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How Businesses Can Be Good For Solving Big Social Issues

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A while ago a colleague of mine vented to me that her girlfriends didn’t get what she was doing. Rather harshly, her friends insisted she needed to get a “real” job, one that paid a competitive salary and would set her on the road to success.

I told her to forget it, they were just corporate sell-outs. Take that, girls!

As someone who’s always known I’d work in the public/non-profit sector, I’ve felt comfortable putting the private sector in a box. I’ve unabashedly teased my friends who work in finance (someone has to make sure the wealthy stay wealthy!) and lazily grouped businesses together to make unfair, sweeping statements.

While it’s been easy to cast myself as the protagonist, heroically fighting the injustices caused by greedy businesses, over time I’ve realized that this kind of thinking is both delusional and harmful. I’ve even come to believe the opposite- instead of casting off the private sector as the problem, we should look to it as the solution.

Michael Porter, a business strategist and Harvard Professor, says so much in his TED talk, which I highly recommend you check out.

If not, I think the little teaser beneath the video gives you the gist:

Why do we turn to nonprofits, NGOs and governments to solve society's biggest problems? Michael Porter admits he's biased, as a business school professor, but he wants you to hear his case for letting business try to solve massive problems like climate change and access to water. Why? Because when business solves a problem, it makes a profit — which lets that solution grow.

So what’s his case. Essentially, Michael confronts the conventional wisdom that businesses profit by causing social problems like exploiting their workers, harming the environment, etc.

Instead, he argues that businesses profit by solving social problems. There are tons of examples of this. Way back when, Henry Ford proved that by investing in his workers (he doubled their salary) he was able to decrease costly turnover and increase productivity. Similarly, studies have shown that when companies invest in the health of their workers, the same workers take fewer sick days, and are more productive. AND, what surprised me most, was learning that companies that make environmentally sustainable choices actually benefit from more than just good PR. Clean energy sources are sometimes more expensive upfront, but often end up being cheaper in the long run, and environmentally conscious companies save themselves from having to deal with future governmental regulations and fines down the line.

Now that we’ve established why it’s in businesses’ best interest to act responsibly, let’s talk about the one thing that they have over the public sector- MONEY. I can tell you from experience (not that it should be surprising) that nonprofits, NGOs, and governments are in a constant uphill battle when trying to finance projects. It never ends. Successful businesses, however, generally have more financial resources available to them (this may not be true in absolute dollar per dollar comparison, but large, successful companies do have more spare capital than many governments and definitely have more than nonprofits and NGOs). So what would happen if they used their power for good?

Already, tons of businesses have a shared goal of earning profits while doing good. This concept, described by the Harvard Business Review, is called Shared Value. HBR defines it as “policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates.”

Ever heard of TOMs shoes? Warby Parker sunglasses? or THINX underwear? Each of these companies sells a product, while creating impact. However, instead of relying on the generosity of donors, they’re self-sustaining through sales. This is the direction where we need all companies to head!

Then, you have companies like Unilever- one of the world’s largest soap manufacturers. Unilever realized that India was a major, untapped market- with approximately 70 million people who never use soap. According to its website,

It was decided to create a new programme with the bold objective of educating 200 million Indians – 20 per cent of the population - to wash their hands with soap after defecating and to achieve this goal within five years.

The campaign, called Swasthya Chetna, meaning ‘Health Awakening’, is the single largest rural health and hygiene education programme ever undertaken in India.


Speaking about the program, Hindustan Lever Lifebuoy Brand Manager HarpreetSingh Tibb adds,

“Swasthya Chetna is not about philanthropy. It’s a marketing programme with social benefits. We recognise that the health of our business is totally interconnected with the health of the communities we serve and if we are to grow sales of our brand, we have to increase the number of people who use soap”.

Shared value. So awesome!

It blows my mind when I imagine what kind of world we could create if more businesses followed the examples of these incredible companies. And what better time than now? The rivalry between public and private is officially over. Together, we can create the world we want to live in.

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