The Benefits of Doing Well, and Doing Good

Can companies do well by doing good? To my mind, almost all companies are able to make profits while solving a problem rooted in society. For instance, Hemant Sahal, a VIT University undergraduate, has created Callmat, a chemical product which makes water fit for drinking. Sahal’s business has great potential to thrive, because the product is cheap and can solve a common problem in India. In an interview by the Spanish newspaper La Vanguardia, Sahal claimed that if he can not invest the profits made in society, he will have failed in his project.

According to Rosabeth Moss Kanter, who writes here, if a company can integrate the benefits that it offers society more closely into its existing business, that integration can be very sensible and beneficial for the business. Moreover, she highlights that some smart companies are finding that including a focus on benefiting society in their mission can help yield competitive advantage by creating a corporate culture that leads to high performance and profits.

On the other hand, Kanter argues that there are a number of reasons why incorporating social good into strategy can improve a company’s long- term performance.

• Can help motivate employees.
• Help to maintain a cohesive culture despite the diversity.
• Can help spark innovative thinking by exposing employees to new ideas and perspectives.

Also, the writer points out that the reason many companies now want to enter emerging markets is because those markets are growing. But companies are discovering that there are so many social and environmental needs in emerging markets and those needs can be a good source of new product or service ideas that people will pay for.  For instance, in November 2006, Danone launched a yoghurt called Shoktidoi, designed to provide a response to the nutritional needs of Bangladeshi children at an affordable price.

Furthermore, for surviving, companies have to do some good for society to continue doing well financially. Fundamentally, companies that are not somehow doing good will eventually have problems. For Kanter, information about a company’s behavior anywhere in the world is more readily available to people all around the globe. That is why most companies try to invest part of their benefits in their Corporate Social Responsibility programs.

In conclusion, Kanter agrees that thinking about creating societal benefits through business should be part of setting strategy. If, as a business leader, you start thinking deeply about growing your company, in the future that means thinking about unsolved problems and unmet needs. Solving some of those problems and addressing some of those needs can, if done well, benefit both your company and the larger world.