Increasing the Value of Business
Wednesday, 18th May 2016 at 9:52 am
Despite the growing good intentions of the corporate sector, many businesses need guidance of a “third-space” organisation, writes Ellie Cooper in this month’s Executive Insight.
Formerly known as Change Labs, Karrikins Group is a global consulting firm, or third-space organisation, that works with businesses to increase their social impact through a strategic approach.
Earlier this year, Jason Hincks, former head of FoodBank Australia, became the CEO of Karrikins with a view to using his Not for Profit experience to grow community investment from the corporate sector.
“As we move forward from the era of ‘chairman’s choice’ and disjointed corporate community investment, it is critical for charities and programs to align more closely with their partners’ strategic objectives”, Hincks told Pro Bono Australia News at the time.
“Equally, it is important for corporates to understand and articulate these objectives in a way that will resonate with their customers, stakeholders and shareholders.”
Hicks, along with Dom Thurbon, founder and chief creative officer, explain how Karrikins Group helps businesses on their shared value journey.
How does Karrikins Group achieve social impact?
Dom Thurbon: Karrikins Group exists to create social impact by improving the quality of strategy and execution in businesses’ community investment. Our vehicle for change is to try to ensure that every dollar spent on community investment by large corporations goes to evidence-based, impact-focused, well-designed change programs, and begin to move the conversation away from more generic, feel-good, chairman’s choice-style partnerships where a lot of legacy spend still exists. The primary vector for our social impact is trying to harness corporate spend and direct it towards shared value activities that both create social value for communities, but also business value for the organisations that sponsor them.
We work in a few different ways, the focus of our programs is generally on behaviour-change programs, so we have a strong focus on face-to-face change programs that work especially with young people and education. So we’d work directly with almost one million kids a year as young as five and well into their 20s in areas like financial education, cyber safety, digital literacy, health and wellness, disability and inclusion, across Australia, New Zealand and North America. We build change programs that look to affect knowledge, attitude, self-efficacy and attention to create experiences that change behaviour.
How does Karrikins work with other companies to enhance their impact?
Jason Hincks: We work with companies in two key ways. The first one is as a consulting business. We work with organisations to achieve the outcomes that Dom spoke about, so with their social investment and community investment strategies, so how do they achieve social impact, and how do they create business value along the way, and that really has been the most evolving part of our business. There really is lots of evolving thinking in that space, more so from the client side. We often talk internally about when we talk about the shared value concept that it’s something that Karrikins Group has been doing for years, it’s just now got a name, so consulting is our first piece that we work in. The second piece is in programs, large scale education programs with a focus on behaviour change.
How is this impact measured?
Thurbon: It is the $64,000 question right now. For us, measurement falls into three steps. Firstly we think most organisations we look at actually fall at the very first step of measuring, which is figuring out what they want to measure, and so we have a firm belief that measurement and all social impact programs need to start with a construction of a logic model that clearly identifies their belief and assumptions about the causal change that they’re trying to affect, and really answer the question, how do we think this program or this activity makes change happen.
In the second step – what looks like the impact of measuring – we design bespoke, fit-for-purpose, mixed-method measurement practices. So we use blends of quantitative and qualitative tools to try to assess the type of short, intermediate and long-term changes that programs are having, and link the variables we look at back to the logic model. That’s a dense way of saying, every program has to be different in the way it measures impact, but you have to build your methods based on a very clear articulation of what change are we trying to create?
And then the third part of measurement is to not forget, for businesses in particular, especially for companies that are looking to try to get more sophisticated in their approach to community and social investment, is to try to understand how they think these programs are going to create impact back on their business. We look at the four buckets of brand, customer, stakeholder and staff, and ask, how can a community program like the one we’re doing impact those four parts of the business, and what are the things in there that we’re going to measure. And again, the actual methodology for this has to be bespoke designed, based on the answer to that question.
Those are the three ways we try to understand impact, the first two are about social impact and the third one is about business impact on the programs that are being run.
What are the challenges in this line of work?
Hincks: One of the key challenges is the fact that most organisations are really early on in their journey. One of the first things that we need to understand when working with a client is how far along they are in that journey – understanding what their current methods are and, at the same time, understanding their appetite for a more contemporary approach to the space.
Quite often the challenges in those organisations are their current practices. It’s quite common in the space in Australia for a chairman’s choice and for very subjective views of social impact to be driving strategy. What we’re looking to do is… take them through the various methods they can apply, and then almost at the same time looking at implementation and reporting.
So the key challenge is understanding where they are in that journey, and then understanding what the appropriate measures are to get them to a point where they really are achieving shared value.
Thurbon: I agree that the biggest challenge is the fact that many, many businesses are still rooted in legacy approaches to these things, and the spectrum of where businesses are up to is just so broad – you’ve got your super integrated, super strategic AIAs of the world, and at the other end you’ve got organisations spending, in some cases, hundreds of millions of dollars in ways where there’s effectively no discernable strategy underpinning it. And that’s a huge challenge to try to help businesses evolve the way they think about it, especially business leaders, not just the CR [corporate responsibility] professionals.
How can businesses increase their impact? What opportunities are available?
Thurbon: The one thing that always springs out in my mind as the great untapped potential is to bring a more sophisticated approach to partnership. Not for Profits do amazing work, but I think the real opportunity lies in businesses and Not for Profits developing a more sophisticated and evolved approach to partnership. Make it less like businesses effectively treating Not for Profits like suppliers of community services and having this really transactional – we buy your logo with a donation and we buy your community impact with a donation – approach.
[It needs to be] much more about genuine strategic partners, coming together to say how can we do something that addresses a social issue while returning value to the business. In particular, the path to doing that is for businesses to look at third-space organisations like Karrikins Group. And this, I think, is the value we bring to the organisation. We are a for-profit business but we are also a for-purpose business, and we believe in the fusion between the private sector and the community sector, and our greatest strength is architecting partnerships that are evolved and strategic, that help people accomplish things they didn’t think were possible.
That’s where the magic is going to be, for businesses to evolve their approach to partnership and think of it more as genuine partnerships, rather than, oh yeah you’re our suppliers in our giving program, you’re the charity we give money to. That’s going to be the space where lots of mileage can be made.
Hincks: What’s really created that opportunity is there’s just a much closer alignment between the business’ objectives – objectives as customer-based brands for example – and the social intent of organisations. I think historically organisations have had to sort of buy their social licence to operate or demonstrate their social intent by partnerships with Not for Profits, and that’s been fantastic and there’s been some incredible work that’s been done through those partnerships.
I think now though the consumers of those organisations are digging a little deeper. The average consumer is a lot better educated, and their expectations that the organisations that they deal with, regardless of what level, are that they are going to be behaving in a way that’s consistent with their own values. So in the past where it was enough to be able to say we support this charity therefore we’re demonstrating our social intent, I think that consumers now want that but they also want to make sure organisations are both behaving in a way that’s aligned with their values and also having an authentic and significant impact on society as a whole.