Tuesday night, sustainability leaders from all over the Bay Area made their way to the Berkeley facility of Clif Bar and Company to hear Gary Erickson, Kit Crawford (the husband and wife co-owners of the pioneering Clif Bar and Company) and Gary Hirshberg (President and CE-Yo of the tremendously successful and equally pioneering organic dairy producer Stonyfield Farms). The event, organized by the Good Business Network aimed to reveal the stories behind entrepreneurs who built wildly successful companies, from both financial and non-financial perspectives.
The stories they shared were inspirational, of course, many of which I’d heard before or read in their books, Stirring It Up: How to Make Money and Save the World, published this year by Hirshberg, and Raising the Bar: Integrity and Passion in Life and Business: The Story of Clif Bar & Co. I left convinced, however, that Clif Bar and Company and Hirshberg fundamentally disagree on the role of social responsibility in a company. The event by no means turned into a bloody fist fight (in which case my money would have been on on Kit), but left at least a few of us with an unsettled feeling that even some of the most respected people behind values-driven companies aren’t really working together.
Clif Bar and Company and Stonyfield Farms are both products of almost fairytale like stories. Clif Bar was started out of Gary Erickson’s mother’s kitchen in 1992, in search of making a better tasting energy bar that he and his buddies could gnaw on during their their 100+ mile bicycle rides The company has since grown to 200 people with revenues topping $200MM a year and a 10 year compounded growth rate of 23 percent. Not bad, considering the company took some incredible leaps of faith in selecting organic ingredients, because they were healthier despite the cost, and fending off acquisition attempts, fierce competition, and the severe debt the company incurred with the buyout of co-founder Lisa Thomas’s stake. Clif Bar and Company not only emerged unscathed, but hit its stride after turning down a $120MM acquisition offer and Thomas’s departure. As soon as Erickson and Crawford realized that they were working for more than money–their true passion was the people and values behind the company–and that an acquisition wasn’t the end game, their business started to truly to take off.
Much like the humble beginnings of Clif Bar and Company, Stonyfield Farms was started from a seven cow organic farming school that started selling yogurt to support its research and grew to become a $300MM a year business. Stonyfield didn’t succeed without a good struggle; the company was unprofitable for its first eight years, but Hirshberg didn’t give up. Stonyfield has become known for its smart marketing, which often borders on activism, combining the social, environmental, and financial missions of the company in every aspect of the company’s activities and brand.
What is Corporate Social Responsibility (CSR)?
Early in Tuesday night’s event, Gary Erickson only half jokingly asked, “what is CSR?” The answer, honestly, did not follow in the hour or so of questions and answers. Don’t fall out of your seat. Instead, ask five experts to define CSR and prepare yourself for five completely different answers. For this reason, I often suggest that we need a new word to describe the values-based approach upon which companies like Stonyfield and Clif Bar thrive today. I like “doing the right thing,” but the phase isn’t, of course, nearly scientific or acronym-worthy to survive in academia.
Both Clif Bar and Stonyfield are deeply committed to minimizing the impacts of their activities on the environment. Clif Bar goes so far as to offer $5,000 forgivable loans (after 5 years) to employees who buy hybrid or biodiesel cars (and $500 for those who choose to buy bikes and ride them to work). Stonyfield is implementing a bonus system tied to employee efforts to reduce their carbon footprint. These companies are leading the way for a business world that is still trying to figure out what Hirshberg means by “talk/do ratio.” Yet, when Crawford mentioned the great pride Clif Bar and Company has in its deep partnership with the community and commitment to volunteering, Hirshberg nearly scoffed. His company, too, pays it employees to volunteer and “that kind of stuff” but philanthropy can’t dilute the focus of a truly great business, he argued. He compared check-writing and volunteering to cutting the leaves and branches off a tree, where the heart of the business and its ability to impact the world positively is the tree itself. And I agree. I am supportive of Clif Bar’s approach to partnering with the community through paid volunteering, since it really does show a deep commitment, in comparison to the companies that simply encourage volunteerism and then ask for them to report back so that it can “take credit” for these efforts. But a responsible business is the tree itself.
Responsible Business is Impact in Four Areas
Here is why I am with Hirshberg. Financial performance aside, companies impact the health and well-being of various stakeholders. These include:
3. Members of the community (global and local)
4. The environment
Therefore, an oil company could attempt to serve the environment by writing a check to an environmental non-profit that is planting trees, or its community by supporting performing arts (I know at least one oil company that does). Yet, the impacts of its efforts would likely be greater if they were directed at the core of its business, working insatiably to provide more sustainable forms of energy to the world. As Kellie McElhaney, Executive Director of the Center for Responsible Business at Haas, says, social responsibility is not how a company spends the money it makes but instead how it makes the money it spends. I am told that she’s synthesized these perspectives in her book, Just Good Business: The Strategic Guide to Aligning Corporate Responsibility and Brand, which will come out later this year.
It is that simple, isn’t it?
Look out for a special post covering Rick Wagoner, General Motors’ Chairman and CEO, on his plan to turn GM into “Green Motors” on Monday. Put it in your calendar.
This is Ryan Mickle’s second post on Triple Pundit. His first was Beyond Green: Adam Werbach and BLUE, Sustainability or Self Help?. Ryan works with many of the consumer brands you know to advance their social responsibility through engaging stakeholders online (we’re not talking CSR reports, either). He lives in San Francisco and can be reached at hey at ryanmickle.com.