The free market is like nature...

And money is like reward.

Imagine a forest.  Trees, bushes, plants, animals, air, soil.  The tree drops its leaves on the ground which nourishes the soil.  Animals live in the trees and feed from its leaves, and they then nourish the soil.  This all comes full circle to nourish the tree.  This is one example of millions of ways that nature works to sustain itself.  Organisms give and in return are rewarded with growth.  Organisms take only what they need.  When this happens a rich, sustainable  community is formed and flourishes until an organism stops giving or takes more then they need.

The free market is the same.  Trees are like Fortune 500 companies and small coffee shops are like insects.  Harmony not only is possible but more rewarding to all.  The more big companies give to the community and environment (in the form of good products and philanthropy) and the less they take the more they are rewarded over the long term.  This also goes for small business.

They key to a companies long term success is having clients and resources, and the key to having sustainable clients and resources is to make sure that the latter are nourished.

 

 

Patagonia lets their employee's surf

Patagonia employees wake up in the morning and cant wait to get to work.  Each day they know they each play a role in building a company that will last 100 years, and if the surf's up...then off they go.  How does one go about building a company that will last 100 years...

There are two stories about Patagonia that come to mind.  One is a personal experience told to me by a friend who walked into a Patagonia store looking for a waterproof warm jacket - Patagonia's bread and butter for north of $200! When my friend walked into the store he was asked how they could assist him.  After hearing what he needed, they asked if he had a fleece at home as well as a waterproof shell.  They suggested that that combination could be a great alternative to a new jacket.  My friend left happy without a new jacket.  This Patagonia employee saved my friend $200 and saved the environment the strain of making a new jacket!

The second story is told by the ex-CEO of Patagonia.  The company was getting a lot of complaints about a new line of fleece, about how the odor of sweat would not come out in the wash.  A fairly easy fix would be to switch to another form of material which was fairly synthetic.  When this decision reached the CEO's desk, the proposed fix did not sit well with him so he decided to send the problem to Patagonia's scientists to try to find a solution, which they did - crab shells that had been washed up on the beach could be used for the needed material!  This much more expensive, much delayed solution to the problem was the path that Patagonia took...better for the environment, and what ended up being a much higher quality for the client.

Patagonia takes the long term approach, considerate of their employees, their clients and the community and environment around them - these are their priorities and a side affect is sustained profitability (a good chunk of which they donate to charity), profitability that has put them ahead of their competitors over the long haul.

Dabbawala

Over 100 years ago, in Mumbai India,  the Dabbawala service was founded.  It delivers lunch boxes to people at work after picking it up from their homes in the morning and then returns the empty lunchbox that afternoon.  Today 5000 employees deliver 130,000 peoples lunches each day.  And rarely is there an error!  So for over 100 years this service has endured famines, wars, monsoons, riots, terrorist attacks, the industrial and age, and still they achieve their one simple goal...on-time delivery.

When it comes down to it, their efficiency and reliability is not because of some magic business process nor is it because they use the most advance technology, nor is it because they've hired a high priced CEO...it is simply because they each have a deep respect for each other, and for their clients receiving their lunch each day on time.  They do this work for very little money, but yet do it happily and efficiently.

Here...social awareness and consciousness...is the pillar for an organization's longevity and effectiveness!!!

Social and environmental consideration is now a legal corporate form

Benefit corporation or B-corp is corporate form that is designed for for-profit entities that want to consider society and the environment in addition to profit in their decision making process.  The purpose of a B-corp is to protect a companies social environmental mission, while raising growth capital.  There are over 1000 companies registered as a B-corp

http://en.wikipedia.org/wiki/Benefit_corporation

https://www.bcorporation.net/

Statistical study shows that it is profitable to be socially considerate

In 1999 Business week asked the question..."Can business meet new social, environmental and financial expectations and still win?"

This question prompted a study titled "Corporate Social and Financial Performance: A Meta-analysis" by Marc Orlitzky, Frank L. Schmidt, Sara L. Rynes.

Based on this meta-analysis(combining and contrasting existing studies) integrating 30 years of research, the answer to the introductory question is affirmative.  The results show that there is a positive association between corporate social performance and corporate financial performance across industries and across study contexts.

http://www.sustainabilitymanagement.net/public/corporate%20social%20and%20financial%20performance.pdf

Social and Environmental Awareness is the Ultimate Competitive Edge

The evidence is in and its not just the subjective opinions or even objective opinions for that matter of a select few.  It’s statistical.  It is woven into the numbers.  The money, the number by which we measure almost everything is showing us that social and environmental responsibility leads to higher profit margins.  How can this be?  Isn’t Social Responsibility a radical new train of thought that is reserved only for those, time and financially privileged enough to act accordingly so that they may add it to their marketing campaign.  Isn’t the road to financial success paved by shrewd decisions, cost cutting and ingenious marketing campaigns?  Isn’t the marketplace too competitive for compassion?

The world is a couple of centuries into an industrial age, where success is taught to hinge on some of the aforementioned questions.  But the whole time there has been a reoccurring theme, that can be seen by looking at the numbers.  An intention of compassion, even in the most cut throat of board rooms, leads to more sustainable profit.  Being compassionate is a sure way to gain an edge over a business’s competition…over the long term.  And there lies the trick.  We wake up in the morning worried about being able to retire comfortably, but yet, when we get to work, we bite and claw for short-term profit.  Short term is so yesterday.  Long term and sustainability is where it’s at!  Why?  Well, it just feels better.  Just like a warm cup of soup might feel better then if its cold.  We might have to wait a few minutes, but it feels so much better.  An old Afghan saying – “Patience is bitter, but its fruit is so sweet”

So where is the evidence.  It’s everywhere. Start by pulling up a chart of your favorite index and compare it to the ETF – DSI.  If you like what you see, I won’t have to get into too much more detail.

In 1999, Business Week posed the question – “Can business meet new social environmental and financial expectations an still win?”  This prompted a study which was published as Corporate Social and Financial Performance: A Meta-analysis, by

Marc Orlitzky, Frank L. Schmidt, Sara L. Rynes. This meta-analysis using 30 years of empirical data concluded that corporate virtue in the form of social and to a lesser extent environmental responsibility is rewarding in more ways then one. There is a positive correlation between corporate, social and environmental responsibility and corporate financial profit.

If you walk into a Patagonia store, ready to pay $200 for a new jacket, the sales associate will ask you about your existing wardrobe to help you figure out if you really need to buy their jacket after-all

Benefit Corporation or B-Corp is a corporate form for for-profit entities that want to consider society and the environment in addition to profit in their decision making process.

 

This is just a sampling of the evidence, but likely more then enough to think twice about the intention behind our next decision.