I was dumb enough to quit a perfectly good job in the summer of 2008. I assumed I could find a position in marketing or advertising or PR. But, as that year wore on, it became evident that the financial situation was dire, and not many people would be hiring. I became a reluctant entrepreneur. And it is one of the best things that has happened to me.
Some of you might be in a similar situation now.
Now, my situation is different than it was ten years ago. I am helping to lead a company through a rapid transition. What is being called the Great Pause feels a little to me like the Great Accelerator. If you were considering a remote work policy before, that has undoubtedly sped up. Maybe you are thinking about positioning, or how you acquire business, or how you keep your employees and customers safe. What was once something you thought about when you had time now occupies full attention. The acceleration has been a roller coaster that has highlighted weak spots in all of our organizations.
We can’t afford the weak spots anymore. We have seen over the last few months that governments across the world play an essential role, that nonprofits can step up to help people meet basic needs, and that businesses have to work on the biggest problems in our community; whether actively pushing against systemic racism or developing a cure for a virus. Building a more resilient community relies on healthy businesses. This is a roadmap to build resilience as we grow out of the COVID crisis into a world where a lot has changed. Quickly.
You may still be on the fence. You may want to include purpose in your company’s mission, but are concerned that it will compromise your profitability. It won’t. Purpose and profit are not at odds. They amplify each other. There is a mountain of data that shows purpose-aligned employees do better work. Also, customers and clients care as much about how you operate your business as what you do or make. If focusing on your values results in better employees and more loyal clients/customers, it isn’t surprising that a purpose-led organization will be more likely to grow faster and be more profitable.
Gallup estimates that only four out of ten workers in the US agree that their employer’s purpose makes their job important. That is a big opportunity for 60% of you out there. More engaged workers have fewer safety incidents, take fewer sick days, and stay longer. Engaged workers show higher job satisfaction, are more likely to be in a leadership position, and actively promote the company to their personal networks.
Glassdoor conducted consumer research in the US and Europe and discovered that half of consumers are belief-driven. Alignment with the company’s purpose determined if they would buy the product or not. That number goes up dramatically with younger consumers. As we build our companies for the future, we should see that Gen Z consumers go beyond being belief-driven and want brands to proactively work alongside them to make a difference in the world.
A Harvard Business School research project showed that purpose-driven companies are more likely to grow. And, they are more likely to be profitable. Again, that might not be a surprise. If you have more engaged employees, they will take better care of your customers. If you have purpose-aligned customers, they will be more loyal. Purpose is good business.
The way companies think about impact has changed over the last ten years. While companies have been engaged in social issues at least since the Industrial Revolution, Corporate Social Responsibility (CSR) programs became prominent in the United States in the 1970s, peaking in the 90s. While CSR programs have had a huge impact on communities, they weren’t perfect. One, they tended to be an afterthought. If there were profits at the end of the year, the company would write a check to a nonprofit. Two, it wasn’t well-integrated into the culture of the company. It was part of corporate communications and didn’t directly impact most of the people in the organization. CSR programs have evolved into two different models: Culture of Impact and Impact as Product or Service.
Culture of Impact
Some companies, like Bullhorn, have a product or service that isn’t inherently virtuous. That puts pressure on the company to do two things. The first is that the company has to be run to benefit all of its stakeholders. While the shareholders are the company owners, the stakeholders could be its community, the environment, employees, vendors, customers/clients. We work with a company called Facilities Management Services (FMS). FMS provides janitorial services. FMS focuses on building a Culture of Impact by empowering their front line workers. They offer above industry pay, access to seasonal produce, and a support network to employees in recovery who are rejoining the workforce. Employees at FMS stay because of this culture, helping the company to beat the industry turnover average of 200%.
Impact as Product or Service
While many in this category also have a Culture of Impact, what stands out about them is that the product or service they provide is inherently beneficial. AppHarvest is an agtech startup building and operating high-tech greenhouses. They started with the idea that a tomato shouldn’t travel thousands of miles by train, truck, and boat to get to your kitchen. AppHarvest is located in eastern Kentucky, a day’s drive from 70% of the country’s population. Because of this, they reduce fuel consumption by 80%. Their high-tech greenhouses minimize the amount of water needed by 90%. With all of these savings, they can provide a non-GMO tomato, grown without pesticides, for the same price as a conventionally grown tomato. They are creating impact through their products.
You may now believe that considering your impact will make your business more resilient. You now understand you can build your company’s impact through your culture or through the products/services you offer. The next big question is, where do you start? The complexity can freeze you in place. When we first decided to focus on our environmental impact, I couldn’t determine if it was more important to concentrate on our office’s electrical consumption or the fuel consumed by transporting ourselves. I wasted precious time seeking information because I didn’t know that I had a one-stop resource to tell me what I needed to do.
You have that resource, too. B Lab is a non-profit that created a framework to certify B Corporations. A B Corporation is accountable to higher environmental and social standards (similar to what the USDA Organic certification is for organic food). Bullhorn became a B Corp in 2017. It is free to get started with their B Impact Assessment, the first step in the certification process. It will tell you where you are already doing well, and where you need to focus some energy. The great thing about the framework is that it isn’t only about environmental sustainability. It gives you a holistic view of your organization’s impact. Here are the five focal areas:
(descriptions below are from B Lab)
Your company’s overall mission, ethics, accountability, and transparency through topics such as integration of social and environmental goals in employees’ performance evaluation, impact reporting and transparency, stakeholder engagement, and more.
Your company’s contribution to its employees’ financial, physical, professional, and social well-being through topics such as payment of a living wage, benefits, employee health and safety, professional development opportunities, and more.
Your company’s contribution to the economic and social well-being of its communities through diversity and inclusion, job creation, civic engagement and philanthropy, supply chain management, and more.
Your company’s overall environmental stewardship, including how the company manages general environmental impacts as well as specific topics like climate, water use, and sustainability, and impacts on land and life.
The value that your company creates for your direct customers and the consumers of your products or services through ethical and positive marketing, warranty and quality assurance of products and services, data privacy, data security, and more.
The B Impact Assessment provides a starting point and a way forward. It will also revolutionize your business. It will empower your employees. It will give your clients/customers something to be excited about and will reinvigorate you, as a leader, about the work you are doing.
To reiterate, making money and making an impact are not at odds. You will increase the resiliency of your business by taking the time to consider your impact and set goals to improve. Additionally, you will strengthen the resiliency of your community, and we need that now more than ever.