December 16, 2015
"Doing Good" Is Great For Business

An owner of a pro sports team recently remarked to me that being seen “doing good” in the world is now a requirement. Gone are the days of quietly sponsoring the local Little League team. Good citizenship has become a big business with a large associated budget. Starbucks recently announced a plan to distribute a million coffee trees, and Ikea has allocated over $1.1 billion to combat climate change.

As the former chairperson of a large charity, I am grateful for this shift. The opportunity to connect societal good with the vast resources of business is an exciting development, and I have decided personally to focus my efforts at this intersection. But these good citizen announcements are coming so fast that a CMO at a large financial institution mused that they weren’t sure people would even remember whether it was them or a competitor who was sponsoring adjacent causes. So it seems timely to step back and review how brands might allocate these significant investments.

Two of my worries surrounding the current headlines are sustainability and scalability.  Having experienced a few business cycles, I fear that the first thing to go will be these external initiatives when margins start getting squeezed. It is a truly committed management that sustains large-scale external programs when they are cutting people or bleeding red ink. Also, from my experiences in charity, the announcements and investments themselves are usually the easiest things to execute. Programs seldom scale by themselves and require significant ongoing attention from the sponsor to ensure success. Great intentions can become PR liabilities when programs are not executed well or worse yet, wound down.

Because of these concerns, I believe joining what is already trying to happen should generally override the temptation to blaze your own trail. Better to share credit with others than to go it alone and fail.  Even more important, I would explore opportunities to build positive social outcomes into your products and processes. This inside-out approach to citizenship can increasingly be accomplished with a compelling ROI. And yes, a clear ROI benefit does not undermine the purity of the cause or taint motives.  Quite the contrary — it ensures the survival and scalability of a program and the impact it will have. TOMS Shoes is a good example of this integrated approach.

One of the most intriguing developments related to corporate goodness is its expanding definition. Based on a recent omnibus survey conducted by my firm with the help of Ogilvy & Mather, 86 percent of 2,500 respondents said that companies should do more to publicly recognize their good employees. I believe this insight creates the greatest sustainable and scalable opportunity to do good within business. The economics of customer and employee retention are compelling and won’t disappear at any point during the business cycle. And it is hard to overstate the societal benefit (or the benefit to one’s own company) when employees are valued and feel good at what they do.  Sir Richard Branson puts it this way, “if you take care of your employees, they will take care of the clients.”

Earlier this month, I was sent a link from a friend entitled, “Florida Starbucks barista signs with customer.”  It was a compelling story about Starbucks employee Katie Wyble using sign language to serve a deaf customer. I was impressed by Katie and Starbucks — turns out so were six million other people!

In my own business, we recently decided to comb through our balance sheet, income statement and cash flow statements to try to unearth potential opportunities to do good across all our products and processes. Applying a little creative thinking (particularly in the areas of marketing and technology) it turned out to be a much longer list than we expected.  And imagining how we might integrate commerce with a greater purpose was the most energizing thing I have done in a long time … and not just for me but also for my employees.

 

Rob Pace is the founder of HundredX, Inc.  HundredX is dedicated to using technology for good and multiplying positive outcomes.

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