How listening to society can contribute to the success of your business

The pandemic has not only impacted health on a global level, it has also accentuated social and economic problems. For the first time in over 20 years, and as a result of the situation generated by COVID-19, the World Bank is forecasting that extreme poverty will increase in the world – an estimated 150 million people will live on less than $1.90 (€1.60) per day in 2021. In particular, over two thirds of the world’s population lives in countries where inequality has become even more polarised, the richest 1% of the population has ever more money, and the poorest 40% earn less than 25% of global income, according to the UN’s World Social Report 2020: Inequality in a Rapidly Changing World.

Given this situation, countries and their business fabric should be prepared to be a source of progress and support. Companies now have two challenges. First, to respect and encourage social sustainability, one of the three pillars of the UN Sustainable Development Goals (SDGs), which means having a positive impact on society, and second, to generate business and financial returns to remain profitable and stay afloat.

How can that balance between social sustainability and the economic viability of the company be found? The answer lies in society itself – listening to what citizens need and what users want. For years, technology and innovation have been positioned as ideal tools for this. In fact, one of the key technology trends for 2021 is what consulting firm Gartner calls “the voice of society”. Let’s listen to it.

Greater responsibility after the pandemic 

The pandemic has been like an earthquake that has shaken the pillars of society. Irma Beatriz Acosta, Responsible Company leader at BBVA Mexico, pointed this out in an interview: “This highly significant shock is a good time for humanity to take a long hard look at itself. Our scale of values and needs is being put on the table.” Companies and the role they play in society are part of this reflection. According to Acosta, “a responsible business is one that is concerned with caring about and balancing the environmental, social and economic aspects”.

Until a few years ago, corporate social responsibility (CSR) was the benchmark for good business behaviour. If we use the International Labour Organization (ILO) definition, it is the way in which companies take into account the impact of their activities on society and the way they affirm the principles and values by which they are governed. CSR was often viewed as something external that was undertaken to improve the company’s image, known as image laundering or ‘greenwashing’ if it’s to do with environmental issues.

The reality is that sustainability and profitability are linked. At La Bolsa Social they are well aware of this because they only invest in positive social impact companies that meet some of the SDGs and that are looking to be profitable as well as generating a long-lasting impact over time.

“The social has never been associated with the profitable, something highly focused on NGOs and philanthropy, as if only a company’s surplus were invested to generate that social value”, says Antón Jáuregui, Marketing and Communication Manager at La Bolsa Social. The expert points out that “it’s true that there are projects that due to their nature have to sacrifice some profitability to be sustainable, but the mistake is to seek maximum profitability – that can’t be the goal, instead it should be to do things better, even if the return is a little worse”.

“Clearly, if you produce in a country where basic labour rights are not taken into account, you’re going to have a higher profit margin”, explains Raúl Sánchez, member of the UPM’s Innovation and Technology for Development Centre (itdUPM) and co-founder of the ActivadoresODS platform. The expert summarises: “Without going into moral issues, if we’re being objective, we have to be aware of the fact that negative environmental impacts cause direct economic costs to countries, internationally it’s increasingly penalised and consumers are becoming more demanding in this area”.

Impact from within the company and towards society 

Experts agree that the SDGs are already being seen as something that must be included in a company’s strategy from the outset, not as an add-on. For instance, “it’s not the same designing an application that’s accessible for everyone from the beginning, having policies focused on gender equality or being vigilant from the outset about how and where your suppliers work. It all generates social impact, it’s a 360° panorama”, says Sánchez.

To create this panorama we have to look not just at companies, but also at society itself and the country to listen to what citizens need. According to Carlos Soto, an expert on urban analysis and sustainability “at this time of economic, climate and social transition, from an urban point of view we need governments to work together with private businesses”. For Soto, “partnerships between entrepreneurs, local businesses and the authorities would drive this transition toward a more socially sustainable model”.

Nicola Cerantola, Professor on Circular Economy and Green Entrepreneurship at the EOI Business School, believes the problem is that “we’ve optimised the economy and the role of companies so much that we’re in a situation where, if we don’t consume, the economy doesn’t work, and this is directly related to environmental destruction and negative social impact”. We need to be agile to turn the situation on its head – as Cerantola indicates, “there’s no time to react to the needs of society with the vertiginous pace at which we’re producing. We need a more responsive model.”

To respond, you have to have knowledge. “The first thing that both small and large companies have to do is to properly identify the agents affected by their business activities. Not just staff and customers, but also people involved in the value chain, in production, the local community and the global impact”, emphasises sustainability consultant Victoria de Pereda. According to the expert, everything that a company does affects society in a systemic way, which is why it is vital “to really bear in mind those affected by its activity”.

This response also involves giving citizens a voice. For example, Carlos Soto notes that “in Scotland they’ve integrated a number of programmes into their legal regulations that take into account community planning and participation, incentives for local economies and urban innovation”. It’s time to ask ourselves what the consumer is saying, what citizens are saying and how companies should react.

Metrics and technology to take society’s pulse 

Measure, collect, analyse and act, then measure, collect, analyse and act again. Like when you listen to a song on repeat, the mantra of companies in recent years has highlighted the importance of using the vast amount of data available to streamline their businesses. As far as listening to society is concerned, these metrics can be seen from several perspectives.

One is that technology can help companies to listen directly to what citizens think and allow them to act quickly as a result. Consulting firm Gartner sees in this social voice a technological trend that has been going strong. They predict that, by 2024, 30% of major organisations will use a new social listening metric to act on society’s problems and to assess the effect on their results.

Measuring social feeling, media and opinion metrics, online reputation data, the digital footprint of companies and social perception surveys are already very reliable, according to Gartner. By way of example, the specialist conversation analysis company CallMiner conducted a proof of concept with BBVA. Using artificial intelligence (AI), calls received by remote BBVA managers were analysed to identify how to improve the customer experience.

A specific case is that of social media. Social media engagement or interacting on these networks  is also known as social listening. This involves monitoring conversations on social media, so feared by companies, but so useful if the right tools are used. These tools often include the use of AI, market research and brand strategy, which when crossed with data obtained from active listening on networks result in smart knowledge on consumers. Hootsuite Insight, Brandwatch, Synthesio and BrandMentions are some of the most well-known.

In the case of financial services multinational Visa, social listening and smart analysis of social media were key to understanding what SMEs needed as regards digital payments. With this information mined from social forums and websites through the NetBase market intelligence platform, they made decisions that improved their users’ positive perceptions by 50%.

What’s more, technology and innovation can also help influence the root causes of a problem and find solutions to make a business more sustainable. This is what they do at Paradigma Digital, as their Impact Strategy Designer Alejandro Rodríguez explains: “The population should not be seen as customers, but as citizens. I imagine a society with two axes – on the X axis, the people; on the Y axis, the technocracy. The key is being able to look at the X axis and identify social problems, and then elevate that to see what technology from the Y axis can be applied objectively”.

The expert points out that companies are often quick to identify what they need to improve, but they have trouble actioning that. “It’s easy to set a decarbonisation target for 2040, but how do I get there? We have to design technological strategies for that”, says Rodríguez. For example, a virtual campus has been created so that people in developing countries can have more user friendly access to education, and there’s also an artificial intelligence solution to measure capacity on beaches because of the pandemic.

At the same time, companies are increasingly being asked to prove their sustainability with figures. This is pointed out in the report “Inclusive growth. In search of shared prosperity” from the Business Observatory for Inclusive Growth, to which BBVA belongs. The report suggests that, in 2017, the Coalition for Inclusive Capitalism (a private international non-profit organisation) began working on new business metrics that can demonstrate long-term value creation on the financial markets. One of its areas of study was social impact. Moreover, certifications such as ISO 14000 and B Corp, which determine whether a company is doing things right, are becoming increasingly common.

Antón Jáuregui from La Bolsa Social confirms that considerable progress is being made with this: “Consumers are demanding transparency about social impact and younger generations are increasingly looking at it. The SDGs are an umbrella, not an indicator. We have to find standards that quantify those goals”.

In terms of social sustainability, the metrics don’t have to be directly related to consumption or sales, but to sustainable indicators. Jáuregui uses the story of the company Hemper by way of illustration. It manufactures garments and accessories using hemp (which is better for the environment than cotton), employing disadvantaged groups from Nepal. “It would make little sense to measure the number of backpacks sold, but rather how many people have come out of poverty thanks to its activities or how many litres of water have been saved,” he says.

What does the future sound like? 

Listening to society is essential for companies to be able to react in time to users’ needs. That’s why, according to Antón Jáuregui, “companies that take it seriously now will be ahead of the game and will work much better, because they’ll convey more confidence to consumers”.

In that future, Nicola Cerantola of the EOI Business School believes that young people are key. “It’s hard for the system itself to change, but entrepreneurs inherently possess that spirit of social entrepreneurship and are very clear that they want to either work in a company with a social purpose or create it themselves”, he explains.

Being a small business can also facilitate that change, as Cerantola adds: “Sometimes big businesses are victims of their own size, they’re caught up in an inertia that won’t always let them stop, although they do have many resources to do great things. A startup that is starting from scratch doesn’t have those, but it can begin with social responsibility and taking people into account”.

Startups and entrepreneurs have that spirit to permeate the philosophy of more traditional companies, some of which are perhaps rather rusty when it comes to listening to society. But they can all be driven together thanks to collaboration, the transfer of talent and the movement of new ideas. That’s precisely why the future sounds like open innovation and social sustainability.