3 Ways Socially Driven Companies Fuel Success

Socially Driven CompanyVery few business owners are driven solely by profits. In order to withstand the ups and downs of entrepreneurship, leaders must rely on the powerful emotional cues that got them started in the first place. For many entrepreneurs, focusing on profit alone is not enough to push through hard times and achieve success. It’s their social responsibility to their community, customers, employees, and stakeholders that keeps them afloat.

In March 2015, The Alternative Board sought to measure the impact of social responsibility on the success of varying businesses. Through a Small Business Pulse Survey of 350 business owners, TAB discovered that having a social purpose can create a competitive advantage for businesses. A deeper analysis of the survey results revealed how and why.

What is a socially driven company?

According to the survey, a socially driven company is one that is built around positively contributing to society. While the term can refer to nonprofit organizations, 75% of the companies that identified as “socially driven” also described their primary business goals as “results” or “profits.” Despite common misperceptions about socially-driven companies only existing for the greater good, most are profit-oriented businesses where owners manage their businesses to achieve results.

socially driven companyWhy socially driven companies are beating out the competition

When respondents were asked how their businesses fared against the competition, 48% of socially driven companies saw their business as being ahead of the competition, compared to 38% of their counterparts. On the opposite end of the spectrum, only 5% of socially driven companies described themselves as feeling like they were behind the competition, compared to 12% of their peers.

A closer look at TAB’s survey results reveal the three most likely reasons why socially driven companies feel they are enjoying a competitive advantage:

  1. Socially driven companies are more optimistic. Nearly twice-as-many socially driven business owners expect their revenues to sharply increase (26%) in the next year compared to other company leaders (14%). These numbers demonstrate that social leaders are substantially more optimistic about their future growth prospects.But does that optimism translate into success?Take it from Bert Jacobs, Chief Executive Optimist of The Life is Good Company, a man who founded his company entirely on the optimistic idea of having a good attitude:“Optimistic leaders focus on opportunities. Optimism is magnetic. Optimism enables open-mindedness, and open-mindedness enables collaboration, creativity, and problem solving. Optimists invent solutions that become genuine points of difference in the market. And points of difference in the market build healthy businesses.”
  1. Socially driven companies exhibit stronger personal vision. When socially driven owners were asked how they would rate their company’s vision and sense of purpose, 19% selected a 10, while only 5% of other owners selected the same rating. Other owners were generally more likely to select a 7 or 8 for the strength of their company’s vision. “A strong personal vision can be a powerful motivator,” says TAB Vice President David Scarola. “It clarifies where you want to go and what you need to do to get there.”Establishing a strong personal vision is a key factor in devising a strategic plan, a critical tool for business success. A previous survey from TAB concluded that 91% of business owners could increase their revenues by using a strategic plan. “With a strong vision and accompanying plan, business owners are better positioned to seize the kind of opportunities that can increase sales, revenues, profits, and lead to further opportunities,” Scarola adds.
  2. Socially driven companies incorporate their community. Socially driven companies put people at the forefront of their business – a proven driver of success.45% of the businesses surveyed saw their companies as a fixture in the community that they served, compared to only 16% of other businesses. In her article, “The Power of Giving Back: How Community Involvement Can Boost Your Bottom Line,” Lindsay Lavine writes “Companies that encourage community involvement distinguish themselves from their competitors, and see many benefits, including loyal customers and happier employees” – both of which play an important role in increasing your business’s bottom line.socially driven companyAccording to the survey, 85% of socially driven companies strongly agree that their business pursues win-win relationships with employees, customers, and other key stakeholders. Here’s a breakdown of how and why winning these relationships can create a competitive advantage:
    • Employees: A recent Harvard Business Review survey on “The Impact of Employee Engagement on Performance,” revealed just how important a high-performing workforce is to the growth and survival of any business. According to the survey, “a highly engaged workforce can increase innovation, productivity, and bottom-line performance while reducing costs related to hiring and retention in highly competitive talent markets.” When employees feel respected and involved they are likely to contribute a higher level engagement, meaning increased productivity and decreased turnover. This is a huge competitive advantage for any business in any industry.
    • Customers: TAB’s January 2015 survey on what business owners wish they had done differently revealed that 80% of survey respondents wish they spent more time developing customer relationships than developing new products and services. Fostering an authentic relationship with your customers builds long term loyalty and unleashes the power of referrals.
    • Stakeholders: More socially driven companies strongly agree that they listen closely to what their stakeholders think of them (68%) than other businesses (55%). This is an important relationship to foster. Working cohesively with external partners can result in many revenue-generating benefits, such as reduced capital from lenders and lower costs from vendors and contractors who enjoy working with your business.

With optimism, vision, and a sense of community, socially driven companies continue to pave the way for innovation. By establishing the greater purpose of “positively contributing to society,” they find themselves better equipped to face the many challenges of entrepreneurship – planning, managing, selling, and simply staying positive from day to day.

The Alternative Board’s peer advisory model fosters a unique environment of community and encourages its members to do the same. If you’d like to increase your social involvement as a leader, get in touch with your local TAB board.

 

Taking a Break, Guilt Free

work life balance

Are CEOs opposed to taking time off from their jobs — even if being overworked leads to reduced productivity and executive burnout?

The vast majority of American employees, CEOs included, work longer than what was once regarded as a “typical” work week. As much as 85.8 percent of males and 66.5 percent of females put in more than 40 hours a week (many chief executives work much longer than that).

“The hours spent at work add up,” notes Jeff Bagdigian at The Massachusetts Daily Collegian. “They turn into weeks, monthly and, ultimately, years. The average American will spend decades of his or her life at work.”

Think about it — decades of your life committed to work, at the expense of time spent with family, engaged in creative or spiritual pursuits, or simply relaxing and enjoying the world around you.

By contrast, many European countries (such as Portugal, Germany, France and Spain) either offer or mandate their employees to take six weeks of paid vacation, as well as paid time off for public holidays — up to three times as many vacation days as offered by most American companies.

But do more hours spent in the workplace and in the C-suite result in greater productivity?

Not necessarily, says Glen Stanberry, co-founder of Gentlemint. Where Americans work approximately 1,804 hours a year, Germans average about 1,436 hours a year. “With those numbers, it would be easy to conclude that Americans do more and would be more productive in the workforce,” Stanberry says. “But we don’t. Studies show that Germans get roughly the same amount of stuff done in fewer hours each week, and with more vacation time.”

CEOs Going Off the Grid

Increasingly, chief executives are seeing less ROI in excessive work hours and no opportunity to replenish themselves. With others on his executive team, Tim Miller, Chairman and CEO of Rally Software, started a company-wide sabbatical program in 2010, based on a simple criteria: Every employee who completes seven years of full-time service becomes eligible for six weeks of fully paid leave.

“The adventure does not have to be work-related,” Miller says, “and we encourage our employees to do something grand — to pursue a passion, to think big, to go deep.”

Miller took advantage of the sabbatical program himself, spending six weeks on a sailing expedition through the Gulf of California with his wife and their dog. He achieved the goal that Rally first had in mind when instituting the sabbatical policy: “Reward the dedication and contribution of long-time employees with a break that allows them to return recharged, refreshed, and relaxed.”

work life balanceGreg Koch, the hard-working co-founder and CEO of San Diego-based Stone Brewing Company, has also embraced the sabbatical concept. Since its founding in 1996, Stone Brewing has become the 10th largest brewery in the U.S., selling nearly 6.6 million gallons of craft beer in 2013 alone.

In addition to his time-consuming responsibilities in the office, Koch is a popular speaker at beer and business conferences. All of the hours at work and on the road add up.

Last year, he alerted his executive team and employees that he planned to take a four-month sabbatical beginning in February 2014. “I wanted everyone to know there are no health problems, no mental problems,” he said. The purpose was to “recharge his creative batteries.”

Koch’s itinerary during that time included travels to New Zealand, Australia, Tasmania, and Southeast Asia. He made a commitment to go off “the communications grid,” with only a select few colleagues and friends knowing how to reach him.

How To Make it Happen

Choosing to take a sabbatical acknowledges the toll taken by an around-the-clock work ethic.

“For many of us, more work leads to more stress and a lower quality of life,” notes G.E. Miller of 20somethingfinance.com. “Stress is the #1 cause of health problems — mentally and physically. And there are few things that stress us out on a consistent basis like work does, especially when it takes away from 
all of the other things
that life has to offer.”

If the time feels right to embark on a rejuvenating sabbatical, small business author and coach Lori Osterberg offers these practical steps:

  1. Determine your purpose. “Sabbaticals aren’t meant to be over-planned, but they do require focus,” Osterberg says. Think about where you really want to go and what you really want to do, and build a plan around those ambitions.
  2. Pick a date and stick to it. A vague notion of when you plan to embark on your sabbatical likely means you’ll never actually get around to it. Pick a date, mark it on your calendar and stick to it. A firm date “gives you a timeframe to work towards, and allows you to set up small steps that will lead you to success.”
  3. Just let things happen. Your leave of absence doesn’t have to have specific goals and objectives attached to it. Just the opposite — enjoy each day as it comes and see where the experience takes you.

work life balance

 

Peter LaMotte is a Senior Vice President at LEVICK and Chair of the firm’s Digital Communications Practice. He is also a contributing author to LEVICK Daily, where he routinely writes about social media marketing and online reputation management.