Today’s leading businesses create social value alongside financial value, say Brunswick’s Jon Miller and Lucy Parker
To stay competitive and maintain their social relevance, businesses need to stay connected to society. Today’s CEO is expected to be capable of juggling the many demands of an increasingly complex and noisy stakeholder universe – including shareholders, employees, customers, consumers, NGOs, politicians, regulators and society at large.
These questions are coming from all quarters: Is your business adding more to the world than it is taking out? Are you playing a positive role in society? Why should we trust you? Social engagement has moved beyond the traditional CSR (corporate social responsibility) function or sustainability team; it has taken its place on the boardroom agenda and shines a light on the character of the company itself.
Among leading businesses around the world, it has become a priority to show how they create social value alongside financial value. This is driven by a mix of motivations, including:
License to operate Companies that demonstrate social value can secure the goodwill of key stakeholders and build public trust.
Employee engagement Being a part of the solution to social challenges makes work more meaningful, makes the company a more attractive employer, and can result in greater creativity and productivity.
Brand strength Taking real action on social issues that matter to consumers can be a strong driver of brand affinity.
A more resilient value chain Companies that focus on social value are better at creating win-win outcomes at all stages as they produce their goods and deliver their services.
Market growth and innovation Societal challenges can be reframed as opportunities to innovate and develop revenue.
Share price Companies listed in Fortune’s 2015 “Change the World” ranking delivered higher median stock returns than the S&P 500 Index.
But the real benefit to business of focusing on social value is simple: better leadership.
As the American business philosopher Peter Drucker, often credited as the father of modern management, wrote: “Management is doing things right; leadership is doing the right things.”
Demonstrating how your business delivers social value can help energize your leadership and build stronger, trusted relationships with stakeholders. It can be the critical difference between a manager and a leader.