Business, Done Better

As discussed in the last blog, when it comes to leading a socially responsible business, you might have an advantage if you’re just starting out and can dedicate your entire mission, vision and business strategy toward your charitable purpose or sustainable goal (demonstrated beautifully by TOMS Shoes).

But what about the well-established global multi-national companies that grew during a booming economy and built business strategies focused upon profits and expansion?

A few notable exceptions aside (i.e. WWF, Greenpeace, Human Rights Watch), most global organizations are only now getting around to the question of Corporate Social Responsibility and Sustainability.

But it’s a hot topic and it’s fascinating to observe how different companies are approaching the challenge. You can see signs of it everywhere you look;

• In Starbucks, the Ethos® Water bottle you buy contributes money to providing children with access to clean water as part of the Starbucks Foundation.
• This Spring, H&M launched a new ‘Conscious Collection’ of clothing made from organic linen, recycled PET bottles and Tencel, a fabric produced with minimal environmental impact.
• Nike, too, has an entire ‘Better World’ product line with shorts, trainers and pants made from recycled materials. Their innovative production and marketing enables the customer to see exactly what impact they’re having on the world through their responsible purchase: “Nike Zoom and Flywire technology turn feet into explosive devices. 100% green rubber in the outsole eliminates the majority of toxic compounds, so your only impact is on the court.” (From http://www.nikebetterworld.com/product)

Nike’s ‘Better World’ strapline, “Kick Ass without Kicking the Planet’s Ass” nicely sums up the challenge of socially responsible business. And everyone seems to be responding to the call in different ways; some through Foundations and donations; some through socially responsible product lines; some through dramatically altering the way they run every part of their business to become more sustainable.

In 2009, Unilever took a bold step as a multi-national consumer goods company, declaring a new business mission “to double the size of the business while reducing our overall environmental impact across our entire value chain.”  They soon transformed this mammoth goal into specific achievable targets as part of the ‘Unilever Sustainable Living Plan’.

The Leadership Team set the mission. And a chunky one at that.

Individual employees, managers, teams and volunteers work tirelessly to deliver it.

This is an excellent model for other multi-nationals to take on board. It can seem a daunting task to change the way a successful business is run, to take the time to look into the inner workings of every single part of the company and ask yourself – is there a better, more sustainable or more socially responsible way to do this/ produce this/ deliver this?

Without change, though, your customers will be drawn to competitors that do demonstrate how well they’re thinking of society and the planet. And in cases where all other factors match up, it’s hard to imagine that customers will turn down the warm, fuzzy feeling that comes with a charitable action.

Alex Hannant writes for Sustainable Brands about a model for Social Innovation delivered by getting behind your talent. Without repeating his excellent article, well worthy of a read itself, I will quote one important line, that “…if you want a low-carbon society, don’t get too hung-up on the technology or regulation – what you really need is holistic and iterative approaches that enable new models of social leadership, collaboration and innovation to emerge.”

Hannant goes on to describe a three pillar approach used at the Hikurangi Foundation in New Zealand. First, developing competencies required to conceive of and lead change, secondly facilitating the platforms (spaces, events or processes) that allow people to build relationships and align their goals, and finally developing the solutions that will change whole systems.

The first part of this solution must be the most critical because, if you can get the PEOPLE bit right, the rest will follow.

The role of leaders is to set sustainable goals and clarify boundaries, and then to step back and allow creativity to flourish. Before you know it, your company will be finding answers from within, connecting with the community in ways you couldn’t have imagined and initiating important viral change.

Develop talent, yes, but ensure that you inspire leaders, engage employees, equip managers and reward teams too. It’s a whole-world challenge, so it makes perfect sense to give it a whole-system answer.   

No more paradox of choice - now, choose charitably.

In California, TOMS are everywhere.

I remember the first time I found a pair of TOMS shoes in a House of Fraser store in the UK. They were just the style of canvas shoe I’d been looking for – perfect for spring, takes you right through to autumn and available in a host of colours to suit any personal tastes.

And the best bit of all? I felt good for making the purchase because the company is founded on the commitment that for every pair sold, they'll donate a pair to a child in need. Which certainly beats post-shopping regret. 

The website states their vision clearly: “With every pair you purchase, TOMS will give a pair of new shoes to a child in need. One for One.”

In that case, I’ll have two please Sir!

Looking at the website now, the business is clearly expanding at pace. They’ve gone global, they’ve expanded to eyewear and the movement, One for One, is hosting global awareness events including “One day without shoes” {self-explanatory} on April 10^th to share knowledge and garner support.

TOMS was founded in 2006 by an American traveler, Blake Mycoskie, after a trip to Argentina. Within a year, Blake returned to Argentina to meet the children who had inspired his movement, armed with 10,000 pairs of shoes – made possible by the sale of 10,000 pairs of shoes to Westerners like me.

Two years later the business had $9.6 million in revenue.

Why such rapid success?

Is it because people like the style? Trust the brand? Or is it because they feel good about their purchase?

Probably a mixture of all three. But when you’re standing in a store looking at three types of canvas shoe that are similar in style and quality – but one will match your purchase with a charitable donation – the choice seems obvious. You get your new shoes and you get a warm, fuzzy feeling thrown in.

It’s social pressure too. If you’re seen to be wearing TOMS, perhaps you’ll be seen as a good person?

Even if you’re unconscious of the psychology affecting your buying behaviour, the business model is a great one. In today’s commercial environment, where there’s increased pressure to be socially responsible as well as environmentally sustainable, founding a business on a One for One principle seems foolproof. And the sheer volume of TOM-cladded feet I’ve seen in California over the past month suggests that it’s working.

So how do established global businesses replicate this model?

To be continued in the next blog…