In this post, our new Head of Impact Strategy shares five ways that companies can create shared value and outlines how this will influence our work at Mightybytes in the coming years.
It Started With a Disaster
I met Tim Frick in the fall of 2013 while rebuilding a washed-out fire road on a mountain pass outside of Boulder, Colorado. We were in town for the B Corp Champions Retreat, and Boulder had just experienced 18 inches of rain in about five days. Despite the disaster, the retreat went on as scheduled in solidarity with the Boulder B Corp community and to support the local economy.
Tim and I connected over unusual circumstances at a forward-looking retreat dedicated to using business as a force for good. We had a lot in common and shared a passion for sustainability and cycling, so we stayed in touch. When I moved from Brooklyn to Chicago several years ago, we began talking more earnestly about opportunities to collaborate.
Fast-Forward to 2020
Considering that Tim and I met in the wake of a disaster, it’s almost fitting, in a very weird way, that I joined Mightybytes as COVID-19 was beginning to turn the world upside down. Our focus as a team has been supporting each other, our clients, and partners. In between the seemingly unending waves of change triggered by the pandemic, we’re looking at how to apply early lessons from this crisis to strengthen our clients when we all emerge from it. The losses are and will be terrible, and there’s nothing we can do to sugarcoat it. What we will have are lessons that teach us to strengthen community, put people first, and in so doing allow other values to become as important as shareholder value.
Before the pandemic, pressure on business to do more for society was rising fast, dramatically changing expectations companies now must live up to. People around the world are frustrated (or worse) by a host of issues that companies are largely or partly to blame for. The need for companies (especially large ones) to change how they do business in the years to come will be a matter of keeping their social licenses to operate.
Long term challenges we face can seem daunting when taken in as a whole, including growing economic inequality, inadequate action on the climate crisis, over-consumption, plastic pollution (much of it single use) strangling marine life and entering the human food chain, massive biodiversity and species loss, lack of data privacy and AI ethics, long-standing social inequalities, and concerns about not having resilient systems to respond to these and other mounting or immediate crises (like COVID-19). Fortunately, companies (and nonprofits) have an ever-expanding set of tools, frameworks, and examples to help transform their thinking and doing.
Five Ways Companies can Create Shared Value
The following practices are proven ways to help companies create both social and business value:
Design for Impact
Prioritizing both design and systems thinking can help companies focus on experiences and outcomes. This sort of thinking (and acting) often requires a cultural shift that can be more effective with an outside perspective.
The UN Sustainable Development Goals (SDGs) provide a framework for exploring how to integrate social and environmental solutions into your company’s core business. When seen as an opportunity and used effectively, the SDGs can inspire teams to co-create previously unimagined business models, products, services, and partnerships that generate social and/or environmental and business value.
Many of the companies we know that are ahead of the curve on creating shared value are Certified B Corporations. B Corp certification helps measure and manage your company’s positive impact on workers, community, customers and the environment by assessing the impact of both your company’s day-to-day operations and your business model.
Adopt Circular Production Models
We could point to numerous examples in our networks of circular economy models. Most recirculate items that would normally go to landfill or (maybe) recycling. A few examples include:
- A few years ago, a friend of ours at Cisco looked at old servers and designed a project to refurbish and sell them instead of disposing of them as e-waste. This project led to a broader circularity program applied to other areas like design and supply chain.
- Chicago-based Rheaply won the Sustainable Purchasing Leadership Council’s 2019 leadership award for advancing the circular economy with its system to track and share (rent, sell, trade, donate) assets within an organization or across Rheaply’s customers.
- Cahoots Co is a NYC-based startup that rents a seasonal wardrobe of kids clothing. The model is designed to be circular by mending clothes with unique designs that keep the items fashionable despite many wears and users.
Designing new products for circularity is a huge opportunity. Examining how current products can be made more circular is the gateway to circular design (e.g., Cisco). The goal is to design waste and pollution out and maximize material lifespan with an emphasis on reuse then repeated upcycling or recycling without downcycling. Even one or a few iterations of upcycling can make a big difference. The Certified B Corp Looptworks explains why in this post. Ultimately, the objective is to create regenerative natural systems through more thoughtful design and production.
Provide Equitable Access to Data and Technology
Equitable access to data and technology is both a global and local concern. As of this writing, about half of the world’s population isn’t online and people living in places where they could get online can’t because connectivity or devices are too expensive. Companies can change this. During the 2020 outbreak of COVID-19, companies like Zoom are offering their software for free to K-12 schools in the US. Offering free software built a lot of goodwill and helped many parents and kids (those with devices). And, B Corps around the world have sprung into action to help their communities. This post on B the Change highlights just a few of the many amazing examples.
Data privacy regulations like Europe’s GDPR and the California Consumer Privacy Act (CCPA) are forcing companies to react to legislation. Companies that get ahead of regulation can win consumer trust by going beyond compliance to protect our data. This means both strong cybersecurity and good practices on selling and sharing data. We’re learning that when we use a service for free we often are the product. People at least want to be notified. Better yet, give the option to limit sharing. As consumer awareness rises, preferences are shifting into conflict with existing digital business models, triggering additional regulations. What new models will arise in response?
The lowest hanging fruit is making websites and software accessible to people with disabilities. Unsure if your website or digital products are accessible? We have numerous posts to help.
Consider FATE AI
Artificial intelligence (AI) exploded into the daily lives of billions of people during the 2010’s. It’s present in the form of search suggestions, email spam filters, voice-to-text, translation, directions, smart speakers and so much more. This decade of AI advancement happened so fast, it, well, just happened.
Yet we often don’t put users first or consider unintended consequences of our work in AI. Machine learning algorithms have evolved to make black box decisions and there’s a scramble to develop “explainability” or interpretable solutions. The need to teach AI models to account for human and other living systems is essential to making machines good partners as they evolve. Today’s dominant use of AI is to maximize utility (often economic) with little or no consideration for the consequences. Again, AI advancement has been so fast that the race to get the technology out there was paramount. Big Tech is hiring ethicists and an increasing number of university and nonprofit researchers are contributing to this field, agreeing that AI algorithms should be:
The trick is building these four principles into existing and new AI. Transparency is key in the full spectrum of how we develop and apply AI, not just in explaining algorithmic decisions. It’s time to put down the sci-fi novel and open the humanities and biology texts!
Put People and Planet First
Building a future of inclusive, shared prosperity requires us to rethink the way we’ve been operating. Capitalism transformed in the 1970’s towards a myopic focus of maximizing shareholder value. The pendulum is swinging again, this time towards stakeholder value, and we’re defining stakeholders broadly. In August 2019, most members of the Business Roundtable (BRT) committed to serve stakeholders not just shareholders. Commitments are good but we’re going to need a whole lot of action to truly align social and business value.
It all starts with a philosophical and cultural shift. B Corporations have been doing this for over a decade. (We’ll see how well BRT members catch up.) We’re seeing many examples of companies helping employees, people with the greatest needs, and the general public in response to the current COVID-19 pandemic. All of those efforts should be applauded. I only hope companies are asking how they can create greater shared social and environmental value when the pandemic ends. It takes a good hard look in the mirror and self-evaluation of a company’s values, culture, and priorities.
Unprecedented Challenges and Opportunities
Now more than ever, companies and organizations are needed to create inclusive and shared value for many stakeholders, not just a few shareholders. The World Economic Forum lists the pursuit of both social and business value as a critical factor for success in the 2020’s.
Another critical success factor listed by the World Economic Forum is applying the science of organizational change. Change management is the connective tissue at the heart of our aforementioned five ways companies can create social and environmental value. Helping clients succeed at managing change is something Mightybytes and I have been doing for years.
Sharing similar values, philosophies like finding root causes to problems, and approaches like placing outcomes over outputs made joining the Mightybytes team an easy decision. Having run my own B Corp, I love that they have been certified as a B Corp since 2011, are an Illinois Public Benefit Corporation, a 1% for the Planet member, and have been voted Best for the World by B Lab on multiple occasions. On top of all that, the team is awesome, they live the company’s B Corp values every day, and put their clients first. I look forward to adding my experience in strategy, sustainability consulting, and business analytics into the mix!
In order to meet the opportunity these times present, organizations across sectors need to become more effective at applying tools like change management, systems and design thinking, creative problem solving, and applying technology in thoughtful ways. This is why I joined Mightybytes—to work with an outstanding, caring team and together expand what they’re already great at—amplifying clients’ positive impacts on the world by applying design, strategy, and technology to solve core business and societal problems.