As more companies embrace the concept of purpose-driven business, organic brands and organisations have an opportunity to become an even bigger force for good.
That was the message from participants in a special panel discussion during this week’s Soil Association Virtual Insight Sessions.
Bourne asked Ben Reardon whether there were any “trade-offs that businesses like Abel & Cole needed to grapple with between profit and purpose”. Reardon told him: “I don’t think there is so much a trade-off between profit and purpose, but there is a timing issue. So, for businesses like us it’s really important to invest up front for the future. And our track record shows us that doing the right thing increases profitability at the same time”.
Reardon gave as an example of this, Abel & Cole’s box policy. “As any of our customers will know we return and reuse all of our boxes. We are actually more profitable as a business by investing in boxes that are strong enough and robust enough to be used many times. They’re quite expensive, but if we were a one-use packaging company we simply wouldn’t be able to run a business on the model that we do. So, doing the right thing absolutely aligns with making the business profitable and sustainable.”
Reardon cited switching delivery vehicles to CNG (compressed natural gas) as another example. “Although the initial outlay of vehicles is more expensive, over time they are more economic and sustainable to run. So in the long run you can make a good investment case for doing the right thing.”
“Businesses do need to make money but thankfully they are increasingly realising that just making money isn’t enough. They need to make a difference as well”
Reardon emphasised the distinction between businesses with purpose, and charities. “Businesses do need to make money but thankfully they are increasingly realising that just making money isn’t enough. They need to make a difference as well. Back in 2006 we created a little model that we stuck up on posters all around the company – and we called it the multiplier effect. It was designed to show the team that trying to sell more stuff and growing the business wasn’t an evil pursuit it itself! We could do more of the stuff that lots of the staff had joined us because of, if we had more money and greater reach.”
Bourne asked Victoria Hurth how businesses could bridge the “short term cost of embedding purpose, compared to the long-term gains”. She said: “It’s a really important question, and it does depend on what market you’re in. What type of business you are. But mostly it depends on how you view your system – that’s why you have to be clear about what kind of value you are trying to create. What is your strategy for moving your system? So, for example, you might have stakeholders as shareholders for example. And they are demanding a certain type of return, because that’s what they would have expected in the past. And that drives you to need a certain level of profitability. But if profits are not the outcome, but are the way that you enable your business to thrive and you can bring on board the right kind of investors, you don’t have to deliver so much profitability.
“And on the other hand you might want to think about how you talk to your customers. It might be that if you are trying to sell a certain type of product to a certain type of customer that will be unprofitable. So the question is, can you help transition that customer to see the extra value of what you are producing?”
Acknowledging that organic businesses “have always been purpose-driven”, Bourne asked Helen Browning about the evolution of how the idea has been articulated within the sector. Browning told him: “One of the reasons I’ve have absolutely loved working in the organic sector through the decades, has been that those values have always been at the core of the movement. And and when I was setting out in this, over 30 years ago, there was always a sense of family that was slightly rebellious against some of the norms, and the drivers of Thatcherism – I think that’s been such a big part of our DNA. I don’t think we actually expressed it in that way, and I think what is coming through now is perhaps a more disciplined way of thinking through the challenges we have around purpose.
“I think being more explicit and more disciplined about challenging ourselves over where is the biggest impact that we can make, where are those trade-offs, how we going to resolve them, how are we really going to behave and the chips are down – more of this deliberative thinking is coming through. To some extent it’s been led by B Corp and some of the bigger brands who have done this in open space, and I think that’s really been helpful to see the thinking that big businesses and brands are doing. I think it gives all of us in smaller businesses and organisations the opportunity to check our logic.”
Bourne then asked Ben Reardon about Abel & Cole’s experience as a B Corporation business, and how it had helped in promoting a more collaborative approach among businesses. Reardon told him: “It’s been a really good experience. I think it’s actually something that we probably underestimated the value of, that experience of collaborating with like-minded companies and organisations who are at different stages of the journey through B Corp – lots of whom are also organic, and the Soil Association is very complimentary to the B Corp process – and it’s been massive eye-opener for us.
“The number of ideas that are generated by people in collaboration who are experiencing the same things, and are sharing the values that you are, is impressive. And the benefits of that are being noticed by some larger corporations, who B Corp are successfully drawing in to the process”.
Bourne then asked Victoria Hurth for some tips she could offer small business that they could put into practice tomorrow, and which would strengthen their purpose. She answered: “There are clearly many different types of businesses at varying stages of the journey, so it will vary a little bit. But this is really all about channelling energy towards achieving those meaningful goals. You need to get stakeholder representatives in the room, and you need to tap into the intelligence and energy of the organisation… you need to challenge whether you have a purpose – whether it is expressed as you want it to be, whether as brands your values are all aligned and pointing in the same direction.
“You need to get stakeholder representatives in the room, and you need to tap into the intelligence and energy of the organisation… you need to challenge whether you have a purpose”
“…(you need to ask) what purpose does to help businesses understand themselves. It’s also about asking questions of yourself. You know, why did we use this piece of campaigning material, what is its purpose?
“So what I would say is, the first thing you do tomorrow morning is sit down with a team of people and start mapping out your value creation system. And ask yourself, is this going where you want it to?”
Bourne closed the discussion by asking the three panellists what they saw as the role for organic in helping a business finds its purpose.
Ben Reardon said: “Organic for us is an absolute cornerstone for the business – particularly at this moment in time, with climate crisis, loss of ecosystems and biodiversity, it’s critical. And I think having the pillar of the organic to build on, with all of its consistency, is an enormous strength for us. And it’s something that we have championed over the years.”
Victoria Hurth was ready to up the ante: “I’d say that if organic isn’t your purpose, or isn’t a major way to deliver your purpose, I would ask what alternative are you using, that you know will be able to contribute to long-term wellbeing outcomes – and tell us about it!”.
“I think with me there is always a ‘no complacency’ message. I will always be asking how can we build on what we have achieved to date.
Further and faster
Helen Browning gave the closing remark: “I think that organic is the minimum that we should aspire to now in the world, at least the do no harm part of organic – that should be absolutely mainstream. I think we need to continue to be ambitious about what organic can’t deliver more of.
“I think with me there is always a ‘no complacency’ message. I will always be asking how can we build on what we have achieved to date. Because there is much more to do. We need to go further and faster. Organic is a great place to start. It’s the only place to start.”