The Paradoxes of Doing Well while Doing Good

It's a question that many of us keep coming back to.  It's also how David Bach of the Yale School of Management kicked off Nov 20th's Sustainability Marketing: The Power of True Stories conference.

How can companies do well by doing good?

More specifically, how can increasing the bottom line also mean or be led by improving sustainable practices?  How can companies of various ages and various sizes make meaningful steps in the right direction?  And how can this happen in major marketplaces rather than just niches?

I can't say that the conference answered these questions, but it did offer the attendees a crucial look at how a diverse group of successful companies is tackling them.  Organized by Interbrand, Yale's Center for Customer Insights (see their post on the conference here), and CBEY, the conference gathered leaders from established sustainability-minded companies like Stonyfield, Applegate Farms, and Patagonia, as well as corporations like Unilever, and up and coming social businesses like Warby Parker, Zady, Feed, and Vine.  To round it out, we also heard from social marketing firm Free Range Studios' veteran Studio Director Amy Hartzler and Yale School of Management Professor of Organizational Behavior, Daylian Cain.

Scaling Sustainability and Growth

Stonyfield Farms' founder and Chairman, Gary Hirshberg, got things started by recounting how Stonyfield got to where it is today.  Initially conceived as a farm and education center, when small farm funding dried up in the 1980's, Hirshberg and his team had to diversify, and found a value-add in yogurt.  Fast forward 30+ years and the company makes up roughly 8% of the market and is a household name.  As the market has changed, Hirshberg underlined the fact that the brand was always about providing healthy, organic products in the most sustainable way possible.  But, as they grew, they had to deal with bigger sustainability challenges, which is why Hirshberg emphasizes that "sustainability is a verb, not a noun."  It takes continuous work, but, in his experience, finding sustainable solutions can also save and make money.  The perfect example of this is Stonyfield's Mission Action Program, through which employees are tapped to work on specific areas of the company's footprint to find ways to tighten the ship.  One MAP team found that they could take the sludge they were generating in increasing quantities and develop methane digesters that generate energy.  This and other MAP initiatives have saved Stonyfield an estimated $31,000,000 since 2006 while eliminating waste streams, proving that finding the best financial solution can also be the most sustainable solution.

At the same time, Hirshberg noted that he's never sought to be anything but a niche product, and he recognizes that the company is limited in how much it can grow while maintaining its values.  Supporting sustainable causes is something that Hirshberg is passionate about.  However, when Stonyfield had the opportunity to be sold in the Congressional cafeteria, the product was pulled for being "too political for Capital Hill" due to the messaging on its labels.  This instance brings in the question of how companies that support environmental causes can move between mass and niche markets.

As they grow, new companies like Zady, FEED, Warby Parker, and Vine, are in the midst of determining how to deal with this issue of scale.  Part of it is about storytelling, but it's also about finding ways to do good after that initial burst of entrepreneurial activity.  At FEED and Warby Parker, doing good is built into each purchase - FEED donates proceeds to organizations fighting hunger, and with every purchase, Warby Parker (through partner organizations) gives a vision test and a pair of glasses to populations in need.  Both Anjali Kumar of Warby Parker and Tascha Rudder of FEED touched on the fact that as their companies get bigger, ensuring that they can continue to provide the same level of "good" through their partner NGOs becomes more challenging.  Zady's mission is slightly different - it seeks to provide a connection to products that are crafted, not just manufactured, which begs the question of how you can grow a consumer company based on conscious consumerism.  I.e. if you want people to buy your stuff, don't you want more of them to buy more of it?

While this is a topic that has come up on the blog before in my Q+A with Vincent Stanley, it was central to the conference, too.  Applegate Farms' Stephen McDonnell and Stanley agreed that it's about redefining growth, especially if your business has a mission.  When faced with the question of how they would handle tackling sustainability for a "traditional" company in their sector, both said they wouldn't want to be placed in that situation, pointing out the challenge of feeling that, although smaller companies have their own hurdles, righting a ship that hasn't already been sincerely working on sustainability is much more difficult than getting it right on sustainability from the beginning.  How they keep the course of their own sustainable brands as the founding leaders phase out is a pressing question for them, though.  For McDonnell, it's about letting go of the reins and knowing that what you're losing in terms of responsibility and control is good, especially if you've created a lasting culture and mission.  Articulating that culture and mission in a concrete way is one of the main reasons that Patagonia decided to become a B corporation, according to Stanley, since it ensures that the values of owners Yvon and Melinda Chouinard are maintained as the company grows past them.

When to tell the Sustainability Story

What complicates all of this is how companies talk about their sustainability efforts.  As Daylian Cain outlined to the crowd, phrasing and framing guides audiences to judgments and actions.  So, as sustainability goes in and out of fashion, how can we wade through the various sustainability claims to determine what is a true story and what is a tall tale?  The conference presenters had, as you'd expect, varying perspectives on this, and, in many ways, the stories they can and do tell are bound by their audiences, and their scales.  At FEED, the product and the company's mission are front an center, and their customers wear the brand as a badge of honor.  At Patagonia and Applegate, as well as Stonyfield, the mission and overall product design work in tandem, while at Zady and Warby Parker, it's different - both companies stress that it's design rather than the mission that leads in terms of their marketing.  It's not that the mission isn't important, but they want the aesthetics to be the driving force for people wanting to purchase their goods.  These contrasts aren't stark. Rather, these companies all champion design and product along with their missions, but they do choose to emphasize their values in different ways.  This speaks to the idea that each company has had to decide if their customer base is driven by a sustainable brand, or if it's something that might just be an unknown extra.  

Whether or not the mission is the central marketing tool or not, the presenters all agreed that they try to avoid having "preachy brands."  They want their customers to feel great about buying something instead of buying through guilt.  Amy Hartzler echoed this sentiment in her presentation on Free Range Studios' approach to marketing strategy.  Their rules for social marketing are simple: your company is not the hero, your audience is, you are the mentor, and your mentoring works as long as you're telling a story with a moral your audience is motivated by.  In addition to these guidelines, Hartzler also emphasizes not to commit the following sins:

• Vanity
• Authority
• Insincerity
• Puffery
• Gimickry

In short, be humble and work from empowerment instead of inadequacy.  It's easier said than done, but many of the presenters pointed to the unique point in time we're living in in which companies and customers have a variety of new touch points.  Customers can hold companies accountable through social media, companies can be more proactive and transparent, and companies that invest the time and energy in building connectivity with customers and potential customers can end up with brand ambassadors.  On the Zady, FEED, Vine, and Warby Parker panel, the sentiment was summed up as a social media "like doesn't mean love" but it can turn into it by nurturing relationships and proving the value of the brand over time.

On the flip side of transparency comes the challenge of our culture of short attention spans when it comes to telling sustainability stories.  Stephen McDonnell of Applegate pointed to their "barn code" that allows customers to scan a bar code to see where their meat came from.  McDonnell says the point is to get people engaged with what they're eating, but he also acknowledges the limits of this approach since their supply chain makes it hard to actually tell where each individual ingredient comes from.  If he could, he would tell the whole story, but customers just don't have the attention span for a story of that complexity.  Since sustainability initiatives are often technical, a significant challenge is finding a way to balance the complexity with digestibility.

Moving Into the Sustainability Space

In order for big change to be made in the sustainability realm, big companies are going to have to be a part of the solution.  During the conference, Unilever announced a massive marketing and sustainability initiative, Project Sunlight.  Watching the video helped me understand why it's so hard to think of scale and sustainability storytelling.  Unilever is made up of 400 brands, many of them common household names.  They estimate that the 400 brands touch over 2 billion customers a day.  That's more than 1/4 of the planet's population.  With the arrival of a new CEO, Paul Polman, Unilever has doubled down on its sustainability efforts, announcing goals of doubling profits and halving environmental impacts by 2020.  They now lead with sustainability for their marketing - it's certainly not a hidden value.  However, what you can both say and do on sustainability is a lot different when your products touch billions and you face some major sustainability challenges across your full value chain footprint.  The centerpiece of their new sustainability initiative, Project Sunlight, is a video designed to get people engaged, but it was clear to me that at their scale, Unilever simply can't be too specific in their ask.  Their labels will never be "too political for Capital Hill." At the same time, if a company that touches so many lives and determines so many supply chains can commit to a sustainable path, then that leadership could cause enormous ripples throughout the business community.

In many ways, new brands have it easy.  They can start with the right building blocks from the start, and they can be nimble enough to make changes quickly and efficiently, without too many negative repercussions.  They can also build trust around their missions.  Brands like Unilever, on the other hand, that have to go back to a very complex drawing board, face massive challenges in doing well and doing good.  But, as older green brands like Patagonia, Applegate, and Stonyfield continue to push boundaries, and new companies like Zady, Warby Parker, and FEED sprout innovations, corporations like Unilever are showing signs that they are willing to step up to the plate to make a big difference.  No matter what, it will be crucial to keep an eye on how sustainability stories are being told and who is telling them.