Every Business Is An Impact Business

Impact Business

The question is never ‘should you’ make an impact as a business leader, the question is what type of impact do you want to be making – positive or negative, unconscious or deliberate. Whether you realize it or not, every business is an impact business.

It is quite common for business owners to unconsciously replicate the ways of doing business they saw modeled in previous companies before venturing out on their own. Here are three policy decision points you may not have considered, and the positive impact you can have by making an intentionally progressive policy choice.

how do you find candidates to interview?

It’s incredibly common for people to make staffing decisions on the basis of personal referrals, or by inviting a former colleague from a previous business relationship to step into a role in your current company. It feels comfortable and safe to hire someone from your inner network – and it’s not necessarily ‘nepotism’ because the person being hired may be extremely talented and a great fit for the role.

The problem with exclusively ‘hiring from your network’ is that there’s a strong possibility your network looks and thinks a whole lot like you do, decreasing the likelihood that you’ll build a diverse team.

This is a problem in principle because it makes it more difficult for members of underrepresented groups to break into an industry when they’re not even hearing about an open role before the role has been filled, denying them the chance to apply let alone be hired.

It’s also a problem for your business, as you will fail to reap the many benefits a diverse team can bring, including monetary ones. According to McKinsey, companies with more diverse workforces perform better financially.

When you have a new opportunity available in your company, consider making an earnest effort not only to post the opening on a job board such as Indeed, but actually to reach out to college career centers, job training programs and diversity recruiters who can help you tap into talent outside your existing network.

how do you structure compensation for your team?

One of the ‘social impact’ horror stories I tell is of a former client who had four different women filling a nearly identical role – each woman had a similar job description, a similar level of education, and a similar length of time with the company, but all four women were making a different rate of pay. 

If you were to ask these four women to stand in a line in the order of lightest to darkest complexion, they would have also been standing in the exact order of highest to lowest paid employee. The discrepancy was not a small one, either – the highest-paid employee among the four was taking home roughly $1,000 more per month than the lowest-paid, for no discernible reason related to their performance or contribution to the company.

When I brought what I thought was an obvious oversight to my client’s attention, they were unwilling to make an adjustment to the four employees’ compensation, saying, “We negotiated payment for each employee when they started with us, and that’s just where the numbers ended up. We think it’s appropriate to have a range of pay for each role.”

Leaning into the ‘that’s just what they negotiated for themselves’ excuse overlooks what should be the obvious point that each woman entered the room with a different societal message about the worth of her work, and a different set of personal consequences if she didn’t accept what was offered. Therefore, when it came to their bargaining positions, the four women were not all standing on level ground.

This is a classic example of intention versus impact – even if the employer was ‘not intending’ to be racist, the impact of their compensation decision was contributing to structural racism.

Conversely, by taking the time to spell out a standard compensation structure with quantifiable (rather than subjective) criteria for pay increases, an employer can take a stand for equitable pay for people of all genders, skin colors and other attributes which should be non-sequiturs in the workplace.

how much work do you accept from your team?

Many people have decided to worship at the throne of ‘hard work’ – using the number of hours they work, or demand from their team, as a badge of honor. The first thing to consider is that this is simply bad management, as productivity sharply declines after a certain point.

In fact, according to recent research by Stanford, a 60-hour workweek is actually LESS productive than a 40-hour workweek, meaning a manager is not only doing the people on their team a disservice by demanding unhealthy workloads, they’re actually doing a disservice to the company as well.

From a social justice standpoint, it’s also important to consider that not all employees are able to work long workdays or workweeks, either because of physical or health conditions, or because they are primary caregivers to children or dependent adults.

Rewarding ‘overachieving’ employees who regularly put in more than 40 hours in a week by extension creates a disadvantage for differently-abled employees who cannot (and should not have to) compete with rigorous work schedules.

Creating HR policies that require employees to ‘unplug’ after a certain point, which do not allow over-work to be positively factored into employee reviews, and which set standards for how projects should be managed so as not to create fabricated ’emergencies’ that pressure employees into working late, are all a means of creating not only a level playing field but also a healthy and productive workplace.

Even if your business model is not founded with the ambition to solve a specific social problem, by taking the time to audit your business practices and think through the social consequences of your policies, you can bring into focus the opportunities you have to use your business as a force for creating positive change.

 

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