Strong Partnerships and Measurement: Keys to Business-Led Social Impact
Today, addressing complex societal challenges has become a mandate for business. It’s now a common occurrence to see businesses pledging to tackle societal issues that have previously gone unmet.
It is empowering to hear business leaders discussing societal impact and inclusive growth alongside other traditional business priorities. This exemplifies a shift in the relationship between purpose and profit. They no longer have to be adversarial priorities – purpose and profit can co-exist within the same business strategy.
Sustaining this momentum will require more businesses to adopt a new mindset for action – one that embeds societal impact within the core of an organisation’s purpose.
Over the last year, executives has been surveyed globally across a range of sectors to gain a better understanding of their inclusive growth approach. According to first Inclusive Growth survey, executives are acutely attuned to the importance of addressing societal issues. However, while the majority of business leaders surveyed publicly support global goals such as the UN Sustainable Development Goals (SDGs), they did not believe their current programmes and initiatives would help achieve the SDGs by 2030. This finding motivated second survey, which looked at how internal and external stakeholders perceive and measure these programs.
Second survey found that a rapidly changing business environment—and media coverage—are influencing decision-making when it comes to inclusive growth programs. Over two-thirds of executives noted external factors such as current public sentiment and media coverage are either encouraging them to reevaluate their current strategies and take new action or are adding momentum to efforts already underway.
As businesses tackle systematic challenges such as sustainability, access to education and skills development to prepare for the Fourth Industrial Revolution as well as diversity and inclusion, news headlines are shifting leaders’ approaches as they try to keep up with societal trends.
Not only does the news cycle influence leaders, but also the evolving cultures in which they operate their businesses. For example, the #MeToo movement increasingly motivated leaders in the APAC region, while the skills gap was of growing concern to leaders in Latin America.
The power of collaboration and a multi-stakeholder approach business-led inclusive growth efforts require collective action and a sharing of knowledge to understand and implement best practices moving forward. As with other high priority business initiatives, driving inclusive growth efforts requires both internal and external relationships, along with a well-defined strategy embedded within organisational priorities.
Groups such as the World Economic Forum and Social Progress Imperative showcase the power of relationships to drive results, as do collaborative initiatives like Business for 2030. Survey underscored this point. Executives indicated that partnerships and collaboration with other business leaders as well as with government and nonprofit organizations are necessary when looking to scale and implement solutions.
Measuring for sustained impact As with other aspects of one’s business, measurement is key. Executives measure their societal impact in a variety of ways to determine if they are successful.
They use internal factors such as employee engagement, retention, and attraction as the primary measure of an initiative’s success. This is particularly crucial as the Millennial and Gen Z generations become a majority of the workforce and seek out businesses that prioritise purpose beyond profit.
However, while inclusive growth initiatives drive employee engagement and inspire the workforce, it is also important to measure their external impact. Executives need to focus on having measurement mechanisms in place that show the broader impact of their efforts.
The survey showed that qualitative, quantitative and revenue metrics are less widely used forms of evaluation. This presents an opportunity for businesses to begin using non-financial and financial measures to evaluate their efforts.
Business leaders might not be reviewing and adjusting their inclusive growth approach as often as they should. The leaders surveyed indicated that they evaluate their programmes once a year or every other year. However, in a 24-hour news environment, and one where public sentiment is having a larger impact on business decisions, business leaders need to be nimble and adjust their approach as needed.
Business can affect systematic change if they set themselves up to make a meaningful impact. As we look to the future, businesses need to develop thoughtful strategies championed at senior leadership levels with clear goals and targets reviewed on a frequent basis. As we continue to drive progress in this area, cultivating partnerships and implementing a strong measurement program will be key to achieving an organisations inclusive growth goals.