Big business is becoming increasingly interested in social innovation.
There are 4 key reasons why the C-Suite in these companies see social innovation as an opportunity to build competitive advantage for their organisation:
1. New Products and Services: Social innovation strategies can provide a gateway to new products and services. GE took the plunge with Ecomagination. Thanks to a heavy investment in developing products designed to solve environmental challenges, revenue in this line of business has grown from $6 billion in 2004 to $ 17billion in 2008.
2. New Markets: Directly connected to the first, companies see social innovation as an enabler to better understanding new markets in emerging economies (base of the pyramid markets). Many mainstream financial services companies are carefully assessing microfinance applications and actively looking for partnerships with organisation operating programs in areas such as microinsurance. Developing markets often seek these services in order to accelerate economic growth and improve personal security, and financial services companies must learn to address these needs if they are to remain relevant to this growing market segment.
3. Differentiation: A robust social innovation strategy provides a powerful way to differentiate a brand in an increasingly crowded marketplace. Pepsi realized this when preparing their annual Super Bowl strategy. Instead of spending millions of dollars on yet another 30 second celebrity-filled advertisement extravaganza, they decided to avoid the chaos all together and invested in the new Pepsi ‘Refresh Everything’ campaign. This campaign is designed to allow the public to vote on ideas that ‘have a positive impact on the US community’ – the winners of this vote are granted funds from a $20 million pool that would otherwise have gone to a more traditional Superbowl plug. This has turned into a massive win for Pepsi. Not only are they seeding socially innovative ideas through their fund, but according to Neilsen, Pepsi’s ‘Refresh Everything’ campaign accounted for more than 21% of the media coverage and online buzz around Superbowl advertising.
4. Employee Engagement: Companies realize that employees are what make organisations succeed. And that employees are people who, more often than not, work harder and better when what they are doing is connected to something that makes them feel good. Accenture cracked this code by offering its consultants an opportunity to work with NGOs through their ADP program. Not only does Accenture benefit from having employees that are thrilled to be given the opportunity to use their skills to help make the world a better place, but the NGOs are able to access top talent that can provide the input that can dramaticly improve their operations.
For more on our thinking related to social innovation – please check out our recent article in Social Enterprise Magazine ‘Irresistible Attraction’.
