Richard Branson on Why Compassion Is a Competitive Advantage
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Editor's Note: Entrepreneur Richard Branson regularly shares his business experience and advice with readers. Ask him a question and your query might be the inspiration for a future column.
Q: Why is it so difficult to persuade the corporate world and the government to partner with businesses that are willing to provide a service to a community for positive change? As soon as I mention that profit is not our focus, they lose interest. How do I overcome this problem? -- Rod McBride, Johannesburg
Business used to be a cutthroat world where the only thing that mattered was profit -- but that’s changing quickly. It has become easier for people to learn which companies pursue profits at all costs and which behave ethically, and to make purchases based on those decisions. This means that business models like yours, Rod, are more likely to survive and thrive in the long term.
While technology is driving this shift, recent research demonstrates the strategy’s benefits. Last year I read about the results of a game theory study that showed that selfish behavior does not improve the odds of long-term survival. The researchers, Christoph Adami and Arend Hintze of Michigan State University, found that communication and cooperation are far better strategies. Adami told the BBC, “Being mean can give you an advantage on a short timescale but certainly not in the long run -- you would go extinct.” While he was talking about surviving in an evolutionary environment, his advice can be useful to entrepreneurs and managers too.
When you are telling people about your business idea, a good place to start might be to compare your model to those of successful businesses that are dedicated to doing good in their communities. Look for concrete examples of success stories that mirror your blueprint, companies like TOMS or Ben & Jerry’s. Once you’ve established that your business model is sound, highlight the unique aspects of your offering -- why your product or service is superior and will appeal to customers. And with that, you’ve established your edge: Almost everybody will choose the products or services of an ethically sound company over its less scrupulous competitors, as long as the quality matches or exceeds industry standards.
If you notice that your listeners start tuning out when you reveal that you want to make things better for people and the planet, as well as making a profit, they may be mostly concerned about the short term, not the greater implications of their choices. Knowing that, you’ll need to tackle the problem head-on.
When you run into this roadblock, stop and listen. Ask your potential partners questions about the obstacles they face until you understand their situation and how you can address it. Then, if you’re indeed offering a sustainable plan that will benefit their business or contribute to the mission of their government ministry over the long term, try to convey that message in a way they’ll understand.
We at Virgin often encounter similar obstacles. The Carbon War Room, a nonprofit group we support that’s devoted to seeking market-based solutions to climate change, can’t simply argue that greenhouse gases contribute to global warming. To persuade large organizations in, say, the shipping sector to adopt game-changing policies, they must be presented with comprehensive plans that show how reducing carbon emissions can be enormously profitable for those who are prepared to work together on changing an industry for the better.
If your pitch doesn’t meet with approval, pick yourself up and move on. Try another approach, find other investors or come up with another plan. Don’t spend time worrying about organizations that don’t welcome or accept change -- they’re not going to be around for long. Just keep looking for people who are willing to listen to your message and who genuinely care about something greater than themselves -- those are the investors and partners you’ll be working with in the years ahead.
Once you launch your startup, it’s unlikely that your competitors will always play fair, as we at Virgin have discovered on numerous occasions over the years, in sectors ranging from air travel to soft drinks. Stick to your strategy and your message; that’s how you’ll win over their customers. And keep listening, even to your opponents -- if you do this well, it’s possible that you may even end up working together.
In business, as in nature, companies that want to survive aren’t mindlessly pursuing profits at the expense of people and the planet; they are smart enough to know that caring and cooperation are key. Your strategy already puts you ahead of the competition -- now you just have to stay there.