Why Social Responsibility Is Good Company Policy AND Good Business

Why Social Responsibility Is Good Company Policy AND Good Business

I am frequently asked why I joined Great Harvest and the answer is: the generosity piece of the Mission Statement. Yes, I love our products and find the Freedom Franchise business model fascinating. Difficult to manage...but really intellectually stimulating. The thing that really got me on board, though, was the generosity piece of the puzzle.

Give (and Get) Generously

People that know me are better qualified to say whether or not this is true, but I consider giving back and helping people to be a large part of my personality. It is certainly something that gives me great pleasure and satisfaction. And, when I saw there was a business opportunity to professionally model that behavior? I was in.

My favorite example of how this has made me smile at work is when we open our bakery in Dillon to the public. We only do this seven times a year and six of the seven are training schools. When you become a Great Harvest franchisee and come for training, graduation is running the training bakery for three days. We do that six times a year and we give all of the proceeds (note: proceeds, not profits) to a local charity. That puts $8-10,000 in cash into the pocket of a deserving Southwestern Montana cause. And we love doing that because it really makes a difference and that is our home. We get to see how we impact the community first-hand. But, it is the seventh time that really is my favorite work day of the year.

Reciprocity is Key to Relationships, in Business & Beyond

On a Friday in December every year, we hold a holiday bake day. We shut the office down and run the bakery ourselves. We get to go play for a day. But, most importantly, we still aren’t taking money. That day is our gift to Dillon and Beaverhead County for supporting our training days the rest of the year. After all, it’s the community that is spending money. We just provide the product and the donation. For the December day, we just give away product to anyone that walks in the door. It is our gift back and I get to be the coffee elf.

coffee_elfBusinesses Are Made of People, Not Just Profit

Over the years, we have all pretty much settled into our chosen roles for the day. We give away hot cider and coffee to anyone that wants it, and I always dress up in some silly elf-like hat and handle beverage distribution. I get to say “hi” to every single guest and personally thank them for all they do for us. (Really? I am the CEO of a nine-figure brand and I get to do that?!) I am not doing the emotion justice here, but it is just the best. It’s also a classic example of how social responsibility is good business. 

In the 1970’s, noted economist Milton Friedman uttered his famous line: “the social responsibility of business is to increase profits,” and we were off to the races with public perception of big, evil businesses having no conscience. On some level, that perception is accurate. But, if you will bear with me, I’ll explain why a modified (kinder) version of Freidman’s famous line is becoming increasingly relevant in today’s world.

The Most Basic “Cause” for Loyalty? Being a Good Neighbor

Brand loyalty is quickly being replaced by cause loyalty as a driver of consumer behavior. Gone are the days when people are loyal to brand names like Proctor & Gamble. Instead, people are increasingly placing their shopping dollars with companies that mirror their value systems.

Look at food. I recently wrote about my move away from processed foods and I am not alone. Whereas people used to want the convenience of the center aisles of their grocery stores, today they want to meet the farmer at a farmer’s market. Or at least shop along the exterior of their grocery store.

And, you know what? That move creates a strong business opportunity, which is why I was reaching to say Freidmans’ statement could still be true. Today, a company can be both profitable and socially responsible, making Freidman’s off-base statement actually relevant. How? First, restate it to say: “The social responsibility of business is to increase profits through sustainable, responsible means.”

Business is Now the Argument For Social Responsibility

In a recent Neilsen Survey, over 50% of consumers are willing to pay a higher price for products from companies that have an established track record of giving back to society. That is up from 45% in their previous survey on this point. And it is true across all age groups, with some interesting twists.

People under the age of 30 are most likely to spend more money with a company that is socially responsible, but the percentage of people behaving that way is increasing most rapidly among people aged 40-54.

People Are Loyal to What They Feel Good About

This goes beyond just engaging in behavior like giving things away. It’s about more than that. It is trust. I may not be able to tell you 100% of my ingredients are 100% GMO-free but I can say what is and what we are doing about the rest and ask you to trust me that we have the safety of your food supply top of mind. But, will you trust me? Perhaps, if I’ve consistently been transparent and honest. Perhaps it will take more to prove my trustworthiness.

It is an endless cycle. Kindness. Giving without a promise of receiving. Humanity. Those things make you vulnerable but they also build trust. Building trust — earning it — is the first step to building a brand in a connected world.

Trust Begets Loyalty & Loyalty Begets Business Success

Back to some statistics. 77% of consumers say it is important for companies to be socially responsible. 70% of people aged 18-26 say the social conscience of a company impacts their decision to work there or not. The numbers go on and on, but neither of those sentiments was on the radar of consumers 20 years ago. Today they are an overwhelming majority.

Even as consumer consciousness evolves, the underlying principle is not new. People tend to gravitate towards what they like, what makes them feel good, and what they can trust. Those who “do good.” It makes them feel good. And that presents a win-win opportunity for businesses and consumers.

Starting down the path of building a brand based upon generosity requires creating vulnerability so consumers can learn to trust you. Once they do, their loyalty will be as overwhelming as the trust you earn.

If this approach makes sense to you, you may be a perfect match for Great Harvest. We are always in search of new franchisees.

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