The Swiss Green Economy Symposium 2018 #6th edition ist the occasion to discuss in depth the meaning of sustainable profitability. The innovation Forum #12 questions the possibilities of using performance indicators to measure impacts on society and on environment. ROI ist one tangible indicator but it isn’t sufficient to mesure the impact on society or environment. What are the best options we have? ROS, ROE,… or different KPIs?
ROI is the indicator we usually use to calculate the impacts of on investment. In our business setup we generally have a strong capability in defining the investment amount but the return is in most of the cases somewhat blur. The main question we raise in business: is it in our budget? If the answer is yes, we go for it. Business cases with a strong analysis of the return on investment of a campaign or project is the exception and when it’s properly done, we always expect macro level and macro thinking.
What do we generally expect from a sustainability investment. By that we mean an investment in a field outside “formal” thinking, outside the scope of a business. This investment isn’t part of the classical account classification and definitely not part of any budget. Sustainable investment has no budget. Therefore the business case is an absolute necessity. The aim of the management is to try making tangible what is by nature intangible. Investment into sustainability belongs for a large part to intangible assets. It’s an investment where we’re not able to exactly measure the return for the business. What will bring this investment in return? As a consequence, we tend to reduce the scope to the fields we know best: reduction of consumables (energy, water), reduction of production costs, reduction of environmental risks… This belongs to 90% to the CSR policy and strategy of a business.
But what about investing for the good into the society, targeting a longer return on investment that could be measured in KPIs like: integration rate of social disadvantage population, level of happiness of a region, amount a disable population having access to public transportation… ? Have we invested enough time into understanding what would be the benefits for society and for a business if the investment would be more societal driven than capital driven?
There is a relationship between Investment into society and ROI and ROS: Investment in society increases the sense of purpose, which increases the identification of employees and fosters emotional loyalty to the company. The translation of the emotional loyalty into KPIs is quite simple: Employee involvement, quality of service, productivity, fluctuation, absenteeism, innovation, customer focus,… The impact on profitability is definitely not to underestimate! Another favourable factor is the reputation increase of the business which have an impact on loyalty, repurchase rate, customer experience, market shares, brand values, new customers (access to market)…
In our business cases and if you have a look at the huge amount of PhD research material in this field, you’ll notice, that the impact of sustainable investment amounts on average:
- -2,7% cost reduction (% of total turnover)
- +4,7% turnover increase (% total turnover)
And we’re not referring to the impact on society itself. This comes on top. Of course this will depend on what business model you choose to invest into society and how deep you’ll be able to root it into your organisation and into the society.
Society.Vision’s business model and approach is one key to take the win-win-win benefits of investing into society. There are big wins for the society, for the employees and for the business!
Have a look at the programm of the innovation forum 12 at the SGES 2018: https://sges.ch/if12-2018/
Do you want to take the slot and perform on a rope? We’re talking about a balance performance act. The Swiss Green Economy Symposium 2018 was the occasion to literally show with David Dimitri that sustainable profitability is a matter of balance. To focus on balancing societal and economic goals makes us all progress on the sustainability path. It is easy to understand but apparently more difficult to carry out.
Finding the balance between return on society, return on equity, return on environment is the challenge we all face. It is a real performance act. If we look at the performing arts, we see artists using their voices, bodies or inanimate objects to transmit their artistic expression. And at the Swiss Green Economy Symposium, there were the great occasion to see David Dimitri represent as a metaphor the need to find the right balance between the company and its environment.
This performance is an illustration that the world of possibilities is open. It is the illustration that a business is part of an ecosystem where each decision has a positive or negative impact. Neutrality does not exist in this environment.
If we are able to design in our minds the flows of values between capital market, enterprises, employees/citizen, society/environment, what do we see? An imbalance in the relationship between value and values. In fact we can oppose the value (money) to the multi-purpose value (human, societal & environmental values). Capital market is still 99,9% focused on value creation slugging multi-purpose values to churn it into money. To find the balance would mean that capital market should start integrate multi-purpose values. This signal would invite enterprises to invest into more multi-purpose value creation and break the vicious circle we’re in.
At the CXPA (Customer Experience Professionals Association) conference held in Zürich on October 4th, I presented how meaningfulness could increase the emotional binding of customers or citizen to a brand in the first hand. Many (not to say all…) of customer experience (CX) activities are based on immediate return on investment (ROI) and the main driving force is data management: having control over customer’s data seems to be the sacred grail every manager is focused on. Programmatic advertising is the end result of Google developments to communicate to customers the right thing at the right time, avoiding unnecessary expenses to catch attention. But customer experience is more than communicating the right thing at the right moment: It‘s also a question of Behavior, isn‘t it?
We have to understand under behaviour its broadest sense. How do a business and its employees behave? The code of conduct is a differentiation factor which is neglected because harder to put in place and we like to rely on hard facts like KPIs. To measure empathy or the real long-term impact of an investment on a social or societal project is much harder than to rely on sales volume linked to a promotion. VALUES is the plural Value, it is definitely more than only transforming material and immaterial things into an amount of money.
Generally speaking, culture is what remains when all else is forgotten. In the same way we can state that VALUES remain when VALUE [money] vanished. The logic tells us that we better concentrate our attention, efforts and energy into values. We should not exclude the value [Money] but find the balance between value and plural value.
Finding the right path from Value [money] to VALUES is finding the way to answer the WHY question: why do we work on this business? What is the sense of purpose of our business? Does it make sense to focus only on short-term profitability, ROI, stakeholder value? Is right or good enough to gamble on the capital market? Which VALUES are attached to our business behaviour?
Most of us would consider the WHY question with a feeling of failure. We fail to drive a business into a virtuous circle where the plural value is at the centre. This despite the fact that the meaningfulness or sense of purpose has a tremendous positive impact: internally on employees and externally on customers. Employees’ behaviour is linked to VALUES that are engraved in its DNA: Lack of VALUES, lack of behaviour. The management has the power to developing VALUES and to focus on more meaningfulness’ commitment. This is an investment that definitely will sustain the long-term financial and societal profitability. Focussing on VALUES means enlarging the strategic view of a business. It is a way to let go on profitability centred activism to rely more on the ecosystem the business is into. It is using the power of a new “ecosystem -thinking” to innovate and find a way to produce a larger sense of purpose for employees and at least customers and citizen.
Focusing on VALUES is the beginning of a virtuous circle that is beneficial for employees and customers, for the society and last but not least for the shareholders. Because the societal engagement of a business has a positive impact on ROI too, on a longer term! It’s not gambling, it’s investing. For Good!
Society.Vision’s business model and approach is one key to take the win-win-win benefits of investing into society. There are big wins for the society, for the employees and for the business!
Monsieur le Président de la République,
Une solution pour rétablir l’équilibre entre finance, Administration publique, économie et société est la défiscalisation de l’investissement sociétal de l’entreprise !
Toute entreprise qui investit 10% et plus de son résultat net opérationnel avant IS dans les actions à but non lucratif ayant un impact positif sur la société est exonérée de l’impôt sur ce financement. L’impact sur l’action sociétale, sur l’emploi dans le secteur associatif, sur les ONG et les initiatives solidaires est une des clés du mécanisme. L’entreprise bénéficie également d’effets positifs avérés en termes de rentabilité et d’innovation.
Je souhaite m’entretenir avec vous des possibilités de ce modèle disruptif qui se base sur la responsabilisation de l’entreprise qui devient un acteur politique dans le prolongement de l’action de l’État. Le livre joint à cette lettre est la source de ce modèle qui est opérationnel.
Vous souhaitant de joyeuses fêtes de Noël et dans l’attente de débattre avec vous et vos équipes de ce concept, je vous prie d’agréer, Monsieur le Président de la République, l’expression de ma plus haute considération.
Hugues Chatelain
SocietyVision
As a matter of fact, “charity expenditures” are most likely to be perceived as “Green Washing” or “social washing”. Why have we reached this level of disillusion or fatalism? One answer could be to question the focus on the short-term perspective and on shareholder value. Anyhow, considering actions for the good of society and the environment as a cost to be charged on behalf of good conscience is too simplistic. A solution is to start considering societal initiatives like real investments with strong ROI at the end. It is by far a better way of re-considering the purpose of a business. Why?
Because societal and environmental investments increase profit and reputation of business!
This has been well documented over the past 10 years and it isn’t a utopian way of seeing the business world, wearing charity or philanthropy glasses. No doubt, there is positive impact on the profitability of a business investing into societal and environmental programs. On the one hand the corporations’ reputation in the market and the motivation of its employees are increasing. Results: revenue growth and cost reduction. On the other hand, considering society and business as an ecosystem unleashes the ability to create and innovate. Investing into its ecosystem means for a corporation to rethink its vision, integrate the values of all stakeholders and not solely focus on shareholder value in a short-term perspective. Depending on the organisation and business model a corporation decides to implement, the impact on profitability could reach up to +20%(*) Earning After Tax (EAT), reducing costs by -2,5%(*) of turnover and increasing turnover by +5%(*).
Society.Vision’s organisational model and approach, which brings business and non-profit organisation (NPO) together, provides these figures. The organisational format proposed creates a virtuous circle based on the increased meaningfulness and its internal and external impacts on the identification of customers, employees and stakeholders to the brand of the business. The identification process brings among others reputation, motivation, attractivity, satisfaction in the forefront of the business and positively influence basic KPIs such as productivity, access to market, brand awareness and others that all are measurable. The figures mentioned above are based on meta-studies, benchmarks and pilot projects.
The organisation format that allows cooperation between business and NPO promotes also the company’s innovation process. The main drivers are a broader knowledge of the ecosystem and the interactions between society, environment and business. It’s a creativity-based approach that opens up to a different way of thinking and that is less focused on until now a single financial and growth aspect of companies.
Overall, we can say loud and clear that there is another way of doing business for the benefit of all stakeholders. Let’s talk about the evolution of corporate culture to create positive impact on society.
Society.Vision advises business owners, CEOs and NPO management organisation on how to implement a new business model that has a positive impact on return on investment (ROI), return on society (ROS) and return on environment (ROE).
(*) Calculation based on universities meta-studies, benchmarks and pilot projects of Society.Vision
Are there any other options that could fulfil the task at minor costs and with positive impact on innovation, profitability and societal progress?
The answer is a big YES. We are actually very much stuck in a Cartesian way of thinking which quite reproduces the same processes and stick to involve best engineers, best IT-specialists, best geeks, majors at the universities. That’s all good. But is it good enough? Hiring the best of class people doesn’t mean we’ll have at the end a systemic understanding of the ecosystem the business is in. One reason I would note is the lack of thinking diversity. The absence of philosophers, sociologist, psychologists and the whole range of professions from the social sciences, life sciences and physical sciences and manual professions limits the outcome. But hiring experts in all the fields is costly and does not provide certainty on the “right” outcome. It’s difficult to find certainty anyway regardless of the solution you implement.
What could be a solution to make sure a company has a thinktank in place that provides great outcome internally as well as externally at low cost or even free of charge? Involving company’s stakeholders in a cooperation structure to design solutions which are linked to environmental and economic progress is worth it. Many companies experienced it within their CSR process. Generally, this process involves many or all parties of the life cycle of a product. And that’s a great thing.
Based on this experience, why not having a permanent thinktank within a company which unleashes the full potential of progress capabilities through the connection of brains covering various competences and fields of experiences? This happens when cooperation is made possible within the company and organised with stakeholders who could balance the antagonisms between profitability/social good/environment. Bringing an appropriate non-profit organisation into this cooperation structure would be a positive addon from a cost and creativity perspective.
Society.Vision’s organisational model and approach, which brings business and non-profit organisation (NPO) together, provides figures that supports its economic impact as well as the societal impact (read previous article “Societal investments increase profit and reputation of business”). This kind of organisation with a functioning cooperation structure involving parties from the company and its stakeholders as well as from the NPO and its stakeholders provides a permanent thinktank for the company and for the NPO. In fact, there is a positive impact in both directions, towards business and society/environment. The defined solutions consider the whole ecosystem, where many parties can make their voices be heard.
The proposed organisation format that allows cooperation between business and NPO promotes the company’s innovation process with the creation of a powerful internal thinktank. The main positive impacts are a broader knowledge of the ecosystem and the interactions between society, environment and business. It’s a creativity-based approach that opens up to a different way of thinking and less focused until now on a single financial and growth aspect of companies.
On top of the beneficial impacts on innovation, the setup of the organisation as an impact on profitability and its ROI is positive. The model generates sufficient returns (cost reductions and turnover increase) to be auto-financed and to at least increase the EAT (earning after tax). Would that make sense to business owners and CEOs?
Society.Vision advises business owners, CEOs and NPO management organisation on how to implement a new business model that has a positive impact on return on investment (ROI), return on society (ROS) and return on environment (ROE).
When two environments benefit from eachother with a common goal: to improve their impact on society. This is the story of a partnership between Euromaster Suisse SA & Accademia Dimitri (university affiliated to the University of Applied Sciences and Arts of Southern Switzerland).
What happpens when a company decides to avoid using mainstream marketing tools & communication streams? What if a company decides to put more than half its marketing budget into a long term societal project? How would the main stream management actors react?
Breaking the golden business rules learnt at university and business schools would mean in every case taking risks. We do not learn enough to try something different which could have an impact within the company and on society. We don’t necessarily speak about huge impact but it all starts with lesser impacts, which when accumulated achieve more and create value for both society and business. It is all about having the courage to question habits and dogmatic theories of a system which seems no longer to achieve progress in a societal direction but mainly (only?) in growth. Growth and financial return on investment is the mantra. Dealing with progress is different. It means combining those energies, which, at first sight, seem to be contradictory. And our society needs to replace principles of growth with principals which target a balance between Profit, Planet & People.
Taking the initiative and investing half of your marketing budget in a societal project with a high impact is an act of courage that most of us should cherish, support and actively try to implement. In fact its not all about courage but about common sense.
The nurturing of a different way of thinking and doing has a tremendous impact on innovation and on how we all percieve our environnement. This fosters new ways of solving problems, of adressing complexity and of coping with outstanding solutions which have a chance to be more progressive and have a positive impact on society.
The experiment launched between Euromaster Suisse SA and Accademia Dimitri shows, from the beginning, that the two organisations thus achieve a mutual benefit. The partnership project between the two entities has one common goal: to build an inclusive movement to trigger a changed mindset recognizing the necessity to invest in environmental and societal sustainability. The project focusses at first on Sustainable Development Goals (UN Global Compact SDGs) Nr.10 Integration and Nr.13 CO2 emission’s reduction. Accademia Dimitri is engaged on all 17 SDGs and translates each goal into a vision : “What would the world look like if every goal is achieved?”. Euromaster Suisse SA commited to recycling 100% of its tires and be the initiator and promoter of a movement towards a better world, including Business & Arts.
Putting money (50%+ of its total marketing budget) and human resources into that project combining Business & Arts is for Euromaster Suisse SA a call to all the actors of the economic world to re-orient themselves so as not only to reduce the negative impact of their company on society but, above all, to create positive impacts thereon0.
What if a business decides to avoid using mainstream marketing tools & communication streams? … The company profits from this opportunity to fuel new energies and produce innovative ways to motivate society, people and PROGRESS forward! This is a fact.
SocietyVision shows at the ELIA Biennial in Helsinki what can be achieved by linking business, society and art. The association’s collaboration with the Dimitri Art School demonstrates the benefit of art to society: academic art used as an instrument to transform society.
From 23 to 26 November 2022, Helsinki is hosting the 17th ELIA (European League of Institutes of the Arts) Biennial. It is one of the largest European art school conferences on art research and cultural education. The last ELIA Biennial was held in 2020 at the Zurich University of the Arts (ZHdK).
This year’s event is under the motto “No stone unturned” and thus confronts the discourse on the importance of art in times of climate crisis, inequality and political conflicts. The biennial aims to promote solutions that address the needs of the environment, art and social justice by bringing people together and uniting them. The slogan illustrates the urgency of not letting anything pass that could contribute to solving the current challenges of humanity.
Under the sign of this slogan, Hugues Chatelain, founder of SocietyVision, wishes to give impulses during the biennial on how art can be associated with a company to illustrate the impact of responsible engagement in and for society. For Chatelain, art is an instrument that inspires companies, motivates their employees and can invite shareholders to assume long-term social responsibility. In collaboration with the Accademia Dimitri University School, he presents his approach to cooperation at the Helsinki session, based on his own practical experience: a new concept of a sustainable and profitable relationship between companies and society. His aim is to show how important it is for companies to make their commitment to society a priority, especially now, in times of economic uncertainty. His model shows how investment in social purpose, which goes beyond the usual CSR (Corporate Social Responsibility) measures, leads to significant positive effects, including increased profits.
SocietyVision helps businesses accomplish their contribution to society. We connect business with the right NGO in a long-term and sustainable way to accomplish their contribution to society.
- We improve corporate reputation in the long term
- We create a successful social & economic vision
- We intensify the intrinsic commitment of employees
- We increase the profitability of the business
At Society Vision we believe that the decisive differentiating factor for the business is its long-term societal commitment.
“We’re going our path to further increase our impact on society. Our aim is to bring culture and the economy closer together. To this end we’ve chosen to build a new societal model with Society.Vision. The Dimitri-World partnering with a business for a long-term collaboration: this is what we want to achieve”. David Dimitri, Artist and President of the Foundation Dimitri.
Society.Vision defined a new business and societal model. A Non-Profit-Organization (NPO) and a business can benefit from each other when they work together. Society.vision’s business model is suitable for this. The Dimitri-World and the business will be brought together in a new format and bridges will be established between the two organisations. This is how the synapses of the two organisations communicate; this promotes know-how development, creativity, efficiency and economic improvements.
The company finances the Dimitri-world and increases de facto its footprint within and for the society. Every employee is aware that a part of its own value is directly reinvested into the society, through the Dimtri-World’s mission and its increased dedication to it. The customer also is aware of his impact for the good when he buys products and services of the partnering company. The involvement of the business into the society is anchored in its DNA.
The bridges built between the Dimitri-World and the business – for example a sustainability committee, a financing committee, an expert committee or innovation / incubation farms, program development meetings… – will favour the exchange of views and know-how between the two organisations. This broadens the perspectives an eases the innovation process, which is definitely a key for success. There are two very different worlds performing together but still being independent.
“We fascinate, stimulate laughs, smiles and boost feelings of the spectators. What we do at partnering company side is to free the teams and the management to simply create their dreams and release a lot of energy to make things exceptional happen”. This is one aspect of the strength of a strong partnership. On the other side, as President of the foundation, as Board member of the Accademia and as small business entrepreneurs David & Masha Dimtri and all employees of the Dimitri-world can give a different blinking angle on the highest floor of the partnering business. They’ll be guarantor of greater sustainable and social impacts. They’ll convey a lot of positive energy within the business. They see themselves as fellow thinkers who bring another facet that can be very useful. “We feel our “customers” – it’s our audience – when we are on stage. You can’t be that close. We cannot afford à-peu-près, it would be dangerous or the performance would not be at the appropriate level to be sustainable. And we feel this immediately and directly. We can convey that’’.
The forecasted cooperation is on its way; follow us to get informed on the latest progress.
Society.Vision’s business model and approach is one key to take the win-win-win benefits of investing into society. There are big wins for society, for employees and for business.
Teatro Dimitri program: http://www.teatrodimitri.ch/de/programma-2018/