Recognizing the Power of Social Innovation

The concept of “innovation” is often looked at strictly through the lens of creating new or improved products and technologies, but this is a very limited understanding of what it can be. While innovation can be a tool for generating growth and revenue, it can also simultaneously be used for a broader positive impact. Over the last few years, a number of major social issues have entered into the mainstream conversation around innovation. This has led to an increased interest in social innovation, with a wide variety of businesses looking to tackle real-world issues and address social challenges.

However, despite extensive research on the subject, scholars have very little practical knowledge about what makes an organization good at social innovation, making it difficult for those looking to get on board with the practice. Previously, organizations mostly focused on innovative ideas rather than innovative processes. Organizations that have cracked the code of social innovation have in common one simple practice: they pay a great deal of attention to the inner experiences of the people who work in them. Therefore, social innovation is less about understanding how people connect with external social landscapes, and more about understanding how people connect with each other.

There have been a number of recent trends that have pushed traditionally profit-focused businesses toward social innovation. According to a 2021 PwC report, 76% of consumers would end their relationship with a company that treats the environment, their employees, or their community in which they operate poorly, while 86% of employees claim that they prefer to support or work for companies that care about the same issues they do. Additionally, recent regulations have made it vital for companies to track and measure various ESG-related topics. The bottom line is that companies that invest in environmental and social initiatives demonstrate greater control over risk management, strengthen their brand image, and create better connections with stakeholders.?

Organizations that aren't used to tackling social issues might struggle initially, but there are steps that can be taken to align business success and positive social impact. They can start by focusing on specific aspects of impact, such as a specific Sustainable Development Goal and/or setting clear KPIs to benchmark progress. This can include metrics such as greenhouse gas emissions or diversity and inclusion percentages.?

In addition, businesses can look for partnership opportunities, scouting specific impact technologies and startups in relevant areas. Larger enterprises can sometimes struggle with social innovation efforts that require a great deal of agility, so partnering with social entrepreneurs can be a good way to deliver measurable results. For example, companies like IKEA have seen great success with programs that partner employees with changemakers outside of the business to support social change. Working closely with established social enterprises and non-profits is a great way to ensure that social innovation goals are having a real impact.?

Yet, perhaps the most important thing for businesses looking to generate social innovation is to prioritize the internal experience within their organizations. It might seem paradoxical for companies looking to innovate and address social issues to focus on the comparatively “smaller” internal issues, but the truth is that the cultural, economic, technological, and moral complexities that social innovation confronts are both internal and external. When members of an organization can speak openly and honestly about those issues, they are better able to develop innovative solutions for them.?

Social innovation cannot be done overnight. It takes time and commitment, just like any other type of innovation. But for those willing to adapt, the benefits will be apparent, both at a business and social level.?