Build Your Company’s Social Impact Plan Before You Need It
It turns out business plays an inarguably powerful role in civic life. Over the past week, the world watched in disbelief as Capitol Hill was invaded by Trump supporters, ready to usurp a democratic process. These people, upset by the results of the election, were incited by the cumulative and deceitful rhetoric of a President who has continually undermined trust in governmental structures. At a moment in history when the President could have taken a moral stand against acts of violence and sedition, he went on Twitter and reminded his followers that he believed the election was stolen and further fanned the flames of insurrection.
The reprisal from the business community was quick. The tech giants suspended Donald Trump and took away his megaphone. In the days following the riot, the PGA Golf tour cancelled its contract with Trump. New York City moved to end its own contracts with his businesses, and Bill Belichick declined the Presidential Medal of Freedom because Trump was the grantor. The consequences of the uprising were swift and widespread. Consumers also voted with their voices and dollars. In my own city, I read news articles about CEOs getting fired, small businesses that were cancelled, and restaurant owners being doxxed because their leadership participated in the Capitol Hill uprising.
If there was ever a time to recognize that the business community impacts the type of world we live in, it is now. Strong emotions abound at every level of American society right now. As worldwide access to information grows, companies are becoming increasingly accountable for their own ethics and alliances. Partnerships and practices in corporate life hold practical consequences. Beyond the monopolistic tech sector, the news is not extensively covering the specifics of the corporate cancellations of Trump. It is likely that this reaction is due to a great deal of moral outrage, as the storming of the Capitol building was a dangerous assault on foundational principles of American democracy. However, we must also recognize that customers value the integrity of the businesses from which they purchase. Customer outrage has bottom-line impact to business profit. Businesses do not want to associate with the Trump brand because of potential future financial implications.
Capitalism could work better if profit plus social good was the daily objective of every company, rather than prioritized when it impacts profit. In fact, capitalism would likely look vastly different if the collective focus of the business community shifted. Businesses would no longer strategize with the objective of maximizing profit, but would balance profit with ethical and societal impacts of their actions. We would be less likely to witness runaway CEO-to- frontline-worker salary ratios if businesses changed their priorities. Dan Price, the CEO of Gravity Payments who voluntarily cut his own salary to pay his employees a $70,000 minimum annual salary is an important voice in this conversation. Many businesses in this world do think seriously about social good. But many more still need to engrain values, ethics, and social impact more deeply into their core operating model.
If current events indicate anything, it is that ethics, integrity and social impact do matter in business. In today’s polarized marketplace, a social impact plan is basic risk management.
A social impact plan is simply a strategy that defines how a company’s products, services, or operating model will impact civic life, justice and equity in the local community, national and global systems, and their employees’ quality of life. Yes, the responsibilities of day to day of operations complicate the ability to start over with a new agenda. Operations are critical, but too often take precedence over deep reflection on business impact to societal issues. Your specific business’s impact on these subjects often feels insignificant until a defining moment arises. But when that moment occurs, reactionary behavior is evident. Americans witnessed corporate declarations of support for increased diversity, and accurately named it performance after the Black Lives Matter protests of 2020.
Awareness of your company’s social responsibility footprint has benefits beyond customer acquisition. Better employee engagement and reduced turnover can lead to greater innovation and reduced expenses. A social responsibility plan should be unique to each company’s operating model. It should also align with its people. At the end of the day, a business brand is a reflection of its leadership.
Although a social impact plan can become complex, it also starts with basic principles.
Look for values congruence in business decisions. In order to identify values congruence, a company must have values that are more than just a framed catchphrase on a wall in a conference room. Company values should guide business decisions, even to the point of discomfort. A company truly guided by values will turn down an exciting business deal if the partner organization’s values are a mismatch. Although this action will feel painful in the moment, it will pay off in the long run. The organization will have avoided being de-railed by a temporary strategy that was not relevant to its core focus.
Integrity must begin before the defining moment. Defining moments are usually less extreme than any examples of recent civil unrest. These moments frequently take the form of negative press and poor public relations as a result of a less-than-ethical business decision or action by company leadership. Personal integrity and corporate authenticity go hand in hand. Leadership must live out the values it wants the company to be known for. Authentic brands are attractive brands. Authenticity means not being an imitation of a competitor. An authentic philosophy cannot be replicated by a competitor.
Take an ethical stance. The country is polarized and divisive. I wish Americans were more willing to be collaborative and nuanced right now. But because we are divided, customers want to support businesses that align with their own values. When your business takes a stand on a social or political issue, the company will repel some consumers, and potentially attract some new ones. Either way, the customers that continue to buy from you will be more loyal because they are buying a philosophy, not just a product. This does not mean your messaging should be deliberately divisive; only that it should be clear to your customers what social causes your company will and will not support. You also need to back it up when your business is not in the spotlight. Philanthropy, while necessary, feels disingenuous when in response to bad publicity.
After the foundation for social responsibility is properly set, your business has the potential to explore solutions, services, and products that impact larger systemic problems within its industry. When a company product, service, or practice influences a system, it becomes innovation, imagination, and disruption. And that adds real value to both broader society and the bottom line. In the fast-paced digital age, your company needs a social impact strategy.