What is Corporate Social Innovation?
Social innovation is defined as an “initiative, product, process or program that profoundly changes the basic routines, resource and authority flows or beliefs of any social system.” It is about new ideas or new ways of addressing pressing unmet needs.
Social innovation in the corporate context is doing business in ways that create business and social value. Social innovation is when companies re-engineer their business models, products, services, structures, systems, processes or relationships to generate profits and new value propositions in tandem with social outcomes. Corporate social innovation involves reframing a social problem or getting to the root of social issues using the tools of business
There is no one formula for social innovation. The following is a suggested process you can follow on the path to social and business value creation:
Step 1. Understand
Engage senior leaders to understand the benefits and opportunities of social innovation investments. Research best practices within and outside your industry to learn how leading businesses are pursuing this innovation path. Understand the macro social trends and systemic challenges, which will have the biggest implications for the future of your business, suppliers, customers and markets.
Document how your products and services and the up- and downstream of your business operations affect people, communities and society to identify vulnerable or opportunistic leverage points for social change. Determine top stakeholders’ social concerns, challenges and expectations. Find out if any of your industry associations are working on these issues and if they have insights to share. Compile these into a list of relevant social issues.
Step 2. Analyze
Using information generated from the first step, conduct a deeper dive into your company’s business model and strategic positioning. Assess your corporate strategy or business plan to identify win-win opportunities. Catalogue your organization’s assets, competencies and resources, which you can pivot to address the societal or community issues you identified in Step 1.
From your initial list of important societal or community-based issues relevant to your business, ask: What strengths does your business have to address them? What opportunities are there to apply these strengths in new or innovative ways? Who might be some key partners to capitalize on these opportunities? Look beyond your business boundaries for some of these answers, including your upstream suppliers and your customer base.
Step 3. Engage
From Step 2 you should have a list of business development opportunities and capabilities that intersects with issues relevant to your company and stakeholders. With this information, invite key internal and external partners with a unique expertise in the business opportunity and social problem to a joint exploration session. An intentional mix of perspectives can foster cross-pollination and bring different insights, skills, competencies and roles into the innovation process.
This step should help you finalize a list of priority social issues that your company is well-positioned to tackle and that can be addressed through your core business strategy. From this process, you will likely also have determined strategic external partners to help you implement your business priorities.
As with any business innovation, you will need to conduct business feasibility studies, and develop business and social benefit and cost projections. Pilots and proofs of concept can validate your social value initiatives and position your business to launch and scale its social impact strategy. The next step will outline how to go from idea to operational concept.
Step 4. Innovate
The foregoing steps provide rich ground for innovation. Leading companies are increasingly embracing the following innovation tools and methods to continuously foster social and business value creation. To encourage innovation, it is important to create experimental and safe spaces where innovation can thrive apart from the requirements of everyday operation, and where failure is embraced as a learning process.
- Design Thinking & User-Centered Design Methods: Many companies use design techniques when developing new products, in media development and marketing. But design thinking can be applied more broadly to rethink the value chain and find new ways to link the business mission to social impact. Design-based and user-centered approaches start with a discovery phase of research about the user, problem or context. Design methods make things tangible, using physical, visual, experiential and creative means. Ideas are made concrete and tested with users or beneficiaries via rapid prototyping, described below, to iterate the best strategy or solution.
- Rapid Prototyping: Rapid prototyping enables a company to seek quick feedback from customers, stakeholders and employees by engaging them to hone an innovation over several rapid cycles of design. Old-style approaches involve heavy upfront investment to get a product or process right, a big launch and little room for ongoing experimentation. Rapid prototyping starts with something that is ‘good enough’ and invests in ongoing learning and development. The motto is “show, don’t tell”. Rapid prototyping involves framing a particular challenge and seeking responses on many parallel tracks.
- Collaborative Innovation Labs: The two methods above are often found in “lab” settings—collaborative innovation labs—which are increasingly recognized as effective ways to convene multiple sectors and stakeholders around challenges of mutual concern. Businesses can set up their own lab processes to get ongoing feedback and start to design products or services that can be more nimble or responsive to shifting demand or markets. But more powerfully, businesses can help solve problems that they have identified as priorities through collaboration.
- Open Innovation Platforms: Idea jams, crowdsourcing and competitions are examples of open innovation platforms—engagement approaches that enable companies to learn about their broader operating context, grow reputation and build relationships. Open innovation platforms can be used with employees, customers, other stakeholders and broader publics to direct resources, solve problems and generate buzz.
Step 5. Sustain
The foregoing steps should put your company on the path of pursuing one or more social change strategies through your core business. Redefining your company’s core purpose to include your social mission, will send a signal to your shareholders, employees, customers, suppliers and other stakeholders of your commitment and will tap into the pent-up consumer and societal demand for company leadership on societal issues.