This week's topic: Building Socially Impactful Companies.
These days, it’s more important than ever before for companies to have some form of social impact. Customers are paying attention to what companies are saying and doing, or not saying and doing. Particularly younger generations want to see businesses that are committed to making the world a better place in order to work with, or for them.
But how does a company both deliver value to its shareholders and make a positive social impact at the same time? Is that even possible? Or are the two mutually exclusive?
On this episode of the CFO Weekly podcast, we talk with Julian Love, Chief Business Officer at St. HOPE, an organization whose mission is to transform Oak Park Sacramento through public education & economic development. We talked about building socially impactful companies, why it matters, how companies are shifting their focus toward social impact and why the younger generations are driving this change.
What Are Social Impact Companies?
In the most basic of terms, a social impact company is a company who at its core, serves a purpose of social impact, while at the same time turning a profit. In other words, social impact is a part of their business model, not just a buzzword.
When asked for an example of a company that does social impact well, Julian offered up his thoughts on one of the most popular companies out there right now: Tesla. With every car Tesla sells, they’re doing good for the environment by reducing carbon emissions, he said, so they’re making a positive impact on the earth, while also selling cars and delivering value for their shareholders.
Julian proves that what used to seem impossible, can be done: having a company that cares, makes a profit and stands true to its values.
Why The Shift to Building a Socially Impactful Company?
The reality is, social media has a lot to do with it. Companies are under immense pressure on social media because everybody has an opinion and everybody wants to share those opinions. And companies are understanding that it’s important to listen.
With corporate news being shared, engaged with and sent at such a rapid and deep level across the globe, and it’s causing business leaders to think about what really matters.
Because of the amplified voice on Facebook, Twitter, Instagram and the like, companies are held at a higher standard. And the people inside of companies are shifting and changing because they're a part of a collective conversation that's happening on social media as well.
Alongside the many companies who are pushing out updates and posts, we've seen examples of those who are doing it well and those who have faced backlash. The big difference, according to Love has to do when intention and authenticity.
“I think the problem comes when companies aren't intentional about their core product, and the consequences of that decision," Love said.
Building Companies That Care - Socially Impactful Companies
So what does it mean to be a social impact company? What does it look like to do it the right way? It means really being intentional, candid and taking the time to think deeply about the consequences of the solutions that you're providing.
It means building systems and processes to make sure that you’re really taking the time to be intentional, and giving a voice to a diverse set of people that are going to see those consequences in different ways.
Julian listed Salesforce as a company that was doing social impact well. Why? Because from their very beginning, they had a dual focus on having social impact AND growing their business. And when a company has social impact baked into their DNA from day one rather than trying to implement it later, they’re better set up to do more good.
Driving Change: Gen Z Demands Social Impact
Younger generations are growing up in the midst of all of this dialogue. It’s changed the way they see the world and capitalism, and their place in the world and the trend isn't’ slowing down. Especially with everything that's going on with the Black Lives Matter movement.
Young folks are growing up in the midst of it, and they don’t know anything but this world. They’re going to bring a whole different level of social impact and corporate responsibility to the companies that they work for, and the companies they’re buying from.
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