Today’s companies must connect their success with social progress not as philanthropy, but as a way of achieving economic success. If we want to fix capitalism, companies and governments need to move away from an outdated approach to value creation. In other words, companies that embrace social innovation will find opportunities to create new goods and services that will benefit not only their bottom line, but also the consumer and community. Yet, why corporate social innovation is considered as having a great importance for businesses?
Social innovation as a key to success in the market
Fast implementation, or even being a leader of change, has a critical influence on corporate image. A responsible corporate image is hard to build and easy to lose, and managers must approach it as more than a short-term public relations issue. Treating social innovation as a natural way of running a business enables companies to establish and maintain a responsible corporate image and through this encourage clients to buy their products and services.
Another thing is that the tackling of social challenges can only be addressed by using socially responsible solutions. In the world of a new normality, it is a must for companies to employ solutions with the ability to predict demographic or environmental challenges. There is no escaping the need to take into account those macroeconomic circumstances that will have a colossal effect on your business and its future.
Rapid changes in the global climate have left companies with little alternative but to embrace sustainability. In this context, being socially innovative is not a choice; adaptation to the new conditions we live in has become a necessity. Governments are implementing new regulations promoting responsible business and banning products and processes that block the path to us improving our environmental footprint. A good example is pursuing alternative energies or limiting the production of plastic packaging (e.g. straws).
Striving to be a leader in your sector is naturally embedded within the fabric of corporate DNA. Competitive advantages include those attributes of your product or service that competitors find difficult to copy. They may be the quality of your staff: their skills, attitudes and relationships with customers; in other words, the innovative features that constitute the intellectual property of the business. Social innovation is a way of creating a fast track to gaining a competitive advantage. Making it the core of your business creates the potential to make a difference in a business pool full of strong players who already have the advantage of low-cost, optimised production.
Increase and sustain the engagement of your team
Social innovations are not only good for your competitiveness and ability to react to the market conditions; they are also helpful in maintaining a healthy corporate culture. More and more companies are choosing to engage their employees in social innovation, often as a non-compulsory project or employee volunteering. Executives have discovered that it is an important element of human resources management, and thus it is becoming more and more popular. Its greatest value, however, is determined by the personal involvement of volunteers and the support of executives.
One of the biggest advantages of involving employees in social innovations through employee volunteering is integrating your team. The main goal of employee integration is to merge the team. Usually, it consists of people with completely different temperaments and character traits, which may result in conflicts and tensions between them. If, however, employees have the opportunity to cooperate on something unrelated to work, it may transpire that disputes fade away and there is a healthier atmosphere.
However, it is not just about settling disputes. Every now and then, someone new joins the team, which can initially be disconcerting and uncertain for all concerned. Working alongside other employees on social innovation can help them to fully feel like a member of the team, which will certainly impact on team effectiveness.
What is more, working on social innovation is a great way to develop the innovative competencies of your employees. The results of the project may increase interest in creating innovations with a sense of social responsibility. It yields a lot of positive effects – employees feel more attached to the company, they become more loyal and have a feeling that their work has a greater purpose, far beyond achieving solely financial results.
Employee–employer contact is also improved. Companies face a constant battle to both attract talented candidates and minimise their employee turnover. Good contact with the employer and a feeling that the company is taking a broader view of the needs of society improve employer branding, which is a proven effective tool for talent acquisition.
RESPECT Index – an example from the Polish market
The social responsibility of Polish companies and the actions they take for sustainable development have an increasing impact on both their business success and valuation. This is well demonstrated by the RESPECT Index, a project run by the Warsaw Stock Exchange (WSE) aimed at presenting companies that are managed in a responsible and sustainable manner.
Companies listed in the index may be more attractive to potential investors. The evaluation criteria for these companies are such distinguishing features as the quality of their reporting, the level of investor relations and ordered information, as well as environmental factors (e.g. limiting their negative impact on the environment or biodiversity), social factors (e.g. human resources management, relations with suppliers, dialogue with stakeholders) and economic factors (e.g. code of conduct, fraud risk management, customer relations).
In December 2016, the WSE highlighted 25 socially responsible companies, the highest number in the history of the index. Compared to its first publication in 2009, the RESPECT Index has increased its value by 50%. The companies listed on the stock exchange assessed by investors are a good example of how to engage in non-financial activities, and often even in corporate social innovation.
Learn more at Social Innovation Academy
To sum up, those organisations that challenge existing beliefs face opportunities to create value through new products and services representing corporate social innovation. It is absolutely a prerequisite for us all to be constantly informed about such new ideas and innovations. So, Limitless, ICAN Institute and three other partners have started a project aimed at developing the first online Social Innovation Academy in Europe with a focus on key issues in social innovation.
If you are interested in following the project, you can subscribe to our newsletter, become one of our Friends, apply to join our Global Advisory Board or follow us on social media (LinkedIn, Twitter and Facebook). We welcome all requests for collaboration here.