According to a leadership expert, the dwindling fortunes – and even implosions – of an increasing number of companies that chased financial returns at all costs, provides context to the growing trend of organisations investing in both commercial and social impact – and also why this makes sound business sense.
But, says Debbie Goodman-Bhyat, CEO of executive search firm Jack Hammer, one of the key challenges for companies and investors in Africa is the difficulty in sourcing viable investments that meet both financial and social objectives – and this is where visionary leadership is in demand.
The hunt is on for a new breed of leader throughout Africa – professionals who can successfully lead and grow companies with a dual mandate of economic and social returns.
“There is an evolving recognition among savvy investors that growth and shareholder returns can – and should – be achieved by measuring more than just the financial bottom line. In fact, data shows that when an organisation has a combined agenda of both commercial and social impact, sustainable growth is the outcome,” said Goodman-Bhyat.
She said that the growing trend by companies and investors seeking to ensure that they make a profit plus a positive difference, makes sound business sense, particularly when viewed in the context of the dwindling fortunes and even spectacular implosions of more and more companies that chased super financial returns at all costs.
Goodman-Bhyat said that visionary leadership is required and in high demand, as companies need to identify how they can take their existing core business, and create projects that will meet the requirements of the impact investment model.
“Right now, throughout Africa, there is more money earmarked for impact investments – predominantly in the fields of fintech, financial and digital inclusion, affordable housing, water and renewable energy, education, health and agriculture – than there are opportunities for these investments,” said Goodman-Bhyat.
“Therefore, investors are struggling to commit funding because there are not enough businesses that can demonstrate social impact on top of track record.”
Goodman-Bhyat said the rise in social impact investing presents a great opportunity for business, business leaders and entrepreneurs.
“But they need to transform a part of their existing business and rethink their business models to attract investment capital earmarked for social impact.
“The challenge is that most corporate leaders are not able to transform from within using the same approach or mindset that has traditionally focused purely on financial profit. The answer to this dilemma is to start thinking innovatively around how to attract leaders who can disrupt current models – and then to give a mandate to them to follow through.”
Goodman-Bhyat said for entrepreneurs and businesses that are driving innovation, and incubators looking for growth opportunities and struggling for funding, there should be no excuse.
“If you can combine social impact with a for-profit business model, there is capital out there waiting to invest in your vision.”