The business of business is not just business
This post appeared on Exchange 4 Media and First Post on November 15, 2011. Click on the publication names to see the original articles.
Recently I had the privilege of meeting a couple of committed young people, Apoorva and Diti, who were pained by the spate of farmer suicides in Maharashtra. They decided to do something about it and set up a company called “No Nasties” (www.nonasties.in). This is a t-shirt company whose designer products are 100% organic cotton and 100% Free Trade certified. As they say in their tag line, “Every t-shirt you buy promises a better deal: to the farmer, to the planet, to our future.”
At Adasia 2011, we got to hear from Duncan Goose, the founder of the One project. His company markets a range of products – bottled water, toilet paper, eggs, liquid soap, sticking plaster – with the promise that 100% of the profits will go toward providing those same things to poor people in Africa. See the commercial for the full range of One products.
Conceptually this is similar to Toms shoes, the iconic company in the USA, which promises to give one pair of shoes to a child in Africa for every shoe that you buy from them. They have already given away more than a million pairs of shoes. Now they have moved into spectacles with the same idea. Every pair that you buy helps a visually impaired person get a free pair of spectacles.
These examples make you feel good about human beings. And make you feel good about yourself. You feel virtuous when you buy that t-shirt, bottle of water or pair of shoes. For the company it is good too. They get to establish a business, create buzz around their brand and form a loyal community of customers. Win-win-win all around.
But is this restricted only to small companies? Does each company have to make the choice between being a social business and a profitable company with shareholders?
Back to Adasia. Another speaker there was Joseph V. Tripodi, Executive Vice President and Chief Marketing & Commercial Officer of The Coca-Cola Company. Mr. Tripodi spoke about an initiative that the Coca Cola company has started just last month to protect the habit of the polar bear in the Arctic region. This is not just a small CSR initiative, but a mainstream marketing activity. For the duration of this activity, Coke cans will not be red, but will turn white. Each time a customer buys this pack, she can donate $1 to the cause by simply sending an SMS. Coke has already donated $2 million to the polar bear fund and, in addition, will match donations made by customers. The program will be supported with advertising, screening of the IMAX movie on polar bears and several other marketing initiatives.
Perhaps Coke had to launch this initiative because it had to respond to Pepsi. You may recall that Pepsi has been running its “Refresh” project for the last couple of years. The idea here is that Pepsi will donate “millions in grants” to the best ideas voted by its customers. NGOs can go to the Pepsi Refresh website and post their ideas. Customers go and vote on the ones that they like the best and Pepsi donates money to the winning ideas. Pretty good way of connecting with their customers.
Mahindra has now brought the idea to India. The Mahindra Rise campaign has caused quite a stir as people rush to put up their ideas and then campaign with their friends to vote for them. Wonderful brand connections and the possibility of forming a strong community.
Is this the future of capitalism? You probably know the statistic that of the 100 largest economic entities, 51 are companies and 49 are countries. So as the corporation becomes larger than the state, it cannot stay disconnected from the problems of society. It has to contribute. Not just by donating money but by aligning its core activities with the needs of society. Some are calling this Conscious Capitalism. Let’s all go and vote for this with our wallets.