Collective Social Impact:  Why CEOs Can and Must Lead Change in Their Communities

In 2017 trust in America’s four key institutions: NGOs, business, government, and the media declined by 37%, the greatest collapse in the history of the Edelman Trust Index. Francis Fukuyama, in his seminal book, Trust: The Social Virtues and the Creation of Prosperity, demonstrates that social capital in any community or business is fueled by cultivating trust. When trust is in the room, people collaborate, give each other grace to make mistakes, and innovation springs forward.

As Harvard political philosopher Michael Sandel says, “Healthy communities build civic muscles that lead to greater trust.”

A leading researcher on building healthy communities, Gidi Grinstein, believes “a model twenty-first century community would be one that focused on supporting employability, productivity, inclusion, and quality of life for its members.” As he points out, national government programs cannot address the complexity of regional issues. Regional issues must be addressed in the spirit of a private-public partnership where all players co-operate to achieve sustained gains over time. 

Enlightened and well-developed CEOs and boards are stepping up to not only build thriving businesses but thriving communities. These CEOs know that they can uniquely work as catalysts to bring non-profits, government leaders, educators, foundations, and faith-based communities together to address complex problems.

The stories of the Itasca Project in Minneapolis, Talent 2025 in Western Michigan, and The West Side Health Initiative in Chicago are all encouraging examples of business leaders coming together to make a difference.

So, why should more CEOs and their organizations get involved in solving the social problems in their communities?

It’s a Responsible Way to Live

A CEO said to me earlier this week, “I’m not involved in our community because it will increase shareholder value. I’m involved because I think it’s my responsibility and the responsibility of our company to give back to the communities where we live and work.” 

And the reality is, communities cannot thrive without the generosity of business leadership.

Consumers Expect It

Consumers today are much more likely to support companies that have a positive social impact. According to a 2014 Nielsen survey, 55 percent of consumers around the world surveyed said they would pay more for products and services from companies that are socially and environmentally responsible. The transparency in today’s marketplace means a company’s involvement must be more than superficial. They need to affect real change in a way that’s tangible to the people in their communities.

It Will Engage Your Employees and Partners

Gallup’s latest research reveals that the pay-off for employee engagement is significant. Companies with engaged employees outperform those without by 202%.

Participating in community initiatives will be meaningful and engaging for employees and other stakeholders. Engagement means a person has a deep, emotional connection to their job or organization. The opportunity to affect societal change through their work is something many employees are trying to find. By cultivating long-term relationships that go beyond the traditional work boundaries, employees, suppliers, and customers have found new ways of bonding and working together for the common good. 

It Will Create Better Conditions for Your Business

Solving complex social problems creates a more positive business environment – from building a stronger, better prepared workforce to creating a more attractive place to work and live so the region attracts talent.  A business, over the long term, will have difficulty thriving in an unhealthy community – especially when it is competing with other major cities. Talent migrates to opportunities and a higher quality of life.

In Orange County, California, where I live, a group of business leaders have come together to address what makes for a healthy community. Their focus is on how to solve the most complex issues in our county of 3.2 million people across 34 different municipalities.  The work of these CEOs has just begun, and it demonstrates a trend not only in Orange County but across the U.S. – business leaders who are aspiring to lead purposefully in building high performing companies and a better world. 

It’s an exciting time, and these initiatives are a reason for optimism in a world that is losing trust.  As Peter Drucker said, “When the problems seem intractable, find islands of health and strength to build on for the future.”

Collective social impact efforts are emerging as “islands” that just may help redefine the trajectory of the communities around us.    

So, how can you get involved now in your own region? 

· Reach out to me if you would like to learn more from people actually doing the work.

· Connect with the Center for Higher Ambition Leadership (CHL), a non-profit doing work in this area. Through contributions from our local business leaders, CHL has helped to sponsor the efforts in Orange County and is also supporting initiatives in other cities around the U.S.

· Invite CEOs from your region to meet and talk about social issues and your desire to make a difference.