Ethical Social Impact Requires Good Business Strategy
But what is "good"?
What happens when you offer a real exchange of value, so the people using your product have explicit power in the relationship?
In the context of making technology that serves living systems, it might seem weird to say that being ethical relies on having a business strategy. After all, having a business strategy sounds like being a capitalist first, instead of being empathetic people who are designing something that serves the greater good.
The fact is, good intentions kind of fail us when we're faced with a product that is unsustainable or a team that is not getting paid. Desperation can set in and we begin making choices that work against our best intentions. That's why it's essential to put as much intention to business strategy design as to product design or even hiring or fundraising.
Everything is integrated. A good business strategy depends on building things that people care about, and also on having a team who sticks around.
A good business strategy does not mean a "for profit" business strategy. A business, or organization, can be sustainable and revenue-generating without being a for-profit entity. You can be revenue-positive and distribute surplus among stakeholders such as team members, customers, other aligned organizations, and even investors, provided that the distributions make sense both in service of the business and the mission of the organization.
Many non-profits and early social tech builders pretend that they exist in a magical universe in which they do not have to worry about business strategy. They "serve" people who don't pay for the services and derive income from project grants or payment for services from a third party, such a local government. This approach naturally creates a weird power dynamic between the team and the 'end user.' To continue to support the costs of the organization, someone must be satisfied and that may not be the people who use the product or service.
It often seems unethical to charge for many things nonprofit organizations provide, especially when those they 'serve' are economically disadvantaged. But the collaborative nature of 'paying' for services does not require money. How can you create a scenario that respects dignity by offering a real exchange of value, so that the people using your product have explicit power in the relationship?
When products or services are not valuable enough to the people using them to give anything in return, it's probably worth considering whether you're in collaboration or saviour-mode. If your organization's staff is vastly different than the people who they 'serve,' it can be a great exercise to investigate some of the assumptions and power dynamics that lead to paternalistic approaches to design and delivery.
You may notice that I keep putting 'serve' in quotations and here's the reason: in a true power-together situation, we're in enough collaboration with our clients/members to be able to call in the power differentials among us and work together to understand our common goals. Great organizations are always seeing the natural human dignity in all of us that means that we must look for solutions that ultimately serve all of our interests holistically, rather than attempts to 'lift others up' to our supposedly exalted positions.
A business strategy helps you to understand how you can grow impact while keeping your values aligned. If you grow as a nonprofit without this intention, you're often entirely funded by grants. Eventually you'll be an organization where fundraisers have a great deal of power, and you may be hiring people who are good at the philanthropy game rather than committed to the organizational mission.
I'm not talking about entrepreneurial approaches where individuals 'get rich.' Don't fall for shadow extraction models in the guise of Doing Well by Doing Good. Our goal should be sustainability, natural growth, moving at the speed of trust, not creating wealth for investors or founders in a "grow or die" paradigm.
A good business strategy will generally help you avoid falling into the trap of solving one narrow problem to make money, ignoring the downstream effects of profit-enhancing decisions. Good business strategies use Warm Data and a responsible business approach that considers the five stakeholders: customers, co-creators, earth, community, and investors. Good business strategy helps ensure your intentions are protected even as you grow, and that your organization will last long enough to make an impact.
*photo by Kindle Media