How the Leaders of Change are Translating Intention into Impact
“Doing well by doing good” is nothing new—in theory, at least. Over the past two decades, corporations of all sizes have invested in CSR or gone the shared value route, reengineering parts of their businesses to drive positive social impact. And one of the most encouraging signs of a turning tide in business is the new focus on delivering long-term value for all stakeholders. From the investor side, we have seen Larry Fink of BlackRock leading the way with his CEO letters of 2018 and 2019, urging businesses to take social and environmental risks more seriously, and to incorporate positive social impact goals into their strategies. More recently, Business Roundtable, an exclusive group of the CEOs of leading companies in the United States urged “leading investors to support companies that build long-term value by investing in their employees and communities.” This is a watershed moment, as top CEOs and investors now acknowledge they need to change their ways.
With all the power, scale, and good intentions of the private sector’s embrace of “purpose,” we have barely scratched the surface in solving climate change, poverty, inequality, food security, access to healthcare and education, and more. Listening to business, government, and NGO leaders alike, I don’t believe the lack of progress on these challenges is due to a lack of corporate interest or understanding of the urgency; I believe it comes down to the very simple fact that most of these corporations don’t actually know how to affect change at a scale proportional to their global footprints. Given their structures and the incentives presented by their investors, they simply were not designed to do so. With fresh incentives presented to corporations from internal and external pressures, we are now 18 months into a new reality—one that represents a tremendous opportunity.
How, during a time of transition, when many investors and corporations appear aligned in a move away from shareholder primacy and short-termism, might these corporations leverage the best of their resources to foster social progress at a scale that assures our planetary future, while meeting necessary business objectives?
I believe that part of the answer lies in accepting the inherent limitations that spring from most companies’ design foundations. Public corporations were originally designed with shareholders first in mind. Actively learning from scaled social enterprises that were designed to change the world has the potential to inform the next generation of corporate citizenship, shared value, or corporate purpose in a way that is truly transformational.
Actively learning from scaled social enterprises that were designed to change the world has the potential to inform the next generation of corporate citizenship, shared value, or corporate purpose in a way that is truly transformational.
Take, for instance, the Jaipur Rugs Company, one of India’s largest manufacturers of hand knotted rugs. Headquartered in Jaipur, India, the company’s operations span across 20+ branches, six states, and 600 villages in India with distribution to over 40 countries. Founder NK Chaudhary’s desire to sustain the centuries-old craft of rug making began 40 years ago with the basic human values of dignity and compassion, and now engages a network of 40,000 artisans at the grassroots level—silk farmers, spinners, and weavers—most of whom are women from underserved communities.
Companies like Jaipur Rugs have this exceptional level of impact because they are designed to change the world from their beginning. Jaipur’s business model is designed to empower every stakeholder within the product’s creation to take ownership and unlock their dormant potential. Promoting social enterprise at the individual level graduates artisans from being mere wage earners to owning their own business. Artisans receive payment without exploitation and training in areas such as leadership enhancement, functional literacy, and health initiatives. They earn and learn to invest in their families and communities. They dream and innovate. “Since most artisans involved are women, increased income will mean meaningful contributions in alleviating poverty. We perceive this concept as the perfect vehicle for rural development and an important role in social responsibility,” says Yash Ranga, Stakeholder Engagement Partner.
At PYXERA Global, we are embracing the social enterprise example as we embark upon a new collaboration with Jaipur Rugs, the Association of Ghana Industries (AGI), and the US-Africa Development Foundation (USADF). The complex partnership seeks to replicate the success of a truly-scaled social enterprise, Jaipur Rugs, in the entirely new geographies of Ghana and Ethiopia with a different, but related, product—woven cloth. The African Artisan Community Engagement and Export (AACEE) initiative will foster new businesses designed to serve employees and communities, while also delivering profit. To bridge this gap between challenges and opportunity, AACEE takes advantage of the proven Jaipur Rugs model to build new enterprises designed from the start to serve all stakeholders.
The lesson big business can glean from the Jaipur Rugs and AACEE example, now that influential leaders have publicly committed to redefine their raison d’être, is this—meeting a company’s revised purpose may not be straightforward, but it is possible to learn from successful social enterprises that truly understand the communities and employees they serve. Only through an authentic relationship with stakeholders, one that unveils consumers’ and employees’ wants and needs, can business begin to serve them effectively.
In this issue of the Global Engagement Forum Magazine, we explore the latest approaches to achieve enduring progress amid increasing complexity. We look through the lens of design thinking and a social enterprise model’s potential to accelerate the delivery of social alignment with business, whether in developing leaders for the future of work, transitioning to a circular economy, or addressing access to energy, education, and healthcare. From government to foundations to multinational companies, learn how the leaders of change are aligning internal goals, pursuing strategic partnerships, and designing to change the world.