PROFITING FOR GREATER GOOD
Many people believe that business is a necessary evil�one that can only make profit, but never bring about positive change. Recently, a journalist remarked that it was very �controversial� for me to say that I wanted business to address social and environmental problems, and to pursue and value societal goals over just making a profit. Indeed, the only way businesses can succeed over the long term is by working to benefit their communities�and as more chief executive officers and entrepreneurs recognize this, we are starting to see real change.
In the past, experienced business leaders would have warned young entrepreneurs away from my strategy, explaining that starting a business is extremely tough and that merely surviving should be enough. However, in recent years we have seen the launch of many businesses that set out to do good rather than only to make a profit, and then succeeded by using these ideals to differentiate their brand from their competitors�.
Consider TOMS, a company that sells shoes and eyewear. For every pair of shoes or eyeglasses it sells, TOMS gives away a pair to a child in need. So far, TOMS manufactures shoes in three countries and gives away products in more than 20 countries. Or look at Patagonia Inc., the outdoor sports clothing company, which has a strong environmental mission and makes many of its products from recycled or environment friendly materials. Both are thriving, profitable businesses.
Entrepreneurs are also pitching such business ideas to me more frequently. The winner of Virgin Unite�s Screw Business As Usual competition was Raise5, an online fundraising platform founded by a team of entrepreneurs from Toronto. Their website allows people to hire volunteers to carry out tasks ranging from computer programming to writing love letters; the volunteers work for charitable donations of as little as $5, with the funds going to not-for-profit organizations.
At a recent �Pitch to Rich� competition for business ideas run by our Virgin Media Pioneers organization in Britain, budding entrepreneurs pitched business plans to a panel of experts including myself and Richard Reed of Innocent Drinks. While all four finalists had great ideas, one really stood out: SafetyNet Technologies, which came up with a wonderful idea for preventing small and inedible fish and marine life from being caught accidentally in fishing nets. The company has developed special nets fitted with holes and lights, thereby reducing harm to the ecosystem. I loved the simplicity of the idea and also that this product could be retrofitted onto nets currently in use. If you own a small business or have founded a start-up, consider your list of stated goals. Improving your community and environment should not be just tacked onto your strategy as an afterthought through charitable giving or a brief volunteer effort; it must be integral to your business planning, affecting decisions about how you choose suppliers, which raw materials you use and how you market your brand. Here is a blueprint of six steps:
Assess the social and environmental needs of the communities you hope to do business in. How can you help tackle big problems such as a lack of training or environmental degradation? What businesses can you build by meeting these needs?
As you put together a strategy based on meeting community needs, set clear goals for your business, but instead of asking your employees just to reach profit and sales benchmarks, challenge them to achieve your social and environmental aims. Then set up systems that measure your progress. Quantify your impact on the planet; build a reward system that keeps your staff on target.
Make a list of all the resources you have at your disposal�everything from your buying power and potential brand recognition from new products to your staff�s energy and passion. This can even include how you dispose of waste, if you are innovative in this area.
Meet community leaders and explain what you hope to achieve. Share your goals, describe your systems, talk about your assets, and ask for their advice and expertise. If you can, enlist other local businesses and non-profits to work with you.
Periodically assess your supply chains, products and services, your clients and partners. Who are you doing business with? Does your product or service stand up to scrutiny? Is your company adding value to the communities in which you do business?
Tell members of the local press, industry groups and politicians about your mission. Explain how you intend to do good business that will also be good for your community. Like Raise5 or Safetynet Technologies, you can help change the way people see business�as a necessary good.
I have written in previous columns about Ray Anderson, the founder of Interface Inc., who revolutionized the carpet industry by setting a goal for his company of radically reducing waste. He once said, �For those who think business exists to make a profit, I suggest they think again. Business makes a profit to exist. Surely it must exist for some higher, nobler purpose than that.� Ray died in 2011, but our generation of entrepreneurs must take his words to heart.
BY NYT SYNDICATE
�2012/RICHARD BRANSON
Richard Branson is the founder of the Virgin Group and companies such as Virgin Atlantic, Virgin America, Virgin Mobile and Virgin Active. He maintains a blog at www.virgin.com/richard-branson/blog. You can follow him on Twitter at twitter.com/richardbranson.