William Henry Chase (Canadian entrepreneur)

Transcription

We have made immoral behavior far more profitable. We have, in the course of the changes in our society, been establishing greater and greater incentives for people to behave in ways that most of us regard as immoral. You know, the traditional form of Capitalism is: Put a product to market, put a service to market and make money. The way I contemplate entrepreneurship is figure out how the world is better off because of your product and service and bring that into the marketplace. Business is kind of construct for people to get together to achieve some kind of result. So why not take business as a tool to achieve a more progressive result? Instead of seeing Capitalism as evil and destroying humanity and the planet, you can take Capitalism and say, "Use it with a conscience to create a purposeful result – a just and equitable society." Can't we agree that Capitalism is an economic system? A system for the production and distribution of things we need and want? Go back 70 years. Think about what "Made in Japan" meant in the 1940's and 50's, post World War Two. You have Capitalism as a key tool in building economies. (announcer) It's new, it's automatic, it dictates, records, seals, sterilizes, stamps and delivers in one operation without human hand! "Made in China", "Made in Taiwan", and "Made in Hong Kong" in the 70's and 80's... (announcer) What do I bid? What do I offer? Sold! Who's next! These are global economies that are major economies of the world. What is next? (announcer) Out of the crowds of the Empire City, the Wonder City, the Windy City, the Passion City... Is it made in Bangladesh? (announcer) Get the big money. You make a pile and raise a pile. That makes another pile! We come full-face into what happens when Capitalism is left unfettered. (announcer) We reached a million! Two million! Five million! Watch us grow! The 20th century model of Capitalism has one rule in its operating system, which is: the purpose of the corporation is to maximize share-holder value exclusively. Even if that means that there are significant, for the benefit of the doubt, unintended consequences. It's amazing to me how consumers just have this unshakable trust in what they buy. (announcer) Pestroy DDT. Used right, it is absolutely harmless to humans and animals. (announcer) And when drinking water comes out sparkling clear, an asbestos cement pipe may have helped guard it from reservoir to home. It's laden with chemicals and it's from questionable factories and I think some of these scares has done us a favor on some level in raising the dialogue. New communications channels like social media primarily are driving transparency into companies. They can't get away with uncareful behavior anymore. They need to be very, very diligent about how they serve their communities that they work in. That's driving corporate social responsibility, it's driving better governance, and it's certainly driving sustainability. That's been a constant trend over the last 15 to 20 years. When you consider the world the baby boomers up grew in, it was post World War Two. Their parents, who lived through the war, they grew up in a world of scarcity. People who were successful had stuff. So the baby boomer generation grew up in a world where if I had stuff, I was successful. This shaped the minds of that generation. So by the time the baby boomers get in control of the economy, in the 1980's, excess was everywhere. It became about stuff. And you had the big stories of the 80's, like the Tycos, the Enrons. The corporations became about adding book value for share-holders, not adding societal value for all stake-holders. In the last 50 years of business, companies are rewarded based on success of one metric, and that is profit. CEOs who are successful deliver profit to share-holders. Our entire stock exchange is founded upon that, so it's hard for us to criticize CEOs for forsaking other things like supplier relations or social impact or other causes. As companies began to feel the pressure of global competition, the sole focus on making profit, without regard for society, seemed like a promising idea. Inspired in part by a 1970 New York Times article by Milton Friedman, the most respected and influential economist of the late 20th century. And now, ladies and gentleman, the Milton Friedman choir. We had a very simplistic view of the world, where we would just define profit as "dollars in" minus "dollars out" equals profit. What we need to do now is quantify all the soft costs. It's very competitive in the international marketplace to find really low cost labor. When you manufacture something in another country, and you import it, they put on a duty rate. Countries like Bangladesh – there is no duties. Because of that, you can save 18%. That's a huge amount of money. So what they do is they go to a lot of these countries that are exempt. My auditor of fabric mills told me that they had gone to Bangladesh. He said to me, "Do you know how many factories had a waste water treatment plant?" And I said, "No. How many?" Two. Out of 300 that they visited. And there's a lot more than 300 fabric mills in Bangladesh. Where's the chemicals and dye stuffs after dying it pink and blue? Where's that going? Straight into the river. Straight into the creek. Are those creeks and rivers connected to oceans that we live beside? Yes. This was all connected. This is what people forget when they buy a product that comes from a country that has no regulations. But they have to, for the corporate culture. They have to make profit. There's been another horrific incident at a garment factory in Bangladesh. It came crashing down, trapping hundreds of people inside. Officials discovered cracks in the building yesterday. Producing clothes bound for some major American retailers... This afternoon, a British retailer, Primark, announced it would compensate victim's families. Loblaw is reacting. The company said late today that it will provide compensation to the families of those killed in Bangladesh. There's something to be said if you're going to be in factories and pushing for low cost labor. There's always a cost. And, on some level, I think a lot of those brands are stepping up and paying a cost at the end of what they didn't pay at the beginning. The core indicator of a country's health is the GDP. It's the total market value of goods and services produced in a single year. Social impact is not considered. The environment is not relevant. The health, happiness, and fulfillment of its citizens doesn't matter. Financial metrics are all that count. We've got to a point now where quarterly returns are more important, it seems, in the news and more important to the way we cover businesses, than the longer term work that they do. So we're trapped in this short return cycle, when most of these big problems and these big contributions to society actually take far longer cycles. They can be three, five, seven, 10 plus year cycles. If we're judging companies on quarterly cycles, we're never gonna get the traction on these long-run goals. So there's something in the way that we look at companies, there's something in the way we judge companies performance that needs to change. It's 1987. -Open this gate. -(crowd cheers) Reaganomics is in full swing... The Simpsons debuts on television... -Change the channel. -No. and the Unibomber is on the loose. It's business as usual in America. Then it hits. There's only one word to describe what's happening and that is "panic". Black Monday, the worst day ever on Wall Street. The market has fallen over 400 points. 508.32 500 billion dollars in paper values have been lost. When you see around the globe the mal-distribution of wealth, the desperate plight of millions of people in underdeveloped countries – when you see so few haves and many have-nots, when you see the greed and the concentration of power, did you ever have a moment of doubt about Capitalism and whether greed's a good idea to run on? Well, first of all, tell me, is there some society you know of that doesn't run on greed? You think Russia doesn't run on greed? You think China doesn't run on greed? What is greed? Of course, none of us are greedy. It's only the other fellow who's greedy. (audience laughs) The world runs on individuals pursuing their separate interests. In the only cases in which the masses have escaped from the kind of grinding poverty you're talking about, the only cases in recorded history, are where they have had Capitalism and largely free trade. And just tell me where in the world you'll find these angels who are going to organize society for us? So there was a meeting in Gold Hill, Colorado, of about 40 people and it included that generation wave of entrepreneurs who made the clean, healthy ice cream, Body Shop, Patagonia, who went into business to try to make a difference and promoted themselves based on some of those values. And so that was 25 to 26 years ago. They came at the invitation of investor Joshua Mailman and Wayne Silby, founder of the Calvert funds, to explore the idea of bringing social values into a more collective sphere. What they didn't know at the time was that this would be the catalyst that would ignite the social impact movement. When I got introduced to the SVN community, it was the first time I saw people with business skills who were using it for social purposes, social good. I had never heard of Triple Bottom Line before. I mean, I now see it as a big, global advocate. I heard about it for the first time at SVN. This group started a movement. At that time, they were laughed at. They were ridiculed. "You're a bunch of flakes." That was one thing that had to be countered. It's kind of not honorable to believe that Capitalism was about anything other than "how do I get more money?" It's okay to give away money after you've made a lot of money, but business is a separate solitude from what matters in the world. But it gave me a support network that believed in the intersection of values and money. Out of it came businesses for social responsibility, net impact on business campuses, investor's circle, which are people that look to do angel investing in early stages of investing and companies like this. So there's now a growing eco-system of different dimensions of aligning money with doing good. In 2005 the co-founder of AND1, a 250 million dollar streetball company attended its first SVN meeting. Two years later, Jay Coen Gilbert would revolutionize what it meant to be a socially responsible company. Because of the assumption that short-term shareholder value is all that matters to big investors, we now have a lot of states passing laws authorizing the creation of a different kind of corporation, so-called B corporations. Stands for the benefit that can be created for all stakeholders, not just share-holders. How do we tell the difference between a good company and just good marketing? Today, everybody claims to be green, responsible, and sustainable. And when everybody claims to be the same thing, those words mean less and less. It was often a, "well, if I put all-natural or if I put green in the title, that makes me sustainable and I’m fulfilling part of life... ...the fad that is CSR in the world." There's a couple of answers to who's doing this well. There are a few organizations that are putting metrics against this kind of performance and the one's that on the top of my mind for me is B Lab and the B Corps certification, where they've got a fairly rigorous assessment process. And you're asked different questions, but they always talk about your company's employment practices, supplier practices, community engagement, and environmental practices. The survey and the auditing process – it's actually quite difficult to get into B Corp. And the company has to achieve a minimum score of 80 out of 200 on an independent rating system, run by a non-profit, in order to be eligible to be certified as a B Corporation. When we actually did the assessment for the first time, we didn't pass and we exist for the main purpose! We realized how we really needed to step up our game in order to play with the people who are actually certified as B Corporations. But even if they scored 140, they're not eligible to be certified as a B Corp unless they make that legal change, so that positive impact is built to last. It's not pretending to be good for the world. It is actually embedding in your articles of incorporation and your share-holders agreement, the fact that this corporation will never forsake societal value to make money. If you're familiar with a LEED certified building or a fair trade bag of coffee, that's what a certification is. Think about the same thing, but the aperture on your lens is wider. The aperture is looking at the whole business. Because it's nice that it's a fair trade cup of coffee, but if they're dumping effluents or treating their workers poorly, that doesn't really help anybody. We need to redefine what corporations are, both from a legal perspective and just from a community perspective. And so Benefit Corp legislation is legislation that creates a new corporate forum, no different than a C Corp, an S Corp, or an LLC, that has passed in Maryland and Vermont this year. It's been introduced in New York, New Jersey, Pennsylvania and Michigan in 2011 and there are another eight states waiting in line to pass legislation to create a new corporate forum, to give entrepreneurs and investors another choice about the type of institution they want to create. It's hard to keep up with the growth of B-Corporations. Now over 750 corporations in the world are B-Corp certified, accounting for more than six billion dollars in revenues. We've played our role. We've certified three businesses, as well as the first ever publicly traded B-Corporation in Canada. I think it's the most exciting thing ever and I think a lot of the old structures are kind of breaking down right now and we're seeing, for example, charities being confronted with funding difficulties and we're seeing businesses being questioned for lack of integerity and lack of values and people, consumers, losing faith in them. I feel like the Conscious Capitalism movement is taking the best of both. Host of the 2010 Olympic winter games and birthplace to companies like Hootsweet and Lululemon, Vancouver consistently ranks as one of the most livable cities in the world. But it's not all yoga pants and sushi. The notorious downtown east side has earned a sobering reputation as Canada's poorest postal code. Pretty complex neighborhood, the downtown east side of Vancouver. Which is a hugely marginalized area for people with drug addiction. You know, one of the worst drug places in the world. It could be as simple as some guy walks in on his wife cheating on him, he gets on a train. Next thing he's here for 20 years. And the stories down here are rife with that. But somewhere between privilege and poverty, an interesting phenomenon has started to occur: ordinary people are embracing a new way of being in business, with a commitment to social impact and a purpose beyond profit. So Save On was a haven for me. I would come and eat here for $3.95 and stuff myself and talk to Al DesLauriers, the former owner. And he was an incredible man. He ran this business from 1957 right up until 2009. His mandate in this area was food security. He didn't have the words for it – and, of course, now that's the coolest lingo in the world. So people would come in, they'd drop $1.50 on the counter and say, "What can you do?" and he'd get them some honey ham and a couple slices of bread and off they would go. So that affected me heavily, that there was somewhere still in the city, 'cause I didn't see that piece of the city at all. I didn't know that existed until I walked in this building. I saw it as a fast paced, high finance, "what car do you drive?", intimidating town. The idea was to continue to make it a community piece of food security, a haven for people in this neighborhood during a time of gentrification. (bell rings) We run a barrier employment program out of here and we started working with people who had all the work ethic, and just had barriers to any kind of employment based on addiction and severe mental disorder. And then we launched a charity based off of this business model last Saturday, called A Better Life Foundation, which entire mandate is to feed, train, and employ. We realized that the problems in this neighborhood are so big, and they're so intense, that I know what part I can do. And my portion is food and training and employment and dignity. So we created this token program, which is hugely controversial, nationally controversial. You come in here, you go to the diner counter, the butcher counter, the sandwich window, and you buy these tokens, essentially the size of a [inaudible] sitting in your pockets. Somebody says, "I'm hungry." Say, "No problem. Take this and you can go get fed." So what people say is I'm taking decisions away from the poor, I'm using it for my own personal development, I'm using it for my own soapbox to go and do whatever else it may be and leverage it for business. I don't know if that's entirely untrue. I do have my own mandates and things I want to do. I do want to be loud and boisterous about it. I do want to affect change and I may not be going about it in the most Canadian and conservative of ways. I don't care. I initially thought we might redeem 5 to 8 of these things a day. Right now, we're redeeming anywhere, this week, between 65 and 120 a day. Everyday! And now the VPD outreach, Vancouver Police Department with their outreach department carries them every night. It goes to health nurses that help people who are very close to death or overdosing and they carry them in their pocket. It's become a part of this neighborhood's fabric. Very unpopular decision, very unpopular press piece, I don't give a shit. At all. I know what the end result is gonna be in my mind and I'm okay to take some loses with the wins. I think it's great to have this huge blowback into what I do because then I get to see from other people's eyes who've been down here working from 20-30 years. So I come flashing, kid with tattoos, slicked back hair, I'm gonna do all this social change and good – I'd be pissed off with me too. The detractors also show me things about myself. They show me flaws in my business. It may be 250 words of vitriol, but 30 of those might be dead on. And they are most of the time like, "Oh! I didn't really think about that." So I'm reverse-engineering a business. I'm allowing people to light me up and burn me in the press or on vlogs or wherever that may be to get better at what we do and I don't take any of it personally because you can't. You know, I was really looking for something that took business and really had a strong connection to the community, so I stumbled across Potluck. All of a sudden, I was in a place that was running a business – it was all about social mission, it was all about community impact and I thought this is the place that I belong. We’re an organization that at the core of our existence, the reason we started, the core of our being, the fact that we are a charity that owns and operates a business, in our case, it's fundamentally embedded in our DNA. Because it's not business for business sake. The purpose of running this great business is actually to have that impact on the neighborhood. We're seeing non-profits pursue more business like activities. So we're seeing this huge trend towards social enterprise, which is still a very nascent sector in North America, but it's growing at an astounding rate. So those two things seem to collide, with this new look at what 21st century enterprise looks like. It seems to connect non-profit ethos and for-profit motives, and landing somewhere in the middle as either the responsible corporation or the social enterprise. We run a corporate catering business and a small neighborhood cafe, which is the Potluck Cafe, and we make about $1,000,000 a year. We employ people facing barriers, in amongst mentors who are industry professionals who have been working in the food business for years and years and years. We prepare and serve anywhere from 15 to 30 thousand free meals every year to downtown Eastside residents, who are the most nutritionally vulnerable. We started and co-founded a project called the Downtown Eastside Kitchen Tables Project, which is all about reforming the food system down here, doing it in a way that's all about community economic development. A lot of these folks perhaps were not working for a long period of time in the past, but certainly here, have really shone and really flourished. It's just very exciting to see that kind of stability come to people who may have had so much instability before. We've got a bit of a different workplace motto, which is we provide wrap-around life skills support, particularly for those facing barriers, but everybody else as well, which means that we absolutely care about if somebody's housing situation isn't stable. We care about people's mental health, whether they live with a mental illness or don't. We care about their relationships with their family and workplace because we know that impacts their job. That idea of wrap-around life skills support is a huge part of our success. There's a really solid business case to make for taking that approach. If you look beyond just your own bottom line, if you can see the interdependence of your neighborhood and your neighbors in the world... whatever's good for the neighbors, whatever's good for the community, will generally be good for you. And consumers no longer think of businesses in a bubble. They think of businesses as their neighbors and as part of their community. If you can't treat your customers like you would your neighbors or your community, you're gonna get in trouble. Gone are the days of basically organizations taking and taking and taking and not giving. It may have worked in the past, but based on my experience, I think we've become a lot more educated. If you don't take care of people around you and the communities you serve... It's my belief that people don't want to be involved. People, they come to organizations because they want to make an impact. They're not just doing it for a couple of bucks. The Nurse Next Door, we're in the business of making lives better. And we're in the business of caring. So people look at Nurse Next Door and think we're a health care company. And, sure, we do a lot of health care things. But we're really in the business of caring for all of the people that we serve and all of the people that work with us. People, I believe, are inherently good and they want to do the right thing. And when they see organizations that are doing the right thing, they want to be part of it. There's a huge shift in social conscious, and knowing that you want to be part of something, something you can believe in, something you can sink your teeth in. So we're seeing more and more organizations adopt a responsible ethos because that actually attracts talent. And we're talking about Gen X and Millenials, people who really want to knit together their purpose in life with their working world. That talent management approach is really, really important. Thanks for calling Nurse Next Door, you've reached Sara. How can I make your life better today? We don't advertise for any positions and for every single position that we have in our office, we get over 100 applicants. Our voluntary turnover is under a couple of percent. With our caregivers, it's under 7% and the industry average is 70%. Four years into the program, we actually defined what our core values were. And they became the non-negotiable laws of our organization. We will live a financial loss to live them. We will free up anyone's future, he doesn't live all four of them. Not great at three and missing one, but people have to evolve four. We had this one client who represented a big part of our business. They accounted for about 80% of our revenue. They gave us about $15 million a year, top line. Problem was they weren't very nice to our people. They would yell at our people, treat them like garbage, and so we fired the client. We built the company that day. Someone once said, "It's not a principle until it costs you money." But in today's highly competitive market place, can businesses really afford to operate in accordance with their values? And is it realistic to expect the company to lose money, just to accommodate their ethics? You know, my first story into business was to Mountain Equipment Co-op, so a cooperative, but nonetheless a quarter of a billion dollar retailer here in Canada. That was kind of my first step into the business world. We had built some mountain bike armor in a factory in China. The way that the scheduling worked with the auditing that we did, we didn't really get the results until the product was made and on the boat. And when we got the results of the factory, as it turned out the factory didn't meet the standards of Mountain Equipment Co-op and it had some red list issues on it regarding worker rights abuses. And we were going to make a decision to leave and yet we had six figures worth of product about to land in Vancouver and the debate was: do we sell it? Everybody had a different opinion. I didn't want to landfill it or incinerate it, as the environmental person, and the buyers thought we should be selling it and just be really transparent and donate the proceeds. By the end of the day, the CEO, I remember it very clearly, Peter Robinson, said, "We can't sell this. And we can't donate it. This product doesn't represent anything that we're about as a company." And he made the decision to destroy the product. And it was a tough decision on so many fronts, environmental and financial, but to me it was probably one of the most significant points of seeing values in action and seeing ethics in action in a business and it definitely influenced how I've moved forward as an entrepreneur. We disparagingly talk about our industry as trash and trinkets and I think that was something that was, in some way, compelling about coming into this industry is that it is one ripe for revolution. It is really fun to sit across the table from someone and say, "Do you really need that? Can you do something different? Can you do something better? Can you do nothing at all?" And there's been cases where some of our team members and myself have sat with a client and talked them out of a product because it's not values aligned, it's chemically laden, or it just has no purpose or utility. It's just a ridiculous knick-knack. We see that as part of our brand promise – talking people out of stuff that they don't need to be doing. And when they are gonna do it, do it right. Our stated current mission, which has pretty much been the same from the get-go, is to change the world through the simple act of buying. I’ve got a call from a woman who said: "I’d like to come and see you; as I understand you’re a local manufacturer and I want to see what you do." "Do you have anything that is low impact, environmentally friendly?" And I said: "What do you mean?" And she said: "Well, you know, a lot of this product is made from petroleum. It’s dyed with this lac dye which has a lot of heavy metals. This probably has a lot of formaldehyde on it... Do you have anything that is less impactful to the environment?" And I just went: "I’m not sure. I don’t think so." I was kind of like a wake-up call. I didn’t really know where she was going, but she was asking questions that nobody has ever asked me before. So, I’m contemplating this and I said: "No, but I would like to learn more, and what should I do?" Her response to me was: "It’s not what you should do, it’s what do you want to do? This is not something that you just say: 'Ok, I’m going to switch!'" And really understand what that meant, I wanted to do it, but I didn’t really know how. There was no roadmap. So, I had to go and do all my own investigation. Then I learned about organic cotton, recycled polyester, hemp, and I saw that there were really cool fabrics out there, And maybe they weren’t the best fabrics in the world, but they had less of an impact on the environment. So, you know, I went down that path and I changed the way I did things. And I thought – yay, I’m eco now, and went with trademark Ecoapparel, And I had all these great things. And a lot of it, I didn’t understand, was marketing. It was: Ok, yes, let’s project to the public that I’m making stuff that’s environmentally friendly. When it wasn’t. And this is really what I didn’t understand. There was one case where they were this large beverage company. Probably like the biggest brand on the planet. They have a social conscience as well, and they thought: hey, let’s buy some apparel from somebody who’s doing it right. I’m sitting there in a room, and there’s all these suits at speak boardroom table. And I’m doing my little song and dance: Hey, I’ve got organic cotton; hey, I’ve got recycled polyester. - Oh, great, that’s awesome. Thanks very much and we’ll be calling you. I’m walking out and I get tapped on the shoulder. - Come with me. So, I go into this guy’s office and he sits me down and says: - What are you doing? I said: "What do you mean, what am I doing?" - I think you’re claiming a lot of things that you really can’t support. - What do you mean? - Do you know where the fabric has been milled? I go: "I think so." - Well, do you know if they have a waste water treatment plant? - No. - Do you know if there is any sort of harmful chemicals and/or dye stuffs in this fabric, that if we tested it, it would inform us that it shouldn’t be in there? - No. - Well, maybe when you are able to tell us through a third party, once you can have someone sign off, and let us know that this is clean and we should be putting our logo on it... We really can’t purchase anything that you have for us, and we won’t put our logo on it. - Right. Ok, good. This is lesson number one. Now I know what Denise was talking about. There’s all of this supply chain behind me, and I don’t know what’s going on back there. You know I think most companies don’t know very much about their suppliers. I’m amazed when I talk to some of my peers in my industry, how many of them don’t even know what countries their products are coming from. I took the role of – ok, I’m going to have to figure all that stuff for myself, and do audits where I don’t really know what I’m doing. And, it’s usually me hiring them, and they don’t know that it’s me doing the audit. Which is great. Even though I’m using that factory, I have an audit, I still go there with my iPhone and just say: Hi, Mark Trotzuk, Boardroom Eco Apparel. This is what it looks like. It’s not pretty. This is the factory that we use. It’s not shiny and clean. And there is [inaudible] doing business. Certifications... It’s part of our production... It’s really hot by this [inaudible] ...quality... ...full checks... [inaudible] the yarn... Recycled soda barrel, turned into yarn. And we’re just making sure everything is, you know, ok. So, we are over there all the time, checking. And I’m a fairly small company, so I only have maybe four off-shore factories. So, it’s easy for me. Some of these companies have these huge supply chains and they’re using hundreds of different factories. And it’s a different story. Our starting point is always: simply just ask. We’re always amazed when we’re calling a new supplier and start asking them questions. And you can learn a lot from that process. Even if you get very little back – it tells you a lot. There might be issues at the factory that are kind of "red flag" issues: The first rule of outsourcing is engagement and trying to work with your business partners, like you do with any business partner. It’s going in and working with factory management and saying: this is unacceptable, and it’s illegal, and did you know that? Are you willing to look at your business practices? And we can help you. Denise introduced me to a whole new world when she said: "What do you want to do?" Because it’s so easy for me just to say: "I don’t care. Here, let me just buy this and I’ll put it together. Are you going to buy it? Buy it! And my hands are clean." No! Right now, we set up a system, where I know where my raw material comes from; only the proper chemicals are used; the right processes with those chemicals are being used; and that people working around them are safe, and that there are policies, and I know that due diligence has been done. Compare to the product I was buying two years ago, I have a product here that I know has a lower impact than what I was purchasing. And that’s what we’re talking about. It’s lowering the impact. Are there still harmful things happening? Yes there are. There’s nothing eco-friendly about it. It’s a harsh industry. Like I say: it’s dyes, chemicals, waste water, energy, transporting stuff all over the planet. - Make sure that clean water is returned to the environment. - And you use this waste water for irrigation? Yet, I’m trying to do whatever I can to mitigate impacts. - Vegetables that are grown from the waste water. - Mmm, very tasty. The end consumer is starting to look past just the price... Consumers are increasingly expecting brands to ensure that basic human rights are being met, products aren’t going to be toxic... What I started to understand right away is that I can save some money... However, I’m just fooling myself. And if it costs me more, that’s fine, because it comes down to guilt, after a while, and I can’t deal with that. It’s knowing what’s happening and not doing anything about it. It’s an industry that has only in the last 5-6 years started to contemplate the impact they have as an industry on the planet and the people inhabiting our planet. And that’s why I’m glad that 90% of the people who buy from me, are buying it because it’s really cool. There’s another 10% who buy it because of that, but also say: "I want what is attached – the added value of you being socially compliant, knowing where every component comes from, you mitigating all of these impacts. That’s important to me." Yes, that shift is happening and you’re going to have to figure out how to benefit form this change, and is not about just selling the cheapest product. And selling more. We look at the great exemplars – all of the fantastic entrepreneurs that we idolized: the Richard Bransons, the Steve Jobs, and so on. All of these people have talked openly and explicitly, they’ve written books about pursuing something way bigger than the quarterly cycles of profits. It’s all too easy to forget the purpose that lights you up and chase the almighty dollar. Great entrepreneurs don’t sacrifice that great purpose in exchange for the almighty dollar. They find a way to knit the two together. I don’t – for any stretch – think that that’s easy. We’re always trying to strike a balance between the success of this business and making sure that we’re not compromising our social impact as well. Unlike a typical business, you can’t abandon your mission. And you don’t want to abandon your mission. You’ve got to be really ingenious about how you do that. And there are times when we have to make difficult choices. So, you need help. And there are communities of great social entrepreneurs, and social venture leaders that exist to share learning. There is something intoxicating about not knowing whether or not you can pay the rent, cover payroll and if the lights are going to go off. The idea of becoming an entrepreneur was exciting, challenging and had an element of risk. Any entrepreneur who doesn’t tell you that they go to bed wondering whether or not they’re crazy is lying to you. What keeps me up at night is contemplating how we’re doing the right thing. Are we actually contributing to our customers, are we getting enough customers? Are we developing organizations that actually positively contribute to society? Institute B is a small part of a global phenomenon called "conscious capitalism". We exist to become the best developer of entrepreneurs in the world, period. The way we do that is by promoting unreasonable business. The world will give you lots of reasons why you can’t do that. Unreasonable entrepreneurs redefine how they relate to the cynicism of the world. Unreasonable entrepreneurs are disrupters. Unreasonable entrepreneurs look at reasons and say: so what? It doesn’t matter if I’m an old entrepreneur, a young entrepreneur, or an Asian entrepreneur, a Canadian entrepreneur, or a European entrepreneur, or a woman or a man. The fact of the matter is that we as entrepreneurs have a responsibility to leave the world a better place than when we began our companies. So, get paid, do good, and this is your legacy. Seems really cut-and-dried, right? I want a legacy of giving to the future, billionaire of good deeds, billionaire of impact. I’ll get super charged up, and it’s not going to be the amount of money that I made or the companies that I created. But it will be the leaders that I had part in – sort of – helping out. And I would love it if Fairware would be a part of moving this industry to greener pastures on a sustainability front. When all is said and done IB’s legacy will be the successful development of several multi-billion dollar, top line, companies that have embedded social impact into the DNA of their corporation from inception. When that happens that will convince any old school for-profit only capitalist that embedding generosity into business is the right thing to do. When the penny dropped that entrepreneurship was actually really powerful social change thing, or could be, if you did it a certain way, with a certain perspective, I sort of thought of it as you’re kind of like a pirate on a high seas of Capitalism. Just the romance of it, just the independence and the autonomy – I thought, yea, that actually makes a lot more sense than trying to do grassroots organizing and then having to go somewhere else to get your money to take care of yourself financially. And I created this product and I thought: I’m going to sell this product and that will finance the revolution that I want to see – through making this things and selling them. Lunapads are products, are washable menstrual pads, and they encourage customers to take more responsibility for themselves from an environmental perspective. And it breaks down shame. And that is one of the single most powerful things you can possibly... ...like, of any change you can create in someone’s life, that alone – seismic! And we take it a step further because the products have that impact but also, what’s behind it is a social change agenda around the philanthropic side of our business. So, back in 2008 we came to Uganda to do some voluntary work. One of the biggest things that we realized when we were there, is that girls skip school during the week of their period, because they have no access to affordable sanitary towels. Here is a problem. Here is Lunapads, which is an ingenious product that can also be manufactured locally, because it is just cloth and sewing. And the light bulb went off. For every pad that we sell we make a donation to our sister company in Uganda who are in turn making their version of Lunapads, called Afripads, and giving them to a girl in east Africa who would otherwise have no supplies whatsoever. Let’s tell a story of one particular girl, her name is Saba, and she’s Ethiopian. And she’s probably 16 or 17 now. She told us that her parents have tried to force her to get married when she was 9 years old. And the receiving of pads had helped her to convince them to let her stay in school. If they don’t go to school, if they don’t stay in school, then they drop out, when they drop out they have to get married, when they get married they are pregnant. The leading cause of death in girls 15-18 globally is complications arising from pregnancy and childbirth. Our products and our practice through pads for girls has touched the lives of over 120,000 girls. There’s also a story of women involved to, with respect to Afripads, and... Afripads has 65 employees working for them. We got a letter from one of them, Irene, and she said to us: "Thank you, Lunapads, for being the inspiration behind the start of the company." I now have a job, I now am able to pay for school fees for my children, I’m able to support my sister and brothers and my parents. So, she has really turned her life around. To read this letter and meet her in person – that’s immeasurable as well. - So, fun! Do I get a job? - Done. That’s why we are a business. We want to prove the B-corp dream that you can do all those things, and create employment for people, and create all those changes. So, we are all in for that as well. So, it’s not just this traditional "you make a ton of money and then you give back later." Start giving now, and don’t do it the normal way; just be totally out there, be totally disruptive around your generosity. We’re doing everything we can to have a greater impact and we’re having fun while we’re at it, because it’s kind of fun to be disruptive. It’s so fun! [laughs] You know, let’s face it: the world is falling apart in so many ways. We need creative solutions that are economically sustainable, as well as environmentally sustainable and socially sustainable. People respond emotionally. I think everybody wants social change, they want a better world for their kids, right? You know, when I contemplate my actions it’s in the context of my children. You know, what drives me, what gets me out of bed every morning... ...is leaving the world a better place, that they can look up and say: "Hey, my dad was part of that." I think old school capitalists should be thinking about the world they want to create for their grandchildren and their great-grandchildren, and asking themselves what the true responsibility is behind the products that they’re making today, knowing that the legacy of that may be long-term social and environmental destruction on a scale never even imagined. Old school capitalists need to get in the game. They need to move some of this money around and allow young, intelligent social entrepreneurs a platform to go and do vertical farming and employment and figure out unconventional ways to fix our water, to fix garbage, to fix all of these things. Because they can do it! There’s something noble in everyone. These "old school capitalists" – at the end of the day, they are just people. They were raised in a system that said: this is success, this is how you’re supposed to do it. I think those people, if they are smart enough to build these multi-billion dollar companies, they’re probably smart enough to take on some of the most pressing social and environmental issues of our time and create something extraordinary. Our vision is that responsible business becomes the norm. We are a long, long way from that. Social enterprise is growing at a rapid rate, but there’re still less than a 1000 true social enterprises in western Canada region, where we happen to be sitting today. So, we have a long way to go, between today, and responsible being mainstream. Our work in the world, our social purpose is to help visionary leaders to change the world. And it’s our job to support them in business consulting, in marketing and outreach, and in convening communities of like-minded people. That’s the contribution that we’re trying to make at Junxion Strategy. So, one of the best ways to develop a strategy that is socially responsible is to actually engage the executive team. Make it part of strategic planning. Make it explicit and open, that they can talk about a vision for the organization that is world changing. Companies that can engage the executive team, and then engage the managerial team, and then ultimately engage all the constituents in their organization about a purpose that’s way bigger than just dollars and cents, are the companies that actually drive really, really interesting returns in the longer haul. So, we attract a kind of investor that is very intentional around impact, and we call them "impact investors". They’re kind of like philanthropists who want to go further than just making a donation. They want to see a return on their capital, but it’s not just a financial return. It’s like paying a dividend to human capital. So, there’s now a growing ecosystem of different dimensions of aligning money with doing good. Renewal has gone on to build investment funds – we call it social venture capital. We are in organic and natural foods, green consumer products, and environmental innovations. And of course, it’s still early. We are proving that you can make a good return, and invest with values and purpose. My first 50,000 dollars, which came from inheritance, I wanted to put it into some things that I thought mattered. So, I had a friend, I went to him and I said: "I don’t want to do philanthropy with this – I want some money to go into a business that is going to mean something, and matter, and have an effect." So, he introduced me to two guys in New Hampshire, who thought that small family farms had a role, still. They had a few cows. And they were making yogurt. In the luckiest investment I’ve ever made, I ended up as one of the first round of investors in Stonyfield Farm yogurt. Stonyfield went on to lose money for 10 years, refine its product, fight its way into the yogurt market which had nothing organic; and the entire yogurt market – which is sold as a health food, inherently – was full of all kinds of stuff. We have this crazy idea that if it’s going to be edible, it ought to be all food. So, it shouldn’t have modified food starches, it shouldn’t have gelatin, it shouldn’t have chemicals, it shouldn’t have red dyes. He eventually built the company up to several hundred million in sales and shopped the major food companies of the world and ended up with the French one called Danone, and sold Stonyfield to Danone, with a lot of conditions. Company is probably pushing half billion now in sales. That’s one of the pioneer stories of someone who just believed in the health and environmental issues around yogurt, that is now... he’s influencing the global food system at some level. Organic food itself, which was an obscure, ridiculed industry 50 years ago, now makes fortunes for people. The major international food companies, beverage companies – Coca Cola, Pepsi, Nestlé – are doing everything they can to both invent products that meet this consumer demand, purchase companies that are doing those products – and it’s still less than 10% of a North American food dollar. The top food companies in the world really resisted for a long time the idea of organic food because it inherently started to suggest: What’s wrong with the other food? So, if we’re saying “conscious capitalism”... They’re not going to say they’re unconscious, and I don’t even like to. Everybody’s done the best they can – or many have done the best they can – but there are both human and biosphere externalities, that we’re now understanding better. Tourists aren’t going to Hong Kong anymore (in China), because you have this air pollution problem where it’s not safe for humans to go and visit. And we’re watching it – we’re watching climate change, and watching thing going on, and we’re just sitting and going: "Ok, wow, this is great, this is a good ride, isn’t it? Are you going to do something about it? Are you going to do something about it? Oh, ok. Well, then let’s just keep going." But, no. There are some people who stop and go: "No, guys. Let’s check this out and see what’s going on, and make sure that we understand what’s happening. And maybe we can change this. And let’s do it together." And part of this – really, I think – is going to come down to a shift where consumers figure out who’s doing it correctly – those dollars get shifted there. So, the companies who are doing it correctly, and the companies whose brands stand for certain values, and stand for sustainability, stand for social compliance – those are the companies in the future – I think – that are going to be the most successful. Places where we’ve had the most success were the companies that already had an incline of social responsibility. That was a huge "aha" moment – just recognizing that we were actually having our most successful case studies come out of organizations that had already expressed some commitment to responsibility. We’re one of a few companies in this industry that has an exclusive focus on social and environmental responsibility. You know, it’s an industry ripe for revolution, and in some ways is literally full of folks that predominantly have that – kind of – old school mentality of: "It doesn’t matter where the product comes from, it doesn’t matter where it’s going to go – I just want to make my margin when it goes through my doors." And you know, that mentality has really made it easy for us to succeed. You can’t do business, in this day and age, and be successful unless there is a giveback. And it’s also cool to be doing it. And people don’t talk about that, but you know, a few want to be in the "Wallpapers" or the "Monocles" or any of this cool press, or any of this stuff. It’s kind of like an elephant in a room: you have to have societal impact. I’ve been using the term and talking about "organic money" recently; how does it get grown? What’s it like when you consume it, or own it? What happens next, where do you place it? What you call "conscious capitalism", organic money, whatever term you like – it has now seeded in the culture. There is a rapidly growing ecosystem around it. - We’re business leaders who want to create a new approach to business that puts people and planet alongside profit. - The term you use is "creating shared value", so talk a little about how that would work. - We once thought, if business just increases its profit, what’s good for business is then good for society. - I actually think if Milton Friedman were alive today, he’d be a stakeholder theorist. He would understand that the only way to create value for shareholders in today’s world is to pay attention to customers, suppliers, employees, communities, and shareholders at the same time. - I think what this article tries to say is really: We need to think differently – what’s good for society is actually good for business. Creating societal benefit is really a powerful way to create economic value for the firm. And that we’ve missed – by and large – many of these opportunities to create profit – let’s call it "the right way". Day-to-day press, business magazines, online, the conversation is so pervasive that this is a movement that is unstoppable. Schools like Harvard producing research that shows that corporations who are committed to social impact, shared value, sustainability, conscious capitalism – however we coin it – are actually outperforming traditional for-profit-only corporations. We’ve gone from an average company to being consistently a top 10 employer in British Columbia. We’ve been named a "Top 10 fastest-growing distributors in North America" in the last two years running. We just ranked #210 on the 500 list. We made the "Profit 100" for women entrepreneurs last year. We’ve seen success both in the sustainability world – people look to us as leaders – but I think even more interestingly, in the mainstream world of our industry, and in the mainstream world of Canadian business, we are actually showing up. And I find that almost more rewarding – just to be able to show folks that you can live by your values and meet success with this very traditional measures. If you are hanging on to for-profit only, and that "do good stuff" is for other people, you are out of risk of really being obsolete and out of touch with what consumers want. Wakey, wakey! Times have changed. The almighty dollar has driven what organizations look like for only the last 100 years or so. The industrial mindset, that we are moving past, quite quickly now, is changing the way we need to think about the world. And the companies that are going to be really, really successful in the next 10 years, aren’t thinking in an institutional mindset. They’re thinking in a community mindset, they’re thinking in a planetary mindset, and they’re reaping the results. I like to say: it probably took 500 years for North American capitalism to evolve; it will probably take us another 50 years. But there are next generations now for whom this is becoming more of a given rather than a struggle and an experiment. And they will reinvent the way the economy is done. So, my favorite quote is from Voltaire: "No snowflake in an avalanche ever feels responsible." So, here we are, as business people, part of capitalism that left unfettered leads to mass destruction, leads to mass waste. What kind of snowflake are we going to be? "It’s not my fault. Who am I? I’m insignificant, I’m small." Are we going to be that snowflake? Or, are we going to be the one that says: "I’m not part of this. I’m going to stand for something bigger. I’m going to stand for something better. I’m going to stand for a world left better because of me." Subtitled by Sara Huang facebook.com/subtitleyoutube and Matej Pirih youtube.com/user/TheChangingWays [visit www.facebook.com/subtitleyoutube to see other videos or make a request]