Why Business Must Become A Third Pillar of Social Change


In 2008 Bill Gates told the World Economic Forum that governments and philanthropies could no longer meet the needs of the world’s problems. He called on companies to accept greater responsibility to develop solutions to the massive problems that endlessly plague our planet, and to take on projects of “creative capitalism.”

Many people didn’t know what to make of it, or found it a little ironic coming from the world’s richest man. The issue was hotly debated but by 2013, this vision can no longer be called idealistic, unrealistic, or naïve. It’s fast becoming a reality and momentum is building every day. So what changed?

At the heart of the issue is social technology, including social media and smart phones. Both have given citizens and consumers an unprecedented power, voice, and ability to organize themselves around shared values. Armed with up to the minute information through posts or tweets, consumers now use their broadcasting power to spread the word about not only those companies that produced bad products, but also those guilty of inauthentic messaging, false promises, and unsustainable and irresponsible social behaviors. According to Edelman, 86% of consumers think businesses should place equal weight on society’s interests as on their own business interests, so in today’s world, impact royally trumps image.

We are witnessing a historical transformation in which the private sector is slowly emerging as a 3rd pillar of social change. So what can we learn from those companies leading the charge and how they scale their business success and impact? Here are three key elements that businesses must embrace to become purpose-driven brands that build their bottom line and a better world:

1. A partnership between brands and consumers: Companies must shift from the transactional mindset of viewing customers simply as dollar signs, to the relational mindset where customers are seen as partners with a goal of creating win-win situations. For their part, brands earn loyalty, goodwill and profits from their customers, and in return, consumers earn more responsible behavior by brands that improve their quality of life. This dynamic that is informing the strategy of so many successful brands today is reflected in the cause efforts behind Starbuck’s “Shared Planet”, Nike’s “Better World” and IBM ’s “Smarter Planet” campaigns. This strategy is more than well intended. It’s well received by customers who are inspired to build their business with them.

2. Contributory consumption: Building on the groundbreaking work by 1% for the Planet and Product (RED), this strategy turns on taking a small portion of the proceeds of every sale and putting it towards a cause that’s in authentic alignment with the core values of the brand. Beyond these funds themselves, contributory consumption is also an efficient way to tap into the full-spectrum of resources, reach, and self-perpetuating dynamics of consumerism within the private sector. Though many corporations already have “cause-related marketing” (CRM) programs in which they donate to a cause for each purchase of their product, these campaigns are often ad hoc, time limited, and ineffective in generating the ongoing resources needed to meet the demands and scales of the crises we face. But contributory consumption has the potential to transform every mall, store, and warehouse from a monument of consumer self-interest into a motor of social change for the benefit of all. If applied to all five areas of commercial transactions – retail, mobile, online, credit cards, and virtual goods – a mere 1 cent on the dollar from 5% of the private sector would generate financial resources that dwarf the $14B raised annually by corporate foundations in a sustainable and systemic way.

3. A global brand initiative: Beyond administering funding raised by contributory consumption, a coalition of brands can leverage their enormous resources and reach around research, training, marketing, and distribution to massively scale the impact of the private sector on the world. For example, the Sustainable Apparel Coalition, led by Patagonia, has engaged over 30% of the global apparel and footwear companies who are now held accountable to a single sustainability index. Nike, one of those coalition members, has now launched a new initiative to “change the making of making” and is inviting coders to help index all their data and materials according to their environmental impact. When brands such as these bring their full resources to bear on social change, and combine their efforts with those of government and philanthropies, these three pillars can meet the challenges we face with equal force.

The unprecedented collision of global needs and personal hopes, of human emotion and social technology, of powerful brands and newly empowered consumers, has the potential to transform our world. By creating a third pillar of social change we can end that false separation between profit and purpose, between living and giving, between and consumption and contribution, and leverage the might of the private sector to build a world we want to leave for our children.

If you interested in learning more from those actively working towards this goal, please join thought leaders from Nike, B Corp and We First for a free G+ Hangout discussing From Profit to Purpose: How Business Can Build a Better World. Fixing our world is a shared responsibility and we’ll be discussing exactly how your can build your business and make a difference in the world.

This article was originally published by Simon Mainwaring on the We First blog.

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