The Changing Face of Business & Civil Society

Helen Goulden on why taking a broader notion of civil society takes us to a place where there is the potential to collectively focus on an issue or challenge… if we have the courage to take an unflinching gaze at some of the root causes of some of our challenges as a sector.

 

It’s been interesting to see the Government’s Civil Society ‘Listening Project’ taking such a broad view of civil society – which is described as all those outside of the public sector who share the mission of building a strong society and improving lives, regardless of traditional sector boundaries.

The evolution of this definition has a logic, given the rise of social enterprises and mission-led businesses all seeking to improve lives. And yet the definition is challenging in some ways. It challenges us to trust that those who are running commercial businesses are able to prioritise and value their social impact as they do their financial returns. It challenges us to dismantle a traditional notion of any particular sector that ‘owns’ civil society and negotiate our perceptions (both real and imagined) of who has the moral authority and practical power to effect change when it comes to increasing the wellbeing of our people and planet. It potentially takes us into an almost boundary-less place that includes everyone from Unilever to my Aunty Doris, decreasing the likely-hood of us having a shared, consistent understanding of what civil society is – and wrapping ourselves in endless debate on definitions. Which would be a bad thing.

But what it does enable us to do, is to look at all of the assets, resources and sources of power that are able to be mobilised outside government and directed toward tackling challenges we face; whether these are collective challenges that face us all, or specific challenges that face only some of us in a particular place. And in that sense, any person, community, organisation or business that is in the business of improving people’s lives and strengthening our society, could be argued as being as valid as any other. And being able to bring business more deliberately and positively into the conversation about ‘collective impact’ is welcome – and long overdue.

A broader notion of civil society takes us to a place where there is the potential to collectively focus on an issue or challenge, bringing the many different levers and assets we have across the sectors to bear – which can only be a good thing.

If we have the courage to take an unflinching gaze at some of the root causes of some of our challenges.

Taking such an expansive view of civil society – one that includes the for-profit sector – will not feel satisfying unless we look beyond remedies to acute individual problems, and towards tackling some of the environmental/systemic causes of those problems; which will be uncomfortable and problematic for some parts of the commercial sector.

For example, ‘Mental Health First Aiders’ does well to address the acute issue of mental health in the workplace. This and other initiatives are to be hugely applauded and supported. But if we understand that those in insecure work are nearly a third more likely to suffer from anxiety and depression, then this also demands we look at the issue of insecure work, not just third sector provision of remedial aid for the problems insecure work can induce.

Looking at underlying causes– or understanding the lived experiences of those who are not served well by a particular system or practice – is not comfortable or easy – and to do so is often to enter complex and sometimes contested territory. But a broader interpretation of civil society that opens up conversations about underlying causes has to be at the root of a cross-sector notion of civil society. And government might helpfully incentivise and support such conversations to take place.

But if there is (and in general, there is) a view that business has a definite role to play in building a stronger society and improving people’s lives, what are the routes for larger businesses to reach into this more challenging space of addressing upstream prevention of social problems?

The Journey we’ve travelled…

Many of us will remember the days when corporate and business philanthropic activity – was about community engagement and ‘giving back to communities’ – a tacit and probably unconscious recognition that something that been taken from society, requiring some form of reciprocation. This usually involved various forms of engagement with local communities that were completely – and often deliberately – unrelated to core business activities.

Then came Corporate Social Responsibility, which sought to align philanthropic activity with business strategy, skills and capabilities. Vodafone focusing on innovations like M-PESA and vast troops of accountants, programmers, for example. Meeting a very clear unmet need and redirecting their local fence painting activities towards putting their professional expertise to good use in charities and communities.

Then around 2011, we saw the very earliest signs of the idea of Shared Value; the idea that the success of a company, and the society in which it was part, were mutually dependent. An increasing recognition that successful, profitable businesses are dependent on a healthy society and environment.

And while we’ve seen a rise in B-Corps and mission-led businesses, the burgeoning recognition in existing corporate businesses of the need for shared value has been accompanied by (in the main) a lack of excitement or innovation about how, as a business, to set about making that transition.

And in so many ways this isn’t surprising. There are many competing demands on businesses; declining margins, uncertainty in the markets, for the UK we have the uncertainties of Brexit, all sitting alongside the very real and inherent challenges of bigger businesses being able to do any kind of big change quickly and the necessity of shareholder appetite for change.

It’s not surprising that we haven’t seen as swift an evolution toward Shared Value as we might like.

So why get excited now? Two big reasons.

  • The wide adoption of open innovation in the commercial sector

Corporations and businesses across Europe are readily and regularly looking outside their own organisations to invest in, support, partner with and acquire smaller organisations who can help them rejuvenate their brand, access new markets, solve business problems more quickly, at lower risk and create a more entrepreneurial mind-set within executives and employees. Over one third of European accelerators are run by or heavily supported by corporates and 45 of Europe’s largest 100 companies do some form of corporate venturing[1]. This trend has become a practice; a culture of looking outward to innovate – usually to smaller organisations.

Increasingly, businesses are also looking towards more open engagement directly with their customers as a way of directing their business and product development. And some entirely new business models, epitomised by the likes of Quirky and Local Motors are entirely porous, ‘thin client’ businesses that mobilise external communities of designers, makers and manufacturers to develop, build and sell products into the market.

In other words, bigger businesses are embracing a culture of working with other, usually smaller, organisations to evolve and innovate their business. This is becoming more normal.

Meanwhile, elsewhere, we see….

  • The continued swell of social enterprise and mission-led businesses

There’s no denying that we’ve seen a whole wave of change in organisations outside the commercial sector. Where once NGO’s, philanthropic institutions, community activities and charities were the mainstay of our social consciousness, the landscape has shifted fundamentally in the last decade or so. The expanding number of organisations blending the mixed motives of financial returns and social impact and growth of asset locked social enterprises and co-operatives across the UK is expanding the spectrum of ways and means in which we can create social value, reduce inequalities and protect our environment in the business realm.

The increasing volume of social enterprises, mission-led businesses and the infrastructure of social investment means that deal-flow is beginning to diversify and grow. And the UK Government’s mission-led business review estimated 4.3% of turnover in the UK private sector was from mission-led businesses.

As bigger businesses become even more culturally open to partnering, investing and acquiring smaller organisations to achieve various business goals and there is an increasingly attractive number of mission led and social businesses on display (who often lacking the brand, reach, capital and infrastructure to scale to a national level or beyond) it might not take a tremendous amount of engineering to incentivise and accelerate a cycle of interaction between those two worlds; working toward Shared Value in pragmatic and incremental ways.

This isn’t just about deploying capital into social investment funds to generate some mixed motive returns. This is about actively seeking out ventures that represent a ‘better version of you’ – that look like your future.

So what now?

There should be a signalling of support for corporate venturing into social enterprises and mission-led businesses. The UK Government’s Inclusive Economy Partnership is a worthwhile endeavour to foster collaboration between corporates, the third sector and ventures seeking to build social value. Collaborating on ventures that increase employee engagement, lead businesses to adopt new tools that drive social value is all good. But collaborations can sometimes lack long-term ‘stickiness’; they can nibble at the edges of problems and they often fail to give enough attention to underlying causes.

So let’s take that once stage further, by actively encouraging corporate social venturing; where we see more routes for large and medium sized businesses to enter into long term joint partnerships with mission-led businesses – or businesses that fundamentally have a different relationship with their employees. How many businesses that respond to Office of Civil Society’s Strategy Consultation– or how many replied to, or were engaged, through the Civil Society Futures Inquiry will be interesting to see.

For our part, the Young Foundation will be reaching out to as many small to medium sized businesses as we can; to share their perspectives on their role in civil society. You can share or respond to the SME version of the survey here.

[1] https://www.nesta.org.uk/blog/winning-together-guide-successful-corporate-startup-collaboration

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