What It Looks Like When Businesses Put Employee Development and Their Local Community First — Even in Challenging Times
October 21, 2020
How B Corp Certification Improves Impact Strategies in Unexpected Ways
This article is the second in a series of Founding B Corp interviews, where B The Change holds conversations between Certified B Corporations that helped found the B Corp movement and other businesses in the B Corp community. The series ties the reasons for the B Corp inception through to today’s discussions around business’s role in solving global and social issues.
The thousands of businesses around the world that have joined the Certified B Corporation community since 2008 represent a variety of industries and sizes, but they share a common focus on business success beyond the bottom line. By striving to create benefit for people and planet as well as profit, B Corps also establish strong company values that keep them rooted through turbulent times.
This year has tested those values, and many B Corps have found new strength in their purpose-driven values and impact strategies. To hear firsthand how B Corp values have provided stability in an ever-changing reality, B The Change spoke with business leaders from BLK & Bold, a Black-owned, Des Moines, Iowa-based specialty coffee and tea roastery and wholesaler launched in 2018, and South Mountain Company, a 45-year-old architecture, engineering, building, and renewable energy business based on Martha’s Vineyard, Massachusetts. South Mountain is among the initial founding B Corps, gaining certification in 2008, while BLK & Bold is a newly certified B Corp.
While these small businesses are in some ways a study in contrast — new and established, island and city, East Coast and Midwest — they both were built upon values like community impact, a commitment to workforce and employee development, and purpose that provide a resilient foundation. BLK & Bold donates 5% of profits to support local and national programs for at-risk youths, while South Mountain Company is a worker-owned cooperative that designs sustainable projects and works exclusively to enhance its local community.
The excerpts below are taken from a conversation with John Abrams, current president and CEO of South Mountain who is transitioning toward retirement in 2022, Deirdre Bohan, future president and CEO of South Mountain, and Pernell Cezar, BLK + Bold Co-Founder.
Why are B Corps needed right now? What value does certification bring to businesses, the world, and your organization in particular?
Pernell Cezar, BLK & Bold: One reason why we chose B Corp Certification is to guide us on how we continue to sharpen our sword on what it means to be an impact business. We’ve locked in to our cause, but we know that we have to be able to pivot and evolve with what impact actually means as well.
In retail, with our products being in distribution at Target, Whole Foods and Hy-Vee, we focus on workforce-development programs that have a core stakeholder focus on underrepresented, disadvantaged youth. We want to help normalize domestic social impact.
John Abrams, South Mountain: Having been a triple-bottom-line business from the start, B Corp seemed like a natural fit. When we first certified, the B Impact Assessment didn’t include employee ownership, so we asked about that. B Lab realized that oversight and changed the certification process. After recognizing that B Lab was a learning organization, we were even more inclined to support them.
Deirdre Bohan, South Mountain: We are currently doing another B Impact Assessment for recertification. The assessment continues to be challenging, and that’s coming from a company that has been certified since the beginning and has consistently scored well. The questions they ask and the expectations of what you should be delivering constantly change and develop.
The assessment has been highly influential, as Pernell said, in sharpening the sword and changing our operating policies. We always believed in transparency, we always believed in equal opportunity, but we never wrote that down. It’s making us do these things and check these boxes for things that we really believe in and make these values explicit. It’s also challenging us on things like our supply chain as well as diversity and inclusion.
John: All points and scoring aside, we thought at the beginning that we were designed as a B Corp a quarter of a century before, and that what we were there for is to bring other companies along and support the movement. But as Deidre said, it turned out that we had so much to learn, so much to gain; it inspired a tremendous amount of change, and we had not expected that.
Pernell: The certification helped us as we were making all these major decisions in our first year. We had an assessment that we had already taken to think further around on some of these key topics that would define our business model and our values.
How have COVID-19 and related challenges shaped and influenced your businesses and your impact on stakeholders?
Pernell: We’ve had some pivotal growth moments throughout COVID-19. We do not have our own coffee shop as part of our business model, we sell through e-commerce and retail. At the end of May, we were the No. 1 new coffee brand on Amazon. Being in retail allowed us to also be adopted a lot faster by people who now were shopping for coffee at Target or Whole Foods.
Our biggest turn for COVID-19 was really aligning to help provide food and security for K-12 students, and building campaigns to do that. We were able to contribute a large portion of our profits back to No Kid Hungry, which basically aligns hyper-local support for providing food to low-income students, but also those displaced because of COVID. If you look at the needs of any K-12 school district, it’s going to impact workforce development. Especially when you look at the communities that have the least amount of resources.
We partnered with a nonprofit in the Des Moines area to provide placement for some of their youth in the summertime for workforce development opportunities. As soon as that program ended, we hired both of them. One part-time employee is still in high school, and the other just graduated from high school. We want to be an example for more established businesses and how they can lean toward supporting nonprofits in their community with workforce development.
John: In an interesting way, our response to COVID-19 actually began in 2008, when we were threatened as a business by the crash. We hunkered down during the ’08 recession and assessed our weaknesses. We realized that we just wouldn’t have enough for everybody. At one point we cut everybody’s wages by 20%. And I remember after that meeting people coming up to me and saying, “Hey, thanks a lot.” And I said, “What do you mean, thanks a lot? Your wages just got cut 20%.” And they’d say, “But so did yours.” That’s the value of building a culture in which all of us are in it together.
At that time, we vowed never to be in that situation again; we began a reserve fund and strengthened our financial foundation. That prepared us for the pandemic. Our company’s primary focus is the 40 employee families that make up our company. The response to COVID-19 was the recognition that we were faced with another crisis we needed to solve. We hunkered down again and marshalled our resources.
Deirdre: Last spring, we faced a local construction ban for five weeks due to COVID-19. A third of our employees couldn’t work at all. The other ones pivoted to work from home, and most of them have children. It was pretty chaotic. We agreed as a company that everybody would get paid 40 hours a week for as long as we could swing it.
That one action made the experience a shared one. Everyone did the best they could to look out for one another. We made it work and then the Paycheck Protection Program money helped us through.
Based on your experience in a stakeholder-focused business, where does stakeholder capitalism and the B Corp movement need to go from here to achieve lasting change?
Pernell: B Corps should garner this momentum by bringing like-minded people from for-profit businesses together, providing resources and challenging them to do better if they can. That’s a great place and a great home for B Corp to help push forward.
John: B Corp’s traction stems from the brilliant combination of certification and benefit corp legislation. Equally important, B Lab is constantly changing itself, adapting, and expanding its reach. That ability to change and grow brings all of us along in an inspiring way. I think its next frontier may be to attract publicly traded companies. The foundation of these two companies is exactly the same. They began with social purpose in mind. That’s why we were drawn to the same place.
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