What Holds Back Corporate Social Innovators By Thijs Geradts

What Holds Backcorporate Socialinnovatorsby Thijs Geradts Ling Ling P

What Holds Back Corporate Social Innovators by Thijs Geradts, Ling Ling Phung, and Maarten van Herpen discusses the organizational challenges faced by corporate social innovators—typically mid-level employees driving socially impactful innovations within large multinational corporations. Despite a growing motivation among corporations to develop solutions that address societal problems while generating profit, many such initiatives fall short due to internal and external barriers. This paper explores three primary dilemmas: balancing social and financial objectives, establishing legitimacy, and securing a dedicated organizational home for social innovation. It also offers strategic recommendations for corporations to better support their social innovators.

Paper For Above instruction

In recent years, there has been a notable increase in corporate awareness and commitment toward social innovation—a strategic effort to simultaneously address societal challenges and generate business value. While many corporations recognize the importance of such initiatives, actual implementation faces numerous barriers that hinder successful social innovations. Thijs Geradts, Ling Ling Phung, and Maarten van Herpen’s research highlights the organizational and strategic challenges that corporate social innovators face within large multinational corporations, emphasizing the necessity for systemic change to foster sustainable social impact.

One of the core dilemmas that corporate social innovators confront is the challenge of balancing social and financial objectives. Social innovations, particularly in large corporations, need to be impactful and scalable while remaining profitable. However, the internal pressures within these organizations often prioritize short-term financial gains, risking the deviation of social initiatives from their core social missions. For example, within Pearson, efforts to develop products for low-income learners were initially driven by social purpose but were later pressured to target easier-to-serve, more profitable segments. Such shifts can diminish the social impact and complicate efforts to serve underserved communities effectively. Achieving harmony between impact and profitability requires long-term commitment and strategic planning, with clear targets that integrate social goals into the core business processes (Geradts et al., 2019).

The second significant challenge pertains to legitimacy—both internal and external. Internally, social innovators often face suspicion and skepticism from other corporate units that may view their work as philanthropy rather than core business. Externally, societal stakeholders such as NGOs, governments, and consumers may perceive these initiatives as profit-driven motives disguised as social good. The tension is exemplified by Philips’ healthcare initiatives aimed at improving access through affordable low-tech solutions. Internally, economic and organizational barriers hinder the development of products for low-end markets, while externally, establishing trust and partnerships with government bodies and NGOs requires sustained effort and credibility.

The third challenge relates to organizational placement or 'home' for social innovation. Many corporations struggle to embed social innovation within a specific unit, affecting resource allocation and strategic alignment. Sitting under CSR tends to limit social innovation to philanthropy, while placement within new business units or mainstream operations can face resistance due to perceived lack of fit or risk. For instance, within Interface, the Mission Zero initiative exemplifies how integrating sustainability into corporate strategy can facilitate innovation. The company’s commitment to eliminating negative environmental impacts by 2020 aligned initiatives like Net-Works, which recycled fishing nets into carpet tiles. Leadership and strategic alignment enabled experimentation and resource sharing, resulting in environmental and social benefits (Geradts et al., 2019).

To overcome these barriers, the authors recommend several strategies. Firstly, senior management must establish clear, measurable targets that align financial and social objectives, recognizing the long-term investment needed for complex social ventures. Pearson’s incubator exemplifies this approach by setting specific goals for low-income market innovations, emphasizing user value, margins, and scale. Secondly, executive support is crucial to legitimize social innovations internally and externally. Demonstrating a genuine social intent, engaging public partners, and transparently communicating investments can help build trust and momentum. Philips’ collaborations with NGOs and public agencies underscore the importance of co-investment and relationship-building to establish credibility (Geradts et al., 2019).

Furthermore, organizational placement and leadership play vital roles. Embedding social innovation within strategic frameworks, with dedicated resources and leadership support, enhances the likelihood of success. Interface’s integration of Mission Zero into corporate strategy illustrates how strategic alignment, leadership endorsement, and experimentation foster successful social innovations. Clear pathways for innovation, aligned incentives, and flexible metrics are essential to sustain progress and embed social innovation in corporate DNA.

In conclusion, social innovation within large corporations faces complex challenges rooted in organizational structures, internal priorities, and external perceptions. Addressing these issues requires a systemic approach where leadership commits to strategic alignment, legitimacy, and resource allocation. By doing so, corporations can unlock the full potential of their social innovators, generate meaningful societal impact, and create sustainable business value. As the global landscape continues to evolve, fostering an environment that supports social innovation is increasingly critical for corporations striving to be responsible and impactful global citizens.

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