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The business of social impact

The Charities Aid Foundation (CAF) revealed that in 2015, 401 million Indians helped a stranger.

Piyush Mehra   New Delhi     Last Updated: April 11, 2018  | 19:53 IST
The business of social impact

The world admires non-profits for their positive intent and idealism. They are also widely perceived as slow and clunky. To counter this, donors and implementing organisations must adapt their mindset and learn from businesses. Having transitioned from strategy consulting to a public health non-profit that takes pride in being close to the field, I see a clear role for business thinking in social impact.

Here are seven mindset shifts that are called for in the development sector:

Charity to return on investment

Businesses are highly focused on measuring returns on their investments. But they often see their giving as random acts of kindness. There is little to no scientific measurement of outcomes. The Charities Aid Foundation (CAF) revealed that in 2015, 401 million Indians helped a stranger. Conversely, less than fifty percent of donors review their portfolio even once a year, according to Bain & Co.'s India Philanthropy Report, 2018. This is hard-earned money. Donors must hold implementers accountable and evaluate returns on their social investments. They could look at two types of returns: direct impact on a social condition (for example, lives saved, children educated, mishaps averted, systems strengthened) and/or indirect impact on their core business (for example, investing in an organisation working on public health could enhance their understanding of people's health needs). Good giving can also be good business.

Beneficiaries to consumers

Businesses invest large sums in market research to understand customer needs. Many successful organisations address customers as partners and co-creators. Many non-profits view beneficiaries as mute recipients who need saving. In my experience, community has all the answers. Ask them, respect their views and involve them in solution development. Consider the Ekjut program. It is a remarkable example of participatory women's groups taking ownership of their maternal and child health and nutrition. Customer-centricity is taken for granted in business. Social impact should be no different.

Seeking perfection to thinking scale

'Time-to- market' and 'first-mover advantage' directly influence business success. Huge investments are made to develop strategies that enable companies to reach customers quickly and at scale. This should be even more important in the development sector, with lives, livelihoods and futures at stake. Yet, many visionary programs spend years working in small geographies, in search of the perfect solution. One understands the need to garner irrefutable evidence in drug development. This effort is wasteful when the solution is a managerial intervention based on common sense. Would stakeholders accept a bank spending years 'perfecting' its solution in few villages?

Hunch to data

Intuition based on experience is good-to- have. It is truly powerful when backed by data. In the non-profit sector, one often hears that data is not available or that it is unreliable, or we will have to wait for the next big survey. Decisions are often taken based on opinions or feelings. Businesses don't always have granular data either. They make reasonable estimates based on available data. Key is to use smart analysis that combines data with common sense to devise an action plan. 400,000 children in the age group one month to fifty-nine months die each year in India. 50.5% of these deaths i.e., over 200,000 deaths are attributed to pneumonia and diarrhoea. Yet, they receive much lesser attention than illnesses affecting far fewer people.

Monitoring to empowering sales force

Businesses and non-profits alike monitor field staff closely with regular reporting. The difference is that businesses provide their salesforce market intelligence and data to succeed. Without this data, each salesperson is groping in the dark. Feedback from salespeople directly feeds into product development. In non-profits, field staff's role has traditionally been restricted to implementing pre-approved guidelines / processes and mechanical data collection. Insights from the community are often lost. Staff lose the inclination to be creative, develop their own strategy and take data-backed decisions. Field staff needs to be empowered with requisite tools and information to achieve desired impact. In Rajasthan, frontline health and nutrition workers in villages - Accredited Social Health Activist (ASHA), Anganwadi Worker (AWW) and Auxiliary Nurse Midwife (ANM), or AAA, have started to approach data collection and sharing rigorously. They use shared information to prioritise care for high-risk beneficiaries such as anaemic women, neonates and malnourished children.

Administrative caps to paying for talent

Non-profits require top talent and skilled management, but shy away from paying for it. A Bridgespan study in 2017 showed that only two percent of Indian non-profits use funds for executive coaching. As entrepreneur and humanitarian Dan Pallotta said in his TED Talk, "you want to make 50 million dollars selling violent video games to kids, go for it. We'll put you on the cover of Wired magazine. But you want to make half a million dollars trying to cure kids of malaria, and you're considered a parasite yourself". Businesses attract the best talent by meeting their personal and professional aspirations. Non-profits working on humanity's most compelling problems, do not get to employ the best minds. Look at the Government of Singapore. They offer some of the best-paying jobs and attract top talent. It is no coincidence that the country routinely tops various global rankings.

Competition to collaboration

Limited availability of philanthropic funds often causes cut-throat competition for grants in the non-profit sector. Knowledge-sharing and synergistic collaboration remain limited though there are obvious benefits. Businesses are fiercely competitive and protectively guard knowledge. But value supersedes other concerns. For instance, Apple sources important components for the iPhone from its principal competitor, Samsung. In the process, Samsung is estimated to have made more money from the iPhone X than its own product, Galaxy S8. In an age when businesses are going open-source, why wouldn't non-profits follow suit? Non-profits arguably represent the toughest management challenge. They attempt to solve the most ambiguous problems. Ambitious goals are to be achieved with limited resources. Having worked in both business and development sectors, I believe that business thinking needs to meet social spirit to address humanity's biggest challenges.

Piyush Mehra is the CEO, Antara Foundation. He has worked in management consulting with Arthur D Little, KPMG and Deloitte. Share your feedback at piyush.mehra@antarafoundation.org. He tweets at @iamPiyushMehra

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