The way we do business is changing. Today’s leaders aren’t just thinking of themselves or the organizations they represent and run – they’re increasingly preoccupied with how their ventures will impact society.
When Ivey Associate Professor and Western Faculty Scholar Oana Branzei began teaching Social Enterprise and Social Innovation 15 years ago, the positive impact organizations can have on society wasn’t yet a major topic in business schools. Those were the heydays of Enron and Nortel, of corporate greed and hubris. Most research, and teaching, honed in on harm reduction.
Social enterprises and social movements were then the exception to the rule, their positive impacts largely overshadowed by growing pessimism about what business was all about – profit at any cost. Exemplary hybrid organizations, which aligned profit-generating activities with the greater good, gradually warmed leaders up to the idea of doing business in ways that transcend self-interest.
Forward-thinking models of doing business in ways that enhance environmental and societal wellbeing are now taught at all top business schools. Ivey programs have featured extraordinarily good businesses for more than a decade, and our alumni continue to advance this frontier in all sectors of the economy.
“Ivey leaders simply won’t do business at the expense of others,” Branzei said. “They want their business to do good, on purpose. Such extraordinarily good businesses pioneer brand new industries, and can also be very profitable.”
The time for widespread optimism is here. “We are shifting the conversation about what businesses can be,” Branzei said, “from their very inception onward.”
Prosocial venturing – explicitly factoring in the interests of multiple stakeholders as leaders blueprint, or repurpose their organizations – significantly broadens the value creation options and toolkits available to every business today.
With her Ivey colleague Professor Simon Parker, Peter Moroz from the University of Regina, and Ed Gamble from Montana State University, Branzei co-edited a double special issue in The Journal of Business Venturing – the top journal for entrepreneurship research.
In the first of the two special issues, Imprinting with purpose: Prosocial opportunities and B Corp certiﬁcation, 14 different contributors focus on B Corps – organizations that have committed to generating significant value for society through their for-profit operations. B Corps treat profit as a means to the greater good rather than an end in itself. The five feature articles are the first to quantitatively and qualitatively unpack the costs and benefits of choosing to certify one’s business as a B Corp.
“The B Corp movement is inviting us to radically rethink the role that businesses can play in society today,” Branzei said. “There are 2,614 registered B Corps across 150 industries in 60 countries (as of August 23, 2018) but we are only beginning to systematically map the unique challenges and benefits of prosocial venturing.”
In the second issue, Going pro-social: Extending the individual-venture nexus to the collective level, Branzei and her co-editors encourage us to broaden “the very DNA” of entrepreneurship.
“Entrepreneurship has so far been understood as the nexus between an individual and a venture,” Branzei explained. “But what individuals want to accomplish through their ventures is rapidly changing. Many entrepreneurs want to make their mark on some of the thorniest grand challenges facing us all today, from climate change to inequality.”
In the September issue of The Journal of Business Venturing, 21 contributors explain why many of today’s entrepreneurs may want to deliberately stretch the individual-venture nexus to include the societal and environmental priorities they care deeply about.
“There is robust evidence that walking the proverbial mile in someone else’s shoes enhances entrepreneurs’ creativity and consistency,” Branzei said.
Branzei and her coauthors underscore a dual benefit to letting others into one’s business. The empathy aroused by witnessing the difficulties of others sparks out-of-box solutions, Branzei explains. Thinking about “the bigger picture” puts one’s own successes and failures into perspective. This compels perseverance and incentivizes cooperation around higher-order goals so that new approaches to previously “wicked” problems can be prototyped and scaled.
Take Goodwill Industries, for example. By engaging people with various barriers to employment, Goodwill has pioneered new segments of activity, such as recycling electronic waste to prevent the escalating human and environmental costs of overconsumption, or creating responsible investing as an antidote to predatory same-day loan practices.
“Business models can be a tremendous force for the good of many. But they need to be carefully calibrated to the grand challenges of our times,” Branzei said. “By weaving together novel and counterintuitive insights from multiple disciplines, our frameworks put today’s leaders into the driving seat of businesses that serve, rather than usurp, our common future.”
On behalf of all 38 of the thought-leaders researching the prosocial frontier of venturing, Branzei underscores that “Good business is no longer just a slogan. Nor is it an empty promise. Rigorous scientific research offers fresh, rich, and surprisingly robust evidence about the transformative role many leaders choose to play through their for-profit ventures.”