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Studies increasingly show that the motivations that drive millennials in both their work and personal lives are starkly different from the motivations of past generations. Chiefly, millennials care less about a paycheck and more about the opportunity to be a part of something that’s making a difference in the world. Deloitte’s 2018 Survey of 10,455 millennials across 36 countries found that millennials believe that business profits and social impact don’t have to be mutually exclusive.
According to Deloitte, “Young workers are eager for business leaders to be proactive about making a positive impact in society—and to be responsive to employees’ needs.” Among their top goals: Making a positive impact on society and the environment, creating innovative products, ideas and services, job creation and improving people’s lives.
In my experience working in Corporate Social Responsibility, I’ve seen firsthand the shift that legacy companies are slowly but surely making towards embracing these issues – a trend that I believe is not only responsible, but will help to set up these companies for long-term success. But why have companies been so slow to change? One reason is that it can be difficult to course-correct at a major organization which has, for decades, had one clear set of priorities that’s focused on revenue and profits. But a new generation of innovative founders is showing how building social impact into your company’s core value set is not only the right thing to do – it also has a positive correlation to scaling your business and resonating with potential consumers and employees alike.
James Reinhart, Founder and CEO of thredUP, says that “Staying true to our values is actually what has enabled us to scale as a business,” he said. “We were always out to prove that doing good and being a for-profit business don’t have to be mutually exclusive. Giving back to the community and lessening our collective fashion footprint are core values at thredUP, and have been from the start.”
Since launch, thredUP has upcycled over 60 million items and has built the world’s largest garment-on-hanger facilities processing 100,000 garments each day. Part of the company’s success has come from its ability to listen to the concerns that drive consumer purchasing decisions and create a product that meets those needs. “Today’s conscious consumer wants the fun of fast fashion without the guilt,” says Reinhart. “In fact, according to thredUP’s 2018 Resale Report, 75% of consumers prefer to shop from eco-friendly brands.”
It’s also been key to attracting talent who are passionate about the problem that thredUP is trying to solve, and to keeping them engaged over the long-haul. “Today, thredUP has over 1,000 employees located all over the world, and every employee is driven by our mission to reinvent resale and inspire a new generation to think secondhand first,” says Reinhart.”
Other founders I spoke with agreed that leaning into social impact and the consumer’s opportunity to make a difference via his or her purchasing behaviors has been a key factor that has helped them to distinguish themselves from their competitors.
Alyssa Ravasio, Founder and CEO of Hipcamp, built her company on the core value of leaving the environment better than you find it – a step beyond the traditional outdoor philosophy of “leave no trace.” Says Ravasio of her company’s mission, “We believe it is possible for people to actively improve the environment beyond minimizing their impact, and that we can do this on both an individual and societal level.”
That stance, she says, has been a key to the company’s success and growth. “Our mission and values are what differentiates us and give us a competitive advantage,” says Ravasio. “They help us attract inspired, driven employees, investors, and partners as well as support incredible hosts and connect them with adventurous, responsible outdoor evangelists.”
“It’s a powerful motivator,” adds Ravasio. “If this company wasn’t creating good in the world, I would have lost interest and given up a long time ago. It’s what keeps us pushing to be better and create the world we want to live in.”
Similarly, David Klein, CEO and Co-founder of CommonBond, says that the company’s social mission of helping individuals pay for higher education while simultaneously helping to fund the education of a student in the developing world has been in place since before the company ever landed its first customer or investor. “I strongly believe that business can and should drive positive social good,” says Klein. “Companies are uniquely positioned to do so. There is a tremendous opportunity out there for companies, no matter their size, to make an impact.”
He says that the company’s mission has also been key to attracting members to its services. “CommonBond is the only company in finance or education with a one-for-one social mission, which we call our Social Promise,” says Klein. This brand value of giving individuals the opportunity to “literally pay it forward by helping to fund a child’s education,” he says, has been “a differentiating factor” for many consumers who are considering to similar services.
When it comes to how founders and entrepreneurs can embrace the hunger for social impact that’s rapidly rising among the millennial and Gen Z generations, Reinhart, Ravasio and Klein suggest that starting with a social impact mission and building out a business that helps achieve it can be a highly successful and impactful approach.
“Make it part of your model from day one,” says Klein. “Just like you develop a strong revenue model or market entry strategy, so too can you develop a strong and sustainable social mission. It’s actually that easy. The hard part is just doing it. There’s much less holding an entrepreneur back from doing this than they might think.”
“I think it’s important for your product itself to be what creates social good, instead of approaching social good as something you do on the side or figure out later,” says Ravasio. “Really baking the impact you want to create into the DNA of your company will set you up for maximum impact and reduce conflict down the road. Figure out what problem you’re uniquely positioned to solve, and don’t stop until you’ve done so. Remember: if it was easy, someone would have done it already.”
“Every entrepreneur wants to build a scalable business that’s able to adapt to a changing world. Assessing your social impact in early stages and keeping those values top of mind when making business decisions is crucial for longevity and influence,” says Reinhart. “When your company’s mission is the driving force, your customers have a reason to keep coming back.”
March 5, 2019 at 12:33PM
Forbes – Entrepreneurs