You're facing a dilemma between social impact and financial decisions. How do you find the right balance?

“In the long-run” this sentence is key. What is the point for a company to set goals if once they are achieved no one is there to share the results? Or just a selected few? What is the company really sacrificing to attain sometimes aggressive and unrealistic goals? In my humble opinion the point is to grow together to drive meaningful changes into the future, and to do that, you might want your company operating for the longest time possible.

This is always the most challenging discussion around striking a balance between social impact and profit. There’s a simple way this can be less of a challenge though - the brand’s CSR should be a separate budget and goal from the main function of the business. That means, impact-driven initiatives should always be factored into the master budget, to avoid any uncomfortable conversations / decisions when executing on the social impact initiatives.

Es importante repensar la definición de "éxito". En lugar de enfocarse únicamente en las ganancias financieras, las empresas pueden redefinir el éxito para incluir métricas de impacto social y ambiental. Esto podría implicar establecer objetivos para reducir la huella de carbono, aumentar la diversidad en la fuerza laboral o apoyar causas benéficas.

Your core values should always lead your decision making: If a path contradicts your core value you absolutely should not do it If a path is inline with your values and won't hurt you financially...do it If a path is value aligned but hurts financially...assess the need vs the cost. If need is higher..do it If path is not quite values aligned but financially attractive.. assess how out of line it is..its it's more in lune than out..do it.. and vice versa

Do you really want to have a social impact? Give your social impact goals the same rank of your financial targets. Are your financial targets discussed at board level while social impact ones stay cornered at the ESG office? Impact will be limited. Do you discuss CEO succession when you miss your financials goals you but only talk about difficult economic conditions for missing your social impact ones? Impact is nobody's accountability. Are your shareholders and what I call close stakeholders taken into account but external ones neglected? Think again about communities you interact with, local governments in your international operations and other sometimes invisible groups that might have a legitimate interest in your activities.

In my previous social enterprise, we used social risk as communication innovation and marketing opportunity. The social risk was "Are you using disabled people as marketing gimmick? How do we know you're paying them fairly?". So we decided to make it transparent and traceable for our customers when purchasing our product, by introducing personal QR code for each baker as a sticker on the product packaging. That way, customers can scan the QR code to learn about the baker themselves, leave a note for them on their profile pages, and even learn about their disability.

Balancing social impact with financial decisions requires a strategic approach that aligns long-term goals with immediate needs. Start by defining clear objectives that integrate social outcomes into financial strategies. Prioritize initiatives that not only enhance community well-being but also contribute to sustainable growth. Engage stakeholders early on to ensure alignment and foster a culture of shared values. By leveraging data-driven insights and fostering innovation, organizations can navigate this delicate balance, driving meaningful change while ensuring financial resilience.

In my previous social enterprise, we integrated strategic planning to balance social impact with financial decisions. Our objective was to create employment opportunities for people with disabilities while ensuring financial sustainability. We invested in sustainable packaging, which not only reduced costs over time but also resonated with our socially-conscious customers. We also developed products that highlighted social issues, such as cookies named after our bakers, sharing their stories and challenges. This approach opened new market opportunities and fostered a deeper connection with our customers. Our strategy remained flexible, allowing us to adapt to market changes while staying true to our mission of social and financial impact.

When balancing social impact with financial decisions, **stakeholder engagement** is the most relevant option for advocating social change. By involving employees, customers, investors, and the communities you serve, you ensure that diverse perspectives are considered and that your decisions reflect a collective commitment to social impact. This collaborative approach builds trust, amplifies voices, and drives meaningful, inclusive change. Engaging stakeholders helps align your financial strategies with the values and needs of those affected, ultimately creating a more sustainable and impactful organization.

In my previous social enterprise, stakeholder engagement was key to finding the right balance between social and financial performance. We actively sought feedback from customers, employees, investors, and community members to understand their unique perspectives. For example, we held regular community meetings and feedback sessions where stakeholders could voice their opinions and suggestions. One valuable insight came from our customers, who expressed a desire for more transparency about our impact. In response, we implemented an online dashboard showcasing our financials and social metrics, such as the number of employment hours and public profile of our disabled employees (with their consent).

In my previous social enterprise, measuring impact was crucial for balancing social and financial decisions. We developed metrics that captured both the social value we created and our financial health. For instance, we tracked social indicators like the number of disabled employees we hired, their job satisfaction, and happiness level. Alongside these, we monitored traditional financial metrics such as revenue growth, profitability, CTI, and productivity. We regularly reviewed these measurements and used the insights to understand the trade-offs and benefits of our decisions. This holistic approach allowed us to make informed choices that supported both our social mission and financial goals.

Conduct Impact Assessments: -Evaluate the potential social and financial impacts of your decisions. Use tools like Social Return on Investment (SROI) or Cost-Benefit Analysis (CBA) to quantify and compare the outcomes. Consider a Triple Bottom Line Approach: -Adopt a Triple Bottom Line (TBL) approach, which emphasizes People, Planet, and Profit. This holistic framework can guide you in making balanced decisions that support social, environmental, and economic goals