Focusing Beyond the Bottom Line.
7 out of 10 people believe “We need to make better progress against today’s societal problems.”* And, there’s a role and an opportunity for business to help us do just that.
Government alone won’t make inroads. It will take organizations working together and at times working around and alone to lead the way.
Yet, it takes great courage for companies to go against the neoliberal view of the virtues of free-market capitalism that favors a singular focus on shareholder profits. But the companies featured here, which are rightfully often heralded for taking a higher road, prove that business success can balance other bottom lines. These companies represent old and new, public and private, and some that have had a “Better Progress” focus since their inception, while others purposely shifted course, suggesting that it’s never too late to raise the bar and do better.
What are the lessons from these examples?
- It takes strong leadership—whether public or private, companies can take a stand with the right person at the helm setting a decisive vision and mission.
- Business often presents false choices—the predominant business model focused on capital returns to shareholders presumes there are trade-offs between business success and other factors. Yet, there are many examples that prove that balancing multiple bottom lines can deliver results and perhaps more success, not less.
- Companies can operate from a place of authenticity. Frankly, today’s consumers are yearning for it and are attracted to it. Building this trust is rewarded not just with purchases, but also with permission for these companies to do more. On the one hand, authenticity is not marketing, yet on the other it is the best marketing there is.
- It must be real. Bring Better Progress to life in what you sell and through internal business practices. For this mindset to truly have impact, it needs to be true from the core.
- Realize that companies have power and a voice to take a stand for issues and set the agenda.
- Leading companies can help set new standards and show that a different way is possible. Those with enough scale or who partner to create the scale can reshape industries and their supply chains.
- Companies, consumers, and investors need to accept that it’s about making positive progress, that all doesn’t need to be accomplished in one fell swoop. Step by step, companies will get closer to their goals.
- There is more than one way to fund growth. Venture capital and public markets are not the only path. Several examples here demonstrate that success, and frankly wealth, can be generated under different business models.
- It’s never too late to shift gears. A company can wake up one day and realize it needs to make a shift towards Better Progress, and it is possible to turn the tide.
- A company with a soul is a company for which people want to work. Better business practices are a great recruiting strategy and is more important to today’s employee than in the past. We might go so far as to say that these will be the companies that win the talent war in the coming decade.
- Own it. Make your commitment part of your story.
Read more to learn more about the companies that inspired and informed these insights:
- Since founder Yvon Chouinard started Patagonia, he had an aversion to commerce and to this day has what seems to be a disdain for business, according to an article in The New Yorker last year. He was always more interested in the environment, and his wife, who’s been a quiet key player in the business, has championed many positive internal business processes worth copying like onsite daycare. Over the last several years, the company has appeared to be both deepening its commitment to being a company run for good with a focus on the environment and its people and becoming more vocal about its message. What does this create? An organization that can be trusted. An authenticity for which people are yearning. A company from which its customers want more.
- The way the company manifests itself is impressive—a clear mission statement articulated on its website:
Our Mission: Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.
- A continual push towards more sustainable products from its now fair trade certified board shorts and bikinis, its neoprene-free, Yulex® natural rubber made wetsuits, products made from recycled materials, and an expansion into food with its Patagonia Provisions focused on creating a more sustainable food supply chain, launched because no one was doing what they wanted to see in the market.
- Support of environmentally-focused political movements and supporting Benefit Corporation legislation to support other companies in broadening the definition of their bottom line beyond profit. Read more here.
- Vividly depicted stories that they’ve always supported with beautiful, artistic photography and now videos covering topics from environmental concerns, stances they are taking, places worth noting, endangered species, and athletes and endeavors in the outdoors.
- Its Worn Wear program to promote reuse, recycling, and fixing products rather than buying more.
- Expansion of employee benefits and a championing for elements of its programs like onsite daycare. Read more here.
- While some criticize the company for the cost of its products, one must remember that investment is required to build products with quality and meaning. For many, the price is more than worth it for all that Patagonia is doing for the environment and its employees.
- For almost a decade, Unilever CEO Paul Polman has been on a mission to put social and environmental causes and having a positive impact in the world at the forefront of the company’s strategy. One doesn’t often think that a CPG/FMCG product has as much influence on lives as a technology product such as Apple’s iPhone, Facebook, or Twitter, but consider the fact that Unilever has products in 70 percent of homes in the world.
- Polman has been a leader who has the courage to put social causes at the forefront of the business he runs. A few relevant quotes from a recent Fortune article:
“The question you ask is, ‘Do you run this [the business] for society or not?’… ‘The real purpose of business has always been to come up with solutions that are relevant to society, to make society better.’”
“We’re wasting 30% to 40% of the food in this world, whilst millions of people go to bed hungry,” he says, as if amazed that the situation is even possible. “Why do we not have the moral courage to attack that?”
- Polman is championing doing good in the world, yet his philosophy is also rooted in what he thinks is a business imperative. Businesses will continue to be impacted by shocks from climate and social changes, and companies will become irrelevant if they don’t change in response. Already in the U.S., large CPG manufacturers are losing share to smaller, more relevant brands. Millennials care about companies that demonstrate positive values.
- While the company isn’t perfect (it does sell Axe body products after all), the company is doing a lot right by putting social good first and having aggressive goals to do better by society and the environment. The company is even working to eliminate gender stereotypes in its advertising. Read more here.
- Some may not agree that Unilever can get away in the short-term with not delivering stronger financial results and keep its commitment and focus on these long-term goals, but it shows that a public company with the right leadership can think about more than the bottom line and integrate other factors into the running of its businesses.
- IKEA is a revered brand, yet it isn’t without its controversies (e.g., Unboring campaign in 2002 that celebrated throwing out furniture to replace with new IKEA products, airbrushing women out of its Saudi Arabia catalog).
- Of late, however, according to an article in Monocle in April 2017, the company has sharpened its focus on doing good and building better products, especially as it considers Millennial consumers who care just as much about value as values and how products are made.
According to Marcus Engman, IKEA’s Head of Design: “If we want to invest in life and how we live, we need to have a long-term approach and think about ideas, rather than a short-term market-driven approach that is just about selling products.”
Simon Caspersen, a Space10 founder (Space10 is a future living lab funded by IKEA) said: “[IKEA] recognize[s] the need to make positive changes in the world.”
- The article also features a couple of the company’s projects related to having that positive impact. Better Shelter is an organization with a mission “to improve the lives of persons displaced by armed conflicts and natural disasters” by providing a home in their temporary shelters. IKEA partnered with The United Nations High Commissioner for Refugees (UNHCR) to develop a temporary housing solution.
- IKEA was one of several companies to partner with the WWF to establish the Better Cotton initiative to establish a more sustainable supply of cotton for farmers and the environment, as well as establish cotton as an ongoing sustainable commodity.
Ray Anderson founded Interface Global in 1973 and drove the company to shift gears and have an environmental focus leading to business success and a more positive environmental record. In 1994, Anderson had a spark of insight after reading Paul Hawken’s book, “The Ecology of Commerce,” realizing that his company was what Hawken described as a “plunderer” of environmental resources. In this 2009 TED talk, Andersen described how he set ambitious goals and reframed how to think about business challenges that fueled innovative solutions to products, such as creating FLOR, and delivered striking results for both the business and the environment. At that time, he reported that greenhouse gas emissions were down while sales and profits were up. Through Ray Anderson’s vision and strong leadership, he showed that companies can change and that the false trade-offs between business success and doing good by the environment are just that—false. Read more about Interface Global’s sustainability efforts.
- In fashion, Eileen Fisher has taken a different approach to crafting both her company’s products and managing the business. She is proof positive that one can honor her beliefs and can use business for good.
- According to a 2015 interview with Janet Kinosian for the Los Angeles Times, Fisher articulated how she sees “business as a movement:”
“I believe as a business we can be a voice for change; that business can be more than about just making a profit and putting more stuff out there. We can use business to change the world, literally. We can be a force to develop and grow people, make better products, have an impact on sustainability.”
- And in an article in SOMA magazine, she builds on the concept saying:
“I often describe our work as ‘business as a movement.’ In addition to being profitable, we always ask ourselves, ‘How can we help make a positive change in the world?’ From the environment to supporting women and girls, to the people in the company. We can all be leaders in this movement.”
- The company has been rooted in the concept of timeless clothing, which Fisher believes has the concept of sustainability built in. The company has slowly but surely deepened its commitment to its sustainability efforts and set a Vision2020 to push for 100 percent sustainability, knowing that the process is a journey and that it’s most important to stretch and do their very best to make positive progress towards their ultimate goal.
- Fisher has also shown that business leaders can manage with a different business model and avoid a profits-only focus. For example, the company is a registered B-Corp and chose not to go public, but rather sold itself to the employees through an ESOP (Employee Stock Ownership Program).
Clif Bar has remained a private company and is well-known for its founders, Gary Erickson and Kit Crawford, shunning an outside sale over 15 years ago in 2001. It’s an example that traditional business investment structures are not the only path to success. The company has been an early leader in demonstrating that a business can be run based on values and principles and be successful balancing multiple bottom lines. The company is managed by its Five Aspirations model focused on sustaining its business, brands, people, community, and the planet. Not only that, the company continues to push the boundaries around food standards. It was an early leader in pushing for not just natural but organic ingredients, inching its way year after year to now source 74 percent organic. You can read more about the company’s Responsible Sourcing guidelines here.
Chobani, the privately held Greek yogurt company, is a successful socially responsible business that lives its purpose through its offerings and its actions. First, its products are made with intention—using local milk and other natural ingredients, and using authentic techniques and sustainable manufacturing practices. Second, it is managed with a strong set of beliefs and gives back through its foundation. Third, the founder and CEO Hamdi Ulukaya treats his employees well, going as far as to share the company’s success with them by giving all full-time employees a stake in the company. Finally, Ulukaya, a Turkish immigrant to the U.S., also supports the community, employing refugees and having started a foundation to help other companies assist in settling refugees.
- Starbucks founder Howard Schultz has long recognized that he can make better business choices that positively impact his employees and that he has a platform and opportunity to voice opinions and back causes. It started with his early commitment to provide comprehensive healthcare benefits to part-time and full-time employees, called partners, and continues with such programs as the Starbucks College Achievement Plan launched in 2014 in partnership with Arizona State University (ASU) for both part-time and full-time employees. Read more here.
- The company has stood up for various causes from supporting veterans to trying to bring a positive voice to race relations to supporting refugees.
- The company accepts its responsibility as being a part of the global community in which it operates. In a 2016 interview with the Washington Post, Schultz said:
“There are moments when I’ve had a hard time recognizing who we are and who we are becoming. We are facing a test not only of our character but of our morality as a people.”
“We can’t be in business just to make money. We must balance profit with conscience and humanity and benevolence and do what’s right for our people and our communities. And we are living proof over a 24-year history as a public company we can do all those things and create long-term value for our shareholders.”
- Fast Company recently reported on a new program that Executive Vice President Rajiv Chandrasekaran is leading in collaboration with Howard Schultz called Upstanders. It is a collection of stories of “ordinary people doing extraordinary things to create positive change in their communities” told through videos, articles, and podcasts. Given its platform and broad reach, Starbucks can bring a more positive voice to the stage and tell the stories of how better progress is happening on a local, individualized level.
- According to Chandrasekaran:
“We see ourselves as a company that is truly grounded in humanity, and the belief that we have an important role to play in American society…. We’re a place where people come together, and when we see a problem, we try to do our part to provide solutions. So when we see the problem of the toxicity and the vitriol out there, we say to ourselves, ‘What can we do to be a part of the solution?’ And part of the solution for us right now involves thoughtful storytelling. It’s another innovative thing that the company is going to be doing.”
Everlane is a younger brand that was born and built with an integrated purpose, bringing transparency to business practices and product manufacturing to raise awareness and quality of life for workers. Termed “Radical Transparency,” the company is almost a bit preachy, but the tone works with its target consumer. The company does an excellent job of putting its purpose front and center in its marketing, the central point of its storytelling.
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* Data from an omnibus study conducted by ProdegeMR with 500 U.S. adults ages 18+, June 2018.
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