Values-Driven Business: How to Change the World, Make Money, and Have Fun

Read This Book…

. . . if you own or run a business or if you’re thinking of starting one.

. . . if you think there has to be more to doing business than just making money.

. . . if you feel there’s got to be a way to run a successful business without driving yourself and your employees to early graves.

. . . if you want to know how to build a business that will reflect your personal values, not force you to hide them.

. . . if you’re studying business and you want to know what business can do at its best.

. . . if you’ve been hearing about corporate social responsibility or the triple bottom line and you wonder what all the fuss is about—or if you think those ideas apply only to major corporations.

. . . if you’ve read books or articles about corporate social responsibility and discovered they don’t help you meet the real-world challenges you confront in a small or medium-sized business.

. . . if you’ve been thinking of investing in ways to treat your customers or your employees better or to reduce the damage you’re doing to the environment but you think your company’s just not big enough to afford it—or if you think your profits will go down if you do.

. . . or if you want to understand one of the most powerful new ideas that’s affecting business all over the world today.

THE SOCIAL VENTURE NETWORK SERIES

values-driven business

HOW TO CHANGE THE WORLD, MAKE MONEY, AND HAVE FUN

Ben Cohen

Mal Warwick

BERRETT-KOEHLER PUBLISHERS, INC.

San Francisco

Values-Driven Business

Copyright © 2006 by Ben Cohen and Mal Warwick

All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. For permission requests, write to the publisher, addressed Attention: Permissions Coordinator, at the address below.

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First Edition

Paperback print edition ISBN 978-1-57675-358-3

PDF e-book ISBN 978-1-57675-951-6

IDPF ISBN 978-1-60994-403-2

2008-1

Cover design: Leslie Waltzer, Crowfoot Design

Cover photograph by Megan Maloy/Getty Images

Interior design and composition by Beverly Butterfield, Girl of the West Productions

Editing: PeopleSpeak

Indexing: Rachel Rice

To the members of Social Venture Network, who are changing the world 365 days a year

vii

Letter from the Editor of the Social Venture Network Series

Like the concept of business itself—or, for that matter, like the idea of money—values-driven business has many parents. No one can be credited with inventing the idea. No copyrights, patents, or trademarks apply. Globally, dozens, perhaps hundreds, of organizations actively promote the concept in their own ways. However, one of the first and most fertile of those organizations is Social Venture Network (http://www.svn.org). I am cowriting this book on behalf of SVN, which I have the privilege to serve now as chair of its board. Coincidentally, I’m also serving as editor of a whole series of books written by members of Social Venture Network. I just happen to be coauthoring the first book in the series.

Since its inception in 1987, Social Venture Network has provided a relaxed and supportive meeting ground for some of the business world’s most innovative and resourceful leaders. Some of their names—Ben Cohen, Anita Roddick, Gary Hirshberg— may be familiar to you. Most of the others have lower public profiles. All of us share a passion to work for a just and sustainable world. The result, with remarkable regularity, has been the emergence of new and often equally influential organizations launched by SVN members in an effort to fulfill the network’s longtime mission: to change the way the world does business. Among those spin-offs were

■ Investors’ Circle, which has helped to advance the concept of socially responsible investing (now accounting for an viii estimated $2.1 trillion, or more than 10 percent of the invested capital under professional management in the United States)

■ Business for Social Responsibility which has proselytized for corporate social responsibility among the Fortune 500, with members that now include the likes of Exxon, Ford, General Electric, and Cisco Systems

■ Net Impact (originally Students for Responsible Business), which engages over 11,000 MBA students and recent alumni through over one hundred chapters at business schools and in cities around the country

■ BALLE (Business Alliance for Local Living Economies), a nationwide network of local businesses in twenty-one cities and states throughout the United States and Canada that have come together to celebrate the value of local business and to support one another

This book represents one more effort by Social Venture Network to promote the concept of values-driven business and to make it accessible to thousands more companies. But don’t get the impression that everyone in SVN subscribes to the point of view advanced between these covers. In fact, you can bet that a whole lot of what Ben Cohen and I have written in the book that follows would provoke lively debate when SVN members gather in one of our semiannual conferences. So if you’ve got a beef with something you read in these pages, you’ll have to blame the authors and the editor (yours truly). The perspective laid out here represents just one of many currents of thought within SVN. The field of socially responsible business is, after all, dynamic and evolving. As more and more companies begin to embed their values in their day-to-day business decisions, the field becomes ever richer in its diversity.

xi

We’re not writing these books for just anybody, though. And we’re certainly not writing for the Fortune 500.

The United States has more than 5 million businesses with employees. Only about one-half of the U.S. workforce of 110 million is employed by the 17,000 companies with 500 workers or more—companies that are usually defined as large. And, just to drive the point home, reflect for a moment on how many companies are in the Fortune 500.

Why, then, do most business books and business management courses address the challenges of running large companies? Most businesspeople work in small ones. Books about business policies and practices at the Fortune 500 are rarely of use or interest to the overwhelming majority of business owners and managers.

Of course, many books in print counsel those who run smaller companies on a wide range of practical business topics, from finance and marketing to production and personnel. But the more specialized literature on the increasingly high-profile topic of corporate social responsibility (or CSR)—what I prefer to call values-driven business—deals almost exclusively with the concerns of large corporations. (Just go online to Google or Amazon.com if you don’t believe me.) No information is widely available about the special value—and special challenges—of socially responsible business practices for the entrepreneur or the owner or manager of a small or midsized company.

Values-Driven Business: How to Change the World, Make Money, and Have Fun seeks to start the process of filling that gap.

In this book, and those that will follow it, we’re focusing on small and midsized businesses. Choose your own definition for a company that fits that description, but know that what I have in mind is one in which actions taken by every individual employee have the potential to affect the enterprise as a whole.

x

I am honored to be joined in this first book in the Social Venture Network series by Ben Cohen, who virtually personifies the concept of values-driven business.

No doubt you’re familiar with Ben & Jerry’s, the company Ben cofounded and led for a quarter century. During much of that time, Ben & Jerry’s was recognized worldwide as one of the most full-bodied expressions of socially responsible business, and Ben was its poster boy. The company was the subject of numerous books, articles, and stories in newspapers, on the radio, on television, and online. Ben & Jerry’s pioneered new frontiers in business, demonstrating—to a world that was sometimes disdainful—that a company dedicated to the triple bottom line of people, planet, and profits could thrive. Ben & Jerry’s proved that a socially responsible company true to its founders’ values could prosper not despite those values but because of them. The company lived its values through its choice of ingredients, its partnerships with suppliers, its exceptional treatment of its employees, and its unusually generous relationships with all of its communities—local, national, and international—and with the many nonprofit organizations it supported so liberally.

Like Ben’s, my experience in business dates to the 1970s but in a wholly different field and on a far smaller scale. Mal Warwick & Associates is a consulting firm that serves nonprofit organizations by providing strategic, creative, production, and management services to assist their fund-raising efforts. The firm specializes in working with individual donors, primarily through direct mail. During the twenty-five years that I ran the company, I also founded or cofounded several other firms that provided complementary services in data processing, telephone fund-raising, and online fund-raising and marketing.

During our first fifteen years or so, Mal Warwick & Associates sought to change the world principally through the careful xi way we chose our clients and through the support we provided them by helping them raise lots of money. Later, after I had joined Social Venture Network and learned from Ben and other leaders in the field what socially responsible business could accomplish, I worked with my board to institute an extensive program of new policies and practices to improve the ways we dealt with all our stakeholders—not just our clients but our employees, our vendors, the community where we’re based, and the environment.

Ben & Jerry’s started small, of course, but became a sizable enterprise over the years, achieving annual sales of $270 million and employing a total of 700 before Ben and Jerry were forced to sell the company to Unilever in 2000. By those yardsticks, Mal Warwick & Associates started and stayed small. The company (and its sister firm, Response Management Technologies) now employs fewer than forty. Aggregate annual revenues are $15 million.

Values-Driven Business: How to Change the World, Make Money, and Have Fun sets the scene for the Social Venture Network series. Each subsequent volume will deal with one aspect of running a values-driven business or one overwhelming issue that commonly comes to the fore.

As the subtitle of this book makes clear, I believe you can change the world, make money, and have fun in business—all at the same time. Values-Driven Business sketches out an approach to doing business that’s based on that belief. It’s an approach that assumes you can live a life of purpose and fulfillment while running or working in a business. This belief is rooted in my own experience. In fact, I can cite abundant examples of remarkable individuals who are living such lives through business. The businesses they’ve started or run have served as the vehicles for their fulfillment. You’ll meet some of those extraordinary people inxii the pages of this book. But don’t be misled by the limited number of profiles in Values-Driven Business. There are thousands of such remarkable folks all over the United States—and thousands more all across the world.

Whatever your own circumstances, whatever your goals, I hope this book will help you find the path that’s right for you. And if it serves you or your business in some practical, down-to-earth manner, as well, all the better!

MAL WARWICK

Berkeley, California

February 2006

xiii

Acknowledgments

If you think it takes a village to raise a child, try producing a book sometime. The effort is almost always a community project. The two guys whose names are on the cover of this book are responsible for everything contained in these pages. If we’ve screwed up, well, blame it on us. But we had a whole lot of help in the process of creating this book. We couldn’t have done it alone.

Three individuals deserve very special mention:

■ Johanna Vondeling, editorial director at Berrett-Koehler, whose gentle guiding hand helped shape the book and keep us on track

■ Deborah Nelson, co-executive director of Social Venture Network, who offered helpful advice throughout the process, reviewed the entire manuscript, and coordinated the often complicated contacts with SVN members, the source of almost all the wisdom to be found in this book

■ Marguerite Rigoglioso (the Editing Queen), who interviewed virtually all of the entrepreneurs whose companies are profiled between these covers and wrote the vignettes you’ll find here

Several SVN members provided invaluable assistance by reviewing individual chapters and supplying their own hard-won insight and advice: Amy Hall (Eileen Fisher), Terry Gips (Alliance for Sustainability), David Mager (Bion Environmental Technologies), and Aaron Lamstein (Worldwise). And Professor xivKellie McElhaney, founding executive director of the Center for Responsible Business at the University of California’s Haas School of Business, was immensely helpful in the early stages of writing this book.

But the full cast of characters in this reality play includes the nearly two dozen people