The New Business of Business: Innovating for a Better World

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The New Business of Business:
Innovating for a Better World
By Philip Mirvis and Bradley Googins
Businesses today face three interlocking challenges: shareholder
demands for growth, employee desire for meaning from
work, and rising public expectations that they address social,
economic, and environmental challenges. This Giving Thoughts
article describes how leading firms are tackling these three
challenges simultaneously by turning to corporate social
innovation (CSI). By investing in new innovation sources and
methods, including partnerships with social entrepreneurs and
employee “intrapreneurs,” they are generating new products,
unlocking markets, and engaging in creative philanthropy—all
of which address social challenges while supporting business
reputation and growth.
What Is Corporate Social Innovation?
Innovation is a key driver of business growth and essential to sharpening and sustaining
competitive advantage. But as core as innovation has been to the DNA of successful
companies, it has not been an integral part of their engagement with society. That is now
changing. As this brief illustrates, companies large and small, domestic and multinational,
are taking this core competence and applying it to pressing social issues.
GIVING THOUGHTS

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These firms are drawing on employee talents and core business assets to co-create
innovations with social sector (and other stakeholder) partners. They are engaging in
corporate social innovation (CSI), which the authors define as follows:
Corporate social innovation is a strategy that combines
a unique set of corporate assets (innovation capacities,
marketing skills, managerial acumen, employee
engagement, scale, etc.) in collaboration with other sectors
and fi rms to co-create breakthrough solutions to complex
economic, social, and environmental issues that bear on the
sustainability of both business and society.1
CSI has developed over the past two decades, building on traditional corporate
social responsibility (CSR) activities in ways that embed social impact more directly in
corporate strategies, activities, and partnerships. The table below gives an at-a-glance
overview of this evolution.
Roots of CSI
The idea of CSI began in the developing world as a way to create new markets to alleviate
poverty. In the early 1990s, Grameen Bank, launched in Bangladesh by Nobel Peace Prize
winner Mohammed Yunus, introduced micro-credit lending whereby villagers could pool
their modest savings and get small loans. The model was emulated by Mexican cement-
maker Cemex, which gave customers technical assistance and loans to design, build,
and fund improvements in their housing. It was further extended with the path-breaking
partnership between Hindustan Lever (Unilever’s business in India) and Project Shakti,
whereby the company trained poor women who were members of self-help groups to sell
hygienic soap and toothpaste directly to consumers in nearby villages.
Table 1
What Makes CSI Different?
Traditional CSR Corporate Social Innovation
Philanthropic Intent Strategic Intent
Money, Manpower R&D, Corporate Assets
Employee Volunteerism Employee Development
Contracted Service Providers NGO/Government Partners
Social and Eco-Services Social and Eco-Innovations
Social Good Sustainable Social Change

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But corporate innovation to address social challenges is by no means focused solely
on developing countries and base-of-the-pyramid markets. Rather, it is moving into
global product portfolios and leading-edge technology. In late 2010, for example,
Unilever unveiled its Sustainable Living Plan to, among other aims, reduce the environ-
mental impact of everything it sells by one-half, while doubling its revenues. To engage
consumers, Unilever and Walmart partnered in a promotional campaign to save water.
Packaging on shampoo and conditioner products informed Walmart customers that
families could “save up to $100 and 3,200 gallons of water per year by turning off the
water when you shampoo and condition.”
On the smart technology front, IBM’s Watson computer is treating cancers through
cognitive computing. The super-computer has been used at Memorial Sloan Kettering
Cancer Center to analyze patient records, medical studies, and clinical-trial results to
help physicians make treatment decisions. Specifically, it connects patients’ genomic
data with “evidence-based” treatment options and can also match patients with the best
available clinical trials.
What Is Driving CSI?
Businesses today confront three interlocking challenges. First, few large firms produce
significant revenue growth, relying instead on cost cutting, reengineering, and industry
consolidation mergers to meet profit targets. Second, many companies face increased
public and stakeholder expectations to play their part in addressing social, economic,
and environmental challenges. Third, they are grappling with a daunting “employee
engagement” gap, especially among young people looking for meaning from work. For
example, the 2015 Gallup Engagement Index found that the percentage of U.S. workers
engaged in their jobs averaged 32 percent. The majority (50.8 percent) of employees
were “not engaged,” while another 17.2 percent were “actively disengaged.”2
How these challenges, and related business opportunities, are combining to drive
CSI, is explored below.
1 Societal challenges are prominent on the corporate radar The world faces
a plethora of pressing and potentially destabilizing challenges. Slow economic
growth and a growing wealth gap. A warming planet. High youth unemployment
in U.S. inner cities, southern Europe, South Africa, and the Middle East. A
technology revolution yielding unprecedented connectivity and access to infor-
mation. With the decreasing power of nation-states to address these matters, and
the inability of civil society to do so on its own, business is beginning to engage
diffi cult social, economic, and environmental issues because stakeholders expect
it and because such actions are required for its own sustainability. A 2015 global
survey of more than 3,000 investors and corporate executives, by MIT Sloan
Management Review and The Boston Consulting Group, found that 75 percent of
senior executives in investment fi rms see a company’s sustainability performance
as materially important to their investment decisions. Nearly half said they would
not invest in a company with a poor sustainability track record.3

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Venturing into this new territory also brings opportunities. John Browne,
former CEO of BP, contends that the ability to “connect” with society is
the new frontier of competitive advantage for companies.4 Many socially
innovative companies we studied map a range of social, political, economic,
and environmental issues relevant to their business in terms of risks and
opportunities. Several regularly consult with a variety of stakeholders to set
their social investment and innovation priorities.
2 Traditional corporate responses to these challenges are not suffi cient
Companies have traditionally addressed societal challenges through their chari-
table giving and corporate social responsibility (CSR) and sustainability initiatives.
Now leading fi rms are taking a more robust approach with moves toward more
strategic philanthropy, development of a comprehensive environmental agenda,
and experimentation with “shared value” principles in their global supply chains
and product development (see What Makes CSI Different?).5 All these moves
require new kinds of innovations and innovation processes.
3 Meeting social challenges requires “innovation in innovation” Many companies
have well-developed innovation protocols and innovation teams that can
encompass R&D, product and marketing units, and their sales force. But these
processes and personnel are oriented to innovation for traditional corporate
markets and in line with commercial criteria. Confronting social challenges
requires outreach from fi rms beyond their usual customer base into communities
and populations in need. Social value propositions hinge on multiple and often
non-fi nancial investment criteria. Novel product, program, or platform ideas must
be tailored to local circumstances in design and implementation.
4 Employees are eager to be engaged in social innovation Increasing numbers
of young people in the U.S.—where millennials now make up the majority of the
workforce—and worldwide, want to do meaningful work. The Deloitte Millennial
Survey 2016, covering 7,700 young people in 29 countries, reported that inter-
viewees want businesses to focus more on people (employees, customers, and
society), products, and purpose—and less on profi ts. To creatively address this
engagement and retention challenge, some companies provide employees with
innovative pro bono service assignments working with local businesses, NGOs, or
government agencies to address social challenges. In others, employees advise
and mentor social entrepreneurs to accelerate their growth and enhance their
capabilities. Other fi rms sponsor internal innovation contests where employees
gain funding for practicable social and eco-innovation ideas.
5 Social innovation often involves multi-party collaboration Companies increas-
ingly collaborate with a wide range of external partners in developing their CSR
thinking and agenda. Complex problems call for complex solutions and organiza-
tions from different industries and sectors bring unique and essential assets to
the work of social change, often pushing fi rms toward a more radical CSI stance.
Firms we have studied often engage external partners early on to refi ne their
understandings of social issues and inform and shape an innovative response.

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6 Social issues are business opportunities According to management sage Peter
Drucker, “Every single social and global issue of our day is a business oppor-
tunity in disguise.”6 And companies are clearly devising social innovations with
business as well as societal value in mind. Many promising social innovations,
however, cannot generate fi nancial returns equal to typical commercial invest-
ments. Hence, socially innovative companies also take account of the relationship
and reputational gains to be made from innovation partnerships, and apply a
longer-term horizon to expected fi nancial payoffs. Some support their innovations
through “blended-fi nance”—with funding from both the corporate foundation
and the business, or from social investors and partners.7 Most important, the
social investment decisions and management are conditioned on producing
measurable “social impact.”
CSI Building Blocks: Roadmaps for Companies
Companies moving into CSI may have to rethink current business models, or devise
entirely new ones; develop new ways of making, selling, and distributing goods and
services; and forge new kinds of partnerships. Emerging research documents how top
companies meet these challenges. Clayton Christensen and colleagues, for instance,
have highlighted how “catalytic” social innovations can enhance health care, education,
and community economic development. John Weiser and co-authors demonstrate how a
diverse range of companies have developed innovations that create social and economic
value in “underserved” markets. And C. K. Prahalad and colleagues have documented
how co-created innovations can create value in emerging markets and often be trans-
ferred to the developed world. 8 These studies and the practical experience of corporate
“early movers” described in this brief suggest at least five key elements to consider and
address as companies move into CSI.
These elements—Purpose, Strategic Intent, Partnerships, Process, Results—are summa-
rized in the graphic below. To assist companies looking to explore CSI, each element is
then described in detail, with case studies, in the following section.
Chart 1
Building Blocks of Corporate Social Innovation
Purpose
What is our social
vision? What assets
and competencies
do we bring to
social innovation?
What needs, risks
and opportunities
are we addressing?
What social
innovation can we
offer to the world?
Strategic Intent Which partner(s) are
best suited to work
with us to co-create
this social
innovation?
Partner How are we going to
design, develop, and
launch this social
innovation?
Process What are the
benefits to our
business and
society?
Results

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Building block 1: The power of purpose
What does it take for a business to drive innovative social change? This research suggests
it begins with a compelling corporate vision of a better world, a high-minded and
actionable mission, and complementary, inspirational values. These conditions give inter-
ested employees a “license to innovate” and enable companies to invest time, money,
and talent in societally-relevant R&D which has a longer-term and often more intangible
payoff than conventional, strictly commercially-driven innovation programs.9
Many companies committed to social innovation reach for a higher purpose. Dow
Chemical, for example, states its purpose in this way: “Dow people include some of the
world’s best scientists and engineers dedicated to solving global challenges. We focus
our innovation engine on delivering new technologies that are good for business and
good for the world.”10 Research has found that top companies use a BHAG—a “big hairy
audacious goal”—to bring vision to life and stretch innovators’ thinking.11 Dow’s BHAG
was to achieve, by 2015, three breakthroughs that “will significantly help solve world
challenges,” and its R&D team delivered with the following commercial innovations:
• Heart-healthy Omega 9 Oils (derived from canola and sunflower seeds) that have
zero trans-fat and the lowest amount of saturated fat among commonly used
cooking oils. (To date, their use has eliminated more than one billion pounds of
trans- and saturated fat from the North American diet.)
• A reverse osmosis water filter that yields significant purity and energy savings
compared to existing technology.
• A new type of structural adhesive for auto frames that improves safety and
gas consumption.
Natura, a Brazilian cosmetic company, exemplifies a business that puts its purpose into
a value proposition for customers. The company’s mission “bem estar bem” (well-being/
being well) guides product innovations that focus on preserving biodiversity and tradi-
tional knowledge and culture in Amazonia. Its Ekos products are sustainably sourced
and biodegradable, and Natura has established agreements with each of its 2,500 small
suppliers to guard against “biopiracy”—the unethical commercialization of the region’s
genetic and cultural heritage.
Building block 2: Strategic intent
Vision, mission, and values set the stage for companies to innovate for social change.
Strategic intent translates purpose into direction for innovation.12 The figure below
depicts the intent of corporate social innovations along two dimensions:
1. Centrality to a fi rm’s value chain (from core business to societal enhancement)
2. Intensity of fi rm investment and involvement (low to high).

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CORE BUSINESS: VALUE CHAIN ENHANCEMENT
Many corporate social innovations center on firms’ value chains—encompassing
employee engagement, innovations in sourcing or supply chains, and devel-
opment of new business models aimed at base-of-the-pyramid (BoP) or socially
conscious consumers.
Employee intrapreneurship There is growing interest in and more exemplars of social
“intrapreneurship” in leading companies.13 For example, to activate its guiding value
of “innovate every day,” Ericsson runs a grassroots Collaborative Idea Management
Program that enables employees to propose innovative ideas in every region and layer
of the company. Over 300 Electronic IdeaBoxes have to date cumulated more than
16,000 ideas and comments from over 10,000 users. These inputs are vetted, rated,
and enhanced by company experts and coaches and bundled into innovations that win
internal funding and support.
In rural Kenya, as one example, a network of employees launched a community power
project that uses “off-the-grid” base stations, powered by wind and/or solar power, to
share excess power among nearby communities. The base stations power mobile phone
charging (which drives network usage) and in larger scale deployment can electrify street
lights, clinics, and schools for an entire community. To help bring promising innovations
to market, Ericsson recently added Innova boxes to the program, providing internal
venture capital funding. This allows employee groups to develop ideas into prototypes
and ultimately launch them in the marketplace.
Chart 2
Strategic Intent of Corporate Social Innovation
EXTERNAL
Societal
Enhancement
INTERNAL
Value Chain
Enhancement
pppP
e
r
i
p
h
e
r
a
l
C
o
r
E
LOW $/IMPACT HIGH $/IMPACT
Social
Entrepreneur
Support
Social
Enterprise
Partnership
Social
Innovation
Incubation/
Contests
Employee
Engagement/
Intrapreneurship
Sustainable
Supply
Chain
BOP or
Socially Relevant
Business Models
P
E
R
I
P
H
E
R
A
L
C
O
R
E

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Sustainable supply chain By 2025, the world will have 8.1 billion people to feed.14 To
ensure a sustainable and secure supply of food, and to support the productivity and
wellbeing of farmers, many companies are innovating in their supply chains and securing
certifications of sustainable sourcing, fair trade, and adherence to ISO standards. Such
firms range from global farm-to-food giants like Nestlé, Danone, Unilever, and Starbucks
to regional innovators like Double A and Charoen Pokphand in Thailand, Jollibee Foods in
the Philippines, and Haigh’s Chocolates in Australia.
FrieslandCampina, a Dutch dairy cooperative with markets worldwide receives milk
supplies from over 19,000-member dairy farms in Western Europe and from thousands of
smallholder farms in Asia, Africa, and Eastern Europe. With local partners, the company
has organized the farmers into networks or cooperatives and provided training, consul-
tation, and tools to improve milk hygiene, stock breeding and feed, and water use. Dutch
dairy farmers also share their dairy knowledge and expertise with smallholder suppliers.
BoP business models Social innovation also helps big business to successfully tap new
markets in low-income countries. For example, SC Johnson, the world’s leading maker of
insect control products, partnered with USAID and the Borlaug Institute of Texas A&M
to work with Rwandan farmers and their communities to sustainably farm the plants that
supply a key ingredient, pyrethrum. To develop and market anti-malaria products in a
culturally compatible format, SC Johnson’s innovation team learned firsthand from rural
communities that they wanted affordable and multifunctional protection products.
Accordingly, SC Johnson developed a bundle of insect control products, ranging from
repellents to home cleaning sprays, in refillable formats. They marketed these products
through clubs of seven or more homemakers, who also participated in group coaching
sessions around home and family-care best practices.
EXTERNAL IMPACT: SOCIETAL ENHANCEMENT
There are also many examples of businesses aiming social innovation squarely at solving
societal problems in areas of economic development, climate change, ecosystems,
education, health care, and human rights, where innovation features and benefits accrue
to both business and society. Here, too, employees were active in the game.
Pro bono global service Multinational companies including SAP, John Deere, FedEx, BD,
and others operate global service programs where employees travel to emerging markets
and work hand-in-hand with local management in small businesses or social enterprises
to help to address economic, social, and environmental challenges. Since 2008, IBM has
sent more than 2,400 employees on 800 projects to 34 countries for one-month service
learning assignments through its Corporate Service Corps. In Tanzania, IBM teams
collaborated with the innovation NGO KickStart to develop modular e-training courses
in marketing, sales, and supply chain management for local entrepreneurs. This engaged
IBMers in socially-oriented R&D. Pfizer’s pioneering Global Health Fellows program
loans employees to NGOs to address local health care needs in Asia and Africa. At
Dow Corning, a team of 10 employees, supported via email by engineers and scientists
back home, went to Bangalore, India, to develop more energy-efficient cook stoves for
street vendors and introduce renewable energy products for rural housing with partners

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including the international development NGO and the Indian Institute of Science.
Innovations included using stabilized mud blocks as a low-carbon emission alternative in
building affordable homes.15
Supporting social entrepreneurs Supporting social entrepreneurs and their enterprises
is an innovative and increasingly popular form of corporate philanthropy. Companies
act like social venture capitalists, vetting entrepreneurs and their ideas, offering
financial support and guidance to the most promising ones, and monitoring progress
and early returns. The aim is to produce social impact and, as a social enterprise accel-
erates, to create jobs. Often, corporate employees provide pro-bono mentoring to
social entrepreneurs, thereby sharpening their own coaching and project management
skills, developing new relationships and innovation partners and expanding the “social
capital” of their companies.
Software company SAP runs an innovation accelerator for entrepreneurs that are set
to scale. SAP technology, workshops applying design thinking, and mentorship by
SAP employees are cornerstones of the model, which also offers access to impact
investors. One beneficiary was Tiago, a 27 year-old Brazilian entrepreneur who created
a global online retail business that provides a sales channel for Brazil’s 8.5 million
artisans, many of whom live below the poverty line. After working with SAP mentors and
analytics, he now provides improved tools and training for artisans to better articulate
their products online.
Social enterprise partnerships Accenture Development Partnerships (ADP) has under-
taken more than 600 projects in 55 countries where its professionals, at 50 percent salary
reduction, partner for up to six months with NGOs to bring business solutions to humani-
tarian problems. For example, ADP worked with NGO consortium NetHope to launch and
staff the first global IT help desk for international NGOs. In 2013, the partners conducted
a study of technology use in developing markets. They found, for instance, that although
mobile technology featured in many development success stories, simpler text-based
applications were more practical for rural workers who don’t own smart phones. Of the
joint R&D project, NetHope’s Lauren Woodman and Accenture’s Jessica Long wrote:
“It’s no longer good enough to arrive in developing
countries and proclaim to have all the answers. We need to
refi ne our solutions by researching local markets, learning
lessons from trial and error, and welcoming feedback and
possibilities from those on the ground.”16
Building block 3: Partnerships across sectors
To innovatively address society’s pressing needs requires a diverse set of interests,
competencies, and skills. Few firms have the appropriate mix of staff, resources, and
know-how to operate in this space on their own and in any case may lack the legitimacy
with local communities to do so. On this count, a study by Austin and colleagues finds
NGOs to be far more knowledgeable about social needs and more effective at planning

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social action than businesses.17 Partnering with NGOs can also give a company a broader
“license to operate” in society. According to GlobeScan, some 85 percent of the public
reports that its respect for a company would go up if it partnered with a charity or NGO.18
What makes partnering so relevant for corporate social innovators?
• First, firms need knowledge about, say, local conditions in their supply chain or
in a market they seek to enter. Non-business partners often have that knowledge
and can work with business partners to study the situation at hand.
• Second, companies need to understand how to produce and implement
social innovations in an unfamiliar culture and context. They can develop this
capability experientially, through the co-creation of social innovations with
partners and/or users.
• Third, companies may need legitimacy with, and connections to, local interests
and users. Partner organizations can facilitate engagement with local communi-
ties and non-traditional customers and provide access to stakeholders beyond
the usual corporate reach.
Partnerships between business and government are relatively common in Latin America,
Africa, and Asia and growing in the U.S. where friction between the sectors has tradi-
tionally been the norm. For example, the California-based outdoor clothing maker
Patagonia teamed up with the U.S. Fish and Wildlife Service and the National Aquatic
Nuisance Species Task Force to help raise public awareness about the threat of “aquatic
hitchhikers”—harmful plants, animals, and other organisms that can “hitch a ride” on
clothing, boats, and other water-based equipment. These invasive species reduce game
fish populations, foul pristine waters, and ruin recreational equipment.
Partnering between and among businesses is also increasing in the social and environ-
mental arenas. There are, for example, multibusiness initiatives regarding climate change
(alliances for carbon trading and energy conservation), natural resources (partnerships
around fish, water and agriculture as well as food), human rights (codes of conduct for
supply chain management and fair labor practices), as well as collaborations concerning
access to medicines and education. Motivations for businesses to work together range
from self-protection to leveling the playing field to preserving natural resource stocks.
Increasingly, they also aim at innovation. Starbucks, for instance, recently invited compet-
itors to a “Cup Summit” to explore coffee cup recycling approaches. The industry, along
with the Foodservice Packaging Association, has launched initiatives to increase cup
recyclability and partnered with waste management firms to increase volume, making
recycling more economically viable.
More complex societal challenges beckon partnerships across sectors. There are many
rosters of “best practices” in forming and managing such partnerships—drawn from both
practical experience and comparative research.19 Key barriers to collaborating include the
absence of compatible goals, a lack of executive leadership, and lack of experience to
draw upon when entering this arena.

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Benefits of effective multi-organizational partnerships
• Increase trust and reduce transaction costs between parties
• Spread the costs and risks of investment and innovation
• Help common interests to enlarge and conflicting parties to cooperate
• Increase communication flows and produce joint learning
• Combine resources and diverse expertise to address complex problems
• Open new market opportunities and produce socio-technical and
cultural innovations
• Forge relationships that transcend the perspective of a single organization and
address multiple stakeholders’ interests.
Source: Chris Worley and Philip H. Mir vis (Eds) Organizing for Sustainability: Build ing Networks & Partnerships v3. (New York:
Emerald) 2013.
Building block 4: Innovation processes
Naturally, different design processes feature in different kinds of innovations. In their
large scale eco-innovations, companies like GE, Dow, Ericsson, and others invest in basic
research and engineering to develop “disruptive” technologies that open new markets
and promote sustainable development, for example by enhancing natural resource
productivity. Similarly, in developing new food recipes and product ingredients, Pepsi,
P&G, Unilever, and others draw on chemistry, biology, and the other life sciences to
do well in their business while providing more nutritional and ecologically sustainable
products. Other kinds of innovation involve co-creation with users who might operate as
both producers and consumers.
Socially innovative companies engage in “indigenous” research in communities,
draw ideas “outside-in” through open innovation platforms and contests, and/or
apply “lean” principles to ensure their innovation processes are cost-effective. Many
co-create social innovations with external partners—including community groups,
NGOs, government agencies, and even other businesses. Examples of process formats,
described below, include:
 Employee innovation contests
 Social innovation incubators
 Big data applications
 Eco-innovation
 Open innovation
 Reverse innovation.
Employee innovation contests Ferrovial, a Spanish multinational that operates urban
and services infrastructure, has sought to engage employees worldwide through an
innovation contest. The program, titled “zuritanken” (a combination of the Swahili term

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“nzuri,” meaning “good,” and the Swedish term “tanken,”, or “idea,”) invites staff to offer
solutions to challenges in the company’s strategic business areas. The winning idea at
the inaugural innovation contest was a walkway that harnesses kinetic energy generated
by footsteps and converts it into electricity. The product, Floor Power, is now installed at
Heathrow Airport, which Ferrovial manages.
Social innovation incubators Barclays Social Innovation Facility is an internal accelerator
for the multinational banking company to develop commercial finance solutions to social
and environmental challenges. Launched with a £25 million financial commitment in
2012, the Barclays Accelerator provides a physical site and co-working environment for
innovative employees and companies. Employees within Barclays develop their ideas
in a three-day intrapreneur lab, then receive three months of internal mentoring before
pitching their innovations to senior executives. Projects launched include a credit card
aimed at millennials that “rounds up” the charge at bank expense and donates the
added funds to social purposes, loans with reduced credit charges for consumers who
otherwise wouldn’t qualify for such rates, and a suite of impact investing products.
Barclays also hosts a 13-week innovation accelerator for fin-tech startups, run in
partnership with Techstars.
Big data applications Danone’s Nutriplanet group, drawing on nutritional, epidemio-
logical, socio-economic, and cultural data has analyzed the habits and health issues of
populations in 52 countries to inform product development. After studying the diets of
Brazil’s youth, for example, Danone reformulated a bestselling cheese by reducing sugar
and adding vitamins. In Bangladesh, children eat 600,000 servings a week of Danone’s
Shokti-Doi, a targeted nutrient-rich yogurt. R&D also extends into packaging. In Senegal,
Danone developed a carton composed of local grain and a little milk that can be stored
at room temperature.
Eco-innovation Ray Anderson, the late head of Interface Carpets, transformed his
industry through the innovation of carpet tiles. Interface’s subsequent innovations include
using plastics and polymers rather than petroleum-based materials for carpet backing.
This enables carpets to be recycled and produce less waste. The company has also used
biomimicry in design to produce carpet tiles with natural leaf patterns that can be laid out
in any order, with no time or materials wasted lining the tiles up and matching seams. The
tiles are also taped together, rather than glued down, avoiding use of toxic chemicals.
Open innovation Innovation in business has moved beyond in-house R&D and
product development to enable open innovation and co-creation with myriad parties.20
P&G’s open innovation platform, Connect + Develop, is a prime example. It has
linked the company with German ingredients-maker Symrise (to develop a natural
honey cough drop with Vicks) and with U.S. technology partner Ecolabs (to create a
refillable anti-static dryer block for its Bounce laundry products brand). Through the
platform, P&G also collaborated with Brazilian packaging supplier Braskem to turn
sustainably harvested sugarcane into a high-density, 100 percent recyclable, polyeth-
ylene plastic used in Pantene shampoos. Beyond business to business collaborations,
the company has partnered with universities, government agencies and NGOs. For
example, the Safe Drinking Water Alliance helps bring P&G’s water purification system
PUR to those in need.

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Reverse innovation Finally, there are intriguing examples of “reverse innovation”—where
innovations from emerging markets migrate back to the more developed world.21 P&G
grew its market share in Brazil by having employees live in and observe low-income
households. Insights gained from their experiences led P&G to create an affordable,
environmentally-friendly, and hands-friendly detergent for hand washing clothes. Success
in Brazil led to Tide Basic in the U.S., targeted to households without washing machines
and urbanites that hand wash and line dry their upmarket garments. In another case, GE
now sells small, low-priced handheld electrocardiogram devices and portable PC-based
ultrasound machines in the U.S. that were developed originally for India and China.
Lessons from Social Innovation Labs
Below are four innovation processes that are especially relevant to CSI:
 Whole systems perspective This takes a holistic view on the design of actions or
artifacts, including their sourcing, production, and uses. It is an approach being
applied in the design of green buildings, product innovations or the corporation
itself. The Cradle-to-Cradle® philosophy exemplifies a whole-systems perspective,22
which Nike has adopted in its “Considered Design” approach to innovation. The
company says: “This evolution requires us to innovate faster, more radically, more
disruptively inside of Nike and throughout our whole ecosystem. It is a top-to-
bottom, bottom-to-top, inside-out, and outside-in innovation.”23
 Hybrid thinking Designer Dev Patnaik makes a case for “hybrid thinking” in design,
which he defines as the “conscious blending of different fields of thought to discover
and develop opportunities previously unseen under the status quo.”24 Scientific
logic is integral to design thinking, hence criteria such as functionality and utility are
of prime concern in commercial creations. At the same time, he argues, creativity
and empathy are needed to match innovation features to people’s emotions and
circumstances.
 Participatory innovation processes Successful multi-party partnerships often benefit
from an early regimen of trust-building exercises, “rules of engagement”, and
facilitation in developing teamwork. For example, participants in Babson College
Food Solutions Lab, an incubator for innovation in food production and services, are
also introduced to a program called “Entrepreneurship of All Kinds™” that supports
“a radical shift from adversarial, zero-sum thinking to alliance-focused, abundance
thinking”.25 Well-known design and innovation firms like IDEO and Jump also employ
tools that assist in empathic design and rapid-prototyping.
 Positive intent Some companies draw on positive psychology and its practical appli-
cation to develop and launch innovations in the social sphere. Novo Nordisk’s Unite
for Diabetes initiative brought together other companies and diabetes associations,
leading to a UN General Assembly resolution that designated November 14 World
Diabetes Day. On a broader front, the search for “positive deviance”, pioneered by
Jerry and Monique Sternin, has led innovators to design new practices based on the
successes of individuals and communities that have overcome social challenges and
disadvantages.26

THE NEW BUSINESS OF BUSINESS: INNOVATING FOR A BETTER WORLD www.conferenceboard.org
14
Building block 5: Measuring results
Considerations of the financial returns on CSI hinge very much on a company’s intent
when investing in this arena and how it funds the effort. Is it more interested in, and
motivated by, benefits to the business or to society? This research suggests a broad
spectrum stretching from an emphasis on commercial returns to companies whose
intent is more or less philanthropic. At one end of the spectrum are Dow, GE, and other
major multinationals making big commercial plays with their eco-innovations. Likewise,
IBM’s efforts to smarten cities, Unilever’s embrace of cause marketing to sell “inner
beauty” through Dove Soap, and many “fair trade” certified products and services are
social innovations that aim for competitive financial returns. The social and ecological
benefits are important to these companies but they are also a sales feature (see also
Returns on CSI, below).
At the other end of the scale are corporate social investments made from more philan-
thropic motivations. The Shell Foundation, for instance, uses an “enterprise-based”
approach that combines venture funding, market principles, and “business thinking,
models and disciplines” to help entrepreneurs and small enterprises create commer-
cially viable business models. Such strategic social investments can yield reputational
benefits, enhance companies’ license to operate, open doors to future business and, in
the case of BoP markets, reward global firms with brand recognition and a loyal customer
base that will grow in spending power. But few of these approaches would meet typical
hurdle rates for commercial corporate investment. How then do companies justify these
investments beyond, say, a well-intentioned effort to do good by fostering innovation?
Laura Aisle, former director of corporate citizenship at Dow Corning, helped start the
company’s Citizen Service Corps whose volunteers work with the global NGO Asoka to
develop affordable housing and with the Indian NGO Sustaintech on solar cook stoves
for street vendors. She makes the investment case in this way: “We go back to the
beginning: insight for innovation. As a specialty materials supplier…we had no way of
understanding a market for which we had no experience, and no way to gain experience,
save [by] going there.”27
The graphic above shows the spectrum of CSI motivation for companies, with blended
value approaches the most impactful in terms of driving socio-commercial innovation.
Chart 3
Corporate Social Innovation Spectrum
Traditional
Giving
Social Impact &
Commerce
Traditional
Investment
Commerce &
Social Impact
Strategic
Philanthropy
Shared
Value
Social Value Blended Value Economic Value
Socio-Commercial Innovation
Philanthropic Motive
Stakeholder Accountability
Profit-Making Motive
Shareholder Accountability

www.conferenceboard.org THE NEW BUSINESS OF BUSINESS: INNOVATING FOR A BETTER WORLD 15
The Many Returns on CSI: Examples from the Frontline
New markets IBM uses CSI to establish a footprint in new markets by developing a
track record with local stakeholders (including government officials and NGOs) through
programs such as a toolkit for small and medium enterprises (SMEs). The SME toolkit
provides free web-based resources on business management for enterprises in devel-
oping economies, in partnership with the International Finance Corporation of the
World Bank and with partners such as India’s ICICI Bank, Banco Real in Brazil, and Dun &
Bradstreet in Singapore. IBM’s 30 SME toolkit sites in 16 languages also plant the seeds
for users to become potential future customers.
New customers To help market products and services geared toward customers above
the age of 60, Telefónica has developed a training program in collaboration with elder
associations to address the target’s population’s “knowledge barrier”. The company
offers a free training course, taught by retired people to their peers, about how to use
new telecommunications technologies and their benefits. The program helps meet a
social need for understanding modern technology, while helping the company build a
customer base in an underpenetrated market.
Retail branding Coca-Cola is using improved environmental practices to drive marketing
to retailers. The company’s eKOfreshment branded coolers, vending machines, and soda
fountains, designed for retail locations, eliminate the use of HFCs (hydrofluorocarbons)—
gases with high global warming potential—in refrigeration systems. They also reduce
energy consumption by using a sophisticated energy management device developed by
Coca-Cola. Together, these innovations increase energy efficiency by up to 35 percent
over traditional models. The company highlights the benefits—especially financial savings
from energy efficiency—to retailers. In return for providing more efficient equipment,
Coca-Cola asks for prime space in retail outlets.
Conclusion
Innovation is active, creative, and aimed at breakthroughs. This is what society needs
in the face of tough and intractable social and environmental problems. And it is what
business needs to reestablish trust and to reinvigorate its leaders, employees, and
relationships with many stakeholders. Successful innovation can dramatically improve
what currently exists or create something new that is significant and useful. This
requires new voices, new ideas, new processes, and renewed passion. It represents
a confluence of ideas and interests where employees are engaged in new, fulfilling
ways and social entrepreneurs become partners with businesses looking to create
greater societal impact.

THE NEW BUSINESS OF BUSINESS: INNOVATING FOR A BETTER WORLD www.conferenceboard.org
16
Seven Starter Steps
While the roadmap outlined above is broad and ambitious, creating a culture of CSI at
a company requires a gradual metamorphosis. Here is a starter list of what a company
might do to begin embedding CSI across the organization and its value chain:
1 Enact a social vision Start with a noble social vision for the company and align
it with organizational values. Then bring the vision to life through purposeful
engagement with society and its needs and challenges.
2 Bring employees to the center of the effort Successful companies are solic-
iting and rewarding employees for social and environmental innovation.
They are also using societal engagements to develop a next generation of
socially-conscious leaders.
3 Nurture social intrapreneurship Transform employees into social intra-
preneurs that mimic social entrepreneurs’ approach through internal
innovation labs or contests.
4 Engage a broad spectrum of interests using connective technology and
social media Socially innovative companies run incubators and accelerators for
scaling the societal impact of innovative NGOs. They sponsor social innovation
challenges for college students and host “hackathons” to engage the public in
product development.
5 Reset CSR to innovation The Shell Foundation used to be the philanthropic
arm of the parent corporation. Now it funds and develops commercially viable
business models that can achieve sustainable social impact.
6 Focus on social impact Corporate social innovations are designed to produce
social and business value. Nearly all the companies described in this report assess
the impact of their social innovation. A few have monetized impact and calibrated
a social return-on-investment SROI.
7 Join hands with social entrepreneurs Finally, speed up movement toward CSI by
working directly with social innovators and entrepreneurs. Get your employees
engaged as coaches and mentors to them.
Methodology
The ideas and company examples in this article, unless otherwise stated, are drawn from
desk research and in-person and phone interviews conducted by the authors. We visited
70 companies, large and small, domestic and multinational, in 25 countries, to explore
the nature and practice of the growing trend we define as corporate social innovation.
Interviews were conducted from 2012 through 2016.

www.conferenceboard.org THE NEW BUSINESS OF BUSINESS: INNOVATING FOR A BETTER WORLD 17
ABOUT THE AUTHORS
Philip H. Mirvis is an organizational psychologist whose studies and private practice concern
large-scale organizational change, characteristics of the workforce and workplace, and business
leadership in society. An advisor to companies and NGOs on five continents, he has authored
12 books including The Cynical Americans (social trends), Building the Competitive Workforce
(human capital investments), Joining Forces (human dynamics of mergers), To the Desert and Back
(business transformation), and Beyond Good Company: Next Generation Corporate Citizenship
(with Bradley Googins).
Mirvis serves as a board member of PYXERA Global, a Washington, DC-based international
development NGO, and formerly as a Trustee of the Foundation for Community Encouragement
and Society for Organization Learning. He received a career achievement award as “Distinguished
Scholar-Practitioner” from the Academy of Management. He currently teaches in executive
education programs in business schools and companies around the world and is leading a study of
corporate social innovation.
Bradley K. Googins, a Professor in Organizational Studies(Ret) at the Boston College’s Carroll
School of Management, was the Executive Director of the Boston College Center for Corporate
Citizenship, a research and education center with over 300 corporations as members that serves
as a leading voice in the U.S. on the role of business in society, from 1997-2009. He was also the
founder of the Global Education and Research Network, a group of 12 of the leading CSR institu-
tions across the globe from Latin America, Asia, and Europe. In 1990, Dr. Googins founded the
Center for Work & Family at Boston University and directed it for six years before moving the
center to Boston College. He was selected and served as a National Kellogg Leadership Fellow
from 1989-1992.
Currently, he is serving as a senior Research Faculty at ALTIS Postgraduate School at the Catholic
University of Milan where he teaches in Ghana and Uganda in their innovative E4Impact Africa,
an EMBA that is building a pan-African program on Impact Entrepreneurism. In addition, he is a
visiting fellow at Babson College in their Social Innovation Lab, and a board member of the RVR
Center for Corporate Social Responsibility at the Asian Institute of Management in Manila.
(Endnotes)
1 Philip H. Mir vis, Bradley Googins, and Cheryl Kiser, Corporate Social Innovation, Lewis Institute, Babson
College, 2012.
2 Amy Adkins, “Employee Engagement in U.S. Stagnant in 2015,” Gallup, January 13, 2016 (http://www.
gallup.com/poll/188144/employee-engagement-stagnant-2015.aspx).
3 Gregor y Unruh, David Kiron, Nina Kruschwitz, Martin Reeves, Holger Rubel, and Alexander Meyer Zum
Felde, Investing For A Sustainable Future, MIT Sloan Management Reviewand the Boston Consulting
Group, 2016, executive summary (http://sloanreview.mit.edu/projects/investing-for-a-sustainable-future/).
4 John Browne, Robin Nuttall, and Tommy Stadlen, Connect: How Companies Succeed by Engaging
Radically with Society (New York: PublicAffairs, 2015).
5 Claude Fussler and Peter James, Driving Eco-innovation: A Break through Discipline for Innovation and
Sustainability, (London: Pitman, 1996); Bradley Googins, Philip H. Mirvis, and Steven Rochlin, Beyond Good
Company: Next Generation Corporate Citizenship (New York: Palgrave-McMillan, 2007); Michael E. Porter
and Mark R. Kramer, “Creating Shared Value,” Harvard Business Review, January–February 2011, pp. 1-17.
6 David Cooperrider, “Sustainable Innovation,” BizEd, July/August, 2008, p. 32.
7 Jed Emerson, “The Blended Value Proposition: Integrating Social and Financial Results,” California
Management Review 45, 4, 2003, pp. 35-51.
8 Clayton Christensen, Heiner Baumann, Rudy Ruggles, and Thomas Sadtler, “Disruptive Innovation for
Social Change,” Harvard Business Review, 84, 12, 2006, pp. 94-101; John Weiser, Michele Kahane, Steve
Rochlin, and Jessica Landis, Untapped: Creating Value in Underserved Markets (San Francisco: Berrett-
Koehler, 2004); Coimbatore (C.K.) Prahalad, and M.S. Krishnan, New Age of Innovation: Driving Co-Created
Value through Global Networks, (New York: McGraw-Hill, 2008).

THE NEW BUSINESS OF BUSINESS: INNOVATING FOR A BETTER WORLD www.conferenceboard.org
18
9 Philip H. Mir vis, Bradley Googins, and Sylvia Kinnicutt, “Vision, Mission, Values: Guideposts to
Sustainability,” Organization Dynamics, 39, 2010, pp. 316-324.
10 Tony K ingsbury, Creating Shared Value in Action, FSG, webcast aired May 5, 2011.
11 Jim P. Collins and Jerry I. Porras, Built to Last (New York: Harper Collins, 1994).
12 Philip H. Mirvis, Maria E. B. Herrera, Bradley Googins, and Laura Albareda, “Corporate Social Innovation –
How firms Learn to Innovate for the Greater Good,” Journal of Business Research, 69, 11, 2016, pp. 5014-
5021
13 Joh n Elkin gto n, The Social Intrapreneur: A Field Guide for Corporate Changemakers, SustainAbility, 2008;
David Grayson, Melody Mclaren, and Heiko Spitsek, Social Intrapreneurism and All That Jazz (Sheff ield,
U.K.: Greenleaf, 2014).
14 World Population Prospects: Key Findings and Advance Tables (Revision), United Nations, 2015.
15 Philip H. Mirvis, Kevin Thompson, John Gohring, “Toward Next Generation Leadership: Global Service,”
Leader to Leader, 24, Spring 2012, pp. 20-26.
16 Lauren Woodman and Jessica Long, “How Tech Innovation Leads to Sustainable Solutions in Developing
Nations,” Huffington Post, October 14, 2014 (http://www.huffingtonpost.com/lauren-woodman/how-
evolutions-in-technol_b_5631879.html).
17 James Austin, Herman Leonard, Ezequiel Reficco and Jane Wei-Skillern, “Social Entrepreneurship: It’s For
Corporations, Too,” in Alex Nicholls (Ed.) Social Entrepreneurship: New Paradigms of Sustainable Social
Change (Oxford: Oxford University Press, 2006) pp. 169-180.
18 The Shifting Importance of NGOs: Implications for Business, Globescan, Sigwatch, webinar aired on May 7,
2015.
19 Steve Waddell, Societal Learning and Change: How Governments, Business and Civil Society are Creating
Solutions to Complex Multi-Stakeholder Problems (Sheffield: Greenleaf Publishing, 2005); Chris Huxham
and Siv Vangen, Managing to Collaborate: The Theory and Practice of Collaborative Advantage (London:
Routledge, 2005); John Peloza and Loren Falkenberg, “The Role of Collaboration in Achieving Corporate
Social Responsibility Objectives,” California Management Review, 51(3), 2009, pp. 95-113; John Kania and
Mark Kramer, “Collective Impact,” Stanford Social Innovation Review, Winter 2011, pp. 36-41.
20 Henry W. Chesbrough, Open Innovation: The New Imperative for Creating and Profiting From Technology
(Boston: Harvard Business School Press, 2003).
21 Vijay Govindarajan and Chris Timble, Reverse Innovation: Create Far From Home, Win Everywhere (Boston:
Harvard Business School Press, 2012).
22 William McDonough and Michael Braungart, Cradle to Cradle: Remaking the Way We Make Things (New
York: North Point Press, 2002).
23 Lorrie Vogel and Agata Ramallo Garcia, “Nike’s Game Plan for Growth That’s Good for All,” Fast
Company, May 11, 2012 (http://www.managementexchange.com/story/nike%E2%80%99s-gameplan-growth-
that%E2%80%99s-good-all)
24 Dev Patnaik, “Forget Design Thinking and Try Hybrid Thinking,” Fast Company, August 25, 2009 (www.
fastcompany.com/1338960/forget-design-thinking-and-try-hybrid-thinking).
25 Cheryl Kiser and Deborah Leipziger, Creating Social Value: A Guide for Leaders and Change Makers
(Sheffield, U.K.: Greenleaf, 2014)
26 Jerry Sternin and Robert Choo (20 00). “The Power of Positive Deviancy,” Harvard Business Review,
January-February 2000, pp. 14-15.
27 For background on Dow Corning’s start up, see (https://www.pyxeraglobal.org/story-starting-international-
corporate-volunteer-program/)

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