Business is the force of change. Business is essential to solving the climate crisis, because this is what business is best at: innovating, changing, addressing risks, searching for opportunities. There is no more vital task - Richard Branson
Let your social and environmental conscience be your guide" can be a successful and durable strategy for a firm. This is the first book to explain how following a vision for the earth and for society can be a powerful route to profits for small and medium sized companies.
Companies on a Mission: Entrepreneurial Strategies for Growing Sustainably, Responsibly and Profitably, explains that mission-driven companies appreciate and leverage traditional strategic principles—with a twist—to win in the marketplace. By clearly and pragmatically laying out this argument, author Michael V. Russo crystallizes for enlightened businesses what Michael Porter made clear for mainstream firms years ago. The book shows that a mission-driven approach creates significant barriers to imitation by larger, established rivals
Mission-driven firms build their brands on authenticity. Only you are you. And, authenticity builds customer loyalty. Later in the book, Russo moves beyond the firm level to look at these companies in context. He finds, for instance, that just as specific industries often develop in geographic clusters, mission-driven companies also aggregate. But, they put down roots where other businesses are pursuing complementary goals. Portland and the Bay Area are two such hotbeds. This allows for cooperation, as opposed to breeding stiff competition.
The rise to prominence of mission-driven companies like Patagonia, Seventh Generation, Kettle Foods, and Calvert Group is undoubtedly the result of powerful trends in consumer markets, including the rise of conscious consumerism, the transparency movement, and fallout from global competition. Most books that address social and environmental issues are focused on large corporations, crafted as autobiographies by CEOs, or written as moral calls to action without regard for the bottom line. Companies on a Mission both chronicles a movement and provides grounded guidance to entrepreneurs and managers who wish to join the wave.
Andrew Winston, author of Green Recovery, said in a review of Russo's book:
"Michael Russo documents both the direct economic benefits of taking a mission-driven approach (toward sustainability) and the intangible benefits of brand value, product positioning, customer satisfaction and more,"
According to University of Oregon Media Relations:
Companies on a Mission uses the stories and experiences of more than 100 companies to support its premise. Some are well established, such as Patagonia, the outdoor clothing empire founded in 1972 by rebel rock-climber Yvon Chouinard; and Kettle Foods, the Salem company that in 2003 installed the largest solar array in the Pacific Northwest. Others are emerging companies introducing inspiration to traditional fields, such as Revolution Foods, founded by Kristen Richmond and Kirsten Tobey, which brings nutritious school lunches to underprivileged school children in California, Denver, and Washington, D.C.; and Freitag, a Swiss company founded by Markus and Daniel Freitag, which sells fashion-forward bags and purses made from recycled truck tarps.
Russo added:
Companies on a Mission is a book that can be appreciated by anyone with an interest in how small- and medium-sized businesses can be a force for positive change. Larger, established companies have also found that there is much to learn from these companies.
I probed the author:
Dr. Russo,
Responders to my previous Daily Kos diary regarding your work have stated that it's not likely that corporations will suddenly develop a soul or social consciousness. However, because the economic scales are tipping in favor of conservation and renewable energy, businesses are our likely hope.
Would you please give us your response to the above ideas?
Russo responded:
Really, these are two different issues. As currently structured and legally chartered, publicly held corporations are held to very tight requirements to maximize financial returns to shareholders. In practice, this has led to managers frequently viewing social and environmental initiatives as a costly distraction. I think that this is a mistake, because while the costs of these initiatives can be identified relatively easily, their benefits to the corporation meander past the eyeshades of accountants. But a reputation for social advancement or environmental stewardship can create benefits like a stronger brand that draws enlightened customers to the company's products and a reputation that can be a magnet for talented job-seekers. I suppose that's just good business, but collectively, engagement with enlightened customers and employees can broaden the mission of the company to include a greater contribution to social and environmental enhancement.
He continued:
Mission-driven companies, such as those I discuss in my book, are mainly privately held. This permits them much more latitude in pursuing goals beyond simple profit-maximization. What is fascinating about them is that as they endeavor to introduce further humanity into their brand of management, their leading-edge social and environmental initiatives frequently have a marketplace effect far beyond that shown by mainstream companies. That is, their win-win zone, where social and environmental activities both boost profits, is larger than for mainstream companies. The reason is that customers patronize them because they see them as authentic and committed to the greater good. Some might choose to say they have a soul.
Note that the transparency movement very much works in favor of mission-driven companies.
Now, with respect to the conservation and renewables, both contribute to a future where our carbon footprint must be lower. Here, it is important to understand that the atmosphere is a commons: an exhaustible resource that all use but none own, where benefits are felt individually (as when a factory saves costs by not installing emissions control equipment) but costs are felt socially (as each factory dumps a small amount into the air, which collectively amounts to quite a bit and which all must bear). In these situations, government action is necessary to confront incentives to dump carbon emissions into the air without penalty. Either by a carbon tax or a cap and trade system, government will need to take action to address these types of environmental problems. In this situation, we cannot simply depend on markets to elicit positive social outcome.
and added:
As governments move to make fossil fuels more expensive using either of these two approaches, it will create significant opportunities for companies armed with cleaner technologies. The provocative question is whether these companies will be mission-driven ones. While that may be true, it's not guaranteed. In the book, I discuss Sun Power, which was founded by arch-libertarian TJ Rodgers. No friend of environmentalists and social activists, and an outspoken critic of government, he nonetheless was a driving force in elevating Sun Power to a position of prominence in solar panel manufacturing. Should we celebrate his successes or criticize his methods?
Nonetheless, if we can't depend on business then what institutions will drive the type of large scale change we need on this globe? Given proper guidance from governments, owners, and customers, businesses can bring resources, creativity, and determination to society's problems. Mission-driven companies, the small and medium sized innovators that I profile in my book, are leading the way in showing that many of these challenges can be recast as business opportunities.
Russo is the Charles H. Lundquist Professor of Sustainable Management at the UO, and academic director of the Center for Sustainable Business Practices at the Lundquist College of Business. He is an award-winning researcher and frequent lecturer on the topic of environmental management strategy. He is editor of "Environmental Management: Readings and Cases," and has been a member of the university's business faculty since 1989.