Because of Collaborative’s focus on investing in companies that push the world forward, I often meet entrepreneurs who have a genuine interest in weaving ‘good’ into their company. But they are at a loss for best practices. Unlike many other things in business that are quantifiable, social good is subjective.
One solution is adopting B-Corp’s standards - which I am supportive of and have written about previously.
However, at a high level, I think the secret to creating a business that is financially successful and does good in the world, is focusing on creating alignment among its stakeholders (ie. investors, employees, and consumers).
The best instances of ‘social good’ that I have seen are when your core product itself somehow pushes the world forward. This creates a wonderful alignment whereby all of the interests are in sync. The more successful your product is, the better your company does – which allows for your community to engage in your mission, your employees to have their contributions validated and recognized, and most importantly, it removes any pressure from investors around labeling social good as a distraction or sacrifice.
TOMS Shoes was one of the first to tie their core product (and each transaction) towards doing good. Now we see this with Warby Parker and others. In both of those cases, the connection is explicit, but that doesn’t need to be the case. For example, I believe Kickstarter’s business model meets this alignment. The more projects that get funded = the more creativity in the world…and more revenue for the company.
Another interesting model is Salesforce’s 1-1-1 program. They do not get enough credit for this. What I like most is its simplicity. Similar to the concept above, the more successful Salesforce becomes – the more good they do. It is clear and Marc Benioff’s full support is a critical factor in the equation. I’m curious whether Salesforce customers are aware of their role in the success of 1-1-1.
The most common pitfall is separating your social good efforts from the core business. This removes the alignment mentioned above and ultimately can make it feel like an afterthought. I am suspicious of any company that has a “corporate social responsibility department.” Treating your core product and social impact as distinct goals leads to competing priorities, budgets, and fractured focus.
My suggestion: take the good ideas from each of these examples and come up with something that feels right for you. Something that you’ll be committed to in both the good and the tough times. Communicate it clearly (internally and externally), and most importantly try to align everyone’s interests as best as you can. Magic can happen when your customers, employees, and shareholders are all rooting for the same outcome.