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.
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.
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.
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
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.
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.
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.”
Each year, the Boston College Center for Corporate Citizenship holds a film festival, which gives companies an “opportunity to demonstrate how they have utilized video as a communication tool”. There’s a public vote online – it ends tomorrow in case you want to have your say – to decide a shortlist and then the overall winner is selected by a panel of judges at the International Corporate Citizenship Conference in April.
There are a total of 76 entries so it’s quite a feat to watch them all; however, in my quest to find out about corporate responsibility in the States, I thought it would be an interesting exercise to explore what companies are doing and how they’re talking about it.
Video is such an engaging mechanism for telling a story and companies increasingly use it to communicate their environmental and social messages to employees and consumers. In recent years, we've seen some compelling examples of how effective video can be, from the Dove Campaign for Real Beauty videos, which went viral(see below), to Virgin Media’s video-driven approach to sustainability reporting. There is some really innovative and creative thinking out there.
I have to admit that not many of the film festival entries grabbed my attention. I accepted quite early on that the majority of the videos were going to be about philanthropic activities and that I shouldn't try and evaluate them with my strategic sustainability hat on. Some of the videos made reference to the broader social and environmental objectives of the business but, where they did, it felt like a bit of an after-thought. Broadly speaking, I'd divide the entries into two categories:
Emotional stories: personal stories from veterans, cancer survivors, single mums, people with disabilities about how they – or the charity that helped them - have been supported by the company and the impact on their lives.
Volunteer montages: clips of volunteers in corporate T-shirts painting schools, packaging up food bank deliveries or completing a 5 km run.
Videos in both of these categories used similar ‘emotional’ music, and the commentary was provided by staff members, who said very similar things using slightly different words.
Now before you accuse me of being British and cynical, I should say that I was impressed by how much philanthropy seems to go on. The videos really convey the enthusiasm and excitement among employees in the US for ‘giving back’ and there are some really nice examples of how companies are supporting the communities where they operate. Perhaps my expectations are just too high – I believe that business can be a powerful force for good and therefore it’s frustrating to see companies wasting the opportunity to show what can really be done.
Content aside, at the very least, I was looking for a strong message, some creativity in the techniques used, and, most of all, a clear aim; by that I mean that I wanted to understand why the video was made and who it was made for. Only a very small number of entries ticked all these boxes.
In the future, it would be great to see the introduction of categories for the film festival. All the entries are currently lumped together as ‘corporate citizenship’ videos, but perhaps the inclusion of categories would help companies think more broadly about what corporate citizenship means and perhaps to submit something other than the usual volunteering or philanthropy video. The added benefit - it would help balance the expectations of viewers who are (ahem) harder to please.
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.
