I recently chatted with some folks at LinkedIn and their messaging around business vision really stuck with me: Create economic opportunity for every member of the global workforce.
This is a vision that’s both impactful and inspirational. This got me thinking about the inspirational power of social impact businesses.
They are wonderful, profitable and sustainable. Sounds great, right? But…can you name just five?
Umm. Lyft? Arguably, no. It’s just a driver-friendly Uber. Red Cross? No. That’s a charity. Umm Toms?? Buy one – give one to someone in need! Err - maybe, there’s some controversy around the displacement of local shoe markets, but Toms now has other giving options. Umm… American Apparel? I’m digging deep here. (I met Dov Goldberg in my impressionable years and so this one was just a throwback.) Okay, frankly none of these businesses were even top of mind for me as a social impact business. Oh, Etsy!? As we all remember, Etsy IPO’d with a prospectus declaring their value of community benefit over profit.
So what if they are hard to name?
People in the social impact business know who and what these businesses are.
My social impact colleagues are quick to point out that Patagonia and Ben and Jerry’s are B-Corps and are social impact businesses, as well as a number of others. With decades of work productivity behind me, it’s definitely sexy to think about solving “meaningful” problems: social and real-world problems, rather than purely commercial problems. And of course, there are lot of other social and societal issues that our team members and employees at large care about.
Purpose over Profit is Sexy.
But that won’t necessarily pay the bills. So…how do you transition your business from profit-oriented to social/community/purpose drive? Here are some ideas:
- Share in the “upside”. Various mechanisms exist for this, and much guidance can be found by existing models. Some shares of a business can be held in a personal or family trust with rules around community-based or purpose-based investing. Organizations like Upside Foundation have created a pledge for businesses to transfer 1% of their equity to charity.
- Focus on core values that are purpose-driven. Changing the DNA of a business to be purpose-driven is equally, if not more, important than a small equity pledge. Shared core values will help shape the business in its recruiting, culture and overall vision. By way of example – at my beloved Clausehound.com – for us it’s simple: the law is complicated and therefore requires unique expertise, however, we believe in reducing power imbalances by creating affordable access to legal answers. Providing substantive value in every customer interaction (to keep customer costs to a minimum), and sharing learning materials with customers “up front” are two lawyer paradigm shifts that have resulted from this goal, and also forces us to stay lean. (I should share that figuring out a sustainable business model that is not derived from high billable rates is not easy.)
- Pledging employee time towards social initiatives. I had written about the idea of putting 5% of employee time towards social initiatives in a previous post, but even 1% would create significant impact.
- Formally change the business structure to be purpose over profit. The natural purpose of a business (for which the board of directors has a fiduciary duty to fulfil) is to maximize profit. Converting a business to a certified B-Corp flips these requirements by making the main purpose of the business to create a socially beneficial impact.
Don’t forget about the advertising
Of all the positive change created by social impact business, mainstream awareness appears to be one of the most difficult to achieve.
Branding and integration of social impact businesses into mainstream behaviour/activities proves to be an area of improvement for social impact businesses. Toms does a pretty good job of creating visibility – ‘buy one to give one’ gets consumers involved. There are a lot of great and missed opportunities to build awareness though. Solar-powered social impact businesses have brought mobile phone commerce to and changed lives in many parts of the world. Integration of a solar-mobile phone icon inside of my G-chat or Facebook messenger contact list would be an example of such businesses building some cool awareness. Pedometers track footsteps, and that’s pretty mainstream.
But integration with a carbon offset calculator such as myclimate.org could possibly catalyze positive change. Certified B-corps get a sticker (among many other points of pride) but add a domain (eg BenandJerry’s.b or BenandJerrys.si (“social impact”) for immediate brand recognition, or (hypothetically) from a brand powerhouse like a SpaceX.si would create a branding impact (“si” is already taken by the way, by Slovenia).
We (the “mainstream”) want to help
We want to build, work for and support social impact businesses.
So…my challenge goes beyond trying to name a social impact business. Please try to make your business into a social impact business. Not just you business owners, but also you, the influencers, social intrapreneurs, or otherwise like-minded.
We will support you!