People/Planet/Profits

Smiles, not Frowns

Why not go to work with a smile on your face? There is neurological evidence that wearing a smile changes what goes on in your brain and brings a more optimistic outlook to you day¹. Feel good about your startup.

Chances are high that if you are clear about your personal values, your business values will spring from those inner convictions. They will determine business behavior.

If you build on good values, they will lead to good behavior, too. The business that starts without consideration of the fundamental values which underpin it, is likely to result in frowns, not smiles. Try it out for yourself. For no particular reason, just put a smile on your face, not just your mouth, but in your eyes, too. I would expect you to feel a sensation of change within your body and that your mind will incline to warmth as well.

This is not a load of flaky BS. In his book, Wired to Care: How Companies Prosper When They Create Widespread Empathy, Dev Patnaik demonstrates with real life examples from a range of different businesses, just how creating empathy can help a business to prosper. Lee Bolman and Terrence Deal have long studied business life and apart from their best-selling management book (which I use in class) called Reframing Organizations, they co-authored Leading with Soul: An Uncommon Journey of Spirit, a parable that shows how the heart of leadership lies in the hearts of leaders. Thomas Pink produced a book called A Whole New Mind: Why Right-Brainers Will Rule the Future in 2005 that stresses the importance of using the right brain in business and emphasizing the role of things like storytelling, empathy and play.

The entrepreneur has a magnificent opportunity to make a positive contribution and be successful by conventional financial yardsticks at the same time, if only he makes use of the right as well as the left brain.

The startup is in the enviable position of being able to set its moral standards and its dedication to a wider purpose from the outset. It is way easier to start off on the right foot than to make corrections to your direction midstream.

Your startup stands a greater chance of sustaining itself if it is anchored in sustaining others. Good business makes good sense. The growing body of data demonstrates the relationship.

Companies with a public commitment to ethics perform better on 3 out 4 financial measures than those without. These companies also have 18% higher profits on average². A study at Harvard Business School, found stakeholder-balanced companies’ showed four times the growth rate and eight times the employment growth when compared to companies that are shareholder-only focused³.

Hundreds of thousands of startups are being created with a purpose based on the multiple bottom line: people, the planet, as well as profits. For better results, do more than aiming uniquely at the maximization shareholder value. To do so will be a conscious choice. You will be among a growing population of companies that specifically set out to create shared value–the idea that corporate success and social welfare are interdependent.

Carl Schramm, president and CEO of the Kauffman Foundation says, “We either embrace a new and different view of our economic future, one that literally can make the world a better place, or we we continue our current system that aims to satisfy the physical needs of a relatively tiny portion of the globe.” Which do you choose?

Respect for People

Think of all the stakeholders in your business and how you value them through behavior and involvement:

• staff
• customers
• partners
• suppliers
• community
• rivals
• … here you complete the list relevant for your business.

Can you set down a brief written statement of how your will relate to them? What contribution do you expect to make to each. Consider the components of each as you imagine interacting.

Respect for the Planet

Think through the ways in which you impact and are impacted by your close and distant environment, both directly and indirectly by:

• purchasing
• transportation
• resource utilization
• manufacturing
• consumption
• … here too, you will complete the list.

If this seems like a tough task to be concerned with as you are struggling with many matters competing for your time, remember that this may make the chances of your startup’s survival much greater.

word ‘sustainability’ is much bandied about these days. It is a tough business to achieve. You will find guidance and usable material at Sustainability: Beyond Fine Words.

You do not have to do it on your own.

The Gort Cloud

“The Gort Cloud” is a term coined by the author and brand counselor, Richard Seireeni, that describes the vast and largely invisible network of NGOs, trendspotters, advocacy groups, social networks, business alliances, certifying organizations, and other members of the green community that have the power to make or break new green brands.

If you are serious about PPP, you better be aware of the Gort Cloud and follow its constantly changing nature as it flits across the business sky. You will need to develop your own cloud map that is relevant to your own market. And you will need to monitor the way it changes. The organizations in your cloud will come and go, they will change in degree of influence and impact upon you business.

Actually those very organizations can be your partners and friends, whether you participate in them or not. By following what they are doing, you will get some of the best free advice around. Their ears may be even closer to the ground than your own.

Humanity’s Load on the Planet

A group of renowned Earth-system and environmental scientists led by Johan Rockström of the Stockholm Resilience Centre sets out to define boundaries for the biophysical processes that determine the Earth’s capacity for self-regulation, reports the scientific journal Nature (in September 2009; Image courtesy of Courtesy of Stockholm Resilience Centre).

The framework presented is an attempt to look holistically at how humanity is stressing the entire Earth system. Provocatively, they go beyond the conceptual to suggest numerical boundaries for seven parameters: climate change, ozone depletion, ocean acidification, biodiversity, freshwater use, the global nitrogen and phosphorus cycles, and change in land use. The authors argue that we must stay within all of these boundaries in order to avoid catastrophic environmental change

It will help any startup business to consider their environmental and product policies in the light of the frightening graphic. There are, at the same time, positive opportunities implied by the data on global freshwater use, land system change, ocean acidification – given our surpassing of climate change limits.

Slow Money and other quests

Founded by Woody Tasch, a pioneer in merging investing and philanthropy, the mission of Slow Money is mission is to build local and national networks, and develop new financial products and services, dedicated to:

• investing in small food enterprises and local food systems;
• connecting investors to their local economies; and,
• building the nurture capital industry.

The Business Alliance for Local Living Economies, or BALLE, is North America’s fastest growing network of socially responsible businesses, comprised of over 80 community networks in 30 U.S. states and Canadian provinces representing over 22,000 independent business members across the U.S. and Canada.

BALLE believes that local, independent businesses are among the most potent change agents, uniquely prepared to take on the challenges of the twenty-first century with an agility, sense of place, and relationship-based approach others lack. They are more than employers and profit-makers; they are neighbors, community builders and the starting point for social innovation, aligning commerce with the common good and bringing transparency, accountability, and a caring human face to the marketplace.

The B Corporation™ Can Help You

The B Corporation™ is a concept and an organization concerned creating a new kind of company. Higher purpose. Higher standards of accountability, transparency, and performance.

Venture Founders LLC is a Founder Member.

Visit the B Corporation™ website and complete the Survey. It will not take long or create pain. Whether or not you decide to seek to become a B Corporation or not, the Survey will help your thinking and decision making. Best practices are embedded in the B Survey. It’s free and easy.

B Corporations™ are a new type of corporation that are purpose-driven and create benefit for all stakeholders, not just shareholders. They are unlike traditional responsible businesses because they:

• Meet comprehensive and transparent social and environmental performance standards.
• Institutionalize stakeholder interests.
• Build collective voice though the power of a unifying brand.

The Benefit Corporation

The Benefit Corporation is a new form of corporate governance that is progressively being enacted by US State legislatures and was midwifed by BLab.

Benefit Corporations are a new class of corporation that 1) creates a material positive impact on society and the environment; 2) expands fiduciary duty to require consideration of non-financial interests when making decisions; and 3) reports on its overall social and environmental performance using recognized third party standards.

Becoming a benefit corporation gives entrepreneurs and investors an additional choice when determining which corporate form is most suitable to achieve their objectives.

How a becoming a Benefit Corporation can benefit a business:

• Providing clarity to directors and officers that their fiduciary duty includes creating a material positive impact on society and the environment, even in liquidity/sale scenarios;
• Offering legal protection to directors and officers to consider the non-financial interests of their workforce, community, and the environment when making decisions, even in liquidity/sale scenarios;
• Helping to maintain mission over time by 1) expanding shareholder rights to enforce this expanded definition of fiduciary duty and standard of consideration; and 2) requiring a 2/3 super-majority vote of shareholders to remove these higher standards; and 3) providing the opportunity to name and enforce pursuit of one or more specific public benefit purposes;
• Creating a marketing opportunity to differentiate the business as a new class of corporation required by law to benefit society as well as shareholders.

PLEASE NOTE: There is tons of useful stuff on Startup Owl, a site that’s been going for a dozen years. So keep browsing, but know that the founder, Will, now devotes most of his time and energy to his new website that you should definitely visit: https://venturefounders.com

 

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1. I am indebted to the unnamed photographer, whom I would like to acknowledge. When the temperature of any body part changes, the chemical activities connected with that area also change. Therefore, when facial muscles are activated in an expression, the biochemical processes associated with those areas of the face are altered according to their temperature change. And research suggests that a cooler brain creates good emotions, while a warmer brain produces negative emotions [source: Daniel Goleman, author of  Social Intelligence: The New Science of Human Relationships “It turns out that there’s a subset of mirror neurons whose only job is to detect other people’s smiles and laughter, prompting smiles and laughter in return. A boss who is self-controlled and humorless will rarely engage those neurons in his team members, but a boss who laughs and sets an easygoing tone puts those neurons to work, triggering spontaneous laughter and knitting his team together in the process.“
2. Institute of Business Ethics, 2003.
3. Kaplan & Norton, Harvard Business School, 2000.