PSFK hosts a discussion with 5 experts on how to drive business through social impact
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 rather 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 moreover, 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.
(Below is the first part of the three-part editorial).
How might a company or brand determine where it lies in the social good spectrum (whether they are good instead of merely doing good)?
Will there be room in the marketplace for companies that don’t incorporate a commitment to social good? Can we expect to see instances in the future where brands and companies phase themselves out if their business is inherently in opposition to the greater good?
Miki Agrawal | CEO & Co-Founder of THINX
“The difference between being good and doing good is authenticity. There are a couple of organizations that have developed tools and indices to measure good business, effectively allowing companies to compare themselves against others on various social good indicators. While such tools make benchmarking easier by standardizing metrics, I think the best and most rewarding indicator of being good is non-solicited feedback from stakeholders. In our case, that’s our customers, our employees, the girls and women we empower through our Global Girls Clubs, our partners and so on.
With 70 percent of consumers today choosing to support authentic, purpose-driven businesses that resonate with their values (35 percent more than in 2008), companies that don’t have a social and environmental mission may struggle to retain millennial consumers and talent. So they may not necessarily phase themselves out, but may be forced to shrink and re-think their raison d’etre.”
David Heath | Co-Founder & CEO of Bombas
“There is a big difference between a company that does good, and a company that is inherently good. It’s one thing for a company to donate product, time, or revenue toward the larger community or a cause; however, it is also that company’s responsibility to extend those fundamentals toward everything else: its employees, practices, customers and partners.
At Bombas, we pride ourselves on producing the most comfortable socks available, while also donating socks to those who are homeless. And while we can measure our ‘extent of good’ through the number of socks we donate, it really goes beyond that.
Our mantra is Bee Better, and that’s something we hold ourselves to quite strongly.
It’s why our team participates in giving events twice a month, and why each new employee is given 10 pairs of our donation socks to hand out within their first week of work. It’s what drives us to hold our manufacturing partners to certain standards and inspired our collaboration with the non-profit organization Made in a Free World, which works to ensure free trade practices. It’s the reason we don’t have a strict vacation policy for our employees, and allow people to work remotely when needed. And it’s reflected in how we treat our customers and supporters, with our 100 percent happiness guarantee. It is important that we hold ourselves to Bee Better, not only in our donations, but in every part of what we do.
While it may not be overnight, and will take some time, I think we are heading to a point where brands/companies will phase out if they fundamentally oppose the ‘greater good.’ Because of the internet, social media and the growing expectation of transparency and access to information, consumers want to connect with a brand beyond just the product or service they provide. They want to be a proud supporter of the brands they purchase, and feel as though they can trust these brands. Sure there may be some exceptions, but I think this is a movement that is only going to grow. It will become the norm and expectation for companies to do more than just provide their service or product. As this trend grows, it puts pressure on the existing brands in the space to do the same to keep up, and if they don’t, consumers will begin to ask why.”
Caroline Hadfield | SVP of Personal Care at Biossance
“A company’s social impact needs to be ingrained it its mission. At Biossance, we were created by a parent company, Amyris, whose reason for being is to create top-quality renewable products that deliver sustainable solutions to the world. Our dedication to both doing good and being good is in our DNA.
‘Doing good’ and ‘being good’ are terms that are open to diverse interpretation and often difficult to quantify. If one posits being good as the manner you treat your staff, suppliers and customers, or it means operating an ethical, transparent and socially minded business, or a business that offers products and services which are healthy and beneficial to the population and do no harm (or better still, improve the environment), then these standards can be quantifiable and common across many different business sectors. ‘Doing good’ is often seen solely as offering products that improve the quality of people’s lives or that improve conditions of the environment, but companies whose business is not specifically in these business sectors can certainly still contribute positively and impactfully through financial and social programs that redistribute profits to support good causes, or in innovation for change.
It is up to brands to decipher what doing good means to them and to help educate consumers to make healthier choices for themselves and the planet. We’re seeing overwhelmingly positive consumer feedback based on our brand story and the promises we’ve made to educate and empower our customers. In our case, being good means a commitment to sustainability and omitting 2,000-plus potentially harmful cosmetic ingredients so that you can trust that what you’re putting on your skin is safe and better for the planet.
We are seeing an increased demand by consumers for companies they buy products from to commit to the greater good, particularly from younger demographics. While we hope that this will eventually become a bottom-line requisite, consumers will need more education on what doing good and being good actually mean—not to mention transparency into what brands are really doing in order to enforce a baseline commitment to the greater good in the marketplace.
The pendulum is swinging away from permitting companies to engage in activities that are socially or environmentally harmful who simply exist to make money for shareholders, but there is a long way to go. The pressure needs to be maintained both through social advocacy and education, and through direct government intervention, to increase the speed of change.”
Phillip Haid | Co-Founder & CEO of Public
“Generally speaking, we categorize where a company or brand lies on the social good spectrum based on how much direct and scalable social good they are creating and how integrated it is into their business model. The most socially good companies tend to be the ones whose product or service actually creates social impact.
Tesla is a social good product because it reduces CO2 emissions. Impossible Foods and its plant-based burger is a social product because of its health benefits to individuals and the planet. So too is G Star Raw and its denim created from recycled bottles pulled from the ocean.
A little further along the good spectrum (but still very good) are all the companies that integrate social purpose right into their brand and business DNA. TOMS, Warby Parker, CVS, Tadah Foods, KIND, Dave’s Killer Bread, and G Adventures are all examples of businesses that are seeking to create both social and business benefit with their company. Slightly further along the spectrum are the companies that see the value of social purpose to drive a business opportunity and develop social purpose campaigns to achieve both business and social benefit. The list is very long but one that I love is Inglorious Foods from InterMarche in France. They found a very clever and creative way to sell ugly fruit and vegetables, thereby reducing food waste and creating greater profit on perfectly good food (other than the way it looked). Finally, there are the myriad of companies still playing in the CSR space, separating their community investment from their business drivers but still doing good in the world.
Across these four categories of ‘doing good’ we see four common traits in companies that aspire to be good instead of only doing good:
Conviction. It starts with a fundamental belief that being good and being profitable are mutually reinforcing, not mutually exclusive. At the senior-most levels, and ideally throughout the organization, they see and embrace how social impact can help solve one or more of their core business problems—like attracting and retaining customers and employees, building and sustaining customer loyalty, and creating stronger supply chains, and will ultimately make their business wildly more successful and sustainable.
Integration. These companies embrace the fact that doing good is more than a marketing or PR exercise, or just ‘the right thing to do.’ It is baked into the DNA of who they are as a business, and is reflected in how they organize and operate their supply chain, as a key driver of business performance, not just a cost center, and as a powerful differentiator in terms of their sales, recruitment and retention strategies. It is potentially as strategic as any other marketing or business lever, but also not effective if done in isolation as is too often the case in many CSR ‘strategies.’
Alignment. Not only do these companies integrate good across all aspects of their business, they also model it in their operating practices and policies, ranging from hiring and staff development, to performance evaluation, compensation and reward systems, financial measurement and analysis, and board and stakeholder management.
Courage. Being good is not for the faint of heart, nor does it yet put companies in the majority, despite being a rapidly accelerating trend. More business leaders and experts must be encouraged to openly acknowledge and celebrate that the only way in which they can do the most good in community and for society is by profiting from it.
Do we believe there will be room in the marketplace for companies that don’t incorporate a commitment to social good? Absolutely. Because while we would love to believe that in the future, companies that don’t incorporate a commitment to social good will fail, or be ‘phased out,’ this feels like an overly optimistic view. There are many products consumers will want or need and so long as the company isn’t doing harm, it is hard to see a scenario where none of them exist. We do, however, believe there will increasingly be instances where companies that are exposed for hurtful business practices will be punished financially and otherwise through more organized and targeted consumer and public reaction and response, in ways that could ultimately irreparably damage their reputation and performance, particularly given consumers’ growing ability to self-organize, share, and influence others through social media and other channels.”
Christina M. Alfonso | Partner & CEO of Madeira Global
“Simply put, incorporating socially and environmentally responsible business practices into corporate business models is transitioning from a nice-to-have to a need-to-have; it is not just ethically rewarding, it is financial savvy, and those that bet against this trend may find themselves on the outside looking in in the not-too-distant future.
The steady rise in Corporate Social Responsibility (CSR) initiatives and Sustainability Reports (currently issued by 81 percent of S&P500 companies) serves as valuable evidence that investors are demanding greater transparency and more responsible corporate citizenship.
There has been a marked shift from Profit Maximization to Value Maximization at the corporate leadership level in recent decades. Historically, a combination of factors including misaligned incentives structures, an increasingly competitive market environment and an obsession with the bottom line led many global businesses to drive down costs at the expense of many of its stakeholders (think coach seating on any commercial airline under six hours). We, as increasingly socially-conscious global citizens—particularly those of the Millennial generation—realize that we live in an ever-dynamic, interconnected world in which our impact on society today has tremendous implications on our future; this is true at both the individual and the corporate level.”
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.