Create a Business That Inspires Change (in the World and in Your Pocket)
Entrepreneur's New Year’s Guide
Social responsibility has fortunately gone from the realm of corporate communications to business operations: It can no longer be faked. The best businesses are those that have built sustainability into the core of their business models and are using their people to create passion for their mission with consumers.
AeroFarms, which grows nutritious leafy greens and herbs without sunlight, soil or pesticides, is one such company reinventing sustainability. Instead of employing traditional farming methods that require massive acreage, huge amounts of water and solar power, the company has put data to use.
The result is that it can optimize its crops' growth in a temperature-controlled, LED-lit environment, with those crops stacked 30 feet high. What's more, the company is expected to produce 10 times the harvest it normally could expect, in a fraction of the space and with much fewer resources -- a major win for the sustainability movement.
AeroFarms isn’t alone. No longer are only niche groups looking to buy from socially responsible companies. Conscious consumerism is going mainstream. After all, when offered comparable price and quality, 90 percent of consumers surveyed in one study said they would choose brands associated with a cause over the alternative.
In other words, buying socially or environmentally responsible products isn’t just a trend, but a movement -- and a global one.
Such companies prove that consumers and businesses don’t need to sacrifice to live a more sustainable life. AeroFarms demonstrates why it’s time more companies follow suit, building businesses that are inherently more sustainable in what they make.
Though the path to social or environmental responsibility can be difficult, such efforts can have a major effect on not just the planet and its people, but a company’s bottom line. Following are four ways to start “doing good” from the inside out:
1. Make culture your secret weapon: When everything else in business can be easily copied by the competition, culture is the only sustainable competitive advantage. Devote time and effort into developing a strong culture that caters to your social mission to stay ahead of the competition.
At Workday, a company focused on HR and financial services, this employee focus is written into its core values and touches every aspect of the business. As a result, the company’s attrition rate sits below 10 percent and can boast a whopping 98 percent satisfaction rating by customers.
2. Inspire advocates: It’s shortsighted to say that consumers buy solely because of price, value or convenience. Consumers are far more complex, and products that satisfy more than just one specific need offer customers more reason to get behind their brands. That's why it important to build more than just one entry point into your company's wares.
New Orleans entrepreneur Tippy Tippens found great success with cause-based ventures -- beginning with her Bird Project Soap line, which donated proceeds to assist in the Gulf environmental cleanup following the BP oil spill in 2010. The effort was so successful that it led to Tippens' creating Goods That Matter, an eco-friendly marketplace where every product sold gives back to social causes.
3. Sustainability equals quality: Building sustainability into business practices should be about more than marketing. It takes commitment to build sustainability into your products. Ultimately, consumers can see right through "green washing," so whatever your mission is, do it first, and talk about it after.
Nike is a good example. Since the launch of its Flyknit line, in 2012, Nike has literally woven sustainability into it. The product offers a specialized yarn system that minimizes labor and has reduced waste by as much as 3.5 million pounds since its inception. Beyond that, Flyknit's environmental aspect has also improved the performance of its shoes.
4. Build relationships, not customers: Retail is transactional, but it doesn’t need to be. Focus not on pushing products, but on establishing relationships with customers: Help them enrich their lives and expand their businesses -- that's one of the best (and most sustainable) ways to build a successful brand.
Method, a company creating naturally derived cleaning products, is all about consulting with customers. The company asks customers for their their feedback and for suggestions to improve its products and operations. This relationship-based sales approach -- along with sustainable products and an all-hands-on-deck approach to culture -- has helped Method become one of the fastest-growing private companies in the United States.
In sum, consumers will never stop caring about price. The same can be said for convenience and even customer service. But there’s still more depth to what consumers care about in the products they buy. Building sustainability into the DNA of your business and the quality of your products will help achieve your social mission while also building greater loyalty.