How do you engage employees in your company’s sustainability efforts, particularly when you’re just starting out? It can be trickier thank you’d think. In Strategy for Sustainability Adam Werbach reminds us that,

Just as sustainability does not work for businesses unless it serves business needs first, sustainability does not engage individuals unless it first and foremost solves problems they experience in their lives.

So, how can you make sustainability personal and create the best conditions and incentives for engagement?

1. Make it voluntary. Forcing people to care about something is a short-cut to resentment and inaction.
2. Localize it. What matters to the team, to the community, to your customers that employees can connect to? Sometimes it’s as narrow as distinct employee interests (eating organic or reducing office waste, for example). The more localized you can take sustainability, the more personal it becomes.
3. Start with what you care about. To make it personal, start by being personal. Share what issues you’re passionate about and how you first became involved.
4. Don’t pretend to know it all.  Leadership and communication style is a primary influencer engagement. Inspire and listen rather than preach, scare or guilt. Your first job is to inspire possibility.
5. Demonstrate the effect of action. One company piled up a day’s worth of trash to show the potential of what can be eliminated through recycling, composting and product choices.
6. Make it a cross-functional effort. Involve people from different departments and seniority levels from the start.
7. Publicly solicit, display and respond to ideas. After brainstorming sessions or employee surveys, list the ideas in a public place, respond to suggestions and questions and let employees know why some ideas can’t be implemented.
8. Solicit input from outside stakeholders. How have other companies launched successful sustainability initiatives? Are there vendors, organizations or community groups that you could partner with locally?
9. Give employees a place to start now. Even if it’s a small step. My grossest criticism of Michael Moore is that his movies fire me up and then leave me with nothing to do with the indignation he’s inspired. I’m left feeling manipulated and hopeless. What can employees do right away to capitalize on their interest and the momentum of the initiative?
10. Start small for early success. Hitting your target early on builds momentum and confidence.
11. Make it regular. Repeated activities or long-term goals are more inspiring and allow people to connect more personally than a morning of cleaning a park every quarter.
12. Reward the most effective departments or teams. (Tying sustainability goals to individual compensation and bonuses is also very effective, but is more involved).
13. Build company culture around sustainability goals. Whether it’s office parties, charity drives or 401(k)s, look for ways to align them with the company’s sustainability initiatives.

These are just a handful of tactics and ideas. I’d love to know what’s worked for you. What hasn’t?

Image credit, Daily Mail Online

In this 7-minute clip, Better World Books President and CEO David Murphy talks about the company’s fiduciary commitment to its nonprofit literacy partners and how it received funding, initially with an SBA loan and later through Good Capital, a social investment firm. Right-click and download for the MP3.

Download audio file (Cause-Capitalism_David-Murphy.mp3)

Distributing books Tanzania, 2006. (L to R) Michael Retzer, then-U.S. Ambassador to Tanzania; Pat Plonski, Executive Director of Books for Africa; David Murphy, President and CEO, Better World Books (Courtesy of Better World Books)

Better World Books has several rare characteristics. It’s a for-profit social venture with a true triple-bottom line. It gives stock options to its nonprofit literacy partners. And it’s received $4 million in equity investment in a round led by Good Capital.

Better World Books collects and sells used books online to fund literacy initiatives worldwide through its five nonprofit partners, Books for Africa, Room to Read, Worldfund, the National Center for Family Literacy, and Invisible Children. Books are shipped carbon neutral with offsets from Carbonfund.org, and those that don’t sell are kept out of landfills through a certified recycling program. Today, Better World Books collects tens of thousands of books per day, given to the company by college students, libraries and other individuals.

The company promises 8-10% of its revenues, not profits, to its literacy partners. President and CEO David Murphy explains that Better World Books makes a fiduciary commitment to its partners so that when a book sells “it’s a liability on our balance sheet, regardless of whether we make money or we don’t.”  Beyond this, which is the basis of Better World Books’ mission and its origin, the company wanted its partners to be able to share in its success.  So with Good Capital’s encouragement and guidance, Better World Books created a mechanism to give stock options and a board seat to its literacy partners, turning them into shareholders and giving them a voice in the company.  David and co-founders Xavier Helgesen and Christoper Fuchs diluted their own options to creat the pool.

Each year the five organizations are evaluated on how well they met their objectives and supported Better World Books; they receive additional grants for high performance, which they can use without restriction.

By turning its nonprofit partners (which many companies would think of as just charitable beneficiaries) into shareholders, Better World Books ensured that its social mission brought an economic value to the business, which would preserve the mission in the case of a buyout. Kevin Jones of Good Capital who helped structure the deal calls it “mission insurance.”

At the time of this post, Better World Books has diverted 33, 951,415 books from landfills and raised $8,446,480.37 for literacy and education by selling used books.  And it’s profitable, earning more than $48 million in revenue and growing at 30%.

If you like this interview you should thank David on Twitter like this. You can follow Better World Books at @BWBooks.

If you want the real story from a successful for-profit social entrepreneur, click the player to listen to Aseem Das talk about founding and transforming World Centric. Prefer MP3? Right-click and download.

Download audio file (Cause-Capitalism_Aseem-Das.mp3)

World Centric evolved from a nonprofit to a nonprofit with a revenue-earning component to a for-profit social enterprise. Today, World Centric makes fully compostable household products including utensils, plates and cups. You can find the brand in Whole Foods and Cost Plus World Markets and when you take out from your sustainable deli. It’s a profitable company rooted in a strong social mission. It’s a terrific story to profile this week on Cause Capitalism as I’ve been focusing on social business ventures.

Aseem Das founded World Centric as a nonprofit organization with “a mission to reduce economic injustice and environmental degradation through education and community networks.”  He knew he didn’t want to take the rote nonprofit funding approach–donor solictitations and grant proposals–so he looked around for a revenue stream that was aligned with World Centric’s mission.  He dismissed mattress recycling and wind energy in favor of selling fair trade and compostable products online.

In the process of applying for tax-exempt nonprofit status (501(c)3) sales of fair trade compostable products picked up; the organization was earning too much revenue to easily earn 501(c)3 status.  So in 2009, World Centric fully converted to a for-profit enterprise selling compostable products. “It clicked that we could still do what we wanted to do as a for-profit,” says Aseem.

The company is still focused on its social and environmental impact. It works toward being a model for sustainable enterprise and to influence consumers’ consumption and waste behavior.  Aseem feels World Centric is able to reach a larger market segment than it would have as a nonprofit.  But the current challenge is using this opportunity to educate consumers about the environmental and social issues core to the company’s mission.

Aseem decided against taking funding and has been able to grow the company through sales. “We’re 100% in control of what we do with the business.”  The tradeoff for independence is lack of resources, which adds to the challenge of balancing a social mission with profitability.  Aseem now spends more time growing “the business side of things” than running the educational programs on which World Centric (.org) was founded.

But it seems Aseem’s constant juggling of mission and financial sustainability is working. World Centric’s social mission helped the enterprise win larger accounts and gave it more room to build up operations and test the market as a nonprofit. The company has a carbon-neutral supply chain and operations, gives 25% of pre-tax profits to grassroots groups annually, heavily discounts products for schools and nonprofits, powers its offices with wind and solar energy, and offers employees a $250 monthly transportation stipend. Now, its new retail line opens up the opportunity to educate and influence consumer behavior through packaging and marketing.

If you like this interview you should thank Aseem on Twitter like this. You can follow World Centric at @WorldCentric.

About World Centric Products

World Centric products are made with annually renewable resources like corn, sugarcane and wheat straw fiber. Sugar cane and wheat straw fiber are also discarded by-products of the agriculture industry, and it uses this discarded fiber to make sustainable alternatives to plastics and styrofoam.

A social business venture packs a lot of punch. If you care strongly about mission and impact but don’t want to solicit donors and institutional funding, it might be the right model for your work.

By definition, this type of enterprise generates profits, which are reinvested into the business to advance the cause and sustain the company financially.  The business exists to ameliorate a social or environmental concern, not to maximize profits. It sounds Eden-like, but it’s still a living breathing thing, which incurs challenges and benefits. Let’s take a quick look at some.

Challenges

• Dual priorities. (At times) it will be difficult to balance your company’s social mission and financial sustainability. Unavoidably, they’ll sometimes clash.
• Succession can be tough. Conceiving and building a social business venture often takes someone with strong leadership qualities and personal vision, which can make succession hard. Philip Rosedale is the charismatic founder of Linden Lab.  His leadership style gave employees the option to vote on his dismissal every quarter. Eventually, they voted that he wasn’t adding as much value to the company as was needed, so he left–only to return eight months later to lead again.
• Replication.  Traditionally, social businesses have been harder to replicate than mainstream businesses.  If you set up a venture to meet social and financial needs, it’s going to have a very specific structure and approach that fits the sector, country, funding, culture and laws where it operates.  Another threat to replication is the relative limited funding options for social business.

Benefits

• Society can relate. Consumers, investors and employees can relate to a social venture more than to a leveraged nonprofit or hybrid nonprofit because capitalism is still at play.  A social business is a more attractive partner, supplier or investment.  This type of venture can solicit capital (something a nonprofit hybrid or leverage nonprofit can’t do).
• Iconoclast potential. We admire social impact organizations that are financially self-sustaining. And we admire entrepreneurs who’ve found innovative ways to use business for good. Just look at Muhammad Yunus.

Tomorrow, I’ll profile an expanding social business in California that you’ve likely never heard of.  But, I’d love to hear from you! What companies and entrepreneurs should be sharing their stories and experiences here?

In full disclosure, I sometimes feel I’m splitting hairs when I try to isolate different types of social enterprises–I’m about to rename this site the Mobius Trip.  So weigh in or push back.

I’m refocusing on the crux of cause capitalism: building a business to drive social (or environmental) change because I believe that the force of capitalism can be used to solve many of the problems we face and because it’s in companies’ best business interest to do so.

I see cause capitalism is a continuum with CSR and cause-related initiatives (like PRODUCT(RED)) at one end and non-profit social enterprise at the other (like Living Goods).  In the middle of the spectrum is the social business venture (which I frequently call purpose-driven business).

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A social business venture:

• Is specifically conceived and structured to drive social change;
• Generates profits but doesn’t prioritize maximizing earnings for shareholders. Instead, profits are invested in the population or cause the enterprise serves and reinvested into the business; and
• Attracts investors looking for both financial and social returns. This structure (as opposed to a non-profit social enterprise or hybrid social venture) gives the company greater financing and scaling opportunities because it can assume debt and equity.

In their book on social enterprise, The Power of Unreasonable People, John Elkington and Pamela Hartigan call this structure Model 3.  I want to be clear that Model 3 is not better than Models 1 or 2–Leveraged Nonprofit Venture and Hybrid Nonprofit Venture, respectively.  Each model supports different missions and needs.

Briefly,

• Leveraged Nonprofit Ventures (Model 1) tackle market failures that are extremely difficult to resolve with a for-profit model. “Generally [Model 1 enterprises] operate where the market air is too thin for mainstream businesses to even think of venturing.” For example, enterprises serving the bottom of the pyramid.
• Hybrid Nonprofit Ventures (Model 2) serve “populations that have been excluded or underserved by mainstream markets.” Making a profit is possible, but the organization isn’t predicated on it. The enterprise recovers some of its costs by selling a product or service.  One example is Greyston Bakery.

There are different forms of social business ventures even within the definition here. This week, I’ll highlight some social venture businesses and look at the challenges and benefits of this model.