Change your vision of business
Can leaders be idealistic and effective? Passionate and reasonable? Altruistic and capitalist? Can companies be full of good intentions AND effective? Largely inspired by Danone’s social entrepreneurship initiatives, the stories told by Emmanuel Faber provide an initial response to these questions. With doubts and questions, he offers insight into how to forge a sustainable relationship between companies and society.
Social business: An opportunity for conscientious growth
As excess shows its limits every day in financial markets, Emmanuel Faber encourages putting equity—a condition for justice—at the heart of all financial transactions. He calls for a celebration of the legitimate union of the economic and the social, the inseparable pillars of a healthy society.
The three pillars of a successful social business
1. Free yourself from shareholder pressure. According to Emmanuel Faber, the viability of the business is a concept that applies to all social businesses. But shareholders do not look for dividends at any cost! They reinvest profits in the company, enabling it to continue its social function. For example, in 2008, Veolia Water and the Grameen Bank created the company Grameen-Veolia Water Ld., which aims to provide drinking water to 100,000 Bangladeshis before the end of 2012. Based on the concept of “no loss, no dividends,” this investment is self-financed by the sale of drinking water and subsequently will make it possible to launch similar projects.
2. Apply the principle of open source. The objective is to create a “copyleft” system that bypasses the copyright laws of the business world. Social business provides entrepreneurs with advanced know-how for free. The only condition is using the model without giving way to rough approximations and then sharing one’s own knowledge gained with others.
3. Reinvent the compensation system. From a very idealistic (but necessary) perspective, Faber suggests changing the relationship managers have with money by “surfacing the social being that lurks inside them, and developing their capacity to ‘share conscientiously’.” An example is a bonus calculation system requiring all managers to consider their financial and social performance, indexing bonuses based on environmental and social criteria such as reduction in CO2 emissions, workplace safety, and HR development.
Business leader testimony
In 2007, Danone partnered with Muhammad Yunus, winner of the 2006 Nobel Peace Prize, to launch Grameen Danone Foods. Financed by the investment fund danone.communities, the company’s mission is to provide nutrients to poor people in Bangladesh by producing yogurt rich in micronutrients. Mission accomplished: In 2008, two million yogurts were produced in the Bogra plant and more than 10,000 were sold daily.