Companies, governments and NGOs are redefining their roles, seeking greater impact in solving collective challenges; in this new social ecosystem, organizations that try to shine on their own lose space while those that know how to collaborate gain momentum.June-August | 2019
In June 2017, municipal secretaries, shopkeepers, quilombo natives, businesspersons, fishers, community representatives, a priest and a pastor from Goiana, on the coast of Pernambuco, received, each in their place of work, visitors who came to invite them to a meeting to discuss the problems and potentialities of the municipality. Invitations accepted, about 20 people met a few days later, and started a productive and relatively new dialog for that community. The small group has become a forum and has since carried out a series of actions that are helping to improve the quality of life of the region’s residents.
The episode illustrates a part of the initiative that Fiat Chrysler Automobiles (FCA) and Klabin are promoting in the northeastern region, where the two companies have set up their factories. As an alternative to assistance actions, the companies came together and decided to act as catalysts for local development, in a process in which the population is a protagonist. More than an isolated action, the story in Goiana also illustrates a growing movement among organizations that wish to promote socio-environmental innovation, seeking solutions through partnerships, in a dynamic where each participant assumes a role – and where the company is not always the star of the show.
This tendency was well described in the article “Catalyzing Public Sector Innovation”, published by Deloitte Insights. The five authors, Deloitte professionals, examined more than 100 innovative and successful socio-environmental initiatives. They concluded that a common point among them was the ecosystemic nature of the solutions, that is, the organizations that had initiated the projects were able to build a collaboration network with one or more allies, who had complementary capabilities and functions and, with that, arrived at a new product or service. The organizations chose to play one of these five roles: problem solver, trainer, motivator, aggregator or integrator. Understanding which position to assume, according to the researchers, was one of the factors of success.
Empowering the community brings results
The authors of the analysis also make it clear that the role redefinition movement holds true for governments as well as non-governmental organizations (NGOs) and companies. This was the case of Klabin and FCA in Pernambuco.
“We saw that we would have an important role if we acted as an external entity that invites people to get involved in the solutions. Having provoked that first meeting made things happen in a much more dynamic way”, tells Fernando Elias, Social Projects coordinator at FCA.
After putting the local representatives in contact, acting as aggregators, the companies began to act as trainers. They brought the Fundación Avina to Goiana, which presented to the multi-sector group the Social Progress Index (SPI), used to measure the social and environmental performance of a territory. They also supported the training of students of the Federal University of Paraíba to interview the population, through a questionnaire, and to reach robust indicators about the municipality. The discussion circle, which has grown to more than 30 people and has been transformed into the Goiana in Action Forum, is using the data to implement measures such as the establishment of a tourism tour of the region, the evaluation of public school infrastructure and the revitalization of popular parties that were fading.
“It was an example of how dialog can bring extraordinary results to a community. The union of forces provided previously unattainable benefits”, explains Sérgio Piza, director of People, Corporate Services and Institutional Relations at Klabin.
Measuring results makes the difference
The use of the SPI was also part of the strategy chosen by Coca-Cola and Natura in a territorial development project in the Médio Juruá region of Amazonas. It was the first experience of developing SPI in communities and from questionnaires in the world. The application of the methodology has raised the quality of joint work between companies and residents, says Marcelo Mosaner, Monitoring and Learning manager at Fundación Avina and responsible for the Social Progress Index in South America.
“The SPI included in the assessments a number of dimensions that were not taken into account by other indexes, such as gender equality, tolerance and security. It is a scientific research and allows an informed conversation with the government. It also creates a space for dialog and action that creates legitimacy”, Mosaner explains.
Created by the Social Progress Imperative, an initiative of public policy experts led by academic and consultant Michael Porter, the SPI reinforces the possibilities of connecting actors with diverse profiles, but who want to work side by side in search of social and environmental advances, as explains Elias de Souza, Deloitte’s leader partner for the Government and Public Sector industry.
We have propagated the idea of the SPI in all ecosystems we operate, because with the index we can measure results and have more clarity about partnership opportunities, Elias de Souza, Deloitte's lead partner of the Government and Public Sector industry.
From the environmental area, comes another example of an organization that has focused on aggregating multiple ecosystem actors to solve complex challenges. The Nature Conservancy (TNC), one of the largest conservation NGOs in the world, coordinates a number of initiatives it defines as “pre-competitive” by bringing together companies from multiple sectors, or even competitors from the same industry, in search of solutions for risks that affect the entire chain. One of the projects is Agroideal, an online system of territorial intelligence for the soy and meat sectors.
The tool integrates maps and data on the production and the environmental situation of the producing regions to facilitate for managers of the agribusiness companies to plan responsible buying and investment decisions and, as a result, to act as positive influences for the conservation of the Amazon and the Cerrado. Agroideal was developed based on suggestions from the companies themselves, in a collective construction process that lasted more than a year, and is already used in at least three of the main global soy companies operating in Brazil.
The NGO also leads the Indigenous People and Companies Dialog Initiative, where its employees performed as aggregators: representatives of indigenous associations, such as the Coordination of Indigenous Organizations of the Brazilian Amazon (COIAB), and executives from companies in the pulp and paper, energy and mining sectors, among others, were called to the table.
For the first time, the two sides were able to share their perspectives on regions in which developments such as mines, hydroelectric plants and roads were installed in areas near Indigenous Lands. One of the results of the first phase of the project, which has existed since 2012, was the publication of the Proposed Brazilian Guidelines for Good Corporate Practices with Indigenous People. The booklet is intended to guide companies on how to operate respectfully with communities and to include them in initiatives that generate sustainable income opportunities. In the second stage of the initiative, companies are working to implement the practices that the guide compiled.
Social innovation 4.0
In addition to the activities of companies and NGOs that have seen value in working together, another factor that has driven partnership solutions is the growth of impact businesses, those that have the explicit mission of generating socio-environmental change and, at the same time, a financial result for the organization involved. In general, these companies are already born with the collaborative stance in their DNA.
In practice, they are helping to blur the boundaries between types of organization, according to Elisa Larroudé, a professor at FGV-EAESP. “We see more and more NGOs using market mechanisms and companies seeking to reinvest some of their profits, or all of them, in actions with socio-environmental impact” says Larroudé. “Even the terminology is multifaceted. Some of the more common terms (for these new companies) are “impact businesses”, “purposeful enterprises”, or “two and a half” industries, but there are several variations, precisely because it is an evolving industry”, she explains.
It was in this environment that Deloitte launched, in November 2018, the online social innovation platform Match & Matters, free and open to companies, social impact businesses and researchers of all profiles. The purpose of the tool is to promote businesses and generate socio-environmental impacts by facilitating the meeting between organizations that present challenges and others that have answers to these problems and need someone to invest in them.
For Larissa Nakano, Deloitte’s senior social innovation and sustainability consultant, as well as creator of Match & Matters, an example of complementarity that the platform can stimulate is between startups, which offer speed and new ideas, and large companies that bring the capacity of scale that small businesses lack.
“When one understands the pains and solutions of the other, there is a huge potential for new success stories in partnerships. Moreover, with the experiences we’re going to see, we can restructure processes in companies so they’re friendlier to the impact business ecosystem”, says Larissa.
In the wake of these new arrangements, another component of the ecosystem, social finance, is being developed, composed of funders and capital management companies that seek socio-environmental impact with financial sustainability. One of the organizations that stands out in this sector is SITAWI. One of SITAWI’s arms is Social Finance, a non-profit organization that raises funds for donations, guarantees and grants for social organizations and impact businesses. The advantage of this constitution is efficiency, since interest on loans and 10% of profits from for-profit activities are reverted to the maintenance of the non-profit arm.
“Only 30% of the budget of the non-profit arm need to be covered by donations. With a hybrid model, we have been able to finance three times the volume of the traditional model”, explains Leonardo Letelier, founder and CEO of SITAWI.
In a scenario where the roles for those who want to contribute to social and environmental progress multiply and ecosystem actors are increasingly efficient, the figure of the company that tries to shine on its own seems to be losing its appeal. With so many potential partners, it would be a waste to prefer the monologue to the dialogue.