Why long-term values make good business

This is a repost of a blog of mine published for Business Wales. It's setting out what I'm passionate about - why businesses need to give back to their communities and why we should support the ones that do.

The environment is a habitat in which communities and businesses grow. It’s a shared resource that can be contributed to, or spoiled. People are becoming increasingly aware of that. Lately there has been a shift in how people react to companies and the role they take in societies.

We’re seeing a growing awareness of the ‘tragedy of the commons’ and a rejection of it as we become more aware of our world as a long-term resource. In the UK, the ethical market has grown to a record £81.3 billion in 2017.

Sustainability is clearly on the agenda, and people are ready to buy into companies that share their values. In March, the UK government refreshed its ‘Green Book’, setting out a new case for awarding funding to projects based on the long-term benefits they provide. Professor Ian Bateman writes, ‘It’s like thinking about savings in a bank; if each year we take out more than the interest we make, eventually our income will fall. The same thing applies to the environment; extracting too much, too fast, will cause collapse.’

As businesses we have a part to play in this, not only because sustainability is important to our customers and public policy, but also because it’s important to our long-term future.

For 21st Century businesses large and small, here are two questions we need to be asking ourselves:

1. What are we contributing back to our communities and the environment?

Think carefully about what benefit your business is offering to your customers or the problem that it solves. Then think a step wider and consider the indirect impact of what you do. How does your business make the community a better place and protect the environment in which you live?

Depending on the scale and complexity of your business, this can be simple or harder. Small businesses with motivated teams and founders will often excel at this answer, because it’s linked to why they began in the first place. In contrast, a larger business may have a harder time. I worked with one business where hundreds of employees volunteered, ran local initiatives and were respected figures in the local community. On a global scale though, there wasn’t a clear answer.

Whatever business you are, though, it’s a question that can’t be ignored. As Simon Sinek says, asking ‘why are we here?’ is the very first thing an inspirational leader should do when setting the direction for their company.

2. How do we articulate our contribution?

Having the assurance that your business is creating long-term benefits for communities and the environment is a great first step. You have already set yourself apart as a business with a vision.

The next part that may be a challenge is, how do you articulate that to your customers? More importantly, when a customer buys your product how can they buy into your values? As Fast Company put it, ‘We see our purchasing choices as votes like never before.’ The services you provide your customers can’t be separate from the ways in which you benefit their community.

Take the example of a Scottish student who created a local community for startups, which eventually grew into one of the largest, international entrepreneurship conferences in the world. He didn’t have the resources of the incumbents, but he believed in people and had faith in the potential of what they could achieve as entrepreneurs. By supporting him, attendees could give a hand in supporting these people too.

Another case here in Wales – an all-female building company grew and featured on national TV. These things happen through a lot of hard work, but also because the founder said and said again that her mission was to get more women into the construction industry. People understood this and supported by choosing her business first for their home projects.

So be clear. What is the long-term gift your business is giving to communities and how are you articulating it so that customers can support you? Making sure you’re giving back more than you take is crucial for your business and can help you find conscientious customers in a competitive world. More importantly though, creating long-term benefits is your contribution to a sustainable market, one that can support your community, your customers and your business into the future.