Taking Companies to a New Next Level
Making the world a better place through business. Yes. Really.
If you’re like me, you’ve always believed there’s a better way to do business, and it seems the world has caught up to our way of thinking.
The desire to make a true social impact is great today. It’s why we see more socially-driven business models that seek both financial and social return on investment as shown in the chart below.
For-profit companies making the world a better place may seem jarring if not completely incredulous to some, so let me put the big question out there:
How do we know for sure that for-profit companies are really “doing good”?
Here’s one way –
Patagonia, Ben & Jerry’s, Cabot Cheese, Eileen Fisher, Danone Group, N.A., Pete & Gerry’s, Bombas (socks) and HootSuite are among some of the well-known companies that have become certified B Corps.
Architectural firms, coffee growers, CPA firms, IT software firms, fitness centers and thousands of other companies from all types of industries have also earned B Corp certification.
What they have in common is that they do business differently.
Consider the certified B Corp bakery in Yonkers that has an open hiring policy — no resume, no interview, no background check. Their business commitment to hiring people who are chronically underemployed makes the world a better place by reducing the cost of social programs that support those in need. Greyston’s philosophy is brilliantly and wonderfully encapsulated in this quote from their CEO and President, Mike Brady:
“We don’t hire people to bake brownies, we bake brownies to hire people.”
What’s a certified B Corp?
Here’s some background in their own words -
It’s a for-profit company that meets the highest standards of verified social and environmental performance as well as transparency, and accountability.
Who certifies these companies?
B Lab is a nonprofit organization serving a global movement of people using business as a force for good. B Lab’s initiatives include the B Corp Certification, administration of programs and software, and advocacy for governance structures such as the benefit corporation.
Why do companies become certified?
B Corps set the gold standard for good business and inspire a race to the top, creating performance standards and legal structures being used by thousands of other businesses around the world.
In earning certification, companies are able to lead a movement, build relationships, attract talent, improve impact, amplify voice, and protect their mission.
Why is a B Corp certification important from a management perspective? (I’m so glad you asked.)
B Lab’s comprehensive and quantitative certification process includes taking their confidential B Impact Assessment. It’s a survey of how the company is doing good. It requires meeting stringent performance standards in how it’s governed, how it treats its workers, and what social and environmental impact it makes.
Companies that says they provide healthcare insurance for all its employees and their families (They do exist!), will need to provide proof to B Labs. Companies that claim to vet their supply chains will have to submit the screeners they use, and on it goes.
In this way, taking the assessment provides a framework for formalizing (and documenting) what the company does which sounds like a super helpful management tool to me.
It also becomes an opportunity for introspection, creating time and space to focus on how a company defines and measures success beyond a singular bottom line.
Becoming certified on the first try is unlikely, and that’s ok.
The results and initial feedback from B Labs are directional, and can be used to show where to improve or make changes and to what extent. The changes and improvements made can become competitive advantages in today’s responsible business environment, helping the company reach its goals faster or easier or both.
A key aspect to earning certification is in demonstrating the full extent of a company’s social and environmental impact which is not always readily available in traditional for-profit companies. Capturing, tracking, and measuring data, e.g. energy and waste reduction, prior to taking the assessment will help save time when taking the assessment.
There are also legal requirements to meet, and certification fees to be paid based on the company’s revenue.
Companies that achieve certification (80 out of 200 points) use the B Corp logo which offers visible proof that they’re doing good business, as shown here at an Athleta shop that’s local to me.
Earning B Corp certification is a rigorous process, as it should be. The resulting third-party verification is a compelling advantage at a time when it’s challenging for people to know who to trust.
What’s changed that makes “doing good” a good business strategy?
Every type of company operates in a transparent market now. Even seemingly insignificant events can have serious, and often expensive, consequences. Bad acts spread quickly due to the viral nature of social media and rampant citizen journalism. Ask Delta Airlines about the day a passenger was forcibly removed after refusing to give up his seat on an overbooked flight. (It’s likely they remember it.)
On the other hand, good acts are contagious. Companies with verifiable, “good” business practices that also measure their impact on stakeholders (a fundamental requirement of the B Corp certification process), are far more comfortable being transparent about how they achieve their purpose and live their values. In this way, doing good doubles as a risk management tool for those geared toward the financial aspects of running a company and reduces marketing and PR stress.
But wait; there’s more!
The longitudinal financial research finds that companies that do good, do financially well over the long term, and investors like that. According to a recent Barron’s article “Assets invested in companies that pay attention to environmental, social, and governance (ESG) criteria in the U.S. surged from $8.6 trillion in 2016 to $12 trillion last year, and now account for 25% of investors’ total assets under management.”
The personal development market is cresting $10B. People are investing in improving themselves. They’re driven to bring their best selves to work and work for companies that are aligned to their values. In other words, companies that genuinely and intentionally work toward doing good, make it easier for their HR folks to recruit.
Lastly, the complexity, breadth, and depth of today’s challenges and change are significant.
Navigating the ethical conundrum of artificial intelligence, enriching the lives of a 100-year old population, having driverless cars, alleviating food and medicine shortages, knowing what skills to teach our students today for the jobs of tomorrow — are but a few examples of what was beyond imagination 30, 20, even 10 years ago.
To attract and retain talent, grow revenue, and truly innovate calls for new ways of thinking and doing not achieved with the old “What’s In It For Me?” company mindset.
The social business paradigm is redefining business in the 21st century.
When capitalism is good, it works for everyone. Clearly, this has not always been the case. We need to break through what’s become the burden of doing business as usual. We need to take our companies to a new next level. It requires a mindset that demonstrates a genuine concern for people and planet alongside an ambition for profit. It’s a mindset coined by renowned sustainability expert, John Elkington, in the 1990's.
Becoming a certified B Corp is a direct route to putting that mindset into practice. The trailblazing companies that have become certified prove the concept for doing good in business. They have successfully incorporated the social business paradigm into their organizations, and in that way, they are making the world a better place through business. Yes. Really.
And that’s important for companies of all sizes and types that want to be (or remain) relevant and position themselves for long-term success.
Maybe a company like yours.
I’m a champion for positive businesses, speaker, strategic thinker, and practical optimist. I help people find opportunities in business challenges and change. You can reach me at www.ThePositiveBusiness.com.
