Balancing act: Creating companies that generate profit and social impact

Whether you run a corporate business or a consumer brand, social impact is now an essential part of any business strategy. While revenue will forever be a leading priority, this shift in perspective indicates that leaders must invest in strategies that combine profit and impact to ensure consumers, customers and partners, and employees clearly understand the company’s mission and vision.

Building a for-profit business model focused on social impact offers many benefits. Companies are more profitable with corporate social responsibility (CSR) efforts. Research from Harvard Business Review shows companies with CSR programs increase sales revenue by up to 20% and new talent with innovative ideas are more likely to apply to companies with established CSR standards.

Ninety-four percent of Gen-Z now think that companies need to address pressing social and environmental issues, and if a company doesn’t, the chances of attracting strong talent are significantly reduced. likewise, 77% of consumers are more likely to support companies committed to making the world a better place through their CSR efforts and focus on social impact.

So how do you strike a balance between influencing change at a social or environmental level and ensuring profitability? By centering your business model around a clear mission supported by data and education.

Before leaders can create any significant social impact, they must first fully understand the company’s mission and desired impact. Establishing a clear mission statement starts internally with key stakeholders identifying their core values ​​and developing a single mission statement. Next, the company must build a strong foundation and internal processes that advance its mission, so that the entire company is aligned.

Data and insights are essential to drive social impact

The key to balancing corporate social impact and profitability is to prioritize data collection and analysis. Data, measurement, monitoring and reporting are critical to any successful business and the leadership team’s ability to drive change.

Data-driven insights are at the heart of balancing internal positive change and profitability as a business. This idea of ​​using data to drive change is the most comprehensive way to understand your business internally and externally.

By figuring out how to measure social and financial performance to determine success and generate data, you can achieve that balance. While monitoring and reporting on data and findings is the real change. For example, by tracking and reporting on the performance of their CSR initiatives, business leaders can identify key areas to invest in. They can also use the subsequent data to determine how these activities can be used to generate profits and unlock new revenue streams.

Through data collection and analysis, organizations can truly understand and measure the effectiveness of solutions. Businesses need to identify what data delivers results that align with their mission so leadership knows what to prioritize and measure.

While data collection and analysis are the backbone of an impact-driven business, leaders must also implement streamlined processes for data monitoring and reporting. Why? Because (1) you can’t fix what can’t be measured, and (2) you can’t create profitable business models to fuel social change without first understanding their impact.

Clear reporting on data and insights empowers your entire organization to feel more aligned with overall business goals and helps the leadership team make better business decisions. It’s also critical to solve complex problems, connect a company’s mission and purpose to day-to-day processes, better understand customer behavior, and even increase employee engagement.

Education and reach of data findings play a crucial role

Leveraging data and storytelling is critical to shaping a business model that is impactful and profitable. Social change only happens when a company comes across as a united front, willing to build a full understanding of the company’s mission goals and revenue plans. Creating social change and profit is difficult, but the key is balance. The data and insights companies collect plays a critical role in driving social impact, as data can be used to tell meaningful stories that influence and inspire change.

Education through strategic storytelling drives a company’s bottom line by creating emotion and building strong connections with key stakeholders. For example, compelling data-driven stories that highlight a brand’s values, mission and CSR investments are a lucrative tool to forge strategic partnerships (both profitable and socially impactful) or attract new customers and employees.

This also provides a unique opportunity for brands to be transparent about the issues they face and the solutions they have come up with to address them. This can include challenges related to business strategy and finance or, more generally, issues such as minimizing a company’s environmental footprint.

Finally, clearly communicating your brand’s purpose and impact can also be used to create close-knit communities centered on shared experiences and gain support for the social and environmental issues that matter to your brand.

It’s up to business leaders of all shapes and sizes to lay a foundation for a company’s impact-driven mission. From there, it is essential that the entire team understands the company’s mission and the steps being taken to make an impact.

CSR efforts prove profitable and fuel change, but only if the company’s business model can support itself internally first. Businesses must prioritize data collection, analysis, and education to truly understand what’s happening and measure the effectiveness of solutions. Without effective solutions, impact-driven working is just an idea and not a reality.

Lisa Marrocchino is CEO of Proteus Ocean Group.