There is a lot of talk nowadays about purpose, value, and worth at both the individual and organizational levels. Take this recent headline from The Economist: “What Companies Are For.” It’s a profoundly philosophical topic – and one that every company should carefully dissect.
The first time I gave this topic some (serious) thought was when I attended the 76th Meeting of the Academy of Management (AOM) in 2015. Colloquially dubbed the “Oscars of Management,” given the exquisite lineup, the themes discussed at the meeting set the tone for up-and-coming innovation management research. In 2015, the meeting was devoted to making organizations meaningful.
Further reading: Learning About Meaning At This Year’s Academy of Management Meeting
At AOM, I learned that organizations become meaningful in intentional and unintentional ways. For some companies, becoming meaningful is all about achieving important goals or reaching key milestones – i.e., number of partnerships with non-profits per year or size of investment into development programs. For others, becoming meaningful is a matter of culture, and by extension, of cultural change. For example, in pursuit of intra-organizational happiness, organizations might begin to listen more to their employees or relate differently to key external stakeholders (customer-centricity, reader-centricity, patient-centricity, etc., are all related terms). Ideally, the two approaches – intentional meaning through KPIs/investment or “unintentional” meaning through better policy and relations – co-exist.
By and large, organizations become meaningful when they perform so-called “service above self.” That is, when the impact they generate is not only positive but also far-reaching. When the strategy focuses not only on creating short-term efficiencies but also on developing long-term relationships (with stakeholders).
In my daily work as Head of Open Innovation at HYPE, I often hear innovation leaders discuss the many facets of sustainability, their organization’s “worth,” and their contribution to society.
In this blog post, I will briefly discuss what people really want from organizations and some of the mechanisms organizations can use to amplify the impact of their work.
Tensions and soul searching
Corporate social responsibility and what truly signals an organization’s worth are not new topics. As The Economist observes, obsession over short-term earnings and targets, depressing wages, and accounts of exploiting staff create huge tensions between big business, shareholders, and citizens. Amidst so much negative news (which often obscures the truly good work), organizations find it hard, if not impossible, to promote their goals and convince society that they can do good. Despite the negativity, some leaders have managed to make headlines with positive, progressive, sustainability and social impact related work.
Look no further than Marks & Spencer, a major British multinational retailer. By some accounts, the fashion industry is the second-largest consumer of water worldwide. This realization prompted Marks and Spencer’s CEO, Marc Bolland, to act and launch a 5-year, large-scale sustainability program called “Plan A.” In 2012, the CEO’s efforts paid off and the company became the first major UK retailer to become fully "carbon neutral."
Other examples of companies making bold moves in the sustainability area include Ben and Jerry’s, Lush Cosmetics, and Patagonia, all of which were among the businesses that closed their stores to support the global climate strike in September of 2019. A clear sign of solidarity with an important cause.
While new ways of acting sustainably and responsibly emerge every day, the big questions continue to loom. What does society really want from organizations? If it’s not solely their shareholders, who else should organizations be accountable to? And how can an organization engineer mutually beneficial activities – i.e., bring stakeholders together in meaningful ways?
Let’s start with what society wants.
Broadened ownership and increased accountability
What society wants from organizations typically falls into two, inter-related categories: broadened ownership and becoming socially responsible.
Broadened ownership means including stakeholders in decision-making and ultimately in value-creating activities such as innovation and renewal. Essentially, giving customers, suppliers, academic partners, and even entire communities a stake in activities that affect them directly. To illustrate: The New York Times used a reader-centric approach to completely transform its business model. The Times’ strategy included giving units focused on reader experience a voice, creation of a newsroom strategy team, and focusing on digitization. In this process, the company also thoroughly documented what competitors excelled at (designed “competitor cheat sheets”) and promoted dialogue with key stakeholders such as readers, peers and suppliers. I wrote about The New York Times’ Open Innovation journey in an older blog post. You can read it here.
The Times, however, is not a singular example. Many other companies actively strategize with external stakeholders to support value creation and to remain sustainable. UCB Pharma does so through continued work with patients (patient-centricity). T-Mobile does it by encouraging customers to get shares in the organization. And ScotRail does it through its "Adopt a Station” program.
Broadening ownership in a meaningful way builds trust and ultimately leads to stronger, more robust relationships between organizations and stakeholders (including society). Such activities also inspire new business models and help leverage the collective intelligence of crowds. For example, organizations like Buy Me a Coffee compensates creators for their work, and HITRECORD helps distribute the artistic workload. Similarly, organizations like Benevity and the Salesforce Philanthropy Cloud aggregate large pools of thinkers, sponsors, and doers to help projects and interventions materialize.
Alongside broadened ownership, society also demands increased social responsibility.
Increased social responsibility means having a purpose beyond profits and acting in a manner that benefits society. Today, companies are pressured to communicate what they stand for as well as stand by their promises. This has led to many powerful mission statements. For example, non-profit organization TED (yes, the same one that does the TED Talks) passionately believes in the power of ideas to change attitudes, lives, and, ultimately, the world. Spotify is another great example. The company's mission is to "unlock the potential of human creativity." Tesla believes the faster the world stops relying on fossil fuels and moves towards a zero-emission future, the better. Elsevier, one of the world's major providers of scientific, technical, and medical information, believes that by empowering knowledge, it empowers those who use it.
Considering what society wants from organizations, how can entities organize themselves for greater impact and amplified meaning?
Mechanisms that create impact and generate meaning
As discussed above, broadened ownership and increased accountability represent the foundations of healthy collaboration between organizations and society. But how does this collaboration actually work? Which are the mechanisms that facilitate impact creation and that help generate meaning?
In my experience, organizations will typically start by building programs and potentially using digital platforms to support them. Software platforms are especially useful because they provide scale, transparency, the ability to store and research knowledge and ensure governance and accountability. When deployed using the right guidance and incentives, platforms amplify meaningfulness. Let's look at two recent examples from the social sector where sustainability and social impact lie at the very core of the organization’s reason for being.
UNICEF: UNICEF’s innovation management platform amplifies meaning by ensuring that knowledge reaches every corner of the organization. Using sophisticated information and communication systems, and thanks to a highly decentralized structure, double work is limited, working at scale is facilitated, and projects can be implemented faster. Another vital process relates to how knowledge is insourced and processed. At UNICEF, the platform helps unify multiple sources of data and to provide a coherent picture of how projects and activities and progressing. Finally, the platform facilitates the creation and activation of communities of innovators.
THE SOCIAL IMPACT LAB: At The Social Impact Lab – a collaboration between United Way of Calgary and Area and design studio J5 – the Open City platform represents a meaningful way of connecting to key stakeholders. While “known” audiences such as agencies and donors provide essential input, Open City enables dialogue with unknown audiences, too. For example, they engage with citizens directly or indirectly affected by social issues that are hard to spot – i.e., unignorable issues like poverty, mental health, and social isolation. By bringing these diverse voices together online via the platform as well as offline via workshops and meetings, The Social Impact Lab can more effectively moderate discussions and ultimately design effective support services.
As economic activity becomes ever more inter-connected, a “sustainability” mindset can help organizations thrive. Addressing issues like meaning, worth, and relationships with stakeholders provide a much-needed opportunity for reflection. This reflection, in turn, can translate into powerful innovation and transformation programs that benefit the core as well as the periphery.
In other words, by broadening ownership, increasing accountability, and engineering processes that amplify (not mute) meaning, organizations become more resilient and more relevant to those that depend upon them.
At HYPE, we are giving sustainability some serious thought. Moving forward, our recently appointed Head of Social Impact and Sustainability, Sandra Fernholz, will continue this conversation and delve deeper into how some of the organizations we know are creating meaning. Stay tuned!