6 Steps to Corporate Social Innovation

June 8, 2012

In Walter Isaacson’s biography of Steven Jobs, a transformative moment occurs when Jobs returns to Apple (where he’d been fired a few years before) and rescues the company from collapse. New products pore forth—the i-pod, i-tunes, i-phone, and i-pad—and Apple rises to the top of industry in market capitalization, brand value, and customer appeal. 

What’s the secret to this turnaround?  Isaacson recounts a conversation, earlier in Job’s career, where the Apple founder expressed his ambition to build a company that would endure. His colleague advised him that “lasting companies know how to reinvent themselves.” Jobs internalized the message this way: “You’ve got be like a butterfly and have a metamorphosis.” 

What will take for CSR to fly? Corporate Social Innovation!

In a prior blog, we argued that CSR today is in a state of “active inertia”—creeping along like a caterpillar, doing “good enough,” but not able (or even willing) to sprout wings and take off. 

What will take for CSR to fly? Corporate Social Innovation!

Reinventing CSR through Social Innovation

The idea of corporate Social innovation (CSI) began not in the West, but in the developing world as a way to create new markets to alleviate poverty. Banks, including one launched by Nobel Peace Prize winner Mohammed Yunus, introduced micro-credit lending whereby villagers could pool their modest savings and get small loans. Repayment rates have been upwards of 97%. 

This model spread into other businesses where, for example, Mexican cement-maker Cemex introduced its Patrimonio Hoy program that gives customers technical assistance and loans to fund improvements in their housing. The path-breaking partnership between Hindustan Lever and Project Shakti, which has poor women travel to nearby villages in India selling hygienic soap and toothpaste and dispensing health advice to their customers, showed the broader potential of corporate social innovation throughout industry.

Today, a few leading companies such as Shell, Abbott Laboratories, Dow Chemical, and IBM are using the models and methods of social innovation.

Today, a few leading companies such as Shell, Abbott Laboratories, Dow Chemical, and IBM are using the models and methods of social innovation to, respectively, manufacture safe and affordable cook-stoves, improve nutrition, build affordable housing, and help small businesses and non-governmental organizations in the developing world to operate “smarter.”

Meanwhile, legions of young people are fashioning themselves as social entrepreneurs and innovators and a diverse set of NGOs, including Ashoka, Kiva, Taproot, and others are operating as social innovators and a few are forming partnerships with business to address some of the world’s most pressing social and environmental problems. 

Pulling these threads together, we define corporate social innovation in this way: Corporate Social Innovation is a strategy that combines the unique set of corporate assets (entrepreneurial skills, innovation capacities, managerial acumen, ability to scale, etc.) in collaboration with the assets of other sectors to co-create breakthrough solutions to complex social, economic, and environmental issues that impact the sustainability of both business and society.

Characteristics of Corporate Social Innovation

We will develop the theme of Corporate Social Innovation, describe its relevance and contours in business and society, and highlight best practices in CSI in the months ahead. Let’s begin with a starter list of what some companies are doing to transform CSR through CSI:

1. Create a social vision for the company. Dow Chemical states its purpose in this way: “Dow people include some of the world’s best scientists and engineers dedicated to solving global challenges.We focus our innovation engine on delivering new technologies that are good for business and good for the world.” By 2015, the company aims for three breakthroughs that “will significantly help solve world challenges.” Teams are working in the areas of water, food housing, energy and climate change, and health.

2. Bring employees to the center of the effort. Since 2008, IBM has sent over 1,000 employees on 80 teams to 20 countries on one-month service learning assignments through its Corporate Service Corps. In Tanzania, IBM teams collaborated with KickStart, a nonprofit exploring new technologies to fight poverty in Africa, to develop modular e- training courses in marketing, sales, and supply chain management for local entrepreneurs.   

3. Nurture intrapreneurship. Jo da Silva has created an International Development consultancy within Arup—the professional service firm that designed the Sydney Opera House and Pompidou Center in Paris. Her group provides technical advice and practical solutions to reduce poverty and address social and environmental health in developing countries. Hundreds of the company’s consultants have been engaged as “social intrapreneurs” to develop solutions for clients that can be spread across continents.

4. Use the social sector for R&D and service support. Many of the companies involved in global service projects work with nonprofit partners (e.g., CDC Development Solutions, Digital Opportunity Trust, Endeavor, etc.) to identify clients in need, define projects, and handle placement logistics. NGO partners with expertise in emerging markets and placing volunteers can accelerate cross-cultural socialization and provide a “soft landing” for a company in a region where it has limited or no existing business presence.  

5. Reset philanthropy to innovation. The Shell Foundation used to be the philanthropic arm of the parent corporation. Now it is about funding and developing commercially viable business models that can achieve sustainable social impact. Says, Jurie Willemse, one of Shell’s NGO partners, “For us it was always about developing a business model that you can scale-up and replicate in numerous countries and regions and which sustainably addresses the needs of start-up and growing businesses – a solution of global value for emerging economies rather than just a few countries in Africa.”

6. Engage a broad spectrum of interests using connective technology and social media for innovation.  Nokia runs a social innovation lab for scaling the good works of innovative NGOs; Dell sponsors a social innovation challenge for college students; and Studio Moderna leads a Challenge:Future competition that spans over 200 countries, 15,000 schools, and over 23,000 innovators. This is all about using social media to drive social innovation.  Meanwhile, companies like Best Buy use social media to spark and shape programs such as the company’s innovative reuse and recycle program for electronic equipment.

This is just a starter list. Share your ideas and experiences to help the butterfly emerge!