Method in the madness - brand confusion in Boston

Making the move to the States felt like it should be an easy transition to make – same language, similar
culture and standard of living…right? However, there are a couple of things that I didn’t anticipate. One, technically we speak the language but the reality is that we really don’t – trying to order tomatoes at the deli is a nightmare! Second, the disorientation from not recognizing brands. My first few trips to the supermarket were fairly time consuming outings as I tried to work out what was good/bad. Particularly as a ‘concerned consumer' who would prefer to pick products that are sustainably sourced, produced and packaged; it bought it home to me just how much you rely on brand recognition as you make your day-to-day choices.

In the UK, my go-to brand for washing detergent or cleaning products was Ecover. Not only does the brand have great sustainability credentials – it creates plastic packaging from raw sugar cane, has green roofs on its factories and introduced the first phosphate-free washing powder – but the products also work really well without the need for potentially harmful chemicals. So, on arriving in Boston, I was on the hunt for the American equivalent.

Meet Method. It first came to my attention when I read about an amazing company that was making packaging from ‘ocean plastic’, the several million tons of plastic that ends up in the oceans every year. Then I saw a video of Eric Ryan talking at the Conscious Capitalism Conference – dressed as a crazy scientist he stood out a bit – and now I find out that Method and Ecover have just merged to form the World’s largest ‘green cleaning company’.  It’s rapidly gone from being a brand I’d never heard of, to one that seems to appear everywhere!

What’s interesting is the impact that brands such as Method are having on the cleaning industry. Other companies and brands in the sector are starting to think about the impact of their products on the environment – just look at Clorox Green Works, which launched a huge new campaign this year, injecting some rare humor and attitude into its communications.

It will be interesting to see what happens following the Ecover-Method merger. In contrast to lots of the ‘good’ brands that have been bought by larger conglomerates e.g. Kraft + Green & Blacks, and Innocent + Coca Cola) this is a ‘marriage’ of equals. The merger will give both brands additional leverage in their existing and new markets and it’s unlikely that their sustainability credentials will only become more impressive.

In the meantime, I have solved my brand confusion and my house is clean – still looking for a reliable brand of chocolate though. Might take some time!

Would you buy a cup of coffee for a stranger?

A couple of blog posts ago I talked about the 'pay what you can' model that was being rolled out by Panera. Then today I came across a video on the BBC about the concept of Suspended Coffees. First started in Naples, the idea is that consumers can buy an extra or 'suspended' coffee for someone in need. Just like the 'pay what you can' model, it's a simple way to enable consumers to do something good as part of their everyday routine. It has certainly inspired Starbucks, which recently announced that it will shortly be rolling out a version of the Suspended Coffee scheme in the UK. However, whilst the original scheme was based entirely on trust - recipients of Suspended Coffees didn't need to prove that they justified the gift - Starbucks is retaining some control through partnering with the charity Oasis. For each Suspended Coffee purchased, Starbucks will make a donation to Oasis and coffees to the value donated will be distributed through the charity's community hubs around the country.

It's great that Starbucks is taking the Suspended coffee idea and using its size, scale and influence to take it to  huge numbers of people around the world. My only question is whether, by formalizing the model through a more conventional charity partnership, the idea loses some of its magic? We shall see... In the meantime, look out for Suspended Coffees in a Starbucks near you.

People don’t buy what you do; they buy why you do it

Back in the days when I was fundraising for a nonprofit, my communications always focused in on the 'why' – what is the need or problem and why is it important that we address it now. Of course, the funders that I was talking or writing to were interested in what we were doing to address the problem, but, ultimately, the reason that they decided to make a donation was based on the difference that they thought it would make, the positive impact that they would have on the cause in question. Learning to present the 'why' in a compelling way was fundamental.

The importance of the 'why' reaches far beyond the realms of the fundraising world. Simon Sinek, author of Start With Why, gave a great TED talk back in September 2009 that explains the importance of the 'why'. It’s a great talk and I would thoroughly recommend watching it but, in short, the key point is that what inspired leaders and inspired organizations have in common is that they focus on why they do what they do, rather than simply what they do. He uses the example of Apple which sells its products by sharing the core belief that is driving the business – as Simon Sinek puts it, they say to us, “Everything we do, we believe in challenging the status quo. We believe in thinking differently. The way we challenge the status quo is by making our products beautifully designed, simple to use and user friendly. We just happen to make computers. Want to buy one?" It seems so obvious but it’s amazing how few companies actually do this.

However, where understanding the ‘why’ can be really powerful is in terms of understanding the broader purpose of a company – the reason it exists and what it brings to society/the world. Apple is actually an interesting example because it hasn’t done this. Whilst Apple clearly understands the ‘why’ in terms of product strategy and marketing, it has been slow to recognize, articulate or act on the social or environmental opportunities of the business. You could say that it's only identified half its purpose. In today’s world, consumers want more than that – they want to understand the ‘why’ of a company from a product/business perspective as well as a social perspective. By understanding and articulating their ‘why’ or ‘purpose’, companies are in a much stronger position to drive authentic, sustainability activity, derived from the core of the business.

Empowering consumers to do good

Back in 2007, the band Radiohead released its album In Rainbows without a price tag. This was a deliberate ploy to give fans the freedom to pay what they thought it was worth. When you went to the website to download the album, instead of a price, the words 'it's up to you' appeared in the check out box. Although, it's difficult to get a clear answer on the success of this initiative - the band's Publisher did reveal that "Radiohead made more money before In Rainbows was physically released than they made in total on the previous album Hail To the Thief". Perhaps, though, this says more about the quality of the previous album!

Nevertheless, the concept of letting the consumer decide the price is a really interesting idea, particularly when you link it to a social cause. Back in 2003, Denise Cerreta pioneered her 'pay what you can' model, setting up the One World Cafe in Salt Lake City, Utah. Her vision was "to help people see the value of food as more than a mere consumable but rather, as a glue and a catalyst for healthy people, relationships and communities". It seems to have been very successful. The idea of paying what you can to support others who are less able to pay appealed to consumers' social conscience and generosity and what's more, as Denise puts it, "because customers choose their own prices, their portions tend to be more mindful and reflect that they will actually want to eat, with the result being little or no food waste". Denise now advises cafe owners all over the world on how to put the 'pay what you can' model in place, including a recent high profile adopter, the nationwide bakery chain, Panera.

For non-U.S. readers, Panera claims to stand for so much more than simply being a place to get great soups, salads and sandwiches. You can find out more by watching its recently launched Live Consciously, Eat Deliciously commercial:

Back in 2010, Panera trialed the 'pay what can model' at a new Panera Cares Community Cafe in St Louis. It went so well that now you'll find Community Cafes in Michigan, Oregon, Chicago and Boston. Just like the One World Cafe, the company plans to cover the cost of meals for those who can't afford to pay with money collected by those who overcompensate by paying more. According to an article in the International Business Times, the cafes bring in "an estimated 70-80% of the revenue compared to stores that stick to the traditional menu prices" but Ron Shaich, founder and CEO, claims "that's still enough to make a profit". If it continues to go well, the plan is to open other community cafes, as well as to roll out a 'pay what you can' promotions across selected menu items in over 1,500 of the company's locations across North America.

Of course there will always be consumers who take advantage - a number of Radiohead's so-called fans didn't pay a cent to download the album - however, putting a social cause at the heart of it does help reduce this risk. A 2010 study conducted by Leif Nelson of the University of California supports this - it found that customers at pay-what-you-want establishments are more likely to donate when charity is involved. What I like about the initiative is its simplicity - it's such a great way for a company to 'team up' and connect with its consumers to have a meaningful social impact in a really straightforward way. It also, crucially, maintains an element of choice. Let's be honest, for most of us, it's not really a choice because our social conscience tells us what we should do, however, the appeal feels much more positive; Panera is empowering us to be generous, not appealing to us, as many organizations do, through guilt.

Isn't it a bit idealistic?

A new video popped up on my Twitter feed last week. It’s quite a cute film made by the University of St Gallen, which sets out what Corporate Social Responsibility (CSR) is all about. If you’re new to the concept of CSR, then it’s definitely worth a watch as it sets out the key points in a way that’s easy to digest.

When people ask me about what I do - after I've fielded the usual question ‘so you work for a charity?’ - I often get the following comment: ‘that’s great, but isn't it a bit idealistic?’ And the answer, to a certain extent, is yes. What unites people in this field is that they are aspirational and passionate about changing the world for the better; they dare to dream. However, this is coupled with strong sense of realism. The ecomaginations and Plan As of this world are still far and few between and those of us close to the action know better than anyone how much work there is still to do. It’s a positive thing - as the video shows, we know where we want to go; we're just figuring out the best way to get there.

Just in case you don’t have time to watch the film, here is a summary of the key points. The language is a bit clunky but you’ll get the general idea:

• CSR is based on the question of good business for a good society, today and tomorrow
• CSR is not charity. It is about the way a company earns its profits, not how it spends them
• It takes employees of integrity plus appropriate organizational structures to realize CSR. It is a matter of individual and institutional ethics
• Politics continue to play an important role but in a globalized world the effects of regulation can be limited, thus…
• Companies play an increasingly important role
• Soft laws are new governance mechanisms based on a company’s self commitments
• CSR has arrived in business practice and it’s necessary to support these developments professionally but also to provide critical perspectives with respect to them

Happy Watching!

Ruggie's Rules - The End of the Beginning

Ask the CEO of a multinational corporation “does your company respect and protect human rights?” and the answer is unlikely to be negative. But go on to ask another question “how do you know?” and you’ll probably get a much less confident response. The truth is that, until very recently, they didn't have to know. What’s more, if a problem or an accusation was filed against them, there was no international legal framework against which they could be brought to justice - existing national frameworks were inadequate or simply not relevant.

This was the challenge given to John Ruggie, Berthold Beitz Professor of International Affairs at the Kennedy School of Government and an Affiliated Professor in International Legal Studies at Harvard Law School, by the United Nations Human Rights Council – to bridge the gap between national public governance frameworks and the governance of global businesses.

Last night, I went to a talk by John Ruggie at the Harvard Bookstore, to mark the launch of his book Just Business. He talked about his approach to the challenge and his experiences of working with governments and corporations all over the world to agree a set of guiding principles, perhaps better known as Ruggie’s Rules. It became clear to him very early on that there was no silver bullet - it wasn't about creating a legal instrument and expecting everyone to adhere to it because, as we saw with the Kyoto Protocol, this would be far too easy to ignore. What was required was a ‘building block approach’, establishing a common platform (i.e. the guiding principles) and then gradually bringing organisations on-board. For example, having agreed the guiding principles, John Ruggie and his team approached national export agencies and persuaded them that, when promoting companies overseas, there should be some due diligence built into the process to ensure that they are not promoting companies who do not respect or protect human rights. This has proved to be a clever and successful means of pushing the guiding principles out into the global corporate network and a start towards changing the status quo.

As you’d expect, the guidelines have received mixed reactions. Activist organisations don’t think they go far enough with the organization Human Rights Watch saying that the UN Human Rights Council “squandered an opportunity to take meaningful action to curtail business-related human rights abuses.” Other commentators, such as John Braithwaite, Corporate Criminologist at the Australian National University, are more encouraged by the steps taken: “I’m a strong supporter of progressive UN framework agreements that seem pretty wishy-washy at first…“ in the long run they can make a huge contribution from limited beginnings.”

Whilst, I don’t believe that extensive regulation is the answer to making companies more sustainable, it is helpful to have some frameworks in place to ensure a minimum standard of practice. As John Ruggie put it last night “it’s the end of the beginning”; in other words, Ruggie’s Rules are not going to eliminate abuses of human rights by global companies over-night but they create a baseline to support companies to start answering the question “how do you know?” with confidence.

Embrace change - it leads to success

Nike has made huge leaps forward in addressing the social and environmental impacts of its business. Not so long ago, the company was mired in controversy over allegations of human rights abuses in the factories making its shoes and clothing around the world – there were large protests, boycotts and widespread criticism from the media. Today, it's considered a sustainability leader.

The company’s vision is to deliver innovation and inspiration to every athlete and sustainability is central to how they do that. Hannah Jones, VP of Sustainable Business and Innovation at Nike Inc., summed up the approach in a recent tweet:

The key word is ‘innovation’ and ‘opportunity’. In order to become more sustainable, businesses need to see it as an opportunity and it means change, not a few tweaks here and there, but real change. The good news, to steal Hannah Jones’s tweet style, is that change = profit.

A recent report by MIT Sloane Management Review and the Boston Consulting Group, The Innovation Bottom Line, demonstrates the link between business model change and profiting from sustainability. 50% of survey respondents (executives and managers from commercial enterprises) who had changed 3 or 4 elements of their business strategy said that they had profited from sustainability activities:

And more change = more likely profit because, as you can see, only 37% of the respondents who had changed one element of the business model said that sustainability adds profits.

The change doesn't end with the business model, as report outlines, to “hit the sustainability bull’s-eye”, there needs to be:

• Support from the top and full integration across the business
• Clear goals and effective measurement - get the numbers that people can’t ignore
• Understand what your customers think and want in terms of sustainability
• Collaborate with individuals, customers, businesses and groups outside the business

Check out the report for more details - there are some interesting statistics. 

In the words of Charles Darwin “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.”