Sunday, December 22, 2013

Key Strategic Partnerships

 The Yellowstone Business Partnership was founded to work across jurisdictional boundaries on large, ecosystem-scale issues that individual communities can’t tackle on their own. As an organization, we strive to bring together diverse viewpoints and identify actionable strategies to live and grow community within the Greater Yellowstone Ecosystem and beyond.

This is certainly easier said than done. One major focus point moving forward is growing our partnerships. We work with extraordinary groups and individuals, and the opportunities for collaboration are boundless. Regrettably, our time for cultivating such partnerships is not boundless. Here are a few key strategic partnerships I believe we need to dedicate significant time and energy toward.

Perhaps one of our greatest untapped strategic partnerships is with our UnCommon Sense graduates. To date 43 businesses and organizations have completed the program. Only about 5 remain actively engaged with the program, serving as mentors, instructors, and advisors to new classes. Around 10 are occasionally engaged; 17 are generally supportive of our work and remained inactive members; 8 have been unresponsive to communications, and three may not even be in business anymore.

The caliber of organizations and businesses with which I have been fortunate to work is astounding and one of the reasons I love the work I do. Consistently the greatest benefit of UnCommon Sense that is called out is the networking component of the program, how it’s structured to connect the organizations to each other and to encourage collaboration. We need to develop a clear strategy to grow these relationships and partnerships.

The Story of Stuff Project
This past April, I had the incredible pleasure of meeting and working with one of my all-time heroes, Annie Leonard, creator of The Story of Stuff Project. We invited Annie out to speak at the 2013 UnCommon Sense graduation of our 6th class, the “Common Scents”. She spoke to change by design as opposed to change by disaster, moving from individual to societal change, and the power of community. Annie lives and encourages a sharing lifestyle, choosing quality time over stuff. Her neighborhood community of six families collectively owns one car, one trampoline and one power drill (did you know the average lifetime usage of a Home Depot power drill is 15 minutes?). She abhors the mass of “poorly designed toxic containing over packaged crap that we have to throw away because it can’t be fixed”, which speaks directly to my values and is one of the core culture shifts we focus on in UnCommon Sense.

One of the most impactful statements she shared was this: “Martin Luther King didn’t say ‘I want a 20% reduction in segregation every year until 2020’. We’re taking half steps moving toward a solution not half steps solidifying a flaw in the system.” Annie and crew’s newest project, The Story of Solutions, “explores how we can move our economy in a more sustainable and just direction, starting with orienting ourselves toward a new goal.”

BGI network
As I near completion of my MBA in Sustainable Systems from the Bainbridge Graduate Institute (BGI), I see the power of connection becoming more and more evident. The BGI community is social entrepreneurs, innovators, impact investors, change agents and sustainability pioneers. It is people living their passions and working together to “change business for good”.

A few months ago I posted a question to the community asking if anyone had connections to an intellectual property lawyer. Within two hours, I had messages from 3 alumni connecting me to 6 colleagues. I know that I can call up anyone connected to BGI, and from that mutual connection an immediate level of mutual respect is created.

BALLE (The Business Alliance for Local Living Economies) was founded on the idea that local businesses working together have the greatest opportunity for positive impact within their own communities, and that local communities connecting to one another sharing resources and ideas creates a stronger collective voice. “Within a generation, we envision a global system of human-scale, interconnected local economies that function in harmony with local ecosystems to meet the basic needs of all people, support just and democratic societies, and foster joyful community life.”

YBP has an existing relationship with David Korten, founding board member of BALLE. Mr. Korten was the keynote speaker at YBP’s annual conference in 2012, where he spoke on how to create a framework for local living economies.

B Lab
I met Jay Coen Gilbert, co-founder of B Lab, while he was a CAIR (Change Agent in Residence) at BGI last year. B Lab is a non-profit organization third party companies to become certified benefit corporations, . B Corps certification upholds rigorous standards of social and environmental performance, accountability, and transparency. B Lab also works to pass state-level legislation to create the legal framework for Benefit Corporations, to give leaders legal protection to pursue a higher purpose than profit. B Lab also maintains B Analysis, a comprehensive database of verified social and environmental performance data for benchmarking, measuring and reporting on impact, to help “measure what matters”.

Naturally I cornered him at every opportunity to learn more about B Corps and explore ways that we could incorporate B Corps and the work of B Lab into the UnCommon Sense curriculum. UnCommon Sense is deliberately not a certification program, as we work with such a variety of industries and organization types/sizes.


All of these organizations are natural alliances with which to form collaborative and mutually beneficial partnerships. They are doing important and inspiring work to create a better world; and we have an existing relationship with them. Their missions and visions align with everything we are trying to accomplish in UnCommon Sense and with YBP. There are countless others that could become valuable partners. The Social Venture Network? The SRI Conference on Sustainable, Responsible Impact Investing? I welcome any suggestions or connections to other potential strategic partnerships.

We are all focusing on game-changing solutions to systemic problems. The Story of Stuff Project sums it up succinctly: “We’re a Community of 500,000 change-makers worldwide, working to build a more healthy and just planet. Together, we believe it's possible to create a society based on better not more, sharing not selfishness, community not division.”

Wednesday, December 18, 2013

To Be or Not To Be? For Profit vs. Non-Profit

I’ve been doing some thinking lately about business structures, specifically around my organization’s UnCommon Sense sustainable operations leadership program. This program is operated under the umbrella of The Yellowstone Business Partnership, the non-profit for which I’ve worked the past 6 years. It’s a two-year peer support program for businesses, local governments and organizations seeking to operate more efficiently and responsibly. When I stop to think about it, it’s a non-profit doing great work and it’s also a business. We have participants that pay a tuition fee and partnerships with grantees (revenue), and we have staff and workshop costs and materials and overhead (expenses). Applying my prowess for complex, higher mathematics, at the end of the day (year, etc.), if our expenses are greater than our revenue, we’re not going to be around for very long.

I have always been drawn by nature to the concept of non-profit work. Non-profits are generally mission driven and have a “greater good” mentality that aligns with my personal values. Non-profits don’t pay taxes, but they also can’t use profits for anything that isn’t in line with the mission. The terminology “non-profit” is misleading, though sadly reality for many of us. Being a 501(c)3 does not mean that your organization can’t make a profit. Indeed, it must make a profit, or at least break even, to stay alive and continue to do their work.

Does being a “not-for-profit” lend an air of credibility? According to the Ivey Business Journal’s research on why Canadian companies aren’t more sustainable, “Claims made my some businesses and NGOs regarding sustainability are perceived to be credible, whereas others are met with skepticism or disbelief. The different reactions are likely related to attributes of the organization making the claims—its size, its structure, its actions, or its motivations…Companies want to know how to communicate their message credibly, so the integrity of their efforts is clear…One manager noted: “Polls show people consider academics and NGOs more credible than corporations and government.”

A business’s primary purpose, in the conventional sense, is to turn a profit and to create maximum value for its shareholders, everything else be damned. Until recently, the only way to get around this was to structure your organization as a non-profit, so you could have the “freedom” of being mission driven and not be beholden to the financial bottom line. Today many companies are challenging that single bottom line mentality and expanding their responsibility list from shareholders (those that have a financial stake in a company) to stakeholders, including customers, communities, flora/fauna, and even the Earth itself. This allows them to make business decisions beyond just what is financially the most profitable. A new corporate structure called a B Corporation enables corporations to be purpose driven and create public benefit for all stakeholders, not just shareholders. The B Corporation declaration of interdependence states:
·      That all business ought to be conducted as if people and place mattered;
·      That, through their products, practices and profits, businesses should aspire to do no harm and benefit all; and that
·      To do so requires that we act with the understanding that we are each dependent on one another and thus responsible for each other and future generations.

For fun, I did a quick google search on “for profit vs. non-profit” and came across a great Harvard Business Review article on the subject. The author (Jane Chen) outlines the fundamental difference between a for-profit and non-profit organization is how it can source capital. “A for-profit can raise money from private investors, for which it must give equity or dividends to shareholders; ultimately, a return on investment is expected. A nonprofit, on the other hand, can seek donations from individuals, foundations and corporations. Such stakeholders generally expect a “social return” on capital.” I wonder if UnCommon Sense could be structured in such a way to provide a combination—a financial return on investment from savings from more sustainable operations, and a social return by quantifying the collective benefits from each participant’s actions?

The article further describes the ways they tried to run their non-profit like a business: sell products/services at a margin and reinvest any profits back into the organization to fulfill long-term goals. This is easier said than done, as they discovered, and ended up created a for-profit arm that was a spinoff from the mission-driven non-profit, whereas the non-profit retained ownership of the intellectual property and through philanthropy could provide their product to the poorest communities that needed it, and the for-profit arm that raised money from venture capitalists and was responsible for capital intensive aspects of the work and setting up distribution networks and selling at a premium to those that could afford it.

This sounds like the best of both worlds, if it’s done well, and certainly an option that deserves further exploration. Chen’s final paragraph solidified this: “Making social impact requires innovative thinking, not just in terms of developing a new product or service, but also in terms of organizational structures and mechanisms for raising capital. The challenges that social entrepreneurs are trying to solve are some of the most formidable problems in the world, in areas with significant market failures, poor governance, and a complete lack of infrastructure. Effectively tackling problems in this environment may require leveraging both capital and expertise from grant makers and private investors alike. Ultimately, social enterprises should not be confined to a single type of legal structure. The most important part of choosing the right structure is starting with your mission, and then adopting a structure that allows you to best achieve it.”

Sunday, November 3, 2013

Humpty Dumpty and the Elusive Business Case for Sustainability

“Business is the only mechanism on the planet today powerful enough to produce the changes necessary to reverse global environmental and social degradation.”
                                                                                                            ~Paul Hawken

We are at a crossroads in our society, and it seems that businesses are holding the cards. It is businesses that will determine the fate of the world as we know it, and whether our manufactured need for the latest and greatest tech gadget every six months will outweigh our need for clean air, potable water and actual food.

For the past six years, I have been managing UnCommon Sense, a leadership and peer support program in sustainable operations. We work with businesses and organizations over the course of two years to implement, track and quantify the successes and challenges of sustainability initiatives, and to make sustainability systemic in their operations. The program has not been given a chance to run at full capacity, and as such I am spending this year deconstructing UnCommon Sense and putting it back together again (Wanted: all the king’s horses and all the king’s men). There are some major program improvements we need to put in place, one of the primary enhancements being a user-friendly, simple and consistent way to track metrics and quantify the business case for sustainability.

Regardless, we’ve had some pretty awesome successes with 56 businesses over the 8 years the program has been running. Results of course vary, yet without fail participants have saved money, reduced their waste stream, reduced energy use, increased employee retention and/or satisfaction, shifted to more responsible purchasing practices, streamlined their transportation needs, reduced their overall carbon footprint, or any combination thereof.

It seems like a pretty clean argument. If you use your resources more efficiently, it will cost you less and you will need less of them. It will save you money. Nike’s doing it, and so is Patagonia. Heck, even WalMart is “doing it”. So then, why is it so hard to get businesses and organizations to commit to sustainability? Why is there such a disconnect between our short-term thinking and the long-term benefits of sustainability (and the long-term ramifications of our current trajectory)?

After six years of recruiting and working with businesses in UnCommon Sense, I have a fairly well rounded list of reasons why organizations don’t/can’t/won’t commit. “We’re too busy.” “We don’t have any staff to take this on.” “It’s too expensive.” “Yeah, it’s something we’ve been meaning to do but we just can’t right now. Maybe next year…”

Out of curiosity, I decided to do a Google search on “why is it so hard to get businesses to commit to sustainability?” and stumbled across The Top 10 Reasons why Businesses Aren’t More Sustainable.

Top 10 hurdles for business sustainability in 2011
1.        There are too many metrics that claim to measure sustainability—and they’re too confusing.
2.        Government policies need to incent outcomes and be more clearly connected to sustainability.
3.        Consumers do not consistently factor sustainability into their purchase decisions.
4.        Companies do not know how best to motivate employees to undertake sustainability initiatives.
5.        Sustainability still does not fit neatly into the business case.
6.        Companies have difficulty discriminating between the most important opportunities and threats on the horizon.
7.        Organizations have trouble communicating their good deeds credibly, and avoid being perceived as greenwashing.
8.        Better guidelines are needed for engaging key stakeholders, such as aboriginal communities.
9.        There is no common set of rules for sourcing sustainably.
10.     Those companies that try leading the sustainability frontier often end up losing.

This article was from 2011, and all 10 reasons are still relevant today. One key point is in dire need of attention and change: “Many people demand cleaner energy but refuse, for example, to allow windmills in their community. How can we help consumers make informed tradeoffs when it comes to sustainability?” Indeed, how can we entice people to put their money where their mouths are?

I went on a search to find the 2013 version, and instead came across Ten Steps to Sustainable Business in 2013, a follow up from the 2011 article that provides a sort of roadmap forward. The common themes are communication, collaboration, and culture change.

1.     Create smart, integrated public policy
2.     Engage value chain members, including industry and NGO partners.
3.     Build a national dialogue on responsible consumption.
4.     Create organizational structures that support sustainability.
5.     Embed sustainability in corporate culture.
6.     Provide clear and equitable directives regarding Aboriginal rights and entitlements.
7.     Create conditions that support sustainability-related innovation.
8.     Incorporate a social license to operate into business strategy.
9.     Prepare organizations and society to mitigate and adapt to climate change
10. Lessen the burden of sustainability reporting.

This is all well and good, but how do we actually make it happen? How do we jump those hurdles and implement those 10 steps above, change our culture from one of disregard to one of accountability and collaboration? The short answer is, the same way you eat an elephant. One bite at a time.