Integrating ethical business practices is good for all of us. But it’s also in *your* best interests.
You’re probably familiar with the notion that a successful business mind is not only shrewd, but cunning, cutthroat, and in an indiscriminate pursuit of the quickest profit. Somewhere along the line, we’ve been sold on the false premise that kindness, compassion, and empathy have no place in business survival.
We’re here to debunk that myth, and show that you can create a highly profitable business without compromising on the values that make us human.
In fact, being a kind business is a smarter strategy if you’re planning to play the long game, and has its own financial and operational benefits, which we will go over in more depth.
Most people abandoned the concept of kindness, not because they lack interest, but because they didn’t clearly understand what it meant, and they couldn’t define a clear return on any ‘sustainable’ investments they made. They fear that they’re overspending to catch up with trends. But having a kind business is not a trendy word or temporary, and it’s not going away. We’re not ever going to go back to doing business like we did last century. Click here to learn what is sustainability. (link to Lyndsey’s post).
Here are some of the main personal benefits you can start reaping as a result of conducting your business the kind way:
It drives our collective advancement:
Think of everything that made your e-commerce business possible: Services, technology, down to the applications and widgets that enable you to make your online sales. They were all made available to you, because someone was well off enough to innovate and create them.
For thousands of years, the pie was fixed and resources were limited. To get a bigger piece of the pie, you had to take away from someone else’s slice. This is known as the zero-sum economy.
After the industrial revolution, every sector expanded in productivity, the pie got bigger, and its potential to grow is now virtually endless.
In a positive-sum economy, it is in our best interests to help empower the less privileged. When someone on a remote side of the planet thrives, they are more likely to innovate, create, and produce, thus increasing supply.
Moreover, by being more well off themselves, they increase demand for products and services, making them more likely to be produced. In other words, the more people want (and can buy) what you want, the more likely you are to find it in the market.
Improved brand image and competitive advantage:
More than 53,000 U.S. consumers were surveyed by the Natural Marketing Institute, and they discovered that 58% of consumers consider a company’s environmental impact, when deciding where to purchase goods and services. They found that these consumers are more likely to purchase from companies that practice sustainable habits.
In more precise numbers, this means 68 million Americans who are predisposed to buying from companies showing positive practices in personal, social, and environmental values.
The improvement of brand awareness through “doing good” is becoming one of the pillars of advertising campaigns. Take for example Toms Shoes. Set out to sell a lifestyle, rather than being a mere shoe company, Toms donates one pair for every pair of shoes purchased. Toms is also committed to improving lives around the world through different social programs that goes beyond giving shoes. As of last year, Toms has annual sales north of $500 million and donated over 70 million pairs of shoes to needy children, with this social mission as their primary competitive advantage in a crowded market.
Build Customer Loyalty and Positive Publicity:
Having a loyal customer base is one of the keys to long-term business success. It costs 7 times more to acquire a new customer than it does to convert from an existing one. (insert link to Academy post) Therefore, it should be every business’ goal to increase the lifetime value of their existing customers. A company’s reputation for ethical behavior can help it create a more positive, sticky image in the consumer mind, which can bring in new customers through word-of-mouth referrals. Take for example Combat Flip Flops, who send an Afghan girl to school for a day for every flip flop purchase. Or, Headbands Of Hope, who donate a headband to a child with cancer. If a customer was wearing flip-flops, or headbands from an average run of the mill company, and received a compliment about it, they might respond with a simple “Thank You”. However, if they were wearing items from these businesses, and assuming that they know about their social mission, you can bet that they will follow with an enthusiastic sharing of information about “all the cool things” that this company does and even spark a conversation about the cause that they support. And just like that, you gained yourself a brand ambassador, a referral, and your business instantly stood out. Similarly, having a kind business means higher chances of attracting positive publicity. Journalists, blog writers, and influencers alike, are all looking for interesting material to write about. Everyone loves a little bit of inspiration, and while you don’t have to do big things to make an impact, every bit of positivity brings joy to the world, and influencers in the media are more likely to align and collaborate with your business in that case.
Attract and Retain Good Employees, and Foster a Positive Work Environment:
The new generation in workforce cares deeply about creating positive societal, economic and environmental impact. Social Responsibility attracts and retains talent because it creates employee engagement and competitiveness that goes beyond salaries and benefits.
Take this speech about Millenials by Simon Sinek, in which he explains how millennials describe their number one reason for job dissatisfaction as lack of purpose and impact.
And if you think millennials are old news (I’m offended), then you should know that social responsibility and charitable impact appeal to Gen Z, just as they do to their Millennial predecessors. According to Marketo, 60% of Gen Z workers want their work to have a positive impact on the world:
Even if your business is a small one-person show, you know that one day, you’re going to need help. You simply cannot do it all on your own. When the time comes to attract talent, you want people with good ethics, who believe in your business as much as you do, and who are in it in the long run. Failure to attract such individuals means higher turnover which means higher training costs, and lower engagement rate. By establishing a kind culture in your company, you attract better team players, who are inspired to work with you, and to whom you can ultimately give more autonomy so you can focus on bigger things.
Reduce Operational Costs and Waste:
You might think you’re only doing good to the planet when you reduce harmful waste products such as emissions and toxic byproducts. However, your pocket will benefit as well. Enforcing such standards, over time, can reduce costs in energy use, labor, transportation and material inputs, creating less waste. Reducing or eliminating toxicity means you no longer need to use safe disposal and containment fees. Fines and penalties are also reduced through green manufacturing. Using energy efficient lighting is another way to reduce spending, since these lights last longer and require less electricity to operate. Solar panels can also reduce energy costs, although their initial implementation may seem costly, in the long run you end up cutting costs. Producing smaller volumes may seem more costly in the beginning, until you discover that you’ve saved thousands in inventory and storage fees. In short, going green and zero waste may seem more costly at first, but with better use and conservation of resources, operations will be streamlined and costs will decrease.
Increase business ability to comply with regulations:
Regulations are getting tighter around all aspects, whether it be something as big as environmental impact, or as “small” as not spamming a prospective customer with an unsolicited email. Integrating ethical business practices will put you in a position to meet these regulatory requirements in a timely manner.
Improve Financial and Investment Opportunity:
Thinking of going big? Financial and investment analysts have recognized companies who have developed environmentally sustainable practices as an important investment criteria. According to the U.S. Sustainable, Responsible and Impact Investing Trends Report: https://www.ussif.org/trends, the market size of sustainable, responsible and impact investing in the U.S. in 2016 is one fifth of all investments under professional management.
Good Karma, and being able to sleep at night:
A successful business relies on several parties, comprised of its customers, directors, employees, suppliers, shareholders, and the community. Therefore, a business has moral obligation towards its surroundings. As an ecosystem, everyone must be treated fairly, in order for the organism to survive and thrive. Doing good means less stress to you in the long run. Having honest, open practices will help avoid lawsuits or sanctions for malfeasance. It means that you can bask in the knowledge that you’ve built something to be proud of, and that ultimately, what you put in, sooner or later, you will get back.
How kind is your business to the world and its people?
We compiled this checklist of simple sustainability ideas as a quick way for you to see how kind your business is. This covers the basics, but should give you an idea of the direction you’re company is moving to. Ticking more items on the checklist, increases your kind score. If you achieve a minimum score of ten, we’d love to work with you and feature you to our community.
If you are not able to score the suggested amount of points at this stage, don’t stress! We want to help you reach the point of running a sustainable, ethical company. Join our Mailing list and receive educational content that is both accurate and inspirational.
Our sole aim is to make this world a kinder place and you can be part of it.
We’re looking forward to hearing from you!