Industry News
Business transformation that benefits the greater good
February 4, 2020
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This post is sponsored by Philip Morris International

Companies are as much a part of the fabric of society as individuals, and they have a responsibility to ensure that they are good citizens of it. That’s why it is important that they innovate not just to grow their individual businesses, but for the benefit of all their stakeholders – customers, employees and communities alike.

This concept goes beyond philanthropy, or the direct giving of money, time and resources to charitable causes. The lasting opportunities to do good begin with evaluating and improving the ways a company already engages with society, whether that is through its products, people or practices. These touchpoints serve as opportunities to innovate and create new, improved ways to do business.

Consider three ways that most companies interact with society:

Products

If your business manufactures products, then evaluating ways to improve the supply chain is a great way to look for innovation opportunities that could benefit the business and society at large. For example, companies can consider adopting fair trade practices that improve the lives of their workers and contractors, or energy-efficient equipment that reduces their greenhouse gas emissions.

A standout innovator on this front is Toms, the company that devised the buy-one-give-one model for canvas shoes. The company created a business model that worked like this: Each time a customer purchased a pair of Toms shoes, the company sent a free pair of shoes to a person in need..

However, this perceived good deed did not come without scrutiny. In recent years, Toms has been questioned about its business model and how it disrupts local markets. Instead of hiding from these concerns, the company listened, spoke transparently about its recognition of the problem and adapted its business model to promote greater social welfare. It was not enough for Toms to perform what it considered charitable work as a one-way conversation; By listening to feedback and adapting, Toms has demonstrated a crucial practice of business transformation for the greater good. If you want to read more about Toms business transformation, check out the links for further reading at the end of this article.

Employees

One of the most immediate impacts that any company has is on the people it hires. When businesses take an active role in easing the pressures their workers face and helping them obtain a satisfying work-life balance, they not only improve worker satisfaction and reduce turnover, they also have a positive impact on the communities around them.

Tech companies in particular have gotten creative with compensation packages to improve the lives of their employees. Netflix stands out for offering a full year of parental leave that can be taken at any point of a child’s life and Amazon offers parental leave packages to the spouses.

Offering such a benefit reduces the stress and worry that parents who work at the company may face when their lives at home conflict with their work schedules, directly impacting that family’s wellbeing.

Community 

Businesses are also an integral part of the cities where they are based. They can help the institutions around them improve those communities through direct donations, but a more creative approach can have a more lasting impact.

Wells Fargo, for example, pays employees for up to 16 hours of volunteer work so that they can make time to contribute to their community schools and charities. In 2018, the bank’s staff completed 2 million hours of volunteer work – about the equivalent of 1,000 full-time workers.

The result is not just the immediate impact of that time, but valuable community engagement that demonstrates that the company is committed to the places where it operates and seeks to be a responsible corporate citizen.

Similarly to Toms, Well Fargo is not without its own naysayers when it comes to corporate citizenship (see some resource links below for more insight) – but the company does take steps to evolve towards a higher level of interaction with the world outside its business practices. No business operates entirely free of negative social or environmental impact associated with its supply and value chain. Yet, those businesses that recognize the limitations to good corporate citizenship in their current operating model, and demonstrate active and self-aware initiatives to improve, will be the ones making the positive headlines tomorrow.

There is no limit to how companies can innovate to become better members of society. From hiring practices to environmental considerations, volunteer work to corporate giving, there are so many opportunities for businesses to transform themselves in ways that are beneficial to all.

 

Ready to innovate and improve your own business model? Consider these sources for further reading and guidance:

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