LONDON — Using international measures for the Social Return on Investment, IQ Business Group has quantified that in its three years thus far, the project’s total impact has been four times the R52.7m distributed to beneficiaries by the CEO SleepOut™. Stephen Smith provides the hard numbers – and throws out challenges to the top team at companies which are consistently admired for their social conscience. – Alec Hogg
In this update of the CEO SleepOut™ we’re going to be talking about return on social investment. Is the money that you give for good actually going to good use? We can calculate that and we’re going to find out more about that from Stephen Smith of IQbusiness.
Hi there, Alec.
Well, a warm welcome to you, Stephen. You’ve been following the CEO SleepOut™ since its inception in 2015 and done quite a lot of analysis. Just perhaps to step back a little bit, many people invest in good causes like this one, but to quantify whether or not it’s been a good investment I guess, is something that occupies many minds.
Yes, that is right Alec. The concern of course is that so much is being contributed and the question is ultimately, well, what difference is it making and is it in fact having an impact. Within our organisation we apply a methodology known as social return on investment and in much the same way that you look at return on investment from a traditional financial perspective we understand through this, what the return on investment is, what is the real impact that is taking place from a specific event?
What got IQbusiness into looking at this as an area where you’d like to unpack the reality?
I think that we’ve realised more and more and not only ourselves, but many organisations that we work with, that the need to be able to move away from primarily qualitative feedback to something which really does talk, how do I know what I’m investing in, but in addition to that how do I work to optimise that investment. The realisation that as we think of an integrated way of looking at the value that organisations are driving out, it’s the reality of being able to say well, ultimately what is this impact and how do we in fact, make sure it is optimised.
The only way of actually doing that is to then be able to quantify it and social return on investment is an international methodology which is governed at a global level, but interestingly enough incorporates all of the key components of what we find within King IV, which we are so well known for in South Africa. The whole concept of integrated thinking, being able to understand value beyond just finance is absolutely critical to understand the overall impact of something.
It sounds really sensible, facts rather than narrative, but getting to the CEO SleepOut™ itself, how do you quantify the return that it is making or that those who are supporting it are enjoying?
Okay, so what we’ve done is for the last three years we’ve been doing impact assessments on the CEO SleepOut™ and the initiative itself and what we’ve done is we’ve applied two different types of assessment. In the first two years we conducted full social return on investment studies. Then last year we conducted what is known as an impact narrative and there were different reasons why we applied those but nonetheless when we have a look at what is the actual impact, we find that in 2015, for every R1 invested there was a R3 return in terms of invested funds.
I could talk to you about that just now as to how we in fact achieve that, but 2016 allowed the programme coordinators to tweak the programme and based on recommendations that came out of 2015 the return actually moved to R4.24 for every R1 invested and so that was significant. It just demonstrates that as you in fact apply the same principles that we apply to return on investment in business, so we can ultimately increase the return that we’re getting from social initiatives.
That’s a wonderful or a very handsome return if you were in a business, but as far as social investment is concerned, where exactly would one see this, given that the CEO SleepOut™ is to create empathy between people who were very privileged to those who aren’t?
Yes, that’s right and I guess that’s where some of the questions get asked, is how can one night on the streets by a group of CEOs lead to an impact which is a sustainable impact and over the three-year period there have been 472 CEOs and executives which have participated in this initiative. The interesting thing is, as part of the assessment that we did, we asked questions in terms of what has been the sustainable impact that you’ve actually achieved in your own life as a result of spending that time out there. And so you start to be able to get a sense as to what is the impact actually of empathy, the impact of being able to look at somebody and to be able to understand that’s not just another person, but that’s somebody and you understand a little bit more about their lives.
Fair enough, it’s just one night, but the opportunity to be able to say, “You know what, what have I got in my hand that I can then use to influence the change?” Hence the reason why we’ve found that in the study impacting leaders and CEOs is so significant, is because in many cases, what they have been able to do is to be able to change the way that they run their businesses, change the initiatives within their businesses, get people involved, drive and lead through to making sure that business is not just business for the sake of money, but business is a force for good. Additionally, we saw a significant increase over the years in terms of this sort of behaviour, which is a key component because it talks then to the increase in empathy.
I was fascinated by Dr Makaziwe Mandela, the oldest living child of Madiba. When I asked her what one does when you see people at the robots begging for money, she said, “If you haven’t got money to give them, just acknowledge them as human beings” and that’s just a tiny thing that I’ve applied now with the homeless people that I’ve engaged with and it does immediately make a difference. It’s some kind of a connection, whereas in the past I guess most of us look the other way. If you do that at the very top end, if you have that slight change in attitude from chief executives of major corporations one can imagine that knock-on effect would be significant.
Yes, it really is and that example that you’ve just given right now is such a real example. You know just the reality of it, we wonder why we drive past parks and so on and we find people sleeping during the day and you get to realise as well that actually if you just lie still all night you might well not wake up in the morning and so hence, that’s the only time that you have to do it. It’s that realisation that there’s another whole world out there and what can we in fact do with it. However, I guess not more significantly, but very significant is the fact that as leaders we have within our hand the opportunity to really influence and drive change and to use that level of influence that we have to impact the society in which we live.
What we found happening was that leaders would look at their programmes which they have and I’m not talking just the CSI programmes, of course those are significant, but they would have a look at their supplier development programmes, their enterprise development programmes and the mind-set on that would be around how can I tweak that to in fact deal with some of these real challenges, which the lost people in society are facing and just really increasing that whole awareness around homelessness is something and the destitution that goes with that and what can be done to address that in our country.
Stephen, of the 472 chief executives that have participated, how much money have they raised for causes that obviously have been very carefully filtered before they’ve been part of this whole programme?
Alec, that’s what got us, it really did raise the level of interest from our perspective when we looked at the quantity involved. For those 472 CEOs an amount of R52 million was raised. That, from all perspectives is the greatest amount ever raised within our country on individual nights, that’s over the three years. R38m went to the primary stakeholders or the primary beneficiaries, R3.6m to secondary beneficiaries and then R1.79m went to the satellite beneficiaries. Putting all of that together, you really do realise that this initiative not only has raised that awareness, but it has raised significant funding, which has had a big impact in terms of those that have benefited from it.
Those are extraordinary numbers and as you say, comfortably the biggest charity initiative or fundraising initiative ever seen in South Africa, but I think what surprised me, Stephen, is some of the chief executives I’ve been getting hold of and saying to them, “Are you going to participate this year?” have simply refused, they’ve said, no, they’ve done it once or they sometimes haven’t even bothered to make up an excuse on why they won’t be participating this year. Is there a fatigue that sets in, “I’ve slept out once, well, I’ve done my bit, now I’ll carry on with my business”?
Yes, I think that does happen and the reality is that it’s a very cold night. I personally have slept out over the years on each occasion and we certainly do see ultimately that level of fatigue. That goes to the point, well, you don’t have to do it yourself, you could certainly pass that on to others to get involved in and on the basis of that, well, why not get other executives involved who are in fact, going to drive the initiative forward, being a new experience, experiencing the change and making sure that they then pass that onto others too.
So, although it’s a CEO SleepOut™, it can be a delegated somebody from the CEO. In fact, I think we saw that with WDB, and Faith Khanyile. She said she slept out a few times, now she’s going to get her colleague Nicola Gubb to come and experience and I’m sure Nicola’s quite excited about it and so would others who are given this opportunity.
Yes, without a doubt and you know it’s amazing what it does. It’s interesting and we go back to all sorts of assumptions and so on, but if we remember when the first CEO SleepOut™ took place before the CEO initiative was set up and South Africa was in a very dark place, what you found happening was that people were having conversations that evening and that was amazing because from our perspective and I just often wondered about this, if this wasn’t the starting point of certain relationships being formed and so on. So there are all sorts of additional benefits that come through from this, which we don’t really upfront always expect.
That’s so interesting, Stephen. When you do get people together in a room and they start realising that what they have in common is far greater than their differences, when they start building a level of trust. I’m sure in a case like this where they realise that their values are identical, as are most people, most human beings are good, most human beings want to help those who are less privileged, then you have a basis from which to start building.
Yes, that’s exactly it and I mean if you think about what trust is all about, it’s ultimately how do you form a relationship, you form relationship based on trust, but that takes time and where does that time come from. Well, spending that night out talking about the real issues, that is exactly what happens over that evening and on the basis of that I’m convinced that there were some real sprouts of relationships which then went on to become something quite significant as we all know over the following two years.
South Africa’s on the move. It’s going a little in a stuttering manner. Many people were hoping that Ramaphoria would go quicker, but the reality is that it is moving in the right direction. Sometimes we forget that, but Stephen, the message I guess for the chief executives who might’ve slept out before and are not sleeping out this time is, “Hey guys, there’s a great return on investment, it has been quantified by IQbusiness, it’s R4 for every R1 that you invest and secondly you don’t have to do it yourself. We’d love you to do it yourself, but you don’t actually have to be there yourself, but if you can’t make it send along some of your colleagues for a similar experience. It’ll also take their heads to a different place”.
Yes, that’s exactly right and we’ve found Alec, just as a matter of interest, at our business we ran what we called the “Sympathy SleepOut” over the last few years where we got what we call our IQers together and we had bunches of people sleeping out just outside our buildings and I can say from a very personal perspective the impact that that had in terms of driving relationships, driving culture and driving a togetherness within our business around these real issues. I have no doubt at all that this really does work.
Stephen, you have some people that you’d like to challenge to see joining you on the 11th of July, who are they?
Alec, I’ve thought about this and I thought about those companies that to me have demonstrated over the years that they have a conscience and that this is important to them, so I’d to challenge Ian Moir from Woolworths, Doug Jackson from Coca-Cola, Mark Cutifani from Anglo American, Ian Donald from Nestlé and Robert Walton from Momentum.
So, it doesn’t now mean that these individuals if they happen to be travelling or have bar mitzvahs or whatever it might be, that they can’t make it, it doesn’t mean they have to come themselves, but we want a presence from them, is that what it is?
That’s exactly it and the challenge is for them to find somebody, a leader in their organisation that can carry the flag for them.
Just to close off with, I’ve heard it a couple of times now from chief executives or from leaders of companies that the staff really like to see the CEOs involved here. Mike Wylie, the Chairman of Wilson Bayly, he said that when Louwtjie Nel, the Chief Executive slept out there was a huge amount of pride within the whole organisation. The CEO had actually gone out there and hit the streets in solidarity almost.
I heard the same time thing from Sung Yoon who is a new arrival in South Africa. He is the head of Samsung in the country, a huge business as you can imagine. He’s come in from the United States where he spent half of his business life and he said that amongst the staff at Samsung, the feedback to his decision to go on the SleepOut™ has been extremely positive and they’re very proud of him even though they hardly know him. Is this something that perhaps the CEOs themselves don’t quite get a feel of, that the lead they’re showing goes a long way down the organisation?
You know it’s interesting you ask that question because what we discovered as part of our analysis – and what we do is we look at what are the areas that drive the greatest amount of change and impact, the one factor that stood out head and shoulders amongst the rest was that the CEOs are seen by those that work in their organisations as role models of change. What we’ve discovered is that most people want to make a difference. Most people want to do something, often in a situation where they don’t know what to do and when their role models and their leaders and so on are raising their hand and doing it, it has a significant impact in terms of the actual engagement and the employee engagement within that company and that’s significant.
You know if you look at what companies try to do, they try to drive employee engagement because that creates the stickiness in organisations and what we discovered was that this was a significant initiative to drive that level of stickiness. People would far rather work for an organisation where they feel that their leadership is standing by a set of priorities and values and that they in fact, have the opportunity to get involved in some way or another and through the opportunity supporting their CEO.
Therefore, it’s a really significant component and I think Alec, as well, we have to realise that people do get fatigued, people do say, “Well, this is just, you know, more of the same”, yet a CEO with vision getting others involved in this process has the opportunity to drive an event, which not only will be so significant for that person themselves, that leader themselves or who they delegate to, but also will in fact drive significant impact into their organisation. Therefore, I just think that we have to create these milestones and this is something, which is significant in people’s lives.
Well, fascinating discussions, Stephen Smith from IQbusiness and they’ve quantified that R52.7m that has been raised by the CEOs and given to beneficiaries has had an impact four times the amount and that’s the kind of thing that is sure to resonate with the A-type personalities who are chief executives of South African companies. We are heading towards the CEO SleepOut™ on the 11th of July.
I can tell you from my perspective; it is something I’m really looking forward to (with mixed feelings). I’m going to have to try to get myself warm enough that evening, but I’m looking forward to empathising, understanding, knowing that fellow human beings do this continuously, that’s the way they live. It’s been the latest edition of the CEO SleepOut™ and until the next time, cheerio.
