A Founder’s Guide to Impact Led Growth

VITAL works with executive teams to drive value and to help companies grow right. With decades of experience working with leading investors and global brands, we unlock new value by assessing and transforming how companies activate ESG, impact, and sustainability as a competitive advantage and a growth lever. We call this Impact Led Growth (ILG). In this series we will discuss how ILG affects Founders, Funders and other executives in different ways as they navigate their growth journey.

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Part I: A Founder’s Guide to Impact Led Growth (ILG)

Entrepreneurs and investors alike are facing a number of competing priorities. Interest rates, fundraising challenges, and pressure for profitable growth are certainly taking center stage. But how can founders differentiate in these challenging times, while accelerating growth, building a robust culture AND attracting new talent, customers and investors?

What is Impact Led Growth?

We’ve all heard about the various benefits of strategies that lead with Product (PLG), Marketing (MLG), Customers (CLG) and Sales (SLG). While each of these have very real benefits and challenges - and have been anecdotally credited with unlocking hypergrowth at some massively successful brands - what they are all missing  is a fundamental human connection and values alignment that can naturally unlock earned media, new markets and use cases, broader adoption , as well as new investors and new customers. This deeper connection to a company and its values - reinforced and accelerated by robust product, culture and intentional engagement with a company’s stakeholders - is called Impact Led Growth (ILG). 

At its core, ILG is a mission-driven growth strategy. It integrates elements of traditional corporate social responsibility, corporate purpose, and sustainability, but its real power lies in the many benefits and the value it creates across different parts of your growing business. ILG activates environmental, social, and governance (ESG) considerations that have become increasingly important, and as ESG has become politicized in the United States, ILG focuses conversations on value creation versus ideological agendas. It is an x-factor for any brand.

ILG incorporates levers from across the business to drive new value: 

• ILG drives revenue through an emphasis on mission-driven partners, customers, and advocates; 

• ILG drives brand and reputation through the cultivation of a diverse range of human-centered stakeholder story-telling and amplification; 

• ILG creates a powerful center of gravity for employee diversity, attraction, retention and culture; 

• For the founder(s) of a growing company, ILG can be a powerful strategy to attract new investors, customers, and top talent while creating long-term value; and

• ILG advances efforts to mitigate risk, govern responsibly and maintain compliance which actually drive cost avoidance or reduction.

What are the elements of Impact Led Growth?

ILG is a strategy that intentionally leverages existing elements of the business to generate new value and capture new opportunities. What this means is that you can enable your people in existing functions - think Finance, IT, People, and Sales - with new tools that will help you to derive new strategic value from your organization. And growth stage companies take note: this is a roadmap for you to build right the first time, a more agile approach to value creation while your more mature competition will have to retrofit their operations. ILG is a future-proofing strategy for growth companies.

ILG is a fundamentally new way to think about driving growth, and to maximize the value creation opportunity, companies must:

1. Integrate Impact into Business Operations

To drive growth, impact and ESG should be integrated into all aspects of a company's operations. This includes quarterly and annual planning and embedding sustainable practices into marketing and sales, supply chain management, product development, and manufacturing processes. In fact, ILG should be aligned and measured to some of the core KPIs used to manage your operations. By minimizing negative environmental and social impacts while maximizing positive outcomes, the company can differentiate itself and appeal to conscious consumers and future team members. However, ILG is about much more than simply positive social or environmental outcomes. It can have very real financial and risk mitigation benefits.

For example, several years ago companies around the world had to prepare rapidly to ready themselves for the General Data Protection Regulations in the European Union. Because the focus of GDPR was governance of data transfers, retention, privacy and protection - with the objective of enhancing individual control over the use of personal data - companies across industries had to move aggressively to prepare their organizations for fear of sanctions and fines. Leading companies engaged those from across their business to not only identify potential issues, but also to design a new way of doing business and differentiating in their categories. And the market rewarded them!

2. Engage Stakeholders and Investors

Effective stakeholder engagement is a critical component of ILG. Founders should proactively engage and communicate your company's commitment to impact principles to help build trust and transparency with stakeholders, including employees, customers, suppliers, and the community. This engagement can have outsized benefits in the form of new customers, new and active advocates, and powerful new stories about how your products are supporting critical missions and causes. Regularly updating stakeholders on sustainability initiatives and progress will help to enhance brand reputation and customer loyalty.

When approaching investors, founders should highlight their ILG strategies as core drivers of long-term value. The ability to demonstrate a clear link between impact initiatives and financial performance will attract responsible investors and differentiate your company from competitors.

3. Build Partnerships and Collaborations

Authentic engagement and support of mission-driven organizations and peers can amplify the impact of any company. By forming partnerships, founders can access additional resources, knowledge, credibility and networks to further your company's growth imperative. This can take many forms, but often these partnerships help to activate a brand, and humanize sophisticated products and services in a way that virtually nothing else can, while enhancing your credibility and opening doors to new markets and customers. 

For example, many leading technology companies have partnered with Nethope - a coalition of 60 of the largest global humanitarian organizations - to provide technical assistance, product, and other monetary donations. Engagements have centered around disaster response, connectivity in global refugee camps, and core technology support for nonprofit member organizations. Not only does this provide critical donated or discounted technology solutions and support to these organizations, but it also provides invaluable employee engagement opportunities, tangible and impactful use cases and product stories, and some of the most compelling storytelling that technology brands could ever hope for. Companies like AWS, Cisco, Splunk, and Okta - companies with sophisticated software and hardware - have shown that partnerships like this can both drive real impact and showcase their commitment to mission-driven causes.

4. Emphasize ILG Efforts to Attract Top Talent

The integration of impact and ESG can be a compelling factor for attracting and retaining top talent. Employees are increasingly seeking meaningful work and opportunities to contribute to positive change. By emphasizing the company's commitment to ESG and showcasing how employees can make a difference, founders can attract highly motivated individuals who align with the company's values and mission. This can be done through corporate messaging, recruitment sites and partners, as well as impact or ESG reports, but it needs to have authentic activity and commitments that back it up. And keep in mind: it’s critical to keep activities aligned with business and community objectives. The last thing you want is to be known only for sending top engineers out to pick cabbage.

5. Seize Market Opportunities

Impact Led Growth is about aligning your business with emerging and untapped mission-driven market opportunities. As purchasing preferences shift towards sustainable and socially responsible products and services - and companies increasingly integrate this into enterprise procurement and purchasing decisions - founders who embrace ILG  considerations can position their companies as leaders in emerging markets and support mission-driven nonprofit organizations around the world. 

Likewise, as governments and regulatory bodies around the world continue to enact policies and regulations that increasingly require reporting on sustainable practices - such as the International Sustainability Standards Board (the ISSB), the Corporate Sustainability Reporting Directive (CSRD) in the EU, and ongoing efforts of the Securities and Exchange Commission in the US - founders, funders and companies need to stay apprised of the latest trends and requirements. By staying informed and actively engaging with policymakers, forward-leaning founders can position their company, products and offerings to capitalize on these shifts. Participating in industry associations, advocating for sustainable policies, and shaping regulatory discussions can not just create a favorable operating environment, but enhance your company's competitive advantage. As a result, ILG-driven founders and companies that stay ahead of trends and proactively adapt their offerings will capture market share and drive growth.

How can you get started with an ILG strategy?

We all know that strategy is worthless without rigorous and disciplined execution. So how can you get started on this important journey? It starts with a trusted partner like VITAL to guide you on your journey.

The VITAL approach to Impact Led Growth for Founders focuses on aligning business needs with compliance, with culture, and with growth. From innovative partnerships to product and go-to-market strategies, our team can develop your VITAL blueprint to activate unique opportunities in your business and with your customers and employees. Our process enables executives to look across the different areas of operations in the way that best leverages your core capabilities, and provides stage-appropriate support for your growth journey.

The VITAL process helps founders to identify opportunities that can be activated as your company grows.

As a founder, incorporating ILG into your growth strategy is not only a socially responsible choice, but also a smart business move. By developing a purpose-driven business model, integrating sustainable practices, engaging stakeholders and investors, building mission-driven partnerships and collaborations, you will attract top talent and seize new and emerging market opportunities. Founders can leverage impact and ESG to drive the growth of their companies. Embracing these principles not only creates value for society and the environment but also enhances the company's long-term success, profitability, and resilience in an increasingly conscious business landscape.

Contact us now to get started on your journey toward Impact Led Growth!