The Responsibility Revolution

Do organisations work for a larger cause? Can a business maximise the impact of driving social change while pursuing a profit making venture and maximising returns to the share holders? Some businesses have succeeded in combining the two for the greater good of the society.

Ben & Jerry’s ice-cream is a quirky company with revenues of more than USD200mn. It was founded on the belief of deep respect for individuals in and outside the company and supporting the communities of which they were a part. Even after getting acquired by Unilever recently, it retains its motto. It introduced a new flavour called “Rainforest Crunch” that sourced its nuts from the Brazilian rain forest and at the same time worked towards raising awareness about deforestation.

Instead of taking the business decisions based solely on short term financial goals, the values driven business can incorporate local, national and global social causes in its mission and operating plans to drive long term business. It is much more effective than philanthropy. The inclusion of CSR in the New Companies Act 2013 in India is a step in this direction.

IDEO, a respected design firm, was created for values that are still intact even after 30 years. While the company’s folklore has numerous tales including how it developed the first Apple computer mouse, the first single-use instant camera, and many such innovations, there is no mention of costs and profits. The underlying core belief being that brilliant, problem-solving design earns profits for the company and helps its clients become more valuable.

Values led companies earn loyalty from their customers. The conventional companies approach the subject by advertising and using brand ambassadors. This approach is obviously superficial and often fails. The episode with Tiger Woods, who had to be dropped by Accenture overnight, after being caught in a scandal, is a case in point. A company may make its clients feel happy and proud by inspiring them to align their aspirations to something that touches their soul. It is a process of customer segmentation. They should share a value system, only then can the former follow a profitable path to success.

Another such example is Whole Foods, one of the largest retail companies in the world, which started out as a single small store in 1980. It has a set of core values that include selling highest quality natural and organic foods and its motto—“Whole Foods, Whole People, Whole Planet”—emphasises that it is more than just a food retailer. The company measures its success in terms of customer satisfaction, team member happiness and excellence, improved environment and larger community support. Whole Foods with USD17 bn in revenues has been a huge growth story.

In the past factories across US, Europe and Asia were paying workers for time spent on the shop floor. Thanks to mechanisation and IT, we have moved far away from that model. We are knowledge workers with aspirations and preferences. Instead of making a donation, values led organisations link its operations to a social cause. They create a culture where people are concerned about where they are headed instead of identifying themselves with their past.

US Company WL Gore, maker of famed Gore-Tex, is another example. Gore has been a team-based, flat lattice organisation that fosters personal initiative. It has no organisational charts and no chains of command, and has laid down four culture principles—freedom, fairness, commitment and waterline.

Despite having no VPs, EVPs, SVPs, Gore, a USD3 bn business, with over 10,000 employees and operations in over 20 countries, it is consistently ranked as one of the top places to work. Could we identify similar companies in India whose core values are more than just market capitalisation and return on investment and are led by a cause that encompasses individual and society at large?

The author is Senior Partner, Hunt Partners-India, executive search firm