Social impact – is it a marketing sideshow, virtue signalling or a value creator?
Alan Tyrrell writes
‘Greenwashing’, ‘virtue signalling’, ‘cheque book charity’, and any number of other negative labels have been put on corporate initiatives to support social impact. A common ruse deployed by some in response to business efforts to deliver positive social impact is to position it as a marketing sideshow and a sticky plaster on the corporate conscience. This trope is inaccurate, ill-informed and does more to undermine social good than support it.
The debate though is not new. For centuries, business leaders have been debating whether they can, or should, contribute to the society in which they operate. The Cadbury brothers’ establishment of Bournville — the English model town rather than the chocolate bar — from the 1870s onwards, is a good example of leaders taking their duty to all stakeholders seriously. In an unprecedented move at the time, they went beyond the profit motive and invested in employee housing and facilities — much of which still stands — to support business growth while simultaneously creating better lives for their employees.
Bellwether
Fast forward to late 1970 and renowned economist Milton Friedman, who decried business leaders who espoused social good in their strategy as “preaching pure and unadulterated socialism.” Yet just over one year later, in 1972, a company that recently participated in a new research study just published by Teneo’s strategy and communications team in Dublin and Business in the Community Ireland, set out a strategy underpinned by social good, investing in a healthier society, cutting pollution, and creating meaningful jobs. This company is now a global powerhouse, selling their products in 120 countries, ranked among the top 10 in its sector and is a bellwether stock for many diversified portfolios.
Today the impact of business in society, or the ‘S’ in ESG, is subject to greater scrutiny. Rises in the cost-of-living and structural logjams in housing, transport, education and healthcare, and a widening socioeconomic divide that can give rise to social unrest all bring business and societal challenges. In Ireland, these pressures are further compounded by intense competition for talent in a full employment economy. More than anything, these factors are reshaping strategic decision-making in a world where business leaders are grappling with geopolitical uncertainty.
Pictured left to right: Tomas Sercovich, CEO, Business in the Community Ireland, Orlaith Shinnick, director strategy and communications, Teneo and Alan Tyrrell, senior managing director, strategy and communications,Teneo
Against this backdrop, a reasonable inference might be that business has little time for social impact. But inferences, like appearances, can be mistaken. Based on in-depth interviews with c-suite leaders in 25 of Ireland’s most important companies and an additional survey with just under 120 respondents, social impact as a business strategy shows no sign of being overshadowed in the face of broader challenges.
Quite the opposite. Our report, titled ‘The Social Dividend’, shows that embedding purpose and social impact into core decision-making isn’t just a nice-to-have, rather it is a proven driver of medium- to long-term value creation. Time and time again there is a clear, measurable link between high performance in business and high performance in social impact.
Companies we spoke with for the report consistently evidenced that, as well as delivering for society, social impact strategy delivers for business. These companies achieve higher scores on procurement benchmarks, greater customer loyalty, attract the best talent and much more, yielding dividends for both business and society. One participant was able to point directly to a threefold improvement in a key metric with the improvement attributed solely to its implementation of a social impact strategy.
Calibrating business goals with goals for a better society moves strategy to implementation and aids employees
However, it is not without challenges and requires continual rebalancing in boardrooms, strategy labs and frontline implementation. Getting it right means starting with integration of social impact with corporate purpose – fusing the how of business with the why of business. Calibrating business goals with goals for a better society moves strategy to implementation and aids employees in their navigation of the headwinds currently buffeting the world of work and the world at large. This translates into day-to-day collaboration with communities and markets served by the business to create pathways for innovation as well as growth opportunities.
And finally, there is communication of social impact, a hoary topic. The emphasis must be on communication strategies that build trust and ensure that stakeholders know the rationale, focus and desired outcomes for both the social and business impact. By deploying an honest and authentic narrative, businesses can dispel concerns of virtue signalling and instead reinforce a credible, long-term commitment to making a difference.
In today’s world of unprecedented change, social impact is a key component of strategy to address macro challenges, overcome market headwinds and create value. For companies we spoke with the evidence is clear –far from being an afterthought, social impact is a strategic pillar in its own right. The return on investment in business terms is competitive advantage through improved innovation, new opportunities, employee engagement, cost reduction and business growth. The dividend is a social one that is good for business and good for society.
The Social Dividend is a joint report from Teneo and Business in the Community Ireland.
Alan Tyrrell is a senior managing director at Teneo specialising in corporate purpose, culture, and communication strategy client services; alan.tyrrell@teneo.com
