2 Words To Ensure Long-Term Entrepreneur Success (Hint: 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 of generating revenue and managing expenses. In 2019, customers 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 ensure long-term success that 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
So specifically, how does a socially responsible organization succeed with their stakeholders? Are there metrics or data to support the claim about the social responsibility of a company?
A company that is socially responsible creates 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 impact-driven and authentic with messaging and branding.
A company that 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. 88 percent say their job is more fulfilling when they are provided with opportunities to make a positive impact on social and environmental issues.
Social responsibility 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.
Investors are increasingly looking for social responsibility within a business’s core mission. Consider what Laurence Fink the CEO of the world’s largest investment company known as BlackRock said in January of 2018: ““Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.” 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.
Finally, our recent interviews with successful entrepreneurs back this philosophy up. In our 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.
To determine if you’re ready to become a benefit corporation, you can take our free “sniff test” here.