When we think of business, the motto typically has been, “a deal is good if it is best for me.” Today, social entrepreneurs inspire us with a new motto, “A deal is good when it is good for all concerned.” Moreover, most business gurus have not used words like “joy” and “generosity” to talk about the bottom line, nor do we typically think of business creating a sustainable global economy. Yet, for increasingly more entrepreneurs, that is just what is happening. For many, these are our new heroes and heroines.
Our New Heroes and Heroines
The dictionary defines “hero” as “a person noted for feats of courage or purpose, especially one who has risked or sacrificed his life.” A new kind of hero is emerging. They are not famous politicians or soldiers, yet they have improved the lives of millions of people and made the world more secure.
Their weaponry is not of guns and war, but of creative ideas, dogged determination, and a deep belief in their power to change the world. These “social entrepreneurs” are bringing life-changing tools and resources to people desperate for solutions. They are the many businesses that are becoming more socially conscious.
For these entrepreneurs, the bottom line is about more than profit, it is also about people and the planet. They align business strategy with the goals and values of broader society by focusing on the social, environmental, as well as financial contributions of a company. They help to build communities where employees are happy to work, live, and stay, and thereby build stable businesses and communities.
What are They Doing?
Perhaps the most well-known hero can be seen in the story of the Gameen Bank, one of the most successful development organizations in the world. Founded by Muhammad Yunus in Bangladesh in 1976, the Gameen Bank has extended small loans for self-employment to more than two million woman villagers and has helped to lift hundreds of thousands out of poverty. The Gameen bank’s ‘trickle up’ approach has inspired the creation of hundreds of “micro-credit” programs around the world and helped to reshape international development policy.
Another example is that of Susan Davis, a powerful woman in finance; who maintains a down-to-earth candor that resonates caring, authenticity, and concern. She lives in a small town in Wisconsin, and is thrilled at growing an organic vegetable garden. Yet she has created networks among some of the nation’s wealthiest families, foundations, women business owners, and socially conscious investors. She educates money managers about the win-win opportunities for socially responsible investing while giving them the tools and contacts to do the job. This helps them to create socially conscious businesses and practice.
The Big Question: Finance
One of the biggest questions about socially responsible business is: Do socially responsible companies perform better financially? One of Susan Davis’ concerns has been whether this approach is supported by hard research. On this, evidence from meta studies is in: Social and environmental responsibility does go hand in hand with superior financial performance.
A meta-study is distinguished by being a study of studies. It covers years of research from a variety of perspectives, which lends to its greater authority. A most impressive and rigorous was done by Orlizky of the University of Sydney, Australia, and Frank Schmidt and Sara Rynes at the University of Iowa. What were their findings? A statistically significant positive association between corporate social performance and financial performance. It does not take rocket science to understand why socially conscious businesses do better. The businesses are centered on values and mission, and employees are more engaged around a purpose, which makes it easier for the firms to handle external change, turbulence,and crisis. It builds reputations and enhances relationships with investors, while attracting better employees and maintaining goodwill. The firms do better and run better. With the current economic crisis, these new social entrepreneurs help to bring hope to all of us.