Several of the new socially responsible entrepreneurs, including Goldman and Sustainable Harvest's David Griswold, make a point of hiring business-school grads (or using interns from the schools) to beef up their ranks. "I've had business-school graduates here because I feel like the longevity of the company really depends on competing, using the rules of business," says Griswold, who'd applied to business school but kept deferring when the chance to sell the beans of Mexican coffee farmers presented itself. "Good deeds alone don't work."
That's a far cry from the likes of Ben Cohen, Anita Roddick, and Yvon Chouinard, for instance, who saw businesspeople as tools of the military-industrial complex and profits as a dirty word. In fact, in the '90s, when the young turks joined their elders in the Social Venture Network (SVN), an organization for entrepreneurs and investors interested in promoting social responsibility in business, the tension between the business-school contingent and the veterans was palpable. (See "Social Venture Network," below.)
"At that time Anita and Ben ... certainly in their public statements, were very clear," says Wild Planet's Grossman, who first attended an SVN meeting as an intern while he was earning his M.B.A. from Stanford Business School. "They were saying, 'We would never hire an M.B.A. M.B.A.'s are poison. They think about only one bottom line. They're fixated on the notion of net profits at the expense of everything else." It was only later, out of necessity, that the stance softened. "Ben and Anita dropped their rhetoric about the M.B.A. thing because, frankly, through the Trojan Horse we entered, and we were there steadily for years," says Grossman.
Solid commitment to change
Today's CEOs were dedicated to the mission that shaped their companies -- or some variation of it -- before they opened their doors for business. They have a history of working with nonprofits, the government, or other socially responsible endeavors. Their companies, it seems, are a natural outgrowth of their long-held values.
Daniel Grossman, who entered business school with plans to apply his hard-core business skills to the public sector or a nonprofit, served for eight years in the U.S. Foreign Service. David Griswold cofounded and ran Aztec Harvest, a sales-and-marketing outfit for coffee farmers from Mexican cooperatives that was owned by the farmers. Seth Goldman was a press secretary on Capitol Hill and marketed socially responsible mutual funds for Calvert Group. Village Real Estate Services founder Mark Deutschmann was a devotee of historic preservation.
CitySoft CEO Nick Gleason was a community and labor organizer in Oakland, Calif., and ran his own urban-development consulting company, serving nonprofits, foundations, school districts, and governments. His move to the for-profit sector evolved directly from his nonprofit experiences. "I came to believe that the lack of new wealth creation was really the root cause of urban problems," says Gleason. "Activist organizations and entrepreneurship are very similar in terms of trying to create teams, successes. Both attempt to help a group of people achieve goals in a resource-constrained environment."
In contrast, before the company founders of the '80s started their businesses, they were generally involved with activities removed from their companies-to-be -- Anita Roddick owned a small hotel in Littlehampton, England, and was raising two young daughters; Yvon Chouinard saw mountain climbing as a calling. And they more often fell into the socially responsible world than intentionally traveled there. "The first generation went through their formative years in the '60s and didn't found their businesses with the idea that they were going to change the world, by and large," says Grossman. "Ben and Jerry kind of stumbled into making ice cream to make ends meet and then things were added as they went along."
Focusing on two bottom lines
Today's CEOs are just as dedicated to building a viable, profitable business as they are to hewing to a mission -- and they think strategically to make both happen. So they speak of a "double bottom line."
"Part of our concept is that we must have an incredibly focused mission that includes equally environmental and social issues and economic issues -- that is, making sure that we have a really solid, healthy, financially secure business," says WorldWise's Lamstein. "You can't put one in front of the other. You can't be successful if you can't do both." Says Goldman: "A commitment to socially responsible business cannot be used as an excuse to make poor business decisions. If we were to accept lower margins because of our commitment to social responsibility, then we'd be doing the broader socially responsible business movement a disservice because we wouldn't be as competitive or as attractive to investors."
The strategic thinking that Lamstein used to get WorldWise up and running is a case in point of double-bottom-line thinking. Committed to constructing a business around environmentally responsible products, Lamstein initially devised a three-pronged model: a chain of retail stores, which would showcase WorldWise products in the context in which they'd be used; a mail-order catalog; and a research-and-development arm for creating branded products to sell wholesale.
With that model in mind, Lamstein began researching both the environmental and economic sides of the business -- that is, which products the company should make, which materials and methods it should use to make them, and how it should be financed and earn revenues. Investors that he approached found the concept intriguing but couldn't understand why he wanted to spend $1 million to $2 million to start a chain of stores when he had no idea whether people wanted to buy his environmentally friendly merchandise. He took the investors' skepticism to heart. "Since I'd researched about 10,000 products, I thought, 'Why not focus on the wholesale side of the business and develop a brand that has virtually zero competition?" Lamstein recalls.
