How to Convince your Stringent CFO to Create Social Impact
As part of Emily and Cheryl’s Leading for Social Value course this spring, students were asked to write closing blogs with reflections from the seven weeks of the course. This post from Andres Cohen, MBA’17 is the second in this series of posts we’ll be sharing periodically.
“What is the return on investment of this social activity?” Those are the exact words I got when speaking to the CFO of our company when I approached him about investing in social value creation. I have to say that I was not prepared to answer this question the moment this happened, and my lack of preparation not only meant that my initiative would be dropped, but also meant that many people who would benefit from my plan were left without a solution.
Throughout my experience with the Leading for Social Value course, I researched and gathered enough data to prepare for that daunting CFO question. I would like to share with you a list of the 5 most critical points that will prepare you to succeed at convincing anyone on the benefits of creating social value. . .
1. CFOs also have feelings.
On week 3 of our course, we explored how good companies can manage to get stories across through storytelling, and how you tell your story can impact your audience in very different ways. Finding the right content to share with the other party is key to your success in convincing them to join your cause. Here are a few examples of exceptional ones: Meet Gissel by OneSight, StreetChange by Verizon, Cleaner of Your Dreams by Mr.Clean.
2. Increase in revenues.
It has been proven over and over again that when your customers perceive you as a company that really wants to change the world, they become loyal to your brand. This ultimately leads to increased LTV from each unique customer, thereby increasing your revenues. Patagonia is a remarkable example of this: $10 Million for the Planet.
3. Attract more and different customers.
As soon as a companies are perceived as doing social good, they reap benefits from a huge percentage of customers who are willing to buy their products, and oftentimes will choose their products over that of their competitors. Millennials represent a big part of consumer share, and it is of utmost important to the majority of them that the company is really giving back to the world.
4. Increase brand value.
As your CFO might know, investing in brand equity is vital to the success of any company. This being said, initiatives around social impact can also be considered part of brand equity costs. On top of all the benefits of creating social value, if performed properly, the company will also increase their brand value. Positive branding built upon social good will not only attract customers as mentioned before, but will also attract new investors.
5. Financial return also matters.
The previous 4 points are crucial in developing your plan to pitch any financial barrier you might have, but to increase your chances of convincing your CFO, you will actually have to perform a financial analysis of the project. Add your assumptions on costs and revenues, and project long term. This will not work if your project short term.
Now that you can convince your CFO on your social innovation initiatives, are you ready to change the world?