Fighting the battle between Commercialization & Values

Danone’s 6 stages of Sustainable Development

We’re committed to healthy food, healthy people, a healthy planet and healthy business

A classic example of a sustainability embedded mission statement demonstrating inherent values of a company – Stonyfield Farm, now a part of the Danone Group, is seeing its top leadership change for the first time. Last month Gary Hirshberg – the environmental activist turned businessman,  stepped down as the CE-Yo of Stonyfield Farm giving way to a handpicked Walt Freese, Ben & Jerry’s former CEO.

Where would the new CE-Yo take Stonyfield? Is he being given a company that is now on autopilot and just needs to steer in a dedicated growth strategy – all the while keeping its core values intact. A tough ask, though – but being an ex-Ben & Jerry, he would “truly understand” ( Ben & Jerry is now a part of Unilever)

Balancing commercialization and values is a fine art and in most cases, commercialization almost always trumps. But that doesn’t mean giving up values – though at times they can become thinly spreaded.

Anita Roddick felt the same when the company she founded, The Body Shop was being sold to L’Oreal. Both were extremes – one ensconsed in values and ethics and the other exploiting the commerical aspect. But Roddick had hoped to rub some of Body Shop’s values onto L’Oreal, which it eventually did (can be argued) – running as an independent brand.

But Stonyfield’s case is a bit different. In spite of getting sold to Danone, Stonyfield still had the same values and the same leadership at the helm – which was not the case in Body Shop (Roddick was ousted from her own company), thus allowing Stonyfield to continue with “ethical growth” and not just “economic growth”.

In a way, both companies have chalked somewhat similar routes – from starting on ethical and activist mindset to building a large profitable businesses –  from caring for ecological and social issues to promoting healthy products – and eventually getting acquired by much larger players in the field. Even Ben & Jerry’s has had the same trajectory.

So, the eternal question emerges – Do Sustainable companies have scaling problems? Do they grow to a certain point and stop? To continue to be economically feasible, do they really need a shelter and experience of “bigger companies”?

Patagonia, Seventh Generation, Timberland are some other companies that have had similar beginnings. And they are yet to be acquired – though they would be recieving huge pressure with huge monies from the likes of Nike, Adidas and P&G – but those ‘Value driven’ companies are still keeping their own. It is not to say that big companies are not making their practices sustainable – they are. Nike’s Considered Design, Adidas’s ethical supply chains are great examples – but they do it because of an imperative – as a profitable business model – not because of their inherent value system.

Is it simply a matter of time before they get acquired? Or will we ever see any of those companies to reach scale without any outside support? Is going public the only answer to reach mass audience?

Here’s what I feel are the strengths of these value driven companies:

  • They have fierce loyal customers
  • These companies don’t compete on price
  • They don’t reduce their quality to increase their brand portfolio.
  • These companies are very clear on their sustainbility agenda’s with strong leadership commited to it
  • They see business as a vehicle to achieve social and ecological good.
  • They don’t beleive in bringing out “GRI -G3 A+” reports – instead they completely bare themselves in their “Values Reports” – whatever that may be

Even if these companies get sold-out, it in no way means they are selling-out. They will do so only to expand their “values footprint” and hopefully be the cause of change. The battle between commerialization and values doesn’t have to end in values going out the door to achieve scale. Stonyfield and other renegade companies are there to prove that.

Please share your thoughts below

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Comments

  1. In the end, the trajectory towards sustainability is and will always remain a dialogue of (changing) values (I wrote about this here: http://sustainablefutures.info/2010/09/15/sustainability-dialogue-of-values/). Companies are not so different to governments in this regard. New values in form of trends or personalities will challenge the old and established. Both companies and governments are only able to drive on the same set of values for so much time – until the desire for change and something new takes over. For the growing company, at a certain point, managers substitute owner-entrepreneurs – be it because operations have become too complex for the visionary to master or due to shareholder (investor) demands. A dialogue of values between the new and the old will be essential for the vision and USP to survive, while maintaining and increasing competitive advantage all the same.

  2. “Or will we ever see any of those companies to reach scale without any outside support? Is going public the only answer to reach mass audience?”
    Why do these companies need to grow? If they are making a sustainable profit “as is”, why can they not strive to maintain that profit while keeping their social/environmental value intact.
    (Please not that I am not an economist, so what I say next may seem naive) From what I see, the race for every-growing profits is the source of so many problems in our society. Jobs are cut for increased profits. Factories are moved to third world countries for increased profits. Environmental regulations are removed by governments in order to allow increased profits.
    Constant growth is not sustainable on a finite planet. Why can’t our financial system aim for steady profits?

  3. Thanks for your comments. Scaling a sustainable venture always presents challenges as Florian mentioned that “at certain point, managers substitute owner-entrepreneurs” and they necessarily don’t have the same founding values. As far why we need to grow -still alludes me. There are obvious reasons but growth in just financial terms is where we need to pull the brakes and also look at the social and environmental growth caused by a business. So it becomes imperative that “green” companies are recognized and rewarded in the mainstream media to garner attention – thus causing the bigger players also to change their business practices.

    • I am currently reading a book by David Suzuki and in it is a story of an American lumber company called Collin’s Pine. They have been in business for 150 years and their wood land has (give or take) as many trees today as when they started. The reason is that their business plan is sustainability. They’ve remained privately owned which removes the pressure for constant growth. They do selective cutting. They spend great amounts of time studying their trees (they actually photograph every tree on their land every ten years) and wildlife in order to prevent the spread of disease and in order to select where the cutting will take place.
      Yes, that means more labour… but that means more jobs! The company is profitable and sustainable. They make money taking trees out of a forest while keeping that forest healthy. This means the forest continues capturing carbon dioxide, filtering water, protecting against erosion and floods. They’ve actually made wood a renewable resource.
      In my opinion, that is the kind of business practice that should be applauded and encouraged.

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