How big is your generated social value-added? New challenges for transformational leaders...

“Elephants can remember, but we are human beings and mercifully human beings can forget.” ― Agatha Christie

How social are our social entrepreneurs? No time for empty promises…

Social value-added gains increasing attention of modern organizations and scholars: it manifests in a great variety of topics and areas, such as social entrepreneurship, CSR, shared value economy, positive externalities and collaboration, social innovation, sustainable development, management of change, and creative leadership (French, 2017).

In 2018, Global Entrepreneurship Monitor Consortium paid a special attention to entrepreneurship spirit and social impacts of entrepreneurship, which were measured via a set of indicators, such as societal values, individual attributes and entrepreneurial activity, related to jobs creation and innovation. Moreover, social impacts are described as sustainable and inclusive growth and poverty reduction for national wealth. Across 50 analysed economies, 44% entrepreneurs expect to create no jobs in the next five years, while only one fifth of the respondents expect to create six or more jobs. Notwithstanding such modest anticipated social impacts, the transition from non-job creating toward 1-5 jobs generation is witnessed in efficiency-driven economies (from sole entrepreneurship toward small employer).

The main constrains to employ more people, particularly in economically less advanced countries, are related to rigid labour regulations, poor supply of skilled  labour, and limited access to entrepreneurial finance. In addition to these barriers, digital technology enables entrepreneurs to operate on their own. The United States are among the leading countries in job creation (with 38.6% of entrepreneurs expecting to generate more than six jobs), followed by Asia and Oceania (21.0%), and Europe (18.5%), while Latin America and the Caribbean possess 18.0% of socially oriented entrepreneurs, and Africa has 17.0% of entrepreneurs who are willing to create social impacts via job creation.

Given emerging role of new technologies (artificial intelligence, Social Medias, Digital Marketing, IT and robots), human capital remains as a key driver for innovation and change, while creative leadership is emphasized in many scientific studies: Uusi-Kakkuri (2017) focuses on transformational leadership as a way to lead creative individuals and innovators; Jiang et al. (2017) and Aunjum et al. (2017) emphasize employees’ motivation; Yonazi et al. (2012) relate to society an stakeholders’ transformation via modern technologies; and  Gálvez-Rodríguez et al. (2016) accentuate the role of engaging citizens. Society engagement appears critical in policy development. As for example, Science and Technology Committee, authorized by House of Commons of the UK (2017), encourages society engagement in science-related policies.

At a county level, policy makers, governmental programmers or associations of various stakeholders encourage projects which might create social value-added in both the short and long run; stock exchanges introduce guidelines how to report social value-added indicators, while international organizations set rules and requirements for innovation projects and activities. Moreover, globalization trends make social contributions of compulsory nature, rather than a marketing tactics to improve social image.

The changing corporate environment leads organizations to new challenges, related to efficient use of technology, data management, society engagement, collaboration and networking, or social innovation. However, each economy has its own particular context, which is related to cultural and social aspects, such as the fear of failure, social trust, ethical and moral norms, and etc. (Singh et al., 2015). As it was stated by Cartigny and Lord (2017), Social Capital is tightly related to social networks and trust and it can be interpreted at individual and community levels; thus, social value-added could be translated into factors, such as employment creation, collaboration or education.


What characteristics should our transformational leaders possess?

Based on the positive experience of Croatian Public Administration Organizations (Vozab, 2012), the on-going transformation of a country calls for efficient communication to citizens and other stakeholders, while paying attention to the quality and accuracy of information, demonstration of competences, and consistency. At first, it might be uncomfortable to operate hand in hand with citizens; however, the era of rigid linear communication model has come to its end (Paynton et al, 2016), technologies bring higher visibility which creates stronger ties with stakeholders.

In the context of transformational leadership, the leaders of changes are driven by efforts to create community spirit (Husain, 2013), communication improvement strategies (Shanga et al., 2017), team building and training schemes (Luthra and Dahiya, 2015), team performance (McEwan et al., 2017), and employees’ motivation from a more generic perspective.

Jain and Yadav (2017) state, that organizations are centered on digital media devices and key strategic partnerships. However, the invasion of technology in organizational development might be expensive in terms of human resource management, R&D, application of new technologies, as well as big data management. Therefore, transformational leaders face the necessity to develop competences which help allocate resources, communicate via technologies, manage bid data sets, monitor and motivate.

Creative leaders position themselves closer to citizens, thanks to new technologies, but this effect triggers the need to be innovative and create concrete social value-added (Carini et al., 2017), while solving the challenges on case by case basis and addressing the specificity of social groups and markets (Zaimova et al., 2012).

Notwithstanding insufficient creativity and reward systems in transiting economies, organizations feel the pressure from other stakeholders to efficiently collaborate while using modern technologies, manage risks (making fast and effective decisions which are accompanied by execution and monitoring) (Ferguson et al., 2016). Flexibility, clear organizational philosophy, social trust and willingness to excel at each development stage are among the main criteria of successful partnership, which might lead to multiple synergy effects and sustainable development. It is difficult to meet consumer needs and generate larger social value-added without collaboration tactics; therefore, social wealth should be examined in the context of networks as well as resource and knowledge sharing. All in all, the era of empty promises has come to its end – it is time of real actions, concrete social impacts and key strategic partnerships, which might be facilitated by new technologies and business intelligence.




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