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Profit and Purpose by Kyle Westaway

Author and Lawyer Kyle Westaway discusses social innovation and the future of business in this interview with Q. Westaway writes, "Doing business with a mindset toward a broader set of value creation is counter cultural, it takes a good amount of intentionality to plan and implement, but when done well, it has a chance of creating longterm financial, social and environmental prosperity for you and for the people you care about the most."

Q: How is social innovation transforming business for good?

K: Social innovation is transforming business for good by expanding the idea of value creation. Instead of the traditional narrow measure of value creation as purely financial, social innovators are redefining the measure of value to include financial, social and environmental prosperity,recalibrating from a single bottom line to a triple bottom line. This is a major shift from a pure shareholder value mindset to a stakeholder value mindset. The social innovator is seeking for the flourishing not just of his shareholders, but also his customers, employees, suppliers, community and environment.

With this shift in mindset, also comes a shift in operations. Social innovators build products that don’t just meet the minimum requirements for their industries, but delight customers. Not only are Warby Parker glasses incredibly stylish and under $100, they excel at customer service from end to end, by allowing their customers to try on 5 pairs in their home before they buy and staffing their customer support team with college educated people here in the US. The result? They have a higher customer satisfaction rate than Apple.

Social innovators produce in an environmentally responsible manner that’s good for the community. Method is a soap company dedicated to using all natural ingredients, which customers love because they don’t have to worry about putting toxins around their families. But they also were a leader in reducing packaging size by increasing the concentration of their detergent resulting in less waste and less carbon footprint in shippping. Recently, Method broke ground on a new production facility in South Chicago, it’s first US manufacturing plant. This 150,000-square foot production facility sets the bar for sustainable manufacturing facilities with on-site wind turbines, ground mounted solar panels and a commendable goal to become the first ever LEED Platinum certified production plant in the packaged goods industry. In addition they are creating a 75,000-square-feet, rooftop greenhouse (the largest of its kind in the world), capable of producing a 1 million pounds of fresh veggies to the City of Chicago. Method’s facility will not only be good for the environment, but it will bring around 100 manufacturing jobs to South Chicago and provide the city with local produce.

Innovative companies like Warby Parker and Method are disrupting major industries and making healthy profits along the way, proving that profit & purpose can work together.

Q: Your most recent book, Profit and Purpose tells the stories of thirteen social enterprises ranging from non-profits and for profits, to startups and multinational corporations. Can you share with us a favorite story from among those profiles?

K: Each of the organizations I profiled are amazing in their own right, but I’m going to go with a company based in my neighborhood - Etsy. They were started by a couple guys that wanted to think differently about the manufacturing of goods. With the rise of mass manufacturing, the artisan craftsman has had a more and more difficult time finding a market for their goods. With the rise of the internet, these guys from Brooklyn saw an opportunity to find that market for the craftsman and allow customers to bring more humanity into their purchase by buying directly from the craftsman.

What started as a small niche site for crafters and craft enthusiasts, slowly grew into a substantial powerhouse, transacting nearly $2 billion in sales on its platform last year. Their core value of making buying more human has not only given their buyers more unique goods than they can find anywhere else, but it has also spurred an artisan revival by making the practice of a craft economically viable for thousands of sellers across the globe.

Not surprisingly, Etsy is committed to the triple bottom line, so they have chosen to become B Corp certified - a certification for socially and environmentally responsible business. When Etsy went public this year, they became the first B Corp certified publicly traded company.

Q: Our question this week is how can business benefit others? From your perspective, how have you seen this practically manifest itself over the course of your career?

K: Well, the most practical, and maybe the most personal, manifestation of how good business can benefit others is often not as much about the community or the customers, though those are obviously important, but the quality of life of the employees. So, when a company chooses to operate for the common good, by institutionalizing these triple bottom line values, employees feel a real sense of purpose in their work… and this changes everything. They are more excited to get to work in the morning and feel a higher sense of satisfaction from their work. Additionally, they are more engaged while they are at work, which results in a greater output and a higher quality for work product.

Doing business with a mindset toward a broader set of value creation is counter cultural, it takes a good amount of intentionality to plan and implement, but when done well, it has a chance of creating longterm financial, social and environmental prosperity for you and for the people you care about the most.