The Case For The Goodness Business Model

 

One can get anything if he is willing to help enough others get what they want. — Zig Ziglar

There is a trend in business that is starting to emerge that focuses more on doing good than maximizing profit. This trend is a long time coming and appears to be a direct result of the success of capitalism and the huge amount of wealth, burden, depletion and opportunity that it’s reaped on the earth.

The Goodness Business Model (GBM) is nothing new. Companies like Tom’s of Maine, The Virgin Group, Bob’s Red Mill, Dr. Bronner’s Soaps and The Body Shop have all tried and mostly lived GBM in one form or another for decades.

The sea change that is occurring is that these companies have been in the minority and now consumers, citizens and entrepreneurs are now starting to realize that goodness needs to be an integral part of all businesses — not just on the fringe.

The reason for this is simple — our present business models and methods are not sustainable.

• They cannot sustain our natural resources

• They are not solving our social problems

• They are not being good stewards of the earth

What is The Goodness Business Model

Recently, I have read two books about GBM. They did not call it GBM but the ideas are certainly in line with what GBM is.

One was first published in 1993 while the other was just published in 2011 (December to be exact). Both The Soul of a Business by Tom Chappell (of Tom’s of Maine) and Screw Business As Usual by Richard Branson (of the Virgin Group) basically says the same thing — doing good is the only business model that can simultaneously sustain the earth, attempt to fix the worlds problems and provide long term profit for a company.

The interesting thing about these two books is that both authors come to their conclusions from totally different places.

Tom Chappell found his at divinity school and that forever shaped his view of our roll on earth and how God plays a role in everything we do. His idea of goodness started with reading I and Thou by Martin Buber a Jewish philosopher (a wonderful summary is here).

I-Thou is what made Tom realize that our relationships need to be more of an encounter instead of an experience (which is the I-It model). This is a profound concept because it gives meaning and depth to others and things instead of just an experience where we collect data, analyze it, classify it and theorize about it. This modality is the foundation of how goodness works — by opening ourselves to more encounters we see the likeness of ourselves in the world and that makes us want to do more good.

Richard Branson’s journey to goodness does not seem to be a single event or epiphany but rather a process that was engrained in him at an early age. It seems to stem from his family life and the struggles they went through. These struggles instilled in him to always be focused on giving everyone a “fair go”.

One thing is clear is that Richard’s concept of goodness matches nicely to Tom’s in that they both believe that both profit and good are not orthogonal concepts but rather essential for a company to have.

Richard calls his GBM concept Capitalism 24902. It’s chief tenant is simple:

Each and every single business person has the responsibility to take care of the people and planet that makes up our global village, all 24,902 circumferential miles of it. — Capitalism 24902

It’s a powerful idea that meshes nicely with Tom’s of Maine’s Last Statement of Belief’s which reads:

WE BELIEVE that our company can be financially successful while behaving in a socially responsible and environmentally sensitive manner. — Tom’s of Maine Statement of Beliefs

Both of these statements incapsulate The Goodness Business Model.

Doing Good Is Harder Than You Think

The ideals in both these books may seem hard to achieve if not impossible to some business people. In fact, it’s not the fact that it’s hard to be good — it’s the fact that business people are not taught those business ideals.

Recall from business school (those that went) that the main objective of any business is to Maximize Shareholder Wealth.

That’s it. That’s all.

Generations and generations of MBA’s got sucked into that and it’s now making our world worst — from the global financial crisis, the harm we do everyday to our plant and the countless billions of people in poverty. We need to change that mindset to one where goodness plays a key role in business. This is not a new concept.

In the early 1970’s, Corporate Social Responsibility (CSR) coined the term stakeholder and that movement talked about Maximizing Stakeholder Value which essentially meant to consider all the stakeholders of your business (e.g. Those with direct interactions both positive and negative).

Critics of CSR say that it’s just “window-dressing or an attempt to pre-empt the role of government as a watchdog over powerful multinational corporations.” It can certainly seem that way but I think that’s where goodness trumps CSR.

Doing Good Leads to Goodness

Corporate Social Responsibility is important but insufficient since it only addresses the company and not every worker, manager, investor, supplier or customer. That’s where the Goodness Business Model is much more powerful — by adhering to the I-Thou model and knowing that all 24,092 circumferential miles of earth are what you need to encounter, help and protect everyday.

By doing good by all those people, you can achieve goodness.

This is a high ideal but arguably the only way that we can hope to maintain our standards of living (in the developed countries) and to raise up the rest of the world.

Goodness Analytics

Many of you might be wondering how to judge goodness. Clearly, there must be some sort of metric or analytic that shows how much good a company did or can do.

Metrics for goodness can be hard to come by but some to consider include:

• Carbon footprint of your organization

• Waste recycled or diverted from landfills

• Involvement with local charities which includes time, talent and treasure

• Customer feedback on why they buy your product and it’s impact on them

• Amount of sustainable materials used

• Treatment of labor at home and at your sub-contractors anywhere in the world

• Employee engagement, sense of accomplishment and morale

These are only a few of the many metrics that a company can and should track.

One thing about goodness is that the results of being good take time to peculate. For example, at Tom’s of Maine, it took about three years for their mission (which defines their goals for goodness) to be internalized by their employees, management and suppliers. So be patient with goodness — it will pay off.