Bombas, THINX, Public and other industry experts inform companies how to pursue transparency in a noisy world
PSFK’s Editorial Roundtable series takes its inspiration from the traditional roundtable: bringing together industry insiders to share their insights on emerging and compelling trends in an idea-friendly manner. PSFK guides the discussion and our roundtable helps guide the future.
In direct opposition to prevailing political rhetoric, good companies aren’t just acutely aware that they can no longer privatize profits while socializing costs but that social sector problems are business problems. What’s more, in response to mounting pressure from socially-minded consumers and workers, companies must ask themselves whether they’re a business conducting and carrying out social good, or one whose very DNA is socially good in nature.
PSFK’s Labs new report, The Impact Debrief, explores the world of social innovation and business impact. With the implications determined from our study, we ask: how can society expect brands, their business models, and business as we know it to change?
In this month’s three-part Editorial Roundtable, PSFK spoke with industry experts to discuss how companies can elevate impact, influence and innovation in their mission statements, and conversely, how they can be leveraged to drive business growth.
The experts include:
David Heath | Co-Founder & CEO of Bombas – makers of purpose-built socks that are making the world a better and more comfortable place with every pair sold.
Phillip Haid | Co-Founder & CEO of Public – a leading agency-slash-consultancy-slash-incubator helping brands understand how purpose and profit can function in tandem.
Miki Agrawal | CEO & Co-Founder of THINX – a period-proof underwear line—that has a way with words and clever marketing—that trains Ugandan women in the ways of entrepreneurship.
Caroline Hadfield | SVP of Personal Care at Biossance – a no-compromise cosmetics company committed to protecting people and planet.
Christina M. Alfonso | Partner & CEO of Madeira Global – an advisory and analytics firm serving asset managers in the area of ESG (environmental, social and governance) research and reporting in areas such as transparency and stakeholder alignment.
Armed with smartphones, today’s consumers have forced companies to treat transparency as a code of conduct, especially where environmental practices are concerned. How can corporate social innovation ensure a company provides utmost transparency while also remaining competitive in a global market? What examples of innovation within the transparency space come to mind? Is there such a thing as too much transparency?
David Heath | Co-Founder & CEO of Bombas
“In order to remain competitive, given the current landscape and trends, an increasing level of transparency is necessary. We are very transparent with our supporters and will share information on where our socks are produced, where and how they are donated, as well as the answers to most questions people ask—as we’ve seen a growing curiosity.
Everlane has done a really great job in ‘owning’ the transparency policy. They share information on their manufacturing practices, as well as information on their cost and profit margins with the consumer. It’s risky, but being upfront has really worked in their favor. That being said, you do need to strike a balance and ensure that you are not exposing trade secrets or giving up your competitive advantage. You don’t want to give insight into proprietary product research and development, to the point that you release too much on your IP where your business becomes easily replicable.
As a business you also need to protect yourself, so it’s up to you to get trademarks and patents when possible and understand what information is cleared to be shared and at what point.”
Christina M. Alfonso | Partner & CEO of Madeira Global
“Today’s competitive advantage in any field is achieved through constant innovation, which requires an unprecedented level of heightened transparency and information/idea sharing. Since greater transparency alone, or simply more data, does not yield better results, this poses two challenges—identifying the signal in the noise and quantifying qualitative data in a standardized fashion.
I believe the question should be less about the level of transparency and more about focusing on the right areas for risk mitigation and impact/value maximization. Open-source code in the tech world is the perfect example of how a high level of transparency benefits the innovation process. We operate on the ‘What gets measured, gets managed’ philosophy and, in alignment with the global trend, believe that greater transparency of the most relevant data, particularly the non-financial data which gives context to the financials, is a crucial part of any future long-term growth strategy.”
Miki Agrawal | CEO & Co-Founder of THINX
“One of my favorite examples of a brand that has stayed competitive, not despite but, I would argue, because of its commitment to transparency, is Patagonia. A couple of years ago, Patagonia released an ad on Black Friday which called for consumers not to buy their best-selling jacket. The ‘Don’t Buy This Jacket’ campaign was a statement against over-consumption and detailed the negative environmental impact of producing the jacket, urging customers to think twice about whether they really needed it before buying it. By being transparent about their impact on the environment and pledging to continue to work toward innovating more sustainable products, they took a stand for what they believed in and won the conscious consumer.”
Caroline Hadfield | SVP of Personal Care at Biossance
“The intersection of transparency and competition in the global marketplace lies in an informed consumer. Armed with education and motivation to select brands and products that are best for people and the planet, we believe that increasingly, consumers will opt for those who have made corporate social innovation a key tenet over those that have not. Then, brands need to go beyond just claiming something and, instead, truly be able to illustrate it as truth.
Access to instant information through the internet and the speed of communication through social media has provided consumers with more information on which to base their decisions and enabled them to question brand messaging and packaging more closely. This has provided consumers more power to affect change and acted as a catalyst for many more companies to adopt a more transparent attitude to their business practices. Rather than considering transparency as potentially negatively impacting sales, those organizations that have good products and genuine policies for social good can differentiate themselves from the competition and attract customers. Transparency will have a positive effect on those companies that are good and open and adversely affect those that have previously hidden behind a lack of regulation to get away with questionable practices.
At Biossance, because of our commitment to social good and sustainability, there is an inherent responsibility to be transparent in our pursuit of innovation. We make decisions and design products based on research, clinical testing, consumer feedback, and on ensuring that we know where every single ingredient comes from, its effect on people using it and the world around them. This is important for us to explain to our consumer and isn’t a marketing ploy. Rather, we are doing this because we whole-heartedly believe in sustainability and safety and we choose ingredients based on these principles.
In the cosmetic and skincare industry, which has not been sufficiently regulated, we are supporting Dianne Feinstein’s bill that is proposing greater transparency for labeling on skincare and cosmetic products and have introduced our own Blacklist of 2,000 ingredients that we consider to be potentially harmful and which we will never allow in our ranges.
While we don’t believe there is such a thing as too much transparency, it is certainly true that you have to determine how best to prioritize information to consumers that is of utmost importance to them without overwhelming them in a highly connected world full of information. We live in a noisy world and it’s our job as brand stewards to determine the most effective and efficient means of communicating the information that consumers want from us most.”
Phillip Haid | Co-Founder & CEO of Public
“While it is absolutely true that consumers have greater access to more information than they have ever had in history, and that this trend is only likely to continue, it is also generally not our view that most consumers have either the time or the inclination in most cases to understand or dissect the minutiae of most companies’ operating practices and policies to find ‘fault’ in their conduct.
More often than not, it is still principally the companies that are exposed for doing something egregiously bad or harmful, particularly if the perception is that it could have ‘easily’ been prevented, or those who are found to have been guilty of business practices that run counter to what consumers expect of them based on prior experience with or perceptions of the brand, or in rare cases those companies and business leaders who appear to express very little guilt or remorse for having been caught engaging in bad business practices, that garner the most attention.
For every BP, Enron or Volkswagen, there are thousands of companies that don’t necessarily on a day-to- day basis make the best decisions from an environmental sustainability, social/community, and/or employee/consumer perspective who are unlikely to be punished or exposed for these decisions in any meaningful way.
That’s not to suggest this won’t continue to change, nor that there aren’t important lessons in these examples from our perspective. In our view, the keys to managing transparency and access to information are honesty and consistency. The more that companies attempt to hide questionable business practices—knowingly or otherwise—the more they risk these decisions coming back to haunt them. And the more that a company’s operating practices and procedures (where they source, how they hire, how they share financial and other results) are consistent with the brand image they present to consumers, the less likely they are to get exposed for inconsistencies that may provoke a negative consumer reaction.
There are many examples of companies—both large and small—making significant strides toward greater transparency in everything from sourcing to employment practices to financial reporting, including sometimes polarizing and contentious market leaders like Starbucks (Ethical Sourcing), McDonald’s (sourcing), WalMart (packaging, organics) and Unilever (Sustainable Living Plan). One of the most recent interesting innovations in transparency is PUMA and its creation of an Environmental Profit & Loss Statement. And this trend will continue because companies are being rewarded for their efforts by those that are paying attention.”
PSFK’s Impact Debrief explores how companies are taking their corporate social responsibility initiatives to the next level. PSFK Labs spotlights innovation in the world of social good, offering insights into digital and organizational practices that will help any company elevate their impact and influence. Download the full report here and check back daily for exclusive content about the latest trends advancing corporate social innovation.
Note: If you would like to participate in a coming PSFK Editorial Roundtable, please contact us here.