporates Can Create a Competitive Advantage by Engaging Society

17 April 2013 at 12:31 pm
Staff Reporter
Every commercial organisation wants to increase staff engagement, improve performance, launch more products, attract new customers, and enhance collaboration. However, only a select few appreciate how societal engagement can deliver all five performance enhancers says corporate trainer and author, Omer Soker.

Staff Reporter | 17 April 2013 at 12:31 pm


How Corporates Can Create a Competitive Advantage by Engaging Society
17 April 2013 at 12:31 pm

Every commercial organisation wants to increase staff engagement, improve performance, launch more products, attract new customers, and enhance collaboration. However, only a select few appreciate how societal engagement can deliver all five performance enhancers says corporate trainer and author, Omer Soker.

Every commercial organisation wants to increase staff engagement, to improve performance, to launch more products, to attract new customers, and to enhance collaboration. However, only a select few appreciate how societal engagement can, and does, deliver all five performance enhancers.

The rest are missing out, both on commercial gain and on the non-financial rewards of making a meaningful contribution.

Whether you define societal engagement as giving back through philanthropy, or minimising your harmful impact through corporate social responsibility (CSR), or in finding new business opportunities in societal problems through the creation of shared value (CSV), all five performance enhancers apply.

Here’s why:

1. Engage Staff
Human beings are purpose-driven. We need to know where we are going, and why, in order to commit to getting there. Smart companies are realising that ‘greater purpose’ is a powerful uniting force to inspire, unite and engage employees, customers and investors with the pride of being part of something special. Purpose does not have to be as earth-shattering as Grameen Bank’s mission to eradicate poverty, but it does need to provide some kind of social benefit.

IBM shifted its purpose from IT Products to Smarter Cities, National Australia Bank from Credit to Healthy Relationship With Money, and Novartis from Healthcare Products to Healthy Families. These hugely successful and diverse corporations understand the power of purpose. In today’s multi-connected landscape, where product features are copied and assimilated by competitors in a heartbeat, purpose provides a differentiator and a competitive advantage.

All of these organisations use societal engagement to drive purpose, loyalty and engagement in their workforces. With Inc. Magazine estimating that lost productivity is worth $360 billion in the U.S. alone¹, anything that re-engages the workforce is a huge financial bottom-line driver.

2. Improve Performance
Here are three evidence-based examples linking societal engagement to better financial results:

  • The Global Corporate Reputation Index confirms that many top companies outperform their industry averages on CSR by a more significant margin than performance². Good citizenship drives performance by helping companies stand out from their competitors.
  • The Doughty Centre for Corporate Responsibility and Business in the Community confirm that positive community relationships decrease the amount of regulation imposed on a firm because it is perceived as a sanctioned member of society³. Fewer regulatory burdens free up opportunities for growth, and engage community support for new initiatives.
  • The Boston College Center for Corporate Citizenship confirms that 80% of executives agree that environmental and social investments create financial value for their companies?. When integrated, there is a direct link between CSR and long term organisational performance.
  • A wealth of empirical data shows the often surprising direct benefits of engaging society. It’s out there; more corporates simply need to state the debate about what make sense for them.

3. Launch More Products
It is a fact that socially responsible companies are more innovative, in that they launch more products. How so? Research across 128 companies in all major industry sectors showed that the top third in terms of CSR brought out an average of 47 new products, while companies in the bottom third only launched twelve?.

The relationships with external stakeholders provide access to fresh knowledge and diverse thinking that helps companies stay ahead. The new ideas they get from implementing CSR, enable them to launch new products. No company can flourish in a vacuum. Societal engagement brings diversity into the business that would otherwise not have been possible.

4. Attract New Customers
Today, ethical consumerism is a worldwide force that no company can dare ignore. Ethical Consumer’s research shows that between 5-10% of buyers are always ethical, while 60-75% are sometimes ethical and influenced by choice and availability. This new breed of discerning consumer is also conscious of the significant problems that need to be addressed globally for the wellbeing of the people living on our planet, and increasingly demand that commercial organisations stand for something beyond purely profit.

They are voting with their wallets. They are also hyper-connecting online to drive a return to values and sparking debate over significant issues: sustainability, carbon neutrality, climate change, energy resources, globalisation, exploitation and child labour, people smuggling and slavery, oppressive regimes, corruption, fair trade, food security, and the conservation of pristine natural habitats across the globe. Companies that make even a small contribution towards these issues are being rewarded with these new customers. The rewards will grow as this consciousness grows. The time for companies to embrace this new world view is now.

5. Enhance Collaboration
Commerce and society no longer exist in conflict. The global financial crisis showed how vulnerable our commercial system really is. Depleting natural resources show how vulnerable our environment is. Rational thought shows how inter-linked they are, so it is only together that we can strengthen both.

For corporates looking to engage society, their first call should be to the NFP sector, to learn about how to begin a collaborative, participatory process. Societies don’t want to be told what their problems are, and what the solutions must be. They want, and deserve, to have a voice and to participate. The wealth of knowledge in the NFP sector is an untapped resource for business, and it’s time for more collaboration.

Success today is about collaboration. It is about aligning values and finding the overlap where the needs and objectives of both sides come together; such as well integrated CSR, CSV or philanthropic initiatives. This is represented in the red zone in the illustrated model (below) where the congruence is a perfect collaboration between commerce and society.

The blue zones represent extremes of each, where goals are pursued at the expense of the other, pitting commerce directly against the needs of society and vice-versa. The greed and harmful self-interest that fuelled the global financial crisis is an example within the blue zone.

This old 1980s inspired model of ‘greed is good’ is being dismantled in today’s inter-connected, transparent world.

The white zones are neutral areas, where there is no conflict between goals, and where collaboration is defined through a series of negotiations and accommodations. We don’t live in a perfect world. Open debate and discussion are powerful resources that can dictate whether either party moves towards the red, or towards the blue zones. Choices made in the neutral zone determine where you head in the long run.

This model of collaboration created by The Ethics of Success Corporation can also be used to bring any two parties together to create value; whether it’s company and society; NFP and community; employee and employer; company and investors; or even the CEO and Board.

Societal engagement is easier than many companies realise, and has so many benefits that it needs to be on every leader’s agenda.

You don’t have to change the world or save the planet, and even the smallest level of engagement is important. For companies starting out with societal initiatives, I’d recommend you focus on your own customers and suppliers first and ask them how they would like to see your company adding value in your own specific community, or what problems they face that you can assist with.

You might be surprised by the engagement, performance, new products, new customers and collaboration you receive in return. But as the old adage states: “If you don’t ask, you don’t get.”

About the author: Omer Soker is a corporate speaker, trainer and author of The Trust Future; a new book on business ethics, trust, resilience and engagement. He is the founder of The Ethics of Success Corporation.

? Luo Xueming, Du Shuili. (2012, April). "Good" Companies Launch More New Products. Harvard Business Review, p. 28.

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One comment

  • It’s all about purpose, isn’t it? But how do you find your organisational purpose? And how do your connect the energy of your personal purpose with that?

    If you’re interested, check out this blog post by Social Leadership Australia Director, Geoff Aigner:

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