3 Tips for Making Social Responsibility a Priority at Your Startup
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Remember Hormel's acquisition of Justin's last year? If you were surprised at that news, you weren't alone. What could be stranger than the maker of Spam purchasing a vegetarian, organic brand of nut butters?
From a headline view, a company like Justin's -- known for its transparency and great culture -- being gobbled up (pardon the pun) by one alleged to have abysmal working conditions doesn't make much sense.
Except -- it does.
It turns out that there's a lot of money to be made running a socially responsible business. Globally, 84 percent of consumers in one survey said they buy responsible products whenever possible, and 56 percent said they would stop buying if they felt a company was unethical.
With numbers like that -- and health food's growing share of the market -- maybe that acquisition was wiser than it seems.
The mechanics of socially responsible business
The concept of a triple bottom line -- people, planet and profit -- isn't new. I personally ran a nonprofit that focused on redefining the role of business as a social partner and was founded as long ago as the early 1980s.
In recent years, the triple bottom line has become even more popular, as businesses realize the power of making people feel good. People buy stuff because they like it, but if doing so means they're also giving a pair of shoes to someone who needs them or planting a tree where one's needed, the purchase pushes their feel-good button. And the sense of altruism that results keeps them coming back for more.
If that sounds cynical, I don't mean it to. Tapping the altruism button may trigger consumer behavior, but it also allows businesses with positive intent to thrive. Learning to seek profits in an ethical manner will not only help your bank account, but help the world at large.
There are, however, a few keys to doing it right. They are:
1. Don't do it for the buzz. TOMS shoes popularized the whole "buy one, give one" concept, which, at this point, is almost a cliche. Consumers now are interested in companies that source, manufacture and distribute in sustainable ways.
Pura Naturals, to cite another example, makes sponges. The company doesn't market its sustainability by giving away a sponge every time you buy one. But it does have a positive mission: Its technology was born out of an environmental mission to clean up the 2010 Gulf of Mexico oil spill. The secret ingredient in its sponges literally absorbs oil, not water. After seeing that ingredient work so well in 2010, the company took the technology to the masses as a personal cleaning product.
What’s more, Pura Naturals manufactures its sponges in the United States in a carbon-neutral way, using crushed walnut shells and recycled materials. None of this is sexy. But it's socially responsible in every way possible, and the benefit is reflected in its revenues.
If you try to incorporate social responsibility simply for the marketing power, that action will almost certainly backfire. To avoid seeming inauthentic, make your sustainability efforts meaningful to customers from an ethics standpoint and weave them into the fabric of your company culture.
2. Put people first -- for real. All companies pay lip service to putting customers first and establishing a great company culture, but truly socially responsible companies make a real commitment to both. Google, believe it or not, was a startup at one time. By building their company culture around rewarding employees, Google's leaders ensured the incredible growth we've all witnessed.
We have a lot of diversity within our own company -- especially in leadership -- and I believe that that's because we've always rewarded great work. To do the same with your organization, run it as a meritocracy. No matter what color, gender, religion or nationality people are, if they do good work, they should be promoted.
We also strive to err on the side of transparency to make good, long-lasting relationships with the business community. The bigger you get, the smaller the world becomes, which means your success depends on enduring relationships built on trust. So don't lie to customers or exaggerate to recruit people; stay transparent and honest. And be especially careful not to aggrandize your efforts toward being more socially responsible -- it won't help achieve your business objectives.
3. Know the difference between "socially responsible" and "ethical." They aren't synonymous. Social responsibility requires ethics, but ethics doesn't require social responsibility. For example, while it isn't technically unethical to source manufacturing in China, the argument can be made that having a sweatshop producing your widgets or clothing isn't socially responsible.
Ben & Jerry's is a good example of a company that understands both ethics and social responsibility. Right from the start, founders Ben Cohen and Jerry Greenfield made a deal with their employees: The ratio between the company's highest salary and the lowest would never be more than five to one. And those two founders kept the deal in place throughout their tenure.
They also took their business practices beyond ethics. To this day, the company uses fair trade ingredients exclusively and operates a sustainability program for Vermont dairy farmers. Cohen and Greenfield insist on benefiting everyone on the entire planet -- and not just by making great ice cream.
Highlighting your company's sustainability in an ethical way isn't really all that difficult. You could showcase on your website employees volunteering for charities that work to clean up the environment. Or you might explore the benefits your recycling program or other internal green initiative has in a newsletter. To be truly socially responsible, you want to incorporate ethics into every aspect of your operations.
Plenty of people remain skeptical about Hormel purchasing Justin's. But the parent company just might end up integrating the socially responsible mindset of its new acquisition into its own culture and operations. That would improve not only our world, but also its bottom line.