Social Impact 101: Scaling Profit + Purpose
Social impact (SI) is a relatively new concept within the marketplace. Often called social innovation and social impact theory, SI is an innovative methodology that leverages business and technology to solve complex social issues.
Though the terminology may vary, social impact frameworks share 3 common themes:
They contribute to a greater good.
They seek sustainable, long-term and quantitative change
The value profit and purpose.
MISSION-DRIVEN BRANDS FTW
Purpose-driven brand and nonprofits embrace all the components of a successful business. Healthy revenue, expansion, and having a marketplace advantage are still important. The only difference is that along with profit, these social startups and businesses are equally intentional about improving the economy, environment, and empowering others.
They understand that in order to grow they have to listen to the needs of their customers and adapt their practices. As a result, social companies are agile, and when combined with a well-planned business model, are more likely to achieve sustainable growth. Best of all, they can leverage free marketing from their customers!
As noted above 34% of customers will share ethical brands with their immediate community, but 29% of them will also publicly champion ethical companies on social media. #howboutdah
To further debunk the myth that businesses can't be profitable while pursuing social good, here's a glimpse at Patagonia's revenue
Patagonia's mission is very simple:
“Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis (PYMNTS)."
Most well known for its "Don't Buy This Jacket" campaign and for being one of the first retailers to close it's doors on Black Friday, Patagonia boldly fuels the thoughtful consumption movement. Yet sales are as healthy as ever with an annual growth of 14% and revenue sitting just below $75 million. Hats off to Patagonia founder Yvon Chouinard!
Now, you're probably thinking, "Patagonia is a huge company that can afford to be socially conscious. How can smaller businesses achieve the same success?"
I present to you Raven+Lily.
Kirsten Dickerson, CEO and Founder of Raven + Lily, promotes ethical fashion as a means of providing a dignified way to alleviate poverty. Starting as an e-commerce store in 2008, Raven + Lily now employs 1,500 marginalized women at fair trade wages to give them access to sustainable income, health care, education, and a way to break the cycle of poverty. Their revenue is equally impressive, with 189% growth in 2015, and a recent opening of their second brick and mortar location in Austin.
So, have I peaked your interest?
I'm going to assume that you're furiously nodding your head so here's what you'll need to consider before getting started.
Before you begin
First ask the following questions:
What does my business stand for? Does my business have firmly rooted core values?
Take a look at the social landscape. Are there any issues either locally or globally, that resonate with you?
Does this issue have long-term viability?
If your business can realistically address a social need and you'd like to move forward here's a purpose-drive business model canvas to help generate a strategy.
Purpose Driven Business Model Canvas
Stay tuned for my next blog where I'll discuss my favorite purpose-driven business models across various industries. I'll also share a few books and tools to help you implement the right strategy for your business!
Barraket J, Collyer N, O’Connor M, et al. (2010) Finding Australia’s social enterprise sector. (n.d.): n. pag. Web.
Luke, Belinda, and Vien Chu. "Social Enterprise versus Social Entrepreneurship: An Examination of the ‘why’ and ‘how’ in Pursuing Social Change." (n.d.): n. pag. Web.
Pymnts. "How Patagonia Grows Without Growth." PYMNTS.com. N.p., 01 Dec. 2015. Web. 20 Apr. 2017.