Measuring Growth By Positive Impact is the Only Metric That Matters
Posted: October 17, 2022 | Word Count: 1,533
By Marcus Benedetti, Chairman at Clover Sonoma
The Business Model of “Do Unto Others as You Would Have Done To You”
Many worldwide trends are convening on the truth that businesses that run by the model of “Do Unto Others As You Would Have Done To You” will have more success than those that operate for profit at all costs.
First, consumers are increasingly aware of the power they have to trigger change by voting with their purchases, and they are voting every day. Providing transparency is now the lowest common denominator for businesses with a future — countless studies demonstrate how more and more millions of consumers are seeking to understand the impact they have on their communities, the environment and even politics through their purchases and food choices. Second, a growing segment of consumers of all ages want to understand the interdependence between what they consume and the health of the planet. Third, the desire for work that matters, is respected and makes a positive impact in the world. These trends combine to put the individual — as a consumer and an employee — in charge more than ever in modern history.
We are at a crossroads, where pressure will only continue to increase on companies to produce products that meet consumers’ ever-expanding desire to have a positive impact on their world. Bottom line, the general consumer desires not only to understand, but have confidence in, the companies behind the products they purchase.
Now’s the time to strengthen every business model for the future by building transparency into supply chains and business practices, and measuring your business performance against goalposts defined by positive impact, not just profit. We need to create systems and processes that provide credibility and checks and balances that help protect businesses for growth in an increasingly transparent and conscious world. We believe that when you measure revenue growth by positive impact, growth is inevitable.
Just Saying So Isn’t Enough
Of course, the reason running a business by the Golden Rule is even a discussion is because too many companies have obfuscated, sugar-coated, “washed” or explicitly lied about their business practices and their products. Just off the top of my head, many predatory companies come to mind: Enron’s fraud and corruption that not only manipulated energy markets but also lost billions; Wells Fargo's duplicitous opening of millions of unauthorized accounts in its clients’ names; Bernie Madoff’s massive Ponzi scheme that lost $18 billion of other people’s money; Volkswagen’s intentionally programming of 11 million cars to activate emissions controls only during laboratory testing, so that drivers who had paid a premium to have a “clean driving” car were actually emitting 40 times MORE polluting nitrous oxide than the emissions test revealed. None of these companies broadcast their deceptions. People believed in these companies because each one had built a good reputation; reputations built on words, not on checks and balances or verifiable transparency. And while I wish everyone’s handshake was worth something, we have too much evidence that this is not enough to trust.
What the world of business needs now more than ever is what the B Labs bring to the table. I believe that with the B Corp Certification process, every company can be a verifiable force for good.
Every Company Can be A Verifiable Force For Good
The B Corporation (B Corp) certification evolved specifically to combat this “greenwashing” and to hold companies fully accountable for the impacts that they have on the world. Certified B Corporations have been certified by the nonprofit B Lab to have met rigorous standards of social and environmental performance, transparency and accountability. Unlike other certifications such as USDA Organic or Fair Trade, which verify select components of a supply chain, the B Corp Certification validates an entire company’s practices, including worker engagement, community involvement, environmental footprint, governance structure and customer relationships. The B Corp certification process separates the companies who are walking the talk from the companies that are just talking a good game.
Clover Sonoma has the benefit of a long legacy of our “do unto others” business model; it’s how the company started in 1977. However, every company can benefit from this business model, and be a positive force for good and a profitable business in their categories.
The certification process includes several steps to confirm that the company 1) has verified social and environmental performance, 2) legal accountability, and 3) public transparency. After each of these steps is passed with high enough scores or structures in place, each company signs the B Corp Declaration of Interdependence, the document outlining the values that define the B Corp community. Certification is for three years, after which the company repeats the process to maintain its certification. You can read much more here.
The B Corp principles are a roadmap for running a positive impact company. At the same time, the rigorous certification is a third-party verification for our business partners, our team members, and our consumers that we mean what we say and that we are dedicated to a positive relationship with every constituency we touch.
The Golden Rule in Action: Trust and Respect
Treating everyone in your business ecosystem as your business would like to be treated is the most important principle for growth any business can have for today and for tomorrow.
The decision to implement what is inherently a choice to be a positive for good comes down to this: Do all of your stakeholders trust you to do what’s right for them and with them? Do you respect all of the companies, organizations, and people you’re dependent upon as you would like to be respected by them? When the answer to both questions is “Yes,” business can be future-proofed.
When the answer to either or both questions is “no,” your business is in trouble — not just for tomorrow but for today. Any friction in business and consumer relationships translates to wasted energy, lost money and overall inefficiency, all of which negatively impact the bottom line today and any company’s prospects for the future.
How does this translate in Clover Sonoma’s business?
When consumers trust us, our top line naturally grows in parallel, because more people have chosen to pay a premium for our high-quality dairy products, from fluid milk to yogurt, butter and eggs.
- Which means that our customers — the grocery stores and other retailers that sell our products — do a better dairy business, which in turn contributes to their ability to maintain their stores, employ people and offer better products to their customers at better prices.
- Which means that our family dairy farmers are able to thrive and increase their positive and sustainable environmental practices because of how well they treat their cows and manage their land.
- Which means our employees are excited and satisfied with their ability to produce and market better, healthier products.
It’s the total business that matters. Increased topline doesn’t matter unless the whole business is operating in sync to generate a positive bottom line. That bottom line is a result of positive, transparent and respectful business practices.
Every B Corp company, 2,788 companies across 150 industries in 64 countries (as of this writing), can confidently write a similar story about the relationships they have with the communities, employees and customers they touch.
For Clover Sonoma, the B Corp certification process was an affirmation of our legacy and focus. In 2016, we pressure-tested what we thought to be true about our company through the certification process. One of the proudest moments I had as third-generation CEO is when we received our score for the company’s initial certification, 97 out of 100, far above the 80 points required to qualify for the B Corp certification. Yet, we’re never done. What comes naturally, what is part of our DNA, we don’t take lightly. We’re constantly working at it, because we believe, as a business, it is our responsibility to help make the world a better place.
Business Can Make More Impact Than Any Government
Business (industry) makes more impact in our world than any government, humanitarian or environmental organization. By its sheer size, the world’s industry is bigger than all governments combined. (Global gross domestic product is almost $75 trillion, compared to Global government budgets of just over $23 trillion.)
Business can be the biggest force for good anywhere, simply by choosing to measure growth through the lens of positive impact, not just profit for profit’s sake. Taking this approach is also taking a positive step toward future-proofing your business. Given the growing call for transparency and the increasing power of consumers buying with a higher purpose in mind, companies that choose NOT to measure their success through positive impact will see their prospects shrink, and ultimately break under the pressure that not caring for the true impact of their business has on the world around them.
The growing family of B Corps is proving every day that when a business chooses to be a force for good, good things, including revenue, grow. And in turn, that business will create a strategic, forward-looking competitive advantage for the future.