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Why are Corporations Excited About Social Innovation?

Why are Corporations Excited About Social Innovation?
15 July 2018 John Moore

We all know that there are benefits for society and organisations when BIG corporations invest in social innovation. In this article we look at a selection of BIG businesses that have committed to social innovation in different ways.

Social Innovation as Growth

When corporations decide to invest in its people or processes in order to be more socially or environmentally minded, such shifts represent huge investments which need to have a pay-off and increase the business’s sustainability in terms of finance and community. Here are two examples of BIG business using social innovation resulting in growth.

Example 1: Unilever initiated its ‘Sustainable Living’ plan – a 10-year commitment to double the size of the business while reducing its absolute environmental impact. In 2016, it announced that it ‘Sustainable Living’ brands – Dove, Lifebuoy, Ben & Jerry’s and Comfort – having engaged its workforce in this strategy, these brands are now growing more than 50% faster than the rest of the business – in 2016 they accounted for more than 60% of Unilever’s growth in 2016.

Example 2: Puma was one of the first companies to establish an ‘Environment P&L’ in 2011 engaging its whole workforce along the way. This new framework has enabled them to identify and manage the cost to nature of doing business, while simultaneously sharpening focus in pursuit of new and sustainable business opportunities.

Social Innovation as Collaboration

Most businesses underestimate the diversity and value of the communities, organisations and people they impact within their ecosystem representing an untapped source of innovation.

Example 1: SC Johnson, the world’s leading maker of insect control products, partnered with USAID and the Borlaug Institute of Texas A&M to work with Rwandan farmers and their communities to sustainably farm the plants that supply a key ingredient, pyrethrum. To develop and market antimalarial products in a culturally compatible format, SC Johnson’s innovation team learned first-hand from rural communities that they wanted affordable and

multifunctional protection products. Accordingly, SC Johnson developed a bundle of insect control products, ranging from repellents to home cleaning sprays, in refillable formats. They marketed these products through clubs of seven or more homemakers, who also participated in group coaching sessions around home and family-care best practices.

Example 2: GE has undertaken, as part of its ‘Healthymagination’ programme, the development of affordable products that address severe health issues, which has also involved alliances with social enterprises. One problem GE decided to tackle was India’s high infant mortality, which is due in part to the lack of incubators for premature infants. GE’s R&D engineers spent months reinventing their incubator and dramatically reducing its cost but calculated that GE would still have to charge $2,000 for the product — far too much for Indian hospitals and clinics. GE then learned of Embrace, a social enterprise that had created a $200 incubator that could keep a baby warm for up to six hours by combining a sleeping bag with pads that could be heated in water. GE partnered with Embrace to distribute the product in India.

Social Innovation as Employee Engagement

Once social innovation has been embraced at a top level, management needs to engage employees and to have a new strategy engage people. This could be achieved through intrapreneurship initiatives or community driven volunteering schemes designed to change people’s mindsets within the organisation and to align employees with the strategic vision and strategy. Example 1: IBM established the ‘IBM Corporate Service Corps’, a skills-based volunteerism initiative that also influences its talent and professional development strategies. It deploys 500 young leaders a year on team assignments in more than 30 countries in the developing world. Employees engage in two months of training while working full time, spend one month on the ground in a team tackling a social issue, and then mentor the next group for two months. IBM stated that this strategy is more than a philanthropic gesture. IBM sees it as a talent development system which can increase its staff retention rate, help to recruit top talent, and to build the skills of its workforce – it is a key strategy designed to improve competitiveness.

Example 2: Barclays Social Innovation Facility is an internal accelerator for the multinational banking company to develop commercial finance solutions to social and environmental challenges. Launched with a £25 million financial investment in 2012, the Barclays Accelerator provides a physical site and co-working environment for innovative

employees and companies. Employees within Barclays develop their ideas in a three-day intrapreneur lab, then receive three months of internal mentoring before pitching their innovations to senior executives. Projects launched include a credit card aimed at millennials that ‘rounds up’ the charge at bank expense and donates the added funds to social purposes, loans with reduced credit charges for consumers who otherwise wouldn’t qualify for such rates, and a suite of impact investing products.

Social Innovation as Product Innovation

Peter Drucker, consultant and author once said: “Every single social and global issue of our day is a business opportunity in disguise”. There are numerous examples of successful start-ups, now global companies, which have done just that.

Example 1: Danone’s Nutriplanet group, drawing on nutritional, socioeconomic, and cultural data has analysed the habits and health issues of populations in 52 countries to inform product development. After studying the diets of Brazil’s youth, for example, Danone reformulated a bestselling cheese by reducing sugar and adding vitamins. In Bangladesh, children eat 600,000 servings a week of Danone’s Shokti-Doi, a targeted nutrient-rich yogurt. R&D also extends into packaging. In Senegal, Danone developed a carton composed of local grain and a little milk that can be stored at room temperature.

Example 2: Interface, the world’s leading carpet tile manufacturer, has recently brought to life innovations include using plastics and polymers rather than petroleum-based materials for carpet backing. This enables carpets to be recycled and produce less waste. The company has also used biomimicry in design to produce carpet tiles with natural leaf patterns that can be laid out in any order, with no time or materials wasted lining the tiles up and matching seams. The tiles are also taped together, rather than glued down, avoiding use of toxic chemicals.

Social Innovation as Community Engagement

In a TED Talk in 2012, Harvard Business School professor, Michael Porter, made the case that businesses can help tackle community problems, as organisations and institutions dealing with them do not have nearly enough resources to finance the necessary change.

Example 1: Coca-Cola Brazil spent six months making the case for its Coletivo initiative. The initiative involved working with local NGOs to create programmes to train young people for two months in retailing, business development, and entrepreneurship, and then pairing them with local retailers to tackle specific improvement projects. Coca-Cola anticipated that

incremental sales from stronger retail channels and brand recognition in the targeted communities would far outweigh the investments needed to achieve a measurable change in youth skills and employability in the retail sector.

FrieslandCampina, a Dutch dairy cooperative with markets worldwide receives milk supplies from over 19,000-member dairy farms in Western Europe and from thousands of smallholder farms in Asia, Africa, and Eastern Europe. With local partners, the company has organised the farmers into networks or cooperatives and provided training, consultation, and tools to improve milk hygiene, stock breeding and feed, and water use. Dutch dairy farmers also share their dairy knowledge and expertise with smallholder suppliers.

If BIG business recognises the value of social innovation, then surely it makes sense for smaller businesses to adopt social innovation as well. Just look at Lunapads.

Lunapads was created by Madeline Shaw, a fashion designer who wanted an alternative to disposable pads and tampons. After discovering how they made her feel, she set about starting a business to share that gift with others. She met Suzanne Siemens four years later and together they made a plan to help women across the world have access to better health, donating their pads to women in developing nations through their Pads4Girls campaigns and Imagine1Day group, which helps girls who would otherwise be missing school because of lack of adequate menstrual supplies.

The question is for you is, “what opportunities are there for your business to innovate?”

 

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John Moore has over 20 years experience of training and developing Managers, Coaches, Consultants and businesses. As Managing Director of Exponential Training, John researches, speaks, blogs and writes about how to improve performance. He also designs and delivers engaging, fun and interactive learning programmes. John is a Fellow Chartered Manager and has worked with managers and organisations in over 20 different countries.