Finding a Balance: Building Businesses That Generate Profit and Social Impact

Couldn't attend Transform 2022? Check out all the summit sessions in our on-demand library now! Look here.

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

Creating a for-profit business model focused on social impact has many benefits. Businesses are more profitable through corporate social responsibility (CSR) efforts. Harvard Business Review research shows that companies with CSR programs increase revenue by up to 20% and new talent with innovative ideas is more likely to apply to companies with established CSR standards. /p>

94% of Gen Z now believe companies need to address pressing social and environmental issues, and if a company doesn't, the likelihood of attracting strong talent drops dramatically. Similarly, 77% of consumers are more likely to support companies that are committed to making the world a better place through their CSR efforts and social impact.

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

Before leaders can create meaningful social impact, they must first fully understand the company's mission and desired impact. Establishing a clear mission begins internally with key stakeholders identifying their core values ​​and developing a unique mission statement. Next, the company must establish a strong foundation and internal processes that drive its mission forward, creating alignment across the business.

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

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

Knowing how to measure social and financial performance to determine success and generate data helps strike that balance. While tracking and reporting data and results is where the real change starts to happen. For example, by tracking and reporting on the performance of their CSR initiatives, business leaders can identify key areas in which to invest. They can also use the subsequent data to determine how these activities can be leveraged to generate profits and unlock new revenue streams.

Through data collection and analysis, organizations can truly understand and measure the effectiveness of solutions. Companies need to establish what data drives results that align with their mission so management knows what to prioritize and measure.

While collecting and analyzing data are the mainstays of an impact-driven business, leaders should 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 of data and information makes your entire organization feel more aligned with overall business goals and helps the management team make better business decisions. It is also essential for solving complex problems, linking a company's mission and purpose...