Lean Business Scorecard: Responsibility
#4 Is your business idea good for society?
This is Part 4 of the 4-part guide where we focus on Responsibility.
- Overview
- Part 1 — How Desirable is your idea?
- Part 2 — How Viable is your idea?
- Part 3 — How Feasible is your idea?
- Part 4 — How Responsible is your idea?
- Download the Lean Business Scorecard (download link)
The Case for Responsibility
The Responsibility section is the final section of the Lean Business Scorecard.
In the long-term, it is arguably the most important part of the Scorecard because as inventors of the future, by definition our Responsibility towards making this better must extend beyond the present.
To design a business that shows not just resilience but can thrive far into the future requires businesses to have a strategy that protects them against the bumps and knocks they will receive on their journey.
If you’re reading this and thinking this isn’t important because you’re focused on growth right now, consider the tale of BrewDog.
BrewDog was the fastest-growing drinks brand in the UK in 2020. They had taken a few steps down the B-Corp certification route, but behind closed doors, trouble was brewing.
Despite their efforts to maintain a facade of transparency and responsibility through their B-Corp certification efforts, their overarching strategy to drive growth combined with their lack of meaningful strategy for responsibility towards their employees led to a very public revolt by disgruntled colleagues that was, with hindsight, avoidable.
This oversight may have jeopardised their ambitions to list their company on the stock exchange and they have been in damage control mode to repair their reputation ever since.
A more Responsible Focus
So hopefully this has you thinking now…
How can we design businesses in a way that addresses —
- The long-term needs of our customers?
- The people who serve them?
- The communities we carry out our operations within? and
- Our society and the ecosystems that we are a part of?
How can we make our world a better place for years to come?
To help assess how Responsible a business is in creating a better future, I’ve drawn lots of inspiration from the companies that take their B Corporation certification the most seriously. Companies like Patagonia.
I was also inspired by ideas and comments around Sustainable and Responsible design from Jay Peters and Frans Joziasse of PARK, especially around the idea of the Triple Bottom Line.
As Jay talks about in his article, a new wave of purpose-driven companies are seeking to carry out their business activities in better ways…
“At the forefront of the next wave of consumerism are those businesses that are becoming Purpose driven, balancing their bottom line (profits) amongst social and environmental aspects, better known as the Triple Bottom Line (People, Planet, Profit)” — Jay Peters
Because we’ve already covered the Profit aspect of the Triple Bottom Line in the Viability section of the Scorecard, the focus now in the Responsibility section is on People and Planet.
People and Planet
We’ve covered our customer’s needs in the Desirability section, so to take this line of thought for the Triple Bottom Line through to its conclusion, going from People all the way to Planet, I’ve used Eliel Saarinen’s Design Approach.
“Always design a thing by considering it in its next larger context — a chair in a room, a room in a house, a house in an environment, an environment in a city plan.” — Eliel Saarinen
So using this analogy, we are going to work our way step-by-step back from our customers to consider how a business acts responsibly for…
- The People who serve customers and create value for the business
- The People in the community a business operates in
- The Society a business affects via the usage of its products and services
- The Planet and wider ecosystem that a business affects through their supply chain and environmental impact of their operations
As we review this section, I can think of few other Businesses that exhibit and role model the sense of Responsibility like the apparel brand Patagonia, so we will be using them as an example.
We’ll start by examining how we make both work and life better for the people who serve our customers and work for our business.
Making work & life better
Unless you are flying completely solo or running everything through technology and automation, your people are likely to be one of the most — if not the most — valuable asset in your business.
Similar to how we consider what is desirable for a customer, it’s vital we consider how a business makes both work and life as desirable as possible for the people who contribute to the success of that business.
In this section, we explore these 2 ideas to understand what a business does to create a more enjoyable, equitable and sustainable working environment.
An environment that will keep employees engaged and able to create the most value possible for customers, the business and themselves.
We will be looking at 2 aspects…
Colleague Wellbeing — How we make working conditions better for our colleagues and create an environment where they can achieve personal growth, career development and gain a sense of autonomy, purpose and satisfaction.
Colleague Success — How we make the workplace fairer, more inclusive, more aware of unchecked privilege, more accessible and with more opportunity for all from a wage and career progression perspective.
Reviewing Patagonia’s wealth of evidence in their B-Corp report shows what a corporate program of responsibility towards your employees and colleagues looks like, even those who work within your supply chains.
We’ll focus first on the people who work at Patagonia first as we evaluate their scores.
What’s striking is not just the sheer number and scale of schemes dedicated to employee wellbeing and success, but actually the fact that Patagonia is committed to sharing their certifications numbers even when they have declined in recent years.
Their B Corp rating for “Workers” declined between 2016 and 2019 from 24.9 to 20.8, yet they still published these figures in a transparent fashion.
With this in mind, this is the evidence I gathered for Patagonia.
Scoring Colleague Wellbeing & Success
This is the scoring system for the Ladder of Evidence for Responsibility.
Colleague Wellbeing & Success / Level 1
Intentions are a great starting point. But it’s impact that counts. Businesses with great intentions may say the right things, but do they do the right things when it counts? Especially for their people.
Colleague Wellbeing & Success / Level 1 / Evidence to look for
Look for evidence of a business partaking in occasional efforts towards the wellbeing and success of their workers. It’s likely nothing will be stated explicitly in any company materials towards making conditions better and fairer, but if it is, look for clues that this is not being followed through on. If, for example, board membership from under-represented communities is limited, it’s likely the situation will be the same across the business.
Colleague Wellbeing & Success / Level 2
A business will be taking it’s first steps up the ladder of evidence when it declares publically as a corporation its intentions to work transparently to improve wellbeing for- and fairness towards its workers.
Colleague Wellbeing & Success / Level 2 / Evidence to look for
Look at shareholder and press reports for mentions of schemes to improve wellbeing and fairness. Reports that a business can hold themselves to account to at a later date.
What may be missing is any tangible measures of wellbeing or fairness or anything that would allow comparisons and improvement over time.
Colleague Wellbeing & Success / Level 3
Level 3 will take commitment, but employees and responsibility-minded customers and investors are going to intrinsically buy into a company that looks after the long-term interests of its employees
Colleague Wellbeing & Success / Level 3 / Evidence to look for
The Patagonia example is a brilliant example of the kind of evidence you will find for Level 3. Evidence of major corporate programs that run, audit and report on their efforts to promote colleague welbeing and success, even in the bad years are all strong signs of evidence of commitment to this way of working.
Here are scores I have given for Colleague Wellbeing & Success for Patagonia.
Unsurprisingly, they have full marks. Bravo to Patagonia.
Better for Society
Going back to my chair in the room analogy, after looking at how a business treats its employees, in the final section of the Scorecard we step outside the walls of the business and take the next 3 steps.
The first step gets us to think about how a business improves life for people in their surrounding community.
Do they take steps to hire people from underprivileged or underrepresented backgrounds? Do they run schemes to uplift people in their surrounding communities?
I noted that HSBC recently worked in conjunction with the charity Shelter to launch a fantastic campaign in the UK to break the cycle of homelessness by providing people access to a bank account without needing a fixed address.
This is strong evidence of uplifting people in local communities.
The second step moves beyond the immediate community a business operates in to consider how their business activities make life better for society.
How does their product affect how their customers behave as a group? What effects does this have on society?
Just think of the political disinformation and social engineering that social media platforms like Facebook or Parler have allowed to spread. At what point does something move from harmless memes to political turmoil?
The final step goes beyond the society a business operates in to consider the impacts a business has on all societies and how it contributes to making life better for this planet.
It’s easy to think that it’s someone else’s job to make the world a better place, but if we all think like this and we all look on as bystanders, where does it get us?
We need to make conscious steps towards making life on this planet better.
There is no Plan(et) B as they say.
Before we take a look at the final scoring guide, let’s take a look at the evidence around how Patagonia is working towards a better society.
This is what I captured in terms of evidence for Patagonia working towards a better community, society and planet. Impressive to say the least.
Scoring Better for Society
We will continue using the same scoring system as before.
Better for Society / Level 1
As before, good intentions for giving back to society are a great starting point, everyone has to start somewhere. It’s all about where you take it from here.
Better for Society / Level 1 / Evidence to look for
You may see signs of intentional efforts by a business to take responsibility for making life better for their community, society or the planet but these efforts may not necessarily be measured in any way or well communicated.
Better for Society / Level 2
To reach Level 2 there needs to be a clear articulation of a long-term strategy. A public commitment and vision of what a business is setting out to achieve.
Better for Society / Level 2 / Evidence to look for
Strategic statements of intent with Responsibilty themes. Commitments to public programs for Responsibility. Shareholder reports that set out strategic goals for Responsibility.
Better for Society / Level 3
The key to achieving Level 3 is a continuous commitment to measure, audit and improve on the realisation of strategic Responsibility goals. It doesn’t matter if you occasionally falter as long as you stick with your goals to make life better for People and the Planet.
Better for Society / Level 3 / Evidence to look for
Again, Patagonia is a shining example of how to go all in to demonstrate a rock solid commitment to making the communities, societies and planet a better place. It’s not an afterthought. It’s often the first thought and it’s part of the fabric of how the business carries out their business.
Here are the scores I have given for Better for Society for Patagonia.
I’m sure it comes as little surprise. Full marks again.
Patagonia has
- an excellent track record
- global success
- an army of diehard fans that associate with their brand
- engaged employees and suppliers, and
- a bright future ahead.
What the scores mean for Responsibility
There are a total of 15 points available across the Responsibility section.
Responsibility / Score / 0–5
Recommendation for focus
It’s time to start thinking about future you want to create and the stepping stones your business will be consciously taking to get there.
Use the Scorecard as a starting point and consider first how you will improve the well-being and success of your employees. Set out programs to measure and improve satisfaction and engagement. Capture verbatim feedback. Look for underlying issues to improve on. Encourage a culture of safety so people are willing to share their thoughts and feelings. Run exit interviews to get debriefs on their experiences. Listen and learn.
Move then to your impact on society. Consider how you might improve the impact you are having on your local community and society. Listen to how people are talking about your business. Listen to how your industry is talking and behaving. Listen to what is going on around you and shift from being passive to proactive.
Finally, extend your thinking beyond your immediate business to the impact you have from your supply chain to the consumption of your products and services. Consider what the world will be like if everyone followed your example. Consider how you can be a role model for others.
Responsibility / Score / 6–10
Recommendation for focus
It’s time to shift your Responsibility efforts up a gear. Bake Responsibility strategy and targets into every initiative. Seek to learn what’s working for your employees and what isn’t. Engage independent and honest research into your business to understand the hidden impact your business may be having on the wider society.
Work with your suppliers to understand how you can collectively build a movement for a better society and planet. Give your people time to give back and make suggestions for improvement. Hold yourself to account by publishing your figures. Push yourself by working up to B Corporation certification and tie what you learn from your certification scores back to your tactical efforts to achieve your strategy.
Responsibility / Score / 11–15
Recommendation for focus
If you have already considered applying for it, you should think about applying for B-Corp status, you’re doing great. The World needs more businesses like yours. Keep being a great example to others and spreading the word on the value of running a truly responsible business
Recap
In an increasingly well-informed society where irresponsible business practices have led to poor and unfair treatment of employees, unethical treatement of communities, societal upheaval and the depletion of our natural resources and global warming, it’s never been more important to design businesses that consider Responsibility as a core part of their strategy.
The End
You’ve reached the end of the guide, stay tuned for future updates and teardowns of business ideas using the Lean Business Scorecard.
Like what you’ve read?
I really hope you’ve enjoyed reading this guide and that you put these ideas into practice to help create and invest in business ideas that are truly Desirable, Viable, Feasible and Responsible.
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Thanks for reading.
