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Should business have a social purpose, above and beyond simply making money, providing employment and serving up a return to shareholders?
There are, of course, a lot of social enterprises, created with the express purpose of delivering social benefits through their business models. Some trade commercially – selling goods or services – but their constitutions state that any profits made should be reinvested rather than distributed to shareholders. Others are investor friendly. They generate profits, have the potential to scale up and when the time comes to exit, founders and investors alike can look forward to a payday. However, in parallel, they are also focused on not only making a profit, but also making a difference. That could mean running a cafe chain that trains up homeless people, delivering solar power to off grid communities or recycling waste into clothing. Work that can be monetized while also doing a bit of good in the world.,
But what about the vast bulk of entrepreneurial businesses? Are there opportunities to pursue some kind of social agenda, while running the type of company that is not normally associated with any kind of social impact agenda?
The short answer it yes – but there is no one-size-fits-all approach to pursuing a “business for good” strategy.
Stopping For Coffee
For instance, Stefan Allesch Taylor, CBE is co-founder of The Department For Coffee and Social Affairs, a U.K. business that runs specialty coffee shops in Britain and North America. Unlike, say, the Starbucks or Costa Coffee chains, the company runs coffee shops that each have their own identity rather than conforming to a single set of brand guidelines. It has grown, in part, by acquisition and last month it bought up four Baker and Spice shops when they became available after the collapse of Britain’s Patisserie Valerie chain.
And as Allesch-Taylor acknowledges, putting social impact center stage does not necessarily sit well with a brand that is aiming for the upper end of the coffee drinking market. “If a coffee shop is branded as social impact, then consumers may feel there is something substandard about what you are offering,” he says.
But Allesch Taylor has a genuine commitment to doing something positive. As he explains, it’s a commitment that dates back to the financial crisis where the collapse of the banking system wiped out many years of entrepreneurial work. “I had enjoyed 28 years of entrepreneurial success and in 2008 it was all taken away,” he says.
This left him with the conviction that in a world of economic and commercial uncertainty, businesses can nonetheless leave a lasting legacy. Today within his company, social impact is measured alongside commercial performance.
A Multi-Stranded Approach
So what does that mean in practice? Well, the Department of Coffee and Social Affairs takes a multi stranded approach. Staff and managers are encouraged to give of their time, providing governance and mentoring expertise as well as hands-on help to causes supported by the chain.. The organisation also designs social programs, provides funding and offers technical support.
The results are set out in the annual Social Impact report. “It can be picked up at all our coffee shops, so people can read if they want to,” Allesch Taylor says. In other words, customers won’t necessarily engage with the company’s agenda – but the outcomes are in plain sight for those who want to take an interest.
Joining The Club
Visit, Ronald Ndoro’s private members club, the Library, and it is possible- if you dig a little – to see a direct connection between the fabric of the business and a wider social agenda.
The club – designed to attract creatives – is lined with books, and in keeping with the “library” theme, Ndoro reaches out to the wider London community through sponsorship of the Big Read, an annual series of events designed to promote the discovery of books. Although it could be argued that the Big Read appeals to Londoners who are already readers, the initiative also includes work done with a charity partner to boost children’s literacy.
Now, London is coming down with private members clubs and generally speaking they are thought to be elitists institutions. That’s true of the venerable clubs around St James – the natural home of establishment figures – but also of newer variations on the theme such as the Groucho Club and Soho house. In that respect, can private members clubs ever really be perceived as having a social mission.
Ndoro thinks so. In May he will be launching a second London club – the Arboretum – where the emphasis is on sustainability and the environment. His aim – is to use the club environment to raise awareness of key issues around environmental backed up with outreach programs.
Unlike many clubs, membership is open – applicants don’t have to be endorsed by current members to gain access - which Ndoro hopes will break down any hint of elitism while encouraging a diverse membership of creatives. There is a sense of social mission here too. Ndoro argues that one of the key factors inhibiting entrepreneurship on the part of a people from different ethnic backgrounds is often the lack of a peer network that can provide support. He believes his clubs can provide a networking base.
The question is, of course, will the themes promoted by NDoro’s clubs feed through into solid outcomes. Ndoro believes the Big Read demonstrates that outreach programs – promoted widely with the help of partners – can make a difference.
Which brings us back to that happening question. Should business be about something more than profits? That probably depends on the managers and founders, but a successful business – bringing to bear a wide range of skills – is potentially in a very strong position to drive good deeds in a wicked world.
March 14, 2019 at 07:00AM
Forbes – Entrepreneurs