I came across the idea of a B-Corp early on in my exploration of what it would be like to run a business heartfully. For those aren’t familiar with this concept, B-Corps were created in the US as an antidote to the profit rules motive. By US law, companies are required to maximise shareholder value. In the UK and many other countries, this is written in nearly all companies’ articles of association. This means that the boards of commercial organisations in most countries are legally obliged to focus their energies on maximising shareholder value at the expense of all other stakeholders – their employees, their customers, their communities, their suppliers and the environment.
The people behind the B-Corp movement came to the same conclusion that I have, namely, that if you focus on the other stakeholders, the rewards will come for shareholders. It is logical – if your employees are happy and fulfilled and doing a job they love, they will take great care of your customers, who will reward you with better loyalty. A happy team who care about your suppliers will help create loyalty and better service from those suppliers; a happy, local community who value your company and see it as willing to give rather than just take, will generate even more loyalty. And finally, if you care about and are conscious about your environmental impact, it is both good business and generates loyalty amongst the growing number of eco-sensitive consumers. With that picture painted, how can shareholder returns not be greater than the old short-term profit focused profit model?
The good news is that you do not have to take my word for it. We have proven this to be the case with our Heart in Business Limited work at Thornton’s Budgens – we implemented heart and B-Corp principles (which are almost one and the same) and sales and profit went up (See our Case Study – HIBL – Driving Business from the Heart (23 July 2017)). We specifically realised that a lot of the behaviour I described above can be traced back to better utilising Human Potential within an organisation. In our case study, we correlated that better utilisation of Human Potential lead to our sales growth – we used 8% more Human Potential and grew sales by 10 points!
Given the similarity between our work and that of the B-Corp movement, it was a logical step for Heart in Business Limited to become a B-Corp, something we were delighted to achieve just before the summer started. We now join 2262 other companies across 50+ countries with one unifying goal – to be a more responsible business and one where people are really engaged in what they do.
It’s an honour to join some amazing companies and I want to pick out two. First off Patagonia – their mission is to “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis”. They started off in the 50’s with this mission and haven’t budged in purpose since then. Pretty impressive and foresightful all those years ago. Several years ago, they ran an advert for a coat with the headline “Why you don’t need to buy this coat” – a genuine story of the environmental impact that its production lead to. And while it did lead to many people buying the coat and their other products (as the impact is less than alternatives), it wasn’t a cynical ploy to sell more – it was written from a genuinely caring place.
And more locally, COOK, started in 1997 by the Perry brothers, Ed and James, and Dale Penfold to produce home quality frozen meals. As a long time supplier of Thornton’s Budgens, we’ve had the chance to share common principles in our working relationship. And, James was one of the people responsible for bringing the B.Corp movement to the UK.
Looking forward, Danone has just become a committed B-Corp and Unilever are giving it serious consideration – after all, it is a logical extension of their CEO Paul Polman’s statement that “We cannot close our eyes to the challenges that the world faces. Business must make an explicit and positive contribution to addressing them. I’m convinced we can create a more equitable and sustainable world for all of us by doing so”.
This vision of businesses making a much greater contribution to a better world for all of us gives me great hope for the future.