Let’s explore the impactful world of Social Entrepreneurship, where profit meets purpose in a transformative journey of change.
After a year of study and another massive poll of business and HR experts worldwide, we have recently issued the Deloitte Human Capital Trends 2018, headlined “The Rise of the Social Enterprise.”
Following a thorough review of the data and numerous interviews with business executives, we discovered that firms today are entering a completely new management paradigm: one that perceives a business less as a “company” and more as a “institution,” integrated into the social fabric of society.
That may sound a little high-level, but the specific tendencies make it plain and real. Consider a handful of the statistics we discovered.
65% of organizations polled now rank “inclusive growth” as one of their top three objectives, surpassing strategies such as “growing market share” or “being the category leader.”
77% of our respondents evaluated “citizenship and social impact” as crucial or significant, and this topic was deemed the “least ready” problem among the CEOs we polled.
The need to establish 21st-century jobs, increase the relevance of incentive systems, focus on employee well-being, and address the issue of worker longevity are all ranked among the top ten concerns on the human capital agenda.
The trends we discovered, which are described below, are themes that would have been labeled “soft” or “nice to do” in previous eras. They are urgent now because of the influence of each individual in the world of work.
One of the trends we saw is that businesses must now be “social” in a really outward sense. Customers, stakeholders, communities, business partners, and workers all have a significant effect on the brand, growth, and profitability of a firm. Being a “social enterprise” entails seeing beyond income and profit and knowing that we work in an ecosystem in which all of these interactions are equally vital.
Surprisingly, the main problem we discovered in our research is that C-suite executives are not properly functioning or organized to deal with this new reality. Consider the trends highlighted in the study: none of them can be handled without an enterprise-wide, cross-functional approach. As a result, having a C-Suite leader that oversees many functional areas does not work.
In fact, our study discovered that a new model, which we call the “Symphonic C-Suite,” is critical, and that organizations should tackle these challenges as a team, creating a model we term “teams leading teams,” rather than the segmented functional ownership that exists today in the C-Suite.
This work is usually one of the most interesting things I do at Deloitte for me, and this year’s report talks to the importance of finding mission, trust, and value in our lives. We live in a world of incredible economic development and technological progress, but also of income disparity, intense nationalist discussion, and numerous issues about diversity, inclusion, justice, and equity at work. Our study suggests that all of these issues are now converging, and that business executives must handle them in a coordinated and strategic manner.
What is the definition of social entrepreneurship?
Social entrepreneurship is a company concept that strives to generate financial as well as social or environmental benefit.
It’s not only about generating money; it’s also about addressing a social or environmental issue. These companies are dedicated to finding new ways to address some of the world’s most important concerns, such as poverty, climate change, and inequality.
Why is social entrepreneurship becoming more popular?
Consumers’ rising awareness of social and environmental concerns is one cause for the emergence of social entrepreneurship. Consumers are becoming more aware of the effect of their purchases and are increasingly seeking products and services that reflect their beliefs. As a result, firms that put purpose above profit are doing better.
Another factor for the emergence of social entrepreneurship is a shift in investor views. Investors are increasingly interested in investing in companies that benefit society and the environment. The Global Impact investment Network predicts that the impact investment market will reach $1 trillion by 2020.
Social entrepreneurship’s advantages
Businesses can gain from social entrepreneurship in a variety of ways, including:
Increased customer loyalty: When firms promote social and environmental ideals, they frequently attract a loyal consumer base that shares those values.
Increased employee engagement: Employees are more engaged when they believe their labor serves a purpose other than profit.
Improved brand reputation: Companies that are seen to have a beneficial influence on society and the environment frequently have a higher reputation among consumers and investors.
Access to new markets: Social entrepreneurship may provide access to new markets and prospects for growth.
The modern social entrepreneur is driven by profit, but he or she also takes a more holistic approach to business and appears to be more worried about the fate of the earth and mankind. These change agents use entrepreneurial strategies to bring systemic solutions to social and environmental issues. Social entrepreneurs frequently promote the development of environmentally friendly goods, satisfy the needs of an underrepresented community, or engage in charitable activities.
Social entrepreneurs advocate a wide range of sustainable development solutions through non-profit, for-profit, and hybrid companies. Social entrepreneurs and social companies would prioritize initiatives such as providing clean water, boosting access to renewable energy, promoting financial inclusion, and delivering high-quality educational resources.
One more thing to mention. As you study these trends and consider how they will affect your company (whether you are in HR or line leadership), I believe you will notice two distinct aspects of change at work.
Success is being redefined.
Financial profit has long been considered the primary indicator of corporate success. Social entrepreneurship, on the other hand, presents a broader definition of success that includes both financial viability and a good influence on society. Social entrepreneurs understand that profit is not the only metric of success; they aim to address serious social and environmental issues while producing long-term income.
Taking on social and environmental concerns
Social entrepreneurs are motivated by a strong desire to make a positive difference in the world. They address a wide variety of urgent social and environmental challenges, including poverty, inequality, climate change, education, healthcare, and sustainable energy. They want to achieve real and long-term change by linking their corporate aims with societal demands.
Recruiting and keeping top talent
The millennial and Gen Z generations, in particular, prioritize meaningful employment and appreciate organizations that demonstrate a strong commitment to social and environmental problems. Social entrepreneurship provides a distinct value proposition that attracts and maintains great individuals that are driven to make a difference. Employees in these firms frequently have a feeling of purpose and fulfillment, which leads to improved productivity and loyalty.
Collaboration and group influence
Social entrepreneurship promotes collaboration among many stakeholders, such as governments, companies, non-profit organizations, and local communities. Social entrepreneurs optimize their influence through developing collaborations that use pooled skills, resources, and networks. This collaborative approach results in new cross-sector solutions and increased scalability of efforts, eventually amplifying the total impact.
Consumer preference and positive branding
Consumers are becoming more aware of the social and environmental consequences of their purchasing decisions. Businesses that embrace social entrepreneurship strengthen their brand image while also gaining a competitive edge by appealing to socially conscious consumers. Consumers are more inclined to support and remain loyal to firms that demonstrate a strong commitment to social and environmental sustainability, according to research.
Academic institutions and other organizations, such as incubators, are increasingly acknowledging social entrepreneurship as a viable subject of research and practice. Many institutions now offer social entrepreneurship-specific programs and courses, equipping prospective social entrepreneurs with the required knowledge and skills. Incubators, on the other hand, are also found in rural areas of the nation.
The importance of social entrepreneurship in determining the future of business cannot be understated as the globe faces complicated issues. Social entrepreneurs are creating a paradigm change in the corporate landscape by redefining success, solving social and environmental challenges, stimulating innovation, empowering communities, recruiting top talent, boosting cooperation, and appealing to aware customers. Adopting social entrepreneurship is not only a moral necessity, but also a sound business strategy that promotes long-term growth while having a good influence on society and the environment. As more entrepreneurs understand this opportunity, the future of business will certainly be purpose-driven, ultimately leading to a more inclusive, fair, and sustainable society.