While OBM practitioners have been widely effective for several decades, work-related mental and physical health decline, unethical company behavior, expensive yet ineffective performance management systems and rapid changes in the workforce have made the practice of OBM more valuable than ever before. These global challenges have spurred discussion and action surrounding Corporate Social Responsibility (CSR) programs, purpose-driven organizations and other entities dedicated to building a business on making money while improving the world, even if its to simply start taking better care of their employees.
This movement has led to the rise of social entrepreneurs and businesses, which has brought added focus on impact investing. In fact, between 2014-2018, global assets earmarked for social impact investment grew five-fold (Global Impact Investing Network). Conscious Capitalism, Inc. is rapidly growing its network of socially conscious businesses, and Black Rock’s own Larry Fink had this to say in his 2018 annual letter to CEOs:
“Companies must benefit all of their stakeholders, including shareholders, employees, customers and the communities in which they operate”
As there are many ways companies can and do positively affect the world, for the purposes of this article I will speak to a type of social impact that has become the horizon for W3RKWELL – preserving the health, wellbeing and quality of life for employees.
For readers unfamiliar with social impact or Organizational Behavior Management, I review some key terms for clarity here.
What is social impact?
“Social impact is the effect an organization’s actions have on the well-being of the community.” (Knowledge @ Wharton High School)
“A significant, positive change that addresses a pressing social challenge.
Creating social impact is the result of a deliberate set of activities with a goal matching this definition.” (Business + Impact at Michigan Ross)
“Social impact is jargon – broad, vague, and somewhat inaccessible by definition. So what does it really mean? Technically, social impact is how organizations’ actions affect the surrounding community.” (The Stanford Daily)
See this link for additional teasing out of this definition.
What are social impact investments?
Generally, impact investments are the fuel the fires of social impact endeavors. As defined by the Global Impact Investing Network (theGIIN.org):
NOUN: Impact investments are investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return.
What is OBM?
If we think of social impact as “any behavior or set of behaviors from within an organization that directly result in a positive impact on society”, practitioners skilled in the science of human behavior are prime candidates for involvement. Organizational Behavior Management (OBM), is a sub-discipline of Applied Behavior Analysis, or the science of human behavior, as it relates to the workplace. The practice is guided by a single theory of human behavior as opposed to I-O Psychology or Organizational Development, which may draw from several theories. OBM relies primarily on direct observation, continuous measurement and modifying the environment to bring about observable, measurable behavior change (www.obmnetwork.com). The mission of OBM practitioners, regardless of work setting, is to bring socially meaningful, positive change to the workplace though data-driven, science-supported interventions. If our plan is working, we know it. And we likely have a graph to boot. More importantly, if it’s not working, we also know it, and we adjust our interventions accordingly.
OBM has a clear and bright opportunity to answer the challenge of defining and measuring social impact outcomes for organizations that consider meaningful improvements for society as part of their ROI, a worthy challenge currently being taken on by the world’s most forward-thinking companies. The biggest question for social impact investors is one I argue OBM practitioners were born to answer, How do we define and measure “social impact”? Meaning, how can we tell if the good intentions, efforts and resources of these companies are mutually beneficial for stakeholders as well as shareholders?
In the book, Firms of Endearment (second edition), authors Raj Sisodia, David B. Wolfe and Jag Sheth write:
“It is attention to the immeasurable qualitative dimensions of life that gives FoE companies their crucial competitive differences from their competitors”.
In good company, Einstein is quoted in the same paragraph:
“Not everything that can be counted counts, and not everything that counts can be counted.”
While I mostly agree and truly wish this sentiment was sufficient in business, this is essentially a values statement- individuals value different things. What “counts” to one person may not count for the next, and it may not “count” for the business. Moreover, in the age of social impact investing, data analytics and global competition, everything that counts can and should be counted. Otherwise, how will we know what truly works? How will we know where to invest our social impact dollars (or venture capital dollars) for maximum benefit?
I assume the negative connotation assigned to quantitative measurement comes from decades (centuries, likely) of businesses that valued money over all else. “What gets counted” typically meant money, and it was all that was counted. And I’ll be honest here, “quantitative measurement” sounds about as fun as a cactus chair. These days we talk about resilience, grit, passion and culture- words that are simply way more fun and familiar. Sure, we understand them the general sense, but if 5 people are in a room watching employees operate, would they all have the same definition of those showing grit? Would they all identify the same variables that influence and maintain the organizational culture? How might they describe resilience to someone who doesn’t have it, so they can have it too?
Simply because the qualitative “things that count”, are more abstract in nature than simply counting dollars does not mean nebulous terms like culture and resilience cannot be defined in quantitative, behavioral, observable terms. We can think of resilience in terms of behavioral momentum or reinforcement contingencies, or creating a culture of health in terms of lowering response efforts for healthy behavior or removing stress-evoking workplace variables.
Everything people do is behavior. If a manager is striving to make their employee feel valued, it is their behavior that leads to a successful (or failed) outcome. If a company vies to preserve the wellbeing of their workforce- absolutely a social impact endeavor- it is behavior that leads to those outcomes.
For example, a Journal of Organizational Behavior Management study showed that a group contingency requiring employees to take two weeks off lowered the mean number of unscheduled sick leave across all five participant groups (Brown & Redmon, 2008). In plain terms, this study used a lottery and reward system to influence taking time away from work, which resulted in every group taking less unscheduled sick days overall. Through the lens of social impact and wellbeing, these employees were rewarded, not punished, for spending time with their families, friends or alone to enjoy their lives outside of work. In a DowChemical study (2010), presenteeism (working while sick) costs averaged $6,721 per employee, per year. Through the lens of business and sustainability, punishing employees for taking time off (even just making it more difficult) is playing the short game, costing the company money and likely leading to some unhappy, unproductive (if not ready to resign) employees.
What else could have been measured to support the social impact resulting from this policy? Some may say happiness or stress reduction, while OBM practitioners would likely find support for the time-off intervention by measuring how many hours employees spent exercising, reading to their children, volunteering or helping their spouse with life tasks, all behaviors that improve quality of life for the individual, their family or their community. Essentially, the stakeholders Larry Fink recognized last year.
We may not have been optimally equipped for a social impact movement of great magnitude in the past, but with the support of advanced technology, OBM practitioners and forward-thinking HR teams, we are more prepared than ever to define, measure and encourage social endeavors and the impact investment dollars that fuel them.