The Evolution Of Impact: Expanding Social Commitment To Drive Brand Advantage

I recently spoke on a panel about cause marketing at the Kellogg School of Management, where an MBA candidate asked a simple but fundamental question: “Who is driving cause in the marketplace, consumers or companies?” The answer: both. And things are about to get a lot more interesting. Marketers and brand builders take note: the future will be all about leveraging societal impact as a source of innovation and business advantage. Here’s a look at some key trends showing where things are headed.

We live in a time of expanding expectations, with people around the world increasingly demanding companies do more than just make money. Consumers, employees, investors and other key stakeholders are expecting corporations to productively use their assets—whether money, products or know-how—to drive meaningful societal impact. This pressure is pushing companies to act and provoking questions across organizations about the appropriate level of corporate commitment. Leadership companies are expanding their involvement, going way beyond basic actions to pursue strategies that are ripe with business and social opportunity.

Recent research by my firm shows just how high consumer expectations have reached. The 2011 Cone/Echo Global CR Opportunity Study found more than 80% of consumers expect companies to address key social and environmental issues. An overwhelming 94% say companies must evolve their business practices to make positive impact. Just a tiny minority—only six percent—say companies should only make money.

Responding to this pressure, companies are increasingly stepping up to drive positive change. Whether doing simple things to save resources (e.g., no-brainer operational changes like reducing waste), or taking things to the next level (e.g., integrating cause branding and advocacy into brand and business strategy), companies are leveraging their corporate assets to tackle pressing societal issues. This is dramatically shifting corporate social responsibility straight into the heart of business strategy, as companies leverage commitments to positive societal impact to create business advantage. In the process, companies are expanding the scope of their corporate impact and leveraging societal commitments to create new markets—two important trends likely to gather momentum in 2012 and beyond.

Expanding Scope of Corporate Impact

Companies are increasingly taking on expanded roles in their communities by moving to address societal issues historically viewed as business externalities. In the process, they are redefining traditional boundaries between the company and its external environment, resulting in a dramatically expanded corporate impact footprint.

Consider the case of a company that took a unique approach to make the communities in which it operates in Central America more resilient. Realizing that when extreme weather and earthquakes, which are common in the region, destroy poor workers’ makeshift dwellings, families become displaced and the company’s workforce suddenly disappears. The company worked to solve the problem by investing in sounder employee homes made of easily assembled, prefab, reinforced concrete panels. Here, a modest social investment by the company protects its people and supply chain, preventing lost revenue.

Another example: a manufacturing company operating in an unstable country where travel to work is dangerous is significantly expanding its corporate impact footprint to protect employees well before they set foot on company property. Recognizing that the local government is unable to act, corporate security undertakes elaborate daily operations, with large numbers of workers meeting at ever-changing locations for transport under heavy security, all on the company’s dime.  

Leveraging Societal Commitments to Create Markets

Increasingly, companies are using innovative approaches that build brands and drive incremental revenue, while delivering positive societal impact. Take the case of Google in Africa, where the company is dedicating resources to develop what it calls “a relevant, accessible, vibrant and self-sufficient Internet ecosystem.” This means investing in infrastructure, incubating start-ups, nurturing developers and increasing local content. A giant step forward for Africa? Absolutely. Also for Google, which has identified Africa as a significant growth opportunity. Remember, for Google’s business model to work, it needs people using the Internet as a core part of life—all so they can sell those ads.

Another innovative example: the push by shoe giant Adidas to develop low-cost, functional footwear for consumers in developing markets. A pilot in Bangladesh is now being expanded to rapidly growing India, where Adidas will leverage its manufacturing and supply chain know-how to bring shoes to the market under its Reebok brand that are designed to be durable, functional and, most importantly, affordable (they are rumored to cost only $1 per pair). Call this philanthropic market creation.

Examples like these of blurring lines between societal impact and corporate self-interest point to an exciting, integrated future of business and social innovation. Consumers around the world are already there, holding a strong and overwhelming view that the role of business in society is to change it. Smart leaders will hear this mandate, integrating positive societal impact into the DNA of their brands and businesses to drive growth and advantage.

Recommend (3)
4 comments about "The Evolution Of Impact: Expanding Social Commitment To Drive Brand Advantage".
  1. Joel Johnson from GMMB , January 30, 2012 at 9:39 a.m.
    Craig, thanks for sharing with a focus on evolving societal impact of brands with causes. Its clear there are many models developing simultaneously that take cause beyond reputation enhancement to profit-protection/growth, but I'm wondering something. How long do you think companies will wait until they see a societal return, change in reputation or growth? How long will they invest before they decide their commitment has been met? I tend to think that the companies that set hard and short goals will do well, but then the societal impact will be short-lived. What do you think?
  2. Howard Brodwin from Sports and Social Change , January 30, 2012 at 1:35 p.m.
    Great piece - thanks for sharing. I think more tangible examples with measurable results will help to encourage companies to get on board with a long term CSR program that really makes a difference. Companies want results, be it in the bank account or in the community. If we can continue to highlight the successes, and learn from the mistakes along the way, everyone benefits. And that's evolution, isn't it?
  3. joseph florie from imc , January 31, 2012 at 5:14 a.m.
    “The COHRED Group would like to announce the official launch of its first photo competition “Capturing Research and Innovation for Health, Equity and Development”! This photo competition, held in the context of our upcoming Forum 2012, aims to bring to light innovative research projects and to illustrate their impact and value to people’s lives, in real circumstances. Selected photographs, representing research and innovation for health, equity and development, will be showcased at Forum 2012 in Cape Town. These pictures will be used to illustrate ways in which research for health can be brought to the next level through appropriate policies and investments. We invite you to send in your submissions before the 29th of February and to send the word out to your networks today! For more information visit our website http://www.forum2012.org/photo-contest
  4. Craig Bida from Cone Communications , February 22, 2012 at 11:16 p.m.
    Thanks for the comments. You ask a great question about to what degree companies will invest. More and more companies are taking a long-term view when it comes to societal impact, and recognizing that it takes time to shape and deepen brand equity and reputation. Companies that are integrating societal impact deeply in their brand DNA will not be able to—or want to—cut and run. Rather they are seeking ways to make meaningful contributions against focused outcomes so that they can demonstrate results to key stakeholders including consumers, employees and increasingly shareholders. Our appetite for societal impact has reached a point that companies can’t ignore it (only 6% of consumers globally believe that companies exist just to make money; everyone else expects businesses to drive positive change). Don’t expect this to shift anytime soon: Talk to young people today and you’ll quickly realize that a brand’s commitment to positive societal impact is not a nice-to-have, it’s an imperative.