Patagonia and its founder shocked me this week by staying true to their values to do good in the world, in their case specifically good for the environment. This was shocking because it seems so seldom that companies do good not just in sporadic moments but over the long haul.
Most entrepreneurs I know want to build a company that is about more than making money. They want to build something that is also good–good for employees, good for customers, good for society, good for communities, and good for the planet. Some start off good but few stay that way. So, how can you build “good” into your companies in a lasting way?
Good is hard. People have differing ideas of what “good” is. Folks disagree about which good is the most important or relevant. We want to do good on many fronts at once, risking doing no good at all because of our lack of focus. And the big one: While doing good is sometimes free, it often costs, and capitalism is really good at doing away with things determined to be excess cost.
My advice is to make sure the good you’re doing isn’t excess and isn’t perceived as excess. Make good the core of what you do from day one. Your innovation can be doing something that has long existed but with a good twist. It is what Toms Shoes and Warby Parker have done with their buy-a-pair-give-a-pair models. And what my friends at Up&Up have done with their housing product. Their good is giving their customers some of their rent back in the form of home ownership, which is good for their business because they attract great folks who take good care of their homes. Making the good inseparable from your core business is the best way to make sure your company remains good over time.
As those examples imply, it is important to pick a specific good. As with building products and services, doing one thing well is very hard, so we need to pick carefully. Think about what good is most important to you: Is it high pay for employees? Being light on the planet? Something else? Then ask yourself which of the possibilities fits best with your business. Which forms of doing good resonate with your customers, team, competencies, and the market? Pick one good thing, and go all in.
Once you’ve picked the good you most want to embed, talk about it all the time. To make that more likely, build it everywhere inside the company. Put it in your mission statement, in your core values, in your employee onboarding, and talk about it regularly at your all-hands meetings. Make sure every employee knows the good you aim to do. These cultural pieces are the most powerful guardrails you can create to keep your growing team (and yourself) focused on what really matters.
It is not enough to have your good known only inside the company. The true bulwark against your good being chipped away is your customers expecting you to live up to your words. This is a great gift customers can give you, but it happens only if your customers know what you stand for. Make sure your mission is known by the world, and that your brand pillars aren’t solely focused on the features and benefits of your core offering but also on the why behind your business. If your customers demand that you do good, you are left with little choice.
That covers two key stakeholders. The third has a major influence–shareholders. The reality is that unrestrained capitalism looks for more profit everywhere. Your investors have investors who have investors and “everybody’s gotta serve somebody,” to paraphrase Bob Dylan. You can pick better or worse investors, but ultimately it is naive to think that if your company requires a lot of outside capital, you can rely on the good-heartedness of the individuals around your table to keep the company on the good path. That can work if you stay small, but scaling into a big business will bring immense pressure to cut everywhere possible.
Your best defense against shareholder pressure to do away with the good is to wait as long as you can to take capital (avoiding it altogether if possible) and to give away as little formal power as possible (which requires leverage of having many options). Your second-best defense against the good getting eroded is to argue for the good in economic terms rather than human terms, even if that is not your primary motivation. Rather than arguing it is the right thing to do, show that the good you do serves the bottom line. Perhaps giving away product to those in need might get the company a lot of PR and word-of-mouth, lowering marketing costs, or maybe your higher wages save the company money through increased retention. Better to catch flies with honey, as they say.
I believe doing more good in the world is not a matter of inspiring more people to want to do good, but rather finding more ways to build “good” into what we do every day and make sure that good is real and lasting. That doesn’t happen automatically, we have to recognize that doing good sustainably is hard, and choose to take on that hard work.