Blending value – integrating business and a stronger service class
As I read the SiG’s latest white paper on Social Entrepreneurship, I began to think about the spectrum of organizations it depicts from pure social or charity/non-profit to traditional for-profit business and I thought to myself: “maybe this model is too linear to capture all the opportunities.” That’s not to say the representation is incorrect, but maybe there are more options we’re not considering that still have profit incentives and social value intertwined, but may not necessarily be linearly associated with this range or living in the bucket of CSR.
Maybe there is a third dimension that we can overlay that can both utilize and service those not typically considered to be part of a risk group. Let me explain what I mean by an example.
The Four Season’s Hotel chain created by industry pioneer, Issy Sharpe, has blazed a trail to dominant market position within its category. This journey consisted of many novel and admirable business decisions, but one that I have always found particularly interesting is their effective use of service occupations in each location. The recognition that the lower wage service worker is fundamental to their customer service model is key to understanding how Four Seasons does a more effective job of using their talent pools – those that competitors tend to commodify as low skilled, thus get low attention. The brilliance here is that the Four Seasons management counters this and pushes the decision rights down into the organization ensuring that the staff are well treated and well trained to provide customers solutions customized to their needs. One benefit is a higher willingness to pay the room rate based in part on the improved service offering from the empowered staff. It’s a triple win that’s not social entrepreneurship nor social business nor corporate social responsibility. This is a business that has looked at its value chain to extract more value while giving more value to the service workers and subsequently the customers.
The point I’m trying to make is that service workers here are being more effectively deployed in this business model yet the business process does not necessarily fit into the known “social” buckets. The company’s practice affects the bottom line while improving the outcomes for a cadre of an occupational group that is in many cases commodified in the same industry. That is what I am talking about. It is not a social purpose business, but a traditional business that by their unique operating model uses a section of our labour force more effectively that has spill-over effects for society (more pride and skill, less routinized labour that leaves creativity on the table).
Routine oriented service workers are now 46% of Ontario’s workforce. Here are two working papers that build a profile of this group of workers. How will you leverage their creativity and skills for business success?
David is Project Leader at the Martin Prosperity Institute and a practicing management consultant. He is a recent MBA grad from the Rotman School of Management and is passionate about developing the thinking and leadership potential of others. See more…