A new working paper out of INSEAD tracks the growing trend of Corporate Social Entrepreneurship. CSE is different than traditional corporate social responsibility, which seeks to distribute firm resources in order to comply with legal and community ethical standards. With CSE, firms establish business units dedicated to solving a particular societal issue, utilizing corporate resources and skills in order without the explicit goal of gaining that expenditure back. The people who directly benefit from CSE initiatives are not necessarily related to the firm.
The authors of the paper, Christiane S. Bode and Filipe M. Santos explain, CSE initiatives are, “are the work of social intrapreneurs who are responding to perceived shortcomings in society and utilize the resources of the firm to provide market based solutions to address them.”
The motivation of social intrapreneurs lies outside the firm, rather than folded inside it. But, the research shows, while Corporate Social Entrepreneurship seeks to create value for external stakeholders, the work may ultimately benefit firms as well, in the form of increased employee engagement – retaining disaffected high performers, strengthening bonds between employees, and providing lower-pressure real world opportunities for skills development.
Corporate Social Entrepreneurship and Employee Engagement
Bode and Santos provide a few examples of successful CSE initiatives to help illustrate how they work. First, they describe Accenture’s Development Partnerships, which provide discounted top-tier consulting services to NGOs and development agencies while enabling employees to use their business skills to “make a difference in the world.” The company absorbs the overhead costs and consultants take a pay-cut to participate. Second, they name the affordable housing project of the French multinational LaFarge, a cement and concrete company. Through the program, the firm operates in the gray and unregulated markets to meet housing needs of Indian slum-dwellers. Thirdly, the paper cites Novartis’ social business unit which combines NGO health care expertise with efficient business practices to provide health care access to 42 million people across India. While the program was never intended to generate a profit, it is nearing the break-even point, Bode and Santos point out.
One of the key characteristics of the CSE initiative is that is created and driven by the personal motivations of a passionate individual (the social intrapreneur), for example – they are usually founded by someone who has an “extreme” level of job satisfaction (either very high or very low). They in tern, seek out the support of other colleagues for the program, which is the basis for how CSE initiatives create stronger engagement by creating personal ties between successful employees.
In fact, these kinds of initiatives are all about people. Usually with traditional business initiatives, people sign on to support it because it has proven to create value for the firm (or because the logic behind it will create value in the future). But, as Bode and Santos explain, success in CSE initiatives is not measured in terms of the financial value it can create for the firm. It’s a whole different kind of logic – one based on outcomes external to the firm – which means gaining the support of colleagues is based on emotional and personal connections.
Social intrapreneurs must generate buy-in from powerful colleagues who have access to firm resources, and in particular, they tend to seek out the support of colleagues who would normally be viewed as nay-sayers. Having these people “on their side” serves as a way to attract more people to the call, thus creating a workforce groundswell in support of the program.
Secondarily, many employees and business unites won’t be able to throw financial support at the initiative until it has shown signs of success. Early on, the paper explains, support is likely to come from other employees in the form of time or talent, another way personal bonds are strengthened by the initiative.
Finally, these programs present an opportunity for corporate employees to learn and deploy a completely different set of business skills. Not only does a CSE initiative mean setting up an on-the-ground office, hiring, and encountering other operations challenges involved in program growth, the internal challenges behind setting up an initiative are those of politics, power, and influence. Learning how to garner internal political capital and then learning to mobilize that support support are key factors in leadership development. The CSE initiative presents a unique opportunity for individuals to develop their own skill sets. The CSE initiative presents unique benefits to a firm in terms of employee engagement and leadership development – and can help companies retain valuable high performers who may be ready to leave the corporate space for what they perceive as a more fulfilling career.