I have long been a believer that companies can drive sustainable positive impact when they connect purpose to their core business operations. I believe that, with a small change in approach and a commitment to walking-the-talk, purpose-driven organisations can exponentially increase their positive impact.
But social impact requires more than just a clear sense of purpose. It requires concerted action to redirect resources and effort toward activities that hold the greatest potential for positive impact. When those actions are a central part of your day to day operations, the likelihood of sustained success is much greater.
An ongoing initiative by two enterprising South African SAP employees continues to inspire me about the potential for purpose-driven employees to drive true change both in their immediate work environment and society at large.
Striking gold with local social enterprises
A few years ago, Kaunain Nurani and Mathiba Phokungoane realised they shared a common interest in making a positive social impact and started seeking ways in which to bring that purpose to life.
The two launched Procurement with Purpose, an initiative that seeks to make it easier for SAP Africa and other organisations to purchase goods and services from social enterprises that look beyond pure profit and actively seek to address societal problems.
At its core, Procurement with Purpose brings a handpicked selection of qualifying social enterprises into the world’s largest procurement network, Ariba. It increases the visibility of the social enterprises and encourages organisations to divert some of their spend toward these social enterprises, for example for end-of-year gifts, or IT and HR services.
Not just any social enterprise can join: the initiative purposely seeks social enterprises that are aligned to our organisation’s guiding values. One social enterprise, for example, trains girls for a career in technology, which aligns to SAP’s focus on encouraging greater female participation in Africa’s digital economy.
The program has been a resounding success: all five social enterprises that currently form part of the Procurement with Purpose initiative have benefited from increased visibility and greater opportunity to supply goods and services to SAP and other global organisations. The five-million-plus organisations that use Ariba for their procurement needs benefit from access to trusted social enterprises that can help them bring to life their own corporate impact initiatives. The intention now is to widen that base and continue to look at opportunities to find local social enterprises that can provide the daily services required to run the SAP business. For example, all our coffee in our South African offices is now procured from “I Love Coffee” – a Cape Town based social enterprise that supports the deaf community.
This brings me to one of the biggest leadership lessons from the success of Procurement with Purpose: that motivated, purpose-driven employees can make a significant positive impact provided they work in an enabling environment, and that not every impactful initiative needs to be corporate-led.
Multiplier effect of social impact
Corporate social impact has been a growing concern for global businesses over the past decade. According to one report, the percentage of companies listed on the S&P 500 that published a corporate social responsibility report grew from only 20% in 2011 to a near-ubiquitous 90% in 2019.
There’s good reason: 77% of consumers are motivated to purchase from companies that are committed to making the world a better place, while 93% of employees believe companies must lead with purpose.
In order to build a successful business that can grow its customer base and attract top talent, purpose needs to feature highly in the corporate agenda. In a Harvard Business Review study, 58% of organisations that have a clear and strong sense of purpose experienced growth of 10% or more over the past three years.
As the Procurement with Purpose initiative reveals, one of the most significant opportunities for organisations to enhance their social impact and drive true positive change is to augment their supply chains with social enterprises.
Social impact through smarter spending
In 2020, SAP introduced the ‘5 & 5 by 25‘ concept, which formalised the company’s global commitment to direct 5% of its addressable spend to social enterprises and 5% to diverse businesses, with 2025 as the deadline.
This forms part of the company’s goal of being both an enabler – through providing the necessary technology infrastructure and strategic insight – of greater sustainability and social impact, as well as an exemplar in terms of the way SAP itself conducts its work.
At its core is the understanding that, as a business that not only commands sizeable annual spend but also powers many of the systems that support and enable global commerce, we could make a lasting positive impact by simply changing a few of our own processes.
For example, the Ariba network is the largest procurement network in the world, facilitating $3.75-trillion in trade by 5.3 million organisations per year – more than double the commerce of Amazon, Alibaba and eBay combined.
By increasing access to and visibility of social enterprises on Ariba – as Procurement with Purpose has done – we can encourage organisations across the globe to direct some of their spend toward social enterprises to drive greater social impact.
Most importantly, when a business is clear on its purpose and consistent with how it lives up to that purpose, it empowers employees at all levels of the organisation to bring that purpose to life in their own way. And as Kaunain and Mathiba has proven, this holds immense benefits for employees, organisations, social enterprises and society at large.
Cathy Smith is the Managing Director at SAP Africa.