The Gilt tech team takes seriously our collective mission to build and maintain a work culture based on autonomy, trust and empowerment (and fun). We’re always interested in learning about how other companies approach the same goal, so we’re excited to see that the literature on building a progressive work culture seems to be growing. To that end, this week some of us are heading to powerHouse Arena, a popular bookstore located in Brooklyn’s DUMBO neighborhood, to attend a launch event for Profit & Purpose: How Social Innovation is Transforming Business for Good (Wiley).
Written by NYC-based author/lawyer/blogger/entrepreneur Kyle Westaway, Profit & Purpose examines efforts by 13 organizations and companies to “prov[e] that an organization can generate profit and purpose” via social innovation. It also identifies seven key principles for companies wishing to “profit with a purpose”–from “connecting with authenticity” to “designing with humility.”
Recently we chatted with Kyle to learn more about his message.
Gilt: What inspired you to write Profit & Purpose?
KW: The book is the culmination of a lot of years spent thinking about how profit and purpose work together. My journey began while I was a social entrepreneur myself. While spending a lot of time on the ground as part of a nonprofit focused on the sex trafficking industry, I learned that the commercial sex trade was a huge, complex issue. Our nonprofit spotted a smaller issue within the big issue–women would leave the trade, but drift back into it primarily because of their economic situation. That broke our hearts and got us thinking. My colleagues and I thought, “Why don’t we create a company that helps them move from the bars and brothels to something else?”
Gilt: Why a company and not a nonprofit?
KW: The women didn’t want or need charity. What they wanted–just like you and I want–was a chance to make an honest living and provide for their families. There is an amazing amount of dignity in that, not found in receiving a handout.
Gilt: You also run a law firm that counsels social enterprises.
KW: Yes, I’ve spent about the last five or six years focused exclusively on that, and have seen a lot of companies both small and big try to figure out how to do social enterprise. I also teach and try to identify case studies of social enterprise success. I’ve found that there’s not a ton of data. So I thought, ‘What if I go on my own exploratory journey to find companies that successfully blend profit and purpose?’ Curiosity and the desire to be a better teacher and counselor ultimately led me to write the book.
Gilt: How did you go about choosing subjects for the book?
KW: In terms of establishing criteria, I was pretty broad–so the book is tax status-agnostic, with seven for-profits and six nonprofits featured. I believe innovative models for social good can emerge from any legal structure. At the same time, I wanted to focus on entities that used the rigor of business to produce real impacts.
Gilt: What’s the common thread tying IBM, Nike, charity: water, and other companies featured in your book?
KW: It’s cohesive in that all of these companies have innovative business models that are creating tangible social and environmental impacts. I ruled out corporate social responsibility initiatives–people making a lot of money doing nice things, then giving a little to charities–as well as old-school traditional, inefficient charity. I focus on the sweet spot in the middle–a new emerging class of social entrepreneurs. I see a lot of my friends and clients thinking about things differently and wanted to highlight their work.
Gilt: Some of your case-study subjects are long-established multinational corporations. Can you talk about some of those?
KW: One of the stories that I tell in the book is about Coca-Cola–specifically about Ekocycle, their partnership with Will.i.am of the Black Eyed Peas. It’s akin to a Product Red for the recycling cause. It’s got the dual goal of making recycling cool, and then encouraging consumers to be more thoughtful about the products they buy. It has been out for two years and is a tiny, tiny project considering the scale of Coca-Cola, but it continues to grow. We’ll see how big it becomes.
Gilt: Having spoken to representatives at Coke, Nike, and other legacy companies, do you think it’s easier to connect profits and purpose if you’re new?
KW: It’s both easier and harder for new companies to do this. Easier, in that a small group of people dedicated to an idea can affect bigger change more quickly in the organization. Harder, in the sense that you don’t have the stability of the huge corporate war chest to do whatever you want. Coke, IBM, and Nike can do an experiment the size of a whole start-up and it will have no impact on the company’s overall financial health. What’s most challenging to big companies is if they’re set in a clear, pure-profit maximization or shareholder mentality.
Gilt: Some of the principles you endorse in your book–authenticity, honesty–are very important to our team. How did you settle on the final list?
KW: As I was doing the research for the book, I realized how much the customer experience matters–and how a great experience is more and more expected. Wallet share can be earned through good pricing, convenience, and other things, but if you create that emotional connection–especially for premium goods–customers are really excited about staying loyal to a brand.
Gilt: Our CIO, Steve Jacobs, just gave a presentation on the importance of connecting emotionally with customers.
KW: Every touch that a customer has with the brand is an opportunity to build loyalty–or not. A lot of the companies I’ve talked to try to live by the Zappos mentality, that customer service is your best marketing.
Gilt: The term “customer experience” applies to a work relationship, in the sense that you need to give your employees a great experience or else they’ll move on. Values like honesty and authenticity are strong pillars for establishing a workplace with “purpose”–but how do you measure such values?
KW: Some are more easily measured than others. I do think that figuring out how to measure what you value is an important goal–and there are ways. The last chapter of the book focuses on honest evaluation. If values really matter, they need to be measured. You need to quantify those values or else you’re not setting employees up for success. One example I cite is Method, who, every Monday morning, have a team shout-out highlighting someone who really lived up to the values during the previous week–and how. This kind of thing provides a very clear way for people to concretely understand what those values are.
Gilt: At Gilt, have a platform that enables employees to give each other shout-outs–and shopping credits–using a common dashboard. Some of the general things we reward are “caring too much,” “sharing the spotlight” and “using both sides of our brains.”
KW: I love that! That’s definitely creating an honest evaluation based on goals. And it incentivizes upholding the company values. One of the ways values become ingrained is to include a public recognition aspect of it – in your case, you’re lifting these values up and there’s a bit of public praise along with it.
Gilt: You present the notion of “profiting with purpose” as something companies will have to strive for in order to survive. Does this have to do with demographics–ie what millennials want?
KW: As millennials enter the workforce, there’s a stronger and clearer desire among them for both remuneration (financial rewards) but also a clear purpose. A high level of engagement will keep them at their seat and producing, and will also keep them from going to the competition. I do think the realization isn’t just to keep talent, but to engage them.