The Number 1 Strategy for Long-Term Entrepreneur Success: Be Cause-Driven!
There is no magic formula for a startup. But in today’s world, it is not just about focusing on the bottom line – generating revenue and managing expenses. Customers in 2018 make choices not solely on the cost and quality of a product or service, but whether the company itself is doing good. That means for entrepreneurs who want to succeed you must practice the principles of the triple bottom line, “People, Planet, Profit” embodied in Benefit Corporations and B Corps.
One of the fathers of contemporary business leadership, Michael Porter, stated "businesses must reconnect company success with social progress...it is not on the margin of what companies do but at the center.''
How Socially Responsible Entrepreneurs Succeed
Developing the ability to create relationships with customers around similar values e.g. sustainability, social justice or healthy communities. This provides a foundation of trust and leads to sales. 68 percent of global consumers would remain loyal to a brand if the organization practiced social responsibility. The key is to be authentic with messaging and branding.
Becoming a company that truly is socially responsible gains an edge in recruitment and retention. Living the principles of people, planet, profit enhances morale. Millennials, who are aligned with these values, want to work for these companies. It gives them a sense of purpose, pride and camaraderie.
Being socially responsible leads to more credibility and differentiates the company. For many small companies, it is hard to create unique branding that provides a competitive edge. Identifying as a Benefit Corporation or B Corps, committed to the triple bottom line, is a powerful message that resonates with today’s demanding consumers and makes the company stand out.
Understanding that investors are increasingly looking for social responsibility within a business’s core mission. Many potential and current shareholders view efforts around social good, e.g. sustainability as a sign of company health and future profitability. In fact, once a startup goes public, social responsibility initiatives can improve the company’s stock price by getting listed in indices like FTSE4Good and Dow Jones Sustainability.
According to an Entrepreneur Magazine article:
Social responsibility is a strategy for the long-term health of a company. While the benefits of building your startup on philanthropic strategies might not be evident at first, remember the value and satisfaction of adhering to the Triple Bottom Line often surpasses the cost.
Many startups put off social responsibility till they get their “house in order” and begin making a profit as a company. But this is only the case if you view social responsibility as curb appeal, not as a core element of the company where philanthropy has the greatest impact and can produce the greatest results.
Finally, interviews with successful entrepreneurs back this philosophy up. In the book “Putting Soul Into Business” the CEOs of successful businesses share their perspectives around how social responsibility can have a positive impact on a startup’s growth and profits.