5 ways to be a socially-good company without having to solve world hunger
Rule Breaker is the newsletter for people who care about their business being profitable and good for society.
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When I graduated from business school 15 years ago and started working at McKinsey, I though to myself “I’ll do business first and then good later at a non-profit”.
I’ve since realized I was totally wrong. I can do both at the same time and it doesn’t involve charitable donations or volunteer days.
Let’s explore.
Opening Spiel
Normally, when you think of socially-good businesses, they have some sort of sustainable-this, eco-that or inclusive-whatever bent. They solve wealth inequality or malnutrition or rapid deforestation with their core business.
But, not all businesses can directly target a dire social need.
In life, we need all kinds of products and services. Convenience stores, tool and dye makers, concrete suppliers, accountants, and even consultants at McKinsey. These are necessary businesses that don’t naturally fall into the socially-good category.
So what’s a regular, run-of-the-mill company to do?
Normally, businesses use philanthropy or volunteer days to make up for the fact that they don’t solve some big social issue with their product and service.
But that stuff is a distraction.
Instead, it’s the core business that needs to treat our people and planet nicely - not make up for badness after the fact.
Here’s the Rule Breaker view of what makes a socially-good company, even if it’s *just* a tax accounting firm or button manufacturer and not solving world-hunger.
1. Pay your workers a fair living wage.
The most direct impact any business has on society is enabling employees to have a good standard of living.
In capitalist societies, we’ve agreed employers pay citizens wages in exchange for work. Those wages, in turn, are used for housing, food, and other life essentials. The government is only called in as a safety net in bad situations or to provide for basic human rights, like health care (with obvious exceptions).
Paying a living wage fulfills a key social duty of all employers.
To give an example of what not to do - we can look at gig workers, who report they are making less these days.
In Ontario, Uber drivers and other gig workers are pressuring the government to force these companies to give them employee status. They say that without it, they can be making $3 an hour and receiving no benefits.
Making sure employees can afford to live a decent life on their salary is Rule #1 of a socially good company.
2. Give your customers fair value for what you charge.
Remember when people got really angry about Loblaws and others fixing the price of bread?
If you don’t, there is a Wikipedia page, Bread price-fixing in Canada, to document the scandal. (I love the randomness of the interwebs)
This was back in 2018 when it all came to light. The gist of the story is that the largest grocers and bakery wholesalers conspired to artificially raise the price of bread by $1.50 a loaf between 2001 to 2017. At a loaf a week, the average family lost out on $1,200 bucks. That’s a lot of dough. (lolz)
Avoiding a price fixing scandal is the bare minimum.
Better yet, charge a price that is a fair exchange for the value your customer receives.
If my daughter’s magic wand actually worked, I’d switch bank account pricing so that those who get more services (like overdraft protection, cheques etc.) actually pay for those services. Then those that can least afford a bank account wouldn’t be the ones paying the highest rates for the lowest amount of services.
That’s socially-good pricing.
3. Take care to leave the earth as you found it.
Hallelujah - we’ve agreed that carbon-neutral is the way to go!
This summer amid heatwaves across the northern hemisphere, the latest IIPC report said that humans are “unequivocally” to blame for climate change. This comes just in time for when world leaders are gathering to agree to new targets in COP26. (Never have I felt such anxiety about my personal future based on what a small group of people will decide 🙏🤞🙈).
For companies, this means reinvigorating the green team and making sure that you’re doing your bit.
4. Treat the other companies you deal with fairly.
No one liked it when they found out Nike was using sweat shops to make their sweats.
People got mad because despite Nike being a great company, they are still perpetuating badness through their supply chain. Every company relies on others to offer their product or service, even if it is an office cleaner or coffee machine supplier, so it’s not just Nike that has to be thoughtful about this.
Paying suppliers a fair price is the bare minimum.
Better yet, companies can do good by thoughtfully selecting those that are also doing good. You can find them in places like the B Corp directory or in the list of companies that are employee owned.
5. Pay your taxes.
So this one might seem simple but it isn’t.
The stuff that came out in the Pandora Papers is hugely embarrassing for the individuals. And, most of it is legal. So is the fact that Warren Buffet’s true tax rate is 0.10%. But it feels wrong, so obviously the ethics here goes above the law.
We all look to reduce our taxes as much as possible. I do that with my small business. At the same time, there is a degree to which companies should go to reduce that bill.
The straightforward question to ask yourself is: “do you feel proud of the contribution you’re making to the collective pot for shared services with your business taxes?”
If yes, then you’re on a good path.
Parting words
None of the items on the list are rocket science or totally revolutionary. They are simple, core business practices that any business can follow to be socially-good. No need to save the world at the same time.
If you got here and liked what you read, can you share it with someone else? Please and thank you!
Till next time
🟢
Jess
(ps. I tried out the listicle format - what do you think? Got an opinion, drop a comment or reply to this email!)