Who wouldn’t want their business to have a strong social purpose? Organisations that embrace a social mission, measure their social impact, and create value for all their stakeholders—including employees, customers, communities, and the environment—are better positioned to overcome challenges and drive long-term success.
It is well known that low productivity continues to hold Scotland’s economy back, and the numerous challenges of recent times have presented many unforeseen obstacles to progress. In this context, having a clear social purpose can provide significant advantages.
The Competitive Advantage of Social Purpose
There is a drive toward public service commissioning from local authorities and other publicly funded bodies that may provide opportunities. However, this has created a fierce, competitive tendering environment. In this landscape, the social value or community benefit that an organisation can offer is increasingly important.
Even the largest private sector organisations are looking at how they can demonstrate their social impact. In procurement scoring, this can often be equivalent to 5-10% of the total score possible. This presents a strong argument for ensuring your business has a social purpose, but there are other compelling reasons as well.
Core Organisational Strengths
To successfully integrate social purpose and demonstrate social impact, businesses need to ensure they have the right foundation in place. Investment-readiness research has identified several key elements that are essential for organisational viability and sustainability:
- Strong leadership and strategic purpose
- Right people, skills and business model
- Positive engagement with clients/customers
- Strong alliances and partnerships
- Robust management systems
- Effective and efficient delivery
- Credible evidence of impact
These elements are covered in our Investment Readiness workshops and in the work we do with clients, both small and large, to measure social value.
Social Purpose is an Essential Ingredient
We believe social purpose in business is linked to the first element above of “Strong leadership and strategic purpose”. It is essential for several reasons. While a business is there to deliver returns to investors or shareholders, it also provides employment opportunities and support to staff, as well as essential services to its clients. Crucially, businesses can gain significant advantages by reporting on the difference they make to people in the community.
We work regularly with clients that support people in the community through preventative interventions (such as Aberlour Children’s Charity) that lead to significant savings for the public purse. Businesses can make a difference through:
- Participation in employability programmes (such as the work we are doing with Amazon UK)
- Offering mentoring, work-placement, training or apprenticeship opportunities (again like we are doing with another Amazon UK programme)
- Donation of premises, capital equipment, software or other in-kind support targeted at areas of need and disadvantaged people
These community benefits, economic benefits and environmental benefits can be described as the social value an organisation delivers.
Purpose ties into the key elements listed earlier, where a strong purpose can build commitment in the team, leading to positive engagement with clients and customers, more effective delivery and greater impact.
The Benefits of Measuring and Communicating Social Value
Where organisations can measure, report and communicate the social value they deliver, there are clear advantages:
- Competitive Edge in Tendering: As mentioned earlier, many potential clients wish to engage with organisations that share their aims to support people and planet.
- Employee Attraction and Retention: Employees and potential employees are keen to work for an organisation that has a genuine commitment to people and planet. This can lead to:
- Attracting talent and increased employee engagement
- More diversity of thought
- Increased staff productivity
- Increased loyalty and staff retention
- Reduced hiring costs
- Customer Attraction and Loyalty: A YouGov survey from February 2022 found that more people say business purpose and values influence their decision to buy1. This can result in:
- Attracting new customers
- Increasing customer loyalty and trust
- Improved brand awareness and increased trust
- Investment Opportunities: A strong social purpose can attract new sources of investment.
- Environmental Benefits: Businesses with a social purpose often focus on:
- Reducing resource costs
- Reducing their carbon footprint
The Triple Bottom Line: People, Planet, and Economy
Businesses are now looking more at the Triple Bottom Line:
- People: Supporting employees, customers, and communities
- Planet: Caring for the environment
- Economy: Generating value for shareholders
The Scottish Business Monitor 2021 Q3 survey showed the business base believes businesses should play a purpose-driven role in society2.
Creating Solutions for People and Planet
Many more businesses would benefit from embarking on their own business purpose journey. The business case is strong and the ethical case for change is clear. This can lead to:
- Delivering excellence to customers
- Partnering fairly with suppliers
- Supporting communities in which you work
- Generating value to shareholders
- Caring for the environment and planet
- Investing in the skills and wellbeing of employees
Conclusion
A business that empowers employees and shows commitment to people and planet can experience improved productivity, be a better place for staff to work, and deliver benefits to the local community. The question is not “Why should your business have a social purpose?”, but rather, “Why wouldn’t it?”
We can help organisations clarify their purpose, engage their key stakeholders to define and agree a simple purpose statement. As we have done for many voluntary, community and social enterprise organisations and those in the private sector, we can measure the impact of their work.
Ready to unlock the power of purpose for your organisation?
Contact us today to learn how our expertise in social impact measurement and helping organisations get investment ready can help you.
Contact: david@socialvalueb.org.uk
Footnotes
- YouGov survey, February 2022
- Scottish Business Monitor, 2021 Q3 survey
