00:09 Ben Rattray: When I talk to companies about what I think that sort of future possibility of what they might do is, the role they have in social change, and why business is so powerful for the impact of society. It's not because you can make a bunch of money and then just ship it over, throw it over the fence for non-profit is gonna do good. This idea, this perverse perspective that somehow there're these two different discrete environments where there's non-profits all doing good, and companies are all generating profits, and the way the companies benefit is through corporate philanthropy. Now, that's nice, but it's kind of, in some cases, ridiculous.
00:44 Rattray: One example I'll give is, I was talking to an entrepreneur, who I have a huge amount of respect for, who's starting a clothing company, and they source from Bangladesh, and he said, "You know, I really wanna start this clothing company and do good in the world, so I'm gonna take all the profits and I'm going to give it to kids in the US to have better schooling." And so I said, "So you mean you're gonna pay someone 50 cents a day or who can't actually fund their own kids first dollar of school to make some profits to go fund schools in the US with a per-pupil expenditure in the average school in most districts is $10,000 a year?" I said, "That's absurd!" What's interesting about business in its capacity for massive scale impact is actually deeply embedding the idea of making a difference into the mechanic of your business and business model.
01:30 Rattray: In fact, this isn't that hard. Some of this, for some companies, will be the product that you build, the service that you have, some of it's not just what you do but how you do it. The way you treat your own employees, the way you build things, the way you source your products, the way you impact the environment, the way you have influence on your community again not just giving money out, but how you run your company. We all run, as I said before, a social enterprise, it just may not be the world we think that's always being impacted, but certainly our staff and the immediate environment around us. And so, charity, we think is important, but for business the most important thing is how you run your company.
02:12 Rattray: Now, I think that in some part this is because we're entering a really exciting new age, and we've heard this, in some case, a function of social media, where you have this incredible incentive to be good, companies being their best selves. And part of this, I think, is gonna be this huge opportunity, and part of this is because it's gonna become a requirement, a necessity and there are two reasons for this, and I wanna talk through both of them. So, the first is your employees, one of the exciting things, if we look at these campaigns that have won, these campaigns that have had a substantial influence on companies. It's actually not just the people around the world, it's actually the employees of the company, who themselves are signing these petitions and creating unrest, because they wanna work for a company that matters and is doing good in the world. Not a charity, but a company building a valuable product, doing so ethically and sustainably.
03:08 Rattray: I was just giving a talk to the incoming class at Stanford and after my talk, a woman raises her hand, in the back row of this very large auditorium, and she says, "You know, I've just had an incredible time over the past couple of days and hearing this as well, it just... Are you worried that over time, as I'm hearing from all my friends, most people aren't gonna work for normal companies. They're just not gonna wanna work for a traditional company, they're all gonna wanna do social change." And I said... Well, some cases this is ridiculous, but I actually think that there's something really to this. With this increasing numbers of the highest performing human capital, that is highly fluid more than ever before, that it's gonna be substantially increasingly influenced by what you do, by the type of impact the company has. And it starts small, but I think is going to be first an incentive for companies. I mean for us, we're able to recruit, in many cases, we just recruited an executive from Google, an executive from Twitter, about to recruit an executive from another very large internet company, all of whom were offered much more money from each of those companies.
04:12 Rattray: And it's because they are inspired to be able to do something, that they wake up everyday, they're proud of what they do, and they think they're leaving an incredible legacy, and your companies can be the same. Any company can be the same, not just what you do, but how you run that company and the impact that you have. And the second reason that I think this is not just an opportunity, but will absolutely be a necessity, is it will be reinforced by your customers and by the public. And we see this every single day. One of the examples that illustrate this most profoundly to me, the first time this happened, was a campaign around a company, 1-800-Flowers, which I think is a generally great company. The challenge with the flower industry is that, for commodity farming of flowers is mostly in Latin America, mostly women, and reports say that the double digit percentages of women, who while picking flowers in certain farms, have deformed babies.
05:10 Rattray: Nobody wants this to happen, but it's just a chemical exposure to the women, and it's expensive to take care of the health and safety regulations that would obviate this, that would solve this problem. And this has happened for a long time. And people sort of have known, but it's pretty opaque and this has been happening, historically, mostly most businesses are doing the kinds of things, especially in the supply chain, that most people just don't know about. And so, a woman starts a petition, having found this out, and petitions 1-800-Flowers to be the first major retailer to accept fair trade flowers that would actually protect these women, not actually a substantial increased amount of money, but a non-trivial amount. Calls 1-800-Flowers to be its best self and the first day was about 300,000, or sorry, 300 signatures and 1-800-Flowers responded, they said, "Look this is, it's confusing, it's complicated, it's a paradox of choice." We just don't... Nobody really cares about this.
06:03 Rattray: And the next day, 55,000 people took action and the day after that 1-800-Flowers turns a 180 degrees around announces they're gonna be the first major retailer to accept fair trade flowers as do the second biggest and the third biggest flower retailer that next week. And we asked naturally after this had been announced, the head of communications, the organization, why they did this. The CEO woke up yesterday morning and heard about this campaign and heard it was all over Facebook, goes to Facebook, sees it all over 1-800-Flowers Facebook page, clicks through, sees 55,000 signatures, and says "My daughter is on Facebook" and he's ashamed. Ashamed is a really powerful force.
06:46 Rattray: And what's happening now is a few things. One you know that almost everything you do is gonna be radically transparent. And when you're sitting in your board room, making decisions about what you're going to do and how you're going to do it as a company, you need to recognize two things. One is everyone is gonna know and second is you gonna have to explain it to your daughter, right? And so what's powerful I think is thinking that we now have a world in which there's structural incentives that give us... This is going back. The structural incentives that give us the reason to be good. It actually builds in its structural incentive that makes it the case. That it's not just now a charity, sort of a sideshow, it's something we might want to do. It's actually... It's actually good for business and that's have been the case for a long, long time and I think this is good for the world. I think what's gonna happen is that we now live in a time in which we think of the aspirations of our company, we can think of them in context of doing good and not just make money, but make money and make change. Thank you very much.
07:55 Rattray: Thank you. And so I have time for just a few questions. So four or five minutes left. We can turn off the slides. Maybe I can do that and there are... Or otherwise I'll just talk more. But as I tell my team on a regular basis, "we love aggressive, direct, transparent questions and challenges on a regular basis." And until there's someone here... I'll explain one other thing as people... Social entrepreneurs ask me this on a regular basis, which is, "Okay, it's great. You know, you're doing... You know, you're successful and you're telling an investor you're never gonna go public and you're never gonna sell the company. How the heck are you going to raise money?"
08:39 Rattray: And I think it's really exciting now is we're living in an age in which there's gonna be new markets to develop where we think where like business used to be we're gonna actually generate profits and cash flow and that yields dividends and we have the capacity to pay dividends. There's actually a market that you can go to and you can either take revenue-based financing or take debt and actually buy out shareholders then pay down the debt with those dividends. Or I think there's really gonna be a secondary market that develops and it's 'cause companies like us, companies like Kickstarter has announced that they don't wanna sell or they don't wanna go public. There's gonna be a secondary market of long-term capital holders that recognize these are potentially very profitable long-term successful businesses dedicated to impact because of the excellence of the organization, the people they're serving. There's an alignment between the impact they make in the world and the money that they make.