renaissance 2

Unilever, a company with a €40 billion turnover spread across 400 brands is blazing the trail in social innovation, along with a few others, many of which are World Business Council for Sustainable Development members.

In a speech last week to MBA students at INSEAD business school in Fontainebleau, France, Unilever’s boss outlined how his firm sees this leap paying off for business in the future.

According to Cescau, the “agenda of sustainability and corporate responsibility is not only central to business strategy but will increasingly become a critical driver of business growth… I believe that how well and how quickly businesses respond to this agenda will determine which companies succeed and which will fail in the next few decades.”

This is an interesting prediction common among CEOs these days. When Arie de Geus, a former senior Shell executive, studied corporate longevity he found that big multi-national companies on average lasted some four decades. Globalisation since will no doubt have an effect on this in the future, both positively and negatively, but what will be more interesting will be how researchers view corporate strategy and social innovation in this light.

Counting collaboration

In Cescau’s recent speech he revealed how collaboration between government, NGOs and industry is key to social innovation:

“Slowly but surely both governments and NGOs are accepting that business has a role to play in the development agenda and that we can be trusted.”

Cescau summed up how the old “CSR as risk” adage should now be seen as simple sustainability strategy: “The companies that succeed will be those that reduce their environmental impacts and increase the sustainability of their supply chains now, rather than wait until either legislation or public outcry forces them to do so.”

But on to social innovation. Here is where opportunity lies, and Cescau sees the potential here in emerging economies. It of course helps that over 40% of Unilever’s business is now in these markets. Not every company is so lucky that the incentives are so clear.

“Sales there are growing much faster”, said Cescau, claiming that “by 2012 more of our business will come from Asia, Africa and Latin America than from the developed markets of Europe and the USA”.

Social innovation provides material for companies to generate greater trust, believes Cescau. Attempts to turn negative media coverage into positive stories, a key aim of CSR originally, does not help business make its case to the public. He said in his speech at INSEAD:

“…companies do not normally measure their social, economic and environmental footprint in the markets in which they operate and, as we all know, communication without facts is tough.”

Cescau cited Unilever’s 2003 partnership with Oxfam as key to its social innovation strategy. The two organisations together considered Unilever’s impact on Indonesian society in a jointly published and much discussed study.

Essentially the two groups discovered three things:

1) most of the cash value Unilever creates in Indonesia stays in the local economy.

2) 84% of our raw and packaging materials were sourced from local suppliers thereby creating not just jobs but technology transfer from other Unilever factories around the world.

3) While Unilever Indonesia itself employs only 5,000 employees, the business supports the full time equivalent of 300,000 jobs, more than half of them in the distribution and retail chain.

Be frank about the challenges

All well and good. But Unilever is also honest about the limits of its impact. It has not been good at helping farmers and shopkeepers at “the furthest ends of the value chain” to lift themselves out of poverty. Traditionally this has not been their job of course. But this provides an opportunity for social innovation, which the company recognises.

To take this kind of research further, Unilever is now working with Ethan Kapstein, a Professor of Sustainable Development at INSEAD, to consider the impacts of Unilever’s operations in South Africa.

The report, out later this year, will help the company think harder about social innovation and opportunity by looking at the “soft” impacts of the company.

According to Unilever, these are intangibles such as training and skills transfer, support for government capacity building, black empowerment initiatives and “environmental standard setting”.

Don’t get confused

Key to social innovation in emerging economies is capacity building. A term much used in the CSR world often referring to philanthropy.

To the top companies like Unilever, it’s more about new business models to attract customers and product innovation linked with social needs.

The company sees social innovation at two levels.

Macro level corporate social innovation:
Contributing to cross border trade, via membership of Business Action for Africa and the Investment Climate Facility. This a public-private partnership that “aims to address some of the structural bottlenecks holding back investment in Africa.” The company is working with British American Tobacco and Diageo to pioneer customs reform in Kenya.

Micro level corporate social innovation:
Business Action against Chronic Hunger – an initiative the company helped to launch last year. The aim is to help communities lift themselves out of poverty through sustainable income generation. Unilever plans to scale it up from 30 farmers to 4000 – benefiting some 20,000 people.

This is not philanthropy. Unilever will benefit massively from increased cross border trade in Africa, and by buying crops at market prices is not subsidising farmers and creating dependency in the way that aid does.

Unilever’s Shakti initiative in India is another major area of social innovation in a massive emerging market.

Shakti taps into existing networks of women’s self-help groups, which had grown up on the back of micro-credit schemes in the country’s 650,000 rural villages.

Shakti entrepreneurs from these groups became local sales representatives, going door-to-door selling Unilever’s products.

Some 30,000 Shakti entrepreneurs are now operating in 100,000 villages serving nearly 100 million consumers.

The revenues generated are now close to $100 million a year. Unilever says the margins are “very similar to those we achieve through our mainstream distribution channels.”

The Western conscience consumer

In mature markets Unilever believes social innovation is about reassuring consumers that the brands they buy reflect their values:

“[Consumers] want brands that not only make them feel good and look good but that also do good”.

“This trend has all the hallmarks of ushering in a new age of marketing and branding”, Cescau told his INSEAD audience, defining social innovation in Europe and the US as “brands with social benefits”.

Ben & Jerry’s “climate neutral brand” and Dove’s “Campaign for Real Beauty” are excellent examples of Western social innovation. Meeting the desires of consumers by linking products with values.

Unilever’s recent announcement that the Rainforest Alliance will soon be certifying all its tea as sustainable perhaps makes the link between Western social innovation expectations and its sustainability commitments in emerging markets, where the tea is grown.

Cescau admits that finding this balance, this “sweet spot” as he calls it, between the needs of society, the planet, and consumers is tough.

But clearly Unilever believes it is the key to doing business in the modern, connected world.

“Companies that grasp the opportunity this agenda presents in a genuine and sustainable way will be the ones that succeed in the 21st century”, Cescau told his INSEAD audience.

Advising the MBA students to build social innovation awareness “into your professional skill set”, he concluded that “the business world will very soon be divided into those that recognised its potential early on and those who woke up to it too late. Make sure you are an early adopter.”

Cescau and Unilever make a convincing case for the death of CSR and the adoption of social innovation and global opportunity strategies by companies.

Unilever’s history, geographic spread and corporate culture has helped them immensely to get to this point. But other companies can clearly go further faster in killing off CSR and replacing it with innovation by studying their example. How fast they do this may decide the winners and losers in the coming decades.

My thanks to Tony Webb, founder of Ethical Corporation magazine, for this report from the frontlines. If you are interested in the corporate implications of social innovation, Ethical Corporation magazine is an excellent read!

 

Why is it so difficult to make a difference and make a living at the same time? For decades self-help gurus have been telling us to “follow our bliss” and ”live our passion”. For many this has simply become a new age version of the well-worn “Buy My Book and I’ll Make You a Millionaire” genre (think of the “The Secret” which has certainly made its authors multi-millionaires)? Or is there something more here than meets the eye?

We need to move beyond the hype, and fast. In their desperate search for “eyeballs”, the advertising, publishing, internet and self-help industries have created a shameless culture of self-promotion. Add to this heady brew the fact that the “ME Generation” has reached its peak in the more developed parts of the world, and we have a recipe for narcissism on an unprecedented scale.

Meantime, we have a planet in deep crisis ecologically, economically and culturally. In deep denial. So what can we do about this? I am a positive person by nature, but like most of you who are reading this, I am not prepared to stand idly by while watching our planet burn as the new age charlatans push ever more “You are worth it” stuff at a public desperate for some release from the stress and pain we see everywhere.

So, to make a living and make a difference at the same time, it is really important that we penetrate the hype, deal with the reality we currently face, act from a balanced understanding of who we are and develop pragmatic options to create the world of our dreams.

i. Moving Beyond the Hype

If ever there was a time for personal and collective effectiveness and integrity, this is it. We have become ever more demanding of our politicians (though in many countries people are so apathetic they can’t even be bothered to turn out and vote). We are the first to complain about shoddy products, services and places- complaining on the internet is a new growth industry. Yet we are desperately short of real solutions being implemented right now in the face of the major challenges we all confront over the next decade.

I know that for most of you reading this right now, you are also fed up with this “junk-throwaway-careless” culture we have created. Most of you are mindful, caring, sensitive people who are making a difference in one or more ways through your life and your work. A few are desperately hoping that a 1% shift in consciousness is going to herald a new dawn for human civilization. Others believe that if only 11% of the planet “get it”, then the rest will miraculously convert to the cause and save the planet. Just don’t bet your life or our planet’s future on that anytime soon.

ii. Facing Hard Truths

So, let’s get real- it’s time for hard truths. What actual difference have you and I made in other’s lives? In the spirit of “charity begins at home”, how renewable and generous is our home and lifestyle? What good long-term decisions have we both made recently? Can we confidently look each other in the eye and say: “I’ve done what it takes to make a real difference in my life and work, and its working- I and others can see the difference. I also inspire others around me to take right action and live right livelihoods. I am scaling up the kind of impact I can make in my world, and helping others live their dream while living mine. Life is beautiful, and I am rich in many ways- inwardly and outwardly. Life is Good!” (Let’s call this the “Things are Really Working out Well!” outcome).

Or would the following more accurately describe how you are currently feeling: “I’ve acted out of good intentions most of the time, yet there is a gap between what I would like to see happen and what actually shows up. Just when things seem to be coming together while I am shifting into a new space, some kind of shit seems to hit the fan. Sometimes I wonder why I bother: people seem to be so self-centred and stressed right now. I desperately hope for a better future, but some days it seems hard to get out of bed. I know there is a crisis, so perhaps I should just keep my head down until it blows over and things get better”. (Let’s call this the “Why Bother?” outcome)

I am sure if we are honest with ourselves, even the best of us will have the odd day where “Why Bother?” dominates. In fact, in my own experience, after a strong phase of “Things are Really Working out Well!”, one can almost guarantee that setbacks will show up and that we will experience one or more “Why Bother?” periods. (Remind me to tell you why this is a common pattern, in my next blog!)

iii. Acting From a Balanced Understanding of Who We Are

Idealists are particularly prone to this syndrome, as they get more excited than most about the need and opportunities for change around them. We may be idealists for many different reasons: because we were born that way, or because we develop a vision of a better world and want to make it happen.

Each of us is a multi-facetted bundle of talents, traits and tendencies. Our strengths may be physical, emotional, mental and/or spiritual at a general level, and more specifically defined at a technical level in the thousands of fields and disciplines characteristic of a modern society. We are also motivated by different value systems at different times in our lives as we mature (our “vertical” development), as well as displaying our character traits through our personalities (our “horizontal” aspect), which tend to remain fairly stable over time. One of the most popular vertical measures of development is the integral/spiral dynamics approach, while the most popular personality test is the Keirsey version of the Myers-Briggs test. The Keirsey framework defines four principal personality types: idealists, guardians, artisans and rationals.

Idealists are the most likely of all types to resonate with the Boomer phrase, “Finding Your Passion”, and strive to find meaning and unique identity in their lives. Idealists are the group most attuned to values and seeking the greater good. Famous Idealists include Martin Luther King, Jr., Mahatma Ghandi, and Oprah Winfrey. As Abstract Cooperators, Idealists speak mostly of what they hope for and imagine might be possible for people, and they want to act in good conscience, always trying to reach their goals without compromising their personal code of ethics.

But Idealists are in a minority, comprising only 15 to 20% of the population. To get anything done on any scale, idealists need to gain the cooperation of guardians, artisans and rationals.

Guardians are the largest personality type group. Comprising 40 to 45% of the population, Guardians speak mostly of their duties and responsibilities, of what they can keep an eye on and take good care of, and they’re careful to obey the laws, follow the rules, and respect the rights of others. Guardians are “Concrete Cooperators.”

Comprising 40 to 45% of the population, Artisans speak mostly about what they see right in front of them, about what they can get their hands on, and they will do whatever works, whatever gives them a quick, effective payoff, even if they have to bend the rules. Artisans are “Concrete Utilitarians.”

The scarcest group of all are the Rationals, comprising 10 to 15% of the population. Rationals speak mostly of what new problems intrigue them and what new solutions they envision, and always pragmatic, they act as efficiently as possible to achieve their objectives, ignoring arbitrary rules and conventions if need be. Rationals are “Abstract Utilitarians.”

Whatever your personality type, pragmatism is the order of the day. We have limited time and resources to align ourselves around transcendent goals and create coherent solutions. They key is to find the balancing point between conserving what works and really matters to us (Guardians), living in the now for a full and rich life (Artisans), developing oneself and inspiring and growing others (Idealists), and finding clever solutions to difficult problems (Rationals).

When you’ve finished reading this piece, why not check out your own personality profile for free here to see if you are an idealist, or have a dash of idealist lurking beneath the surface: http://www.keirsey.com/personalityzone/wz21.asp

iv. Developing Pragmatic Options to Create the World of our Dreams

Each of us is a complex package of nature (our heredity and genes) and nurture (our culture and past life conditions). Our nature and nurture shape our personality and capabilities, which influence how we engage with and even create our current life conditions. Companies, institutions and networks also have cultures and capabilities which shape what is possible. Recent research into the patterns of success tell us that we are most likely to succeed when building on our strengths, rather than trying to remedy our weaknesses. They also suggest that pragmatic intelligence is the key to unlocking all our other intelligences and capabilities.

At the heart of Renaissance2 lies our commitment to support each of our members in their personal and professional development, as part of a thriving set of networks aligned by powerful meshworks which enable complementary strengths to collaborate and co-create new solutions and better outcomes. Accelerated learning and development are possible in such a hothouse of ideas, capabilities and inspiration.

Join Renaissance2 now if you’ve not done so already. Get involved in one or more of the Renaissance2 innovation crucibles and groups, and join us for our June R2 GreatShift Partner event in Perpignan to meet others like you. We look forward to meeting you!