Finding Compatibility between Values and Profit
The role of ‘values’ in business is a critical one, especially as more businesses seem to be trying to draw on the perception of authenticity and integrity to sell their wares. At least twice this month I’ve found myself helping others embed principles that initially feel at odds with a profit motive into their business model. How would a business in any sector take an individual principle like creative expression, or a civic value like cultural education, and weave that into their venture’s bottom line?
Incorporating ‘Social Entrepreneurship’
One obvious way to explore this would be through social entrepreneurship, a business model in which you don’t just make a profit, you have to make a difference as well. This includes specific forms like Community Interest Companies and B-Corps, but can equally include charities, mutuals, co-ops, and for-profit businesses who work or donate towards a social cause. Running a socially enterprising business is in many ways more challenging than a commercial one. If you’re not making a profit you’re not sustainable and if you’re not making a difference then you’re failing your cause.
However, the cause-focus of social enterprise creates new opportunities too – customer perception (in certain quarters) and affiliation is likely to be more positive, and you’re likely to get a better or more tolerant deal from other organisations and agencies too, who might otherwise be suspicious or cynical about your motives. Staff are often well-motivated, and you might be able to attract talent who would otherwise have been too expensive to hire, but who buy into your values.
In my experience I’ve also often found it much easier to work with students cynical of ‘business’, but who need some commercial awareness and venture-creation experience, by working on social enterprise – as it engages their values. One of my events this week was with PhD researchers at four universities in the south-west; we used social entrepreneurship as a means to help them ‘commercialise’ their research ideas and personal skill-sets into economically sustainable models.
Linked to social enterprise as a business model is the idea of designing your values into the fabric of the business – but is it possible to design a business from the values up?
Earlier this month I supported students working on a design challenge for Tough Mudder – the world-famous mud-race that champions teamwork, courage, personal accomplishment, and fun. The students were all part of the Centre for Innovation at the University of Bristol, and were given an extra-curricular challenge to build an obstacle for the race. They could have started from technical ideas for obstacles (and some definitely wanted to do this) but we wanted to start the design from the lived experience of Tough Mudder participants and would-be participants, as well as building those four key values in.
As a result the students did a lot of primary research, and identified fears and emotional sensations related to height, darkness, unexpected motion, and hiding the scale of obstacles. They further considered how people could work in sync to achieve the seemingly impossible. This meant that the values of the company and participants were front and centre of the resulting obstacles. What was really interesting was when Tough Mudder’s marketing people gave their feedback to the students, it was these value-driven insights that were the most valuable to the business. Whilst the operational cost of the structure was important, if the ‘story’ of the obstacle was compelling, they could engage a sponsor and bring in new income to offset costs.
Developing a story about why your business exists and why it does what it does is a great first step; or even better develop a full-scale ‘Theory of Change’ for what your business achieves through its actions. Companies with a story to tell, a purpose, are more compelling, more memorable (see also: Simon Sinek’s ‘Start with Why‘ material). If your values are critical to you, make them critical to your business. Be more authentic and maybe the resulting customer experience will help you develop the bottom line for your cause.
Dave Jarman is a Teaching Fellow in Entrepreneurship at the University of Bristol Centre for Innovation. He is also a self-employed Innovation Consultant and Entrepreneurial Educator.
Dave’s particular expertise lies in early-stage venture creation; from developing creative confidence, building creative habits, through to testing and validating potential start-ups. The application of this knowledge is useful to both emerging start-up entrepreneurs and larger organisations seeking ways to innovate and bring forward new ideas in an ‘intrapreneurial’ setting.