Jason Saul gives five reasons why corporations must move from social responsibility to social innovation:
1. Corporations are more powerful than governments. Therefore, they are not only expected to contribute to the public good, but are often more capable of positive change than governments.
2. Consumers are more powerful than citizens, and are increasingly willing to vote for products and companies that stand for social change with their wallets.
3. Social issues like talent, governance, climate change, economic inequality and energy have now become business issues that can help or hinder profitable growth.
4. Philanthropy has become a commodity and doesn’t add distinction to corporate reputation anymore, because it is expected of any successful corporation.
5. Intangible assets, like social value, now account for up to 50 percent of the market value of most global corporations.
Jason Saul argues that these five factors are leading to the rise of the “social capital market”. As a result, corporations must not only have a social purpose, but also build social innovation driven business models that lead to real social and economic results, not only reputation.
Jason Saul then outlines five social innovation strategies that integrate Purpose and Profits: creating sub-market products and services; entering new markets through backdoor channels; building emotional bonds with customers; developing new pipelines for talent; and influencing policy through reverse lobbying.
All five strategies are designed to create business value, by leveraging business capabilities to create scalable and sustainable solutions that address market failures and solve social problems.
GE is emerging as a leaders in integrating Purpose and Profits by committing itself to imagine and build innovative solutions to today’s environmental challenges while driving economic growth under its Ecomagination strategy. What about Participation? Well, GE has created a series of Ecomagination challenges to find and fund innovative ideas that can power the grid, or power your home.
Which other companies are integrating Purpose, Participation and Profits to move from social responsibility to social innovation? Do share your insights in the comments below.
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