“There is no perfect company to invest in where you get great returns and it does absolutely nothing to damage the planet. Yet, all businesses should try to strive towards that perfection.”
” That was the opening statement made by restaurant entrepreneur”Iqbal Wahhab OBE, at a panel discussion entitled, ‘Business As a Force For Good,’ last week.
Hosted by one of the UK’s foremost redbrick institutions, The University of Reading, the discussion made up an event that included one of the most exciting entrepreneurial competitions to date.
Fostering the next generation of impact entrepreneurs
There are millions of bright, intelligent minds out there with some great ideas about how to change the world for the better through business. However, the gap between having a great idea, and finding the support system to nurture it is vast.
Paul Lindley, child health campaigner and founder of the vastly successful organic baby and children’s brand, Ella’s Kitchen, is the brains behind this particular project.
His goal is to link the winning candidate with a great impact idea to the research-based resources of an academic institution, as well as to a network of other entrepreneurs and potential investors who can help get it off the ground.
But before we get to the finalists’ pitches, here’s what these entrepreneurial panellists had to say about the state of impact business today.
What’s the issue with the current state of impact business?
Impact business, or running a business with “impact” is a confusing topic. Why” Because the understanding behind what impactful business looks like remains muddled.
Questions need to be answered including, does being an impact business require implementing a separate ‘social enterprise’ arm to a company” Should it always be an add-on policy to a company?
” Or to be called a true ‘impact business’, should companies integrate an impactful culture into the heart of their founding mission and daily operations?
Who’s the panel and how do they see impact?
It was up to this panel of entrepreneurs, including?Stephen Adams, Head of Equities, Kames Capital, Sacha Romanovitch, Former CEO, Grant Thornton, Iqbal Wahhab OBE, Founder, Roast and the Cinnamon Club, and Jenny Costa, Founder of Rubies in the Rubble, a food recycling SME, to convince us that the latter was the way to go.
Impact as ‘the norm’
They believe that doing business and having a positive impact on society should go hand-in-hand, and not only hand-in-hand, but so seamlessly that you can’t tell where one ends and the other begins.
“The thing is that the impetus for doing business with impactful companies is coming from consumers themselves,” adds?Wahhab. So, it’s even more important that companies shape up and ‘get their impact in order’, for their sales, and very livelihoods could depend on it.
Consumers like impact businesses, so why aren’t more businesses impactful?
“We’ve seen time and again how consumers like to buy goods or services that ‘give back’ in some way,” he continues.
?” But if what Wahhab is saying is the case, then isn’t the solution clear” Namely that ‘impact sells’ and all businesses should implement that culture into their operations if they want to make sales” Well, it is clear, but businesses are still not implementing impact properly, the panel says.
Poor impact policies vs none at all
Despite the well-known consumer appetite for engaging with impact businesses, many businesses and their leaders continue to make shallow impact implementations or none at all.
But what’s worse
Well, ineffective and half-hearted impact policies devised to tick CSR boxes are more ineffectual than doing nothing at all if the goal is to make business change the world for good, say this panel. Let’s hear more about what they have to say…
From what direction should the change come from?
Should the government(s) get involved
“The answer could lie in legislation and therefore in government action,” says?Sacha Romanovitch, a former Grant Thornton CEO and passionate advocate for impact in business.
“Businesses cannot be impactful in isolation, you need to deconstruct the system. There has to be cross-party support as well as passionate CEOs who want to strive for change. This issue will only be overcome by having passionate people getting together to do it.” ?” Sacha Romanovitch
By legislation, the panel is inferring that national governments should take the lead on ensuring that all businesses are impactful:
“Look at the United States, it’s the dominant actor in the global business economy. Leading world economies like the US and China should be championing the implementation of impact in business,” adds Romanovitch.[article id=”124211″ title=”Here are some of the UK’s top impact businesses”]
A passionate leader isn’t enough to make an entire business impactful
Romanovitch went on to say that during her time at Grant Thornton, she had felt that the organisation could have “done impact differently”.
” But as one person acting in an almost institutional cog, even if she was ‘at the top’, it was hard to lead a new discussion on impactful business and change implementations from an isolated standpoint.
Even taking charge as a CEO won’t change the system
This shows that a passionate CEO with good intentions isn’t enough to make a company impactful. Even if they are a high-level leader in a company, if they’re not the company creator, there will be a lot of persuading to do to convince the rest of the business of their views, and Romanovitch’s struggles at Grant Thornton is evidence of that.
Coupled with a lack of government intervention, business leaders who are genuinely?passionate about enacting impactful change to companies will continue to face an uphill struggle.
Dismantling the entrepreneurial ego
So, what should this dreamed-for impactful way of doing business look like
Well, for starters it’s not about entrepreneurs with big egos thinking they know how best to give back to society through their business.
Impact on one side of a company doesn’t make the entire business an impactful entity
There are some entrepreneurial oligarchs, (who shall not be named but who can be guessed), who?give money back to society through affiliated foundations connected to, yet distinct from their central company.
“Whilst, on the outside this makes them look like they are ticking the impact enterprise box, they may support business practices within the operations of their company that are the opposite of impactful, whether that’s through zero-hour-contracts or other poor working conditions.”
In essence, doing ‘right’ in one channel of a business does not an impactful business make. ‘Giving back’ must start with the brand, and end with it says the panel.
Tech gave us hope, but they became the business oligarchs of our age
“When the tech start-up culture came into play, we had hope that they would be the future of real impact business,” says Romanovitch.
“Think about it, these were businesses that were using new technology to change the world. But these promising enterprises then became the oligarchs of the business sector,” she adds.
“These microentrepreneurs were going to be the next great impact changers, but it never happened.” ?Sacha Romanovitch
We don’t have to stretch our imaginations very far to realise who these modern-day business giants are, (cough * Facebook). Are such companies creating a fully integrated positive impact on the world through their business model” You decide.
Make an impact policy so normal that it’s not token anymore
So, what are these entrepreneurial panellists getting at when they say they’re calling for a new way to do impact business?
The collective answer they have is to remove labels such as “impact” or “social enterprise” from doing impactful businesses, and make enacting a positive social change through business, simply business. No more profits vs social enterprise, they should be one and the same.
When and how do impact businesses lose their touch?
How is it that a number of businesses that start with good (and impactful) intentions begin to lose their touch?
“The bad business practice can happen when the business has got a little too big,” adds Romanovitch.
“Just because there was an SME that was founded with a specific impact mission doesn’t mean that mission will be retained if it grows to a global giant,” she adds.
So what are the possible solutions?
Do we need to bring the impact economy down to scale
Piers Linney, a former BBC Dragons” Den investor weighed in on the debate from the audience and gave the panel a possible solution, “usually fully impactful brands tend to be from smaller companies,” he says.
“However because of their smaller size, their goods can be expensive. What we need to do is bring the economy down to scale by moving these impactful brands down the pyramid.”
Positivity is great, but is it more important that we get rid of harmful businesses first?
Whilst this is an interesting point, another entrepreneurial guest, founder of Toast Ale and campaigner on food waste,”Tristram Stuart, says the problem isn’t necessarily making businesses act more impactfully, it’s about rallying against the businesses that are actively “doing bad”.
“Just because there is an economy where businesses are doing good doesn’t mean there aren’t businesses out there ‘doing bad’. So how do you make better capitalism” Is legislation the key?” Tristram Stuart, Toast Ale
He then gives the example of the palm oil industry and the rapid deforestation it’s causing around the world:
“The existence of an eco-friendly palm oil brand isn’t impactful in and of itself, as there are still companies actively engaging in deforestation to source palm oil,” he continues.
How can we make the art of ‘doing business’ truly impactful” On the basis of the above discussion, it’s got to come from all sides, from government legislation and from activism within the entrepreneurial community.
Or perhaps it’s more about culture and time, and with the next wave of young entrepreneurs, may come impact policies that are subconsciously entwined within a company’s founding aims, culture and mission.