Valentines Day is the holiday of love. And while many people celebrate the romance of Valentine's Day, I thought it was high time that entrepreneurs like us celebrate our love for our business. After all, as a business owner we probably spend more time working on our business than any relationship! So, I decided to write a love letter to my company, eWomenNetwork , that I started 17 years and share it with you in a video . ....Read More
A 2014 Nielsen Survey says, "Fifty-five percent of global online consumers across 60 countries say they are willing to pay more for products and services provided by companies that are committed to positive social and environmental impact." That means it is easier to grow and scale your business if you are connected in some way with creating social change. Social responsibility increases your bottom line.
Social Responsibility Models
Corporate Social Responsibility (CSR) has become the new norm for business. Not only do consumers want it, but according to a Deloitte survey, 70 percent of millennials listed their company’s commitment to the community as an influence on their decision to work there.
In the corporate world, social responsibilty is more than just traditional philanthropy, such as raising money to support a cause. Authors write in Harvard Business Review that there are 3 types of CSR, which they describe as "theaters." These models can also apply to entrepreneurs.
Theater One: Focus on Philanthropy
Programs in this theater are not designed to produce profits or directly improve business performance. Examples include donations of money or equipment to civic organizations, engagement with community initiatives, and support for employee volunteering.
Theater two: Improving Operational Effectiveness.
Programs in this theater function within existing business models to deliver social or environmental benefits in ways that support a company’s operations across the value chain, often improving efficiency and effectiveness. Thus they may—but don’t always—increase revenue, decrease costs, or both. Examples include sustainability initiatives that reduce resource use, waste, or emissions, which may in turn reduce costs; and investments in employee working conditions, health care, or education, which may enhance productivity, retention, and company reputation.
Theater three: Transforming the Business Model
Programs in this theater create new forms of business specifically to address social or environmental challenges. Improved business performance—a requirement of initiatives in this theater.
These so-called "theaters" can overlap. The key to running CSR effectively, says the HBR, is to run each theater with only those programs that align with your core business. For example, a food industry can operate a program that provides extra food to a food pantry.
Entrepreneur Social Responsibility (ESR)
Entrepreneurs are ripe for integrating social responsibility into their business. The Schwab Foundation for Social Entrepreneurship describes the common traits of ESR's that mirror the characteristics of a business entrepreneur:
An unwavering belief in the innate capacity of all people to contribute meaningfully to economic and social development.
A driving passion to make that happen.
A practical but innovative stance to a social problem, often using market principles and forces, coupled with dogged determination, that allows them to break away from constraints imposed by ideology or field of discipline, and pushes them to take risks that others wouldn't dare.
A zeal to measure and monitor their impact. Entrepreneurs have high standards, particularly in relation to their own organization’s efforts and in response to the communities with which they engage. Data, both quantitative and qualitative, are their key tools, guiding continuous feedback and improvement.
A healthy impatience. Social Entrepreneurs cannot sit back and wait for change to happen – they are the change drivers.
How Social Responsibility Can Increase Your Bottom Line
Whatever "theater" you choose for your company cause, integrating social responsibility into your core values will increase revenue in the long run. Not only are consumers willing to pay more for a product or service that is dedicated to improving humanity, but investors like it too. Entrepreneur magazine reports that a socially responsible company enhances it's reputation as well as sets up a strong foundation if it chooses to go public. Shareholders often view sustainability efforts and social good as a sign of company health and future profitability.
Start with Your Core Values
Before you choose what your company will invest its time and money in for the greater good, start with a set of core values that underscores your company's most fundamental principles. Once you have established that, you and your team will share a common vision for your company's future and those you wish to serve.
Content Manager, eWomenNetwork