Is Authenticity the Key to Responsible Enterprise?

26th March, 2015

This blog was originally written for Authenticity Rules

The concept of responsible enterprise and socially-driven enterprise is very much in vogue. We are seeing a definite trend towards more socially-minded small businesses that are getting ahead not only through smart leadership and good products, but because they have been conscious about how they want their brand to be perceived from a social perspective.

Organisations such as Buster’s Coffee, which sells Fairtrade coffee and provides employment opportunities for adults with learning disabilities, or the phenomenal Roast restaurants that have put employability right at the heart of their business model, are fascinating in terms of social positioning. And International examples abound, including SoleRebels, a shoe company that creates jobs in Ethiopia, providing four times the minimum wage for employees, medical coverage, and transportation for those with disabilities.

Of course it’s easy to question whether the motivation of these brands is truly doing social good, or whether their business model is all about improving the bottom line – but really is there anything wrong with being both? Can you be authentic about contributing to the greater good, when you are also focused on making profits? Surely those businesses that can achieve both, give us the very best of both worlds.

When you hear of examples that have raised staggering amounts, such as the Big Knit partnership campaign between Innocent drinks and Age UK it is easy to be cynical. But not only has the initiative raised over £1.75m for charity over the 11 years that it has been running, but Innocent has also seen its profits go from £7m to 250m. This is happenstance perhaps, but there is no doubt that part of Innocent’s success is to do with its responsible messaging and social approach to building its business. Authenticity, in fact.

So as I consider what is important in encouraging businesses to be more ‘social’, the key surely has to be authenticity. If your enterprise has at its heart, genuine social values, then using them as a lever to get ahead of the competition is surely justified.

My own organisation Cause4 has gone through this authenticity dilemma. We’re a profit-making limited company not a formally constituted social enterprise, yet I have no problem now in describing ourselves as a social enterprise. From a definition perspective, we’re a social enterprise in the more American sense of the term – in that we are a profit-making enterprise led by market demand, yet all our profits are ploughed back into talent development and sector changing initiatives. So should we be ashamed somehow that we also seek to make a profit? Well it’s completely counter-intuitive if so, as the core of our business is to advise charities and social enterprises to grow and develop, so it’s more important than ever that we run a good business. How can we encourage others to improve their bottom line – if we’re somehow failing to do so ourselves?

So then how do we distinguish the truly authentic social businesses from those just using social principles in hoping to make a cheap buck? In my view, the hallmarks are as follows:

  • The social value of the enterprise is right at the heart of the vision and mission
  • The founding entrepreneur is passionate on the point of obsessed about the social drivers of the business
  • The enterprise is being built to sustain and grow for the longer-term with the majority of resources being channeled back into the social cause
  • Social values are seen right through the heart of the business, from talent programmes to engagement with customers and suppliers
  • The staff team are there because the social cause is the most important thing. 

Undoubtedly a truly authentic statement of social intent for any business is compelling, but it’s surely those entrepreneurs that have the ability to combine this with a profit-making drive that will see their enterprises forging ahead.

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