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April 25, 2006
Book Review--Values-Driven Business: How to Change the World, Make Money, and Have Fun
    by Bill Baue

The first in the Social Venture Network book series provides loads of anecdotal advice on how to establish a values-driven business, but little on how to retain social responsibility in a buy-out.

Values-Driven Business (Berrett-Koehler 2006) has only five footnotes. For academically minded folks, this is a bad sign, as authors Ben Cohen and Mal Warwick have not mapped the footprints of their research. For the rest of us, this is great news, as the book reads conversationally, and the research it conveys is not the kind you find in library books but rather the kind gathered from years of networking with socially responsible businesspeople. The book gleans the experience and expertise of values-driven business owners from the Social Venture Network, as this is the inaugural publication in a series sponsored by SVN.

The anecdotal nature of the information proves particularly useful to the book's intended audience--those interested in establishing a socially responsible (or values-driven) business. Statistical data pales in comparison to the value of hands-on experience. Messrs. Cohen and Warwick convey truckloads of personal experience from founding and running socially responsible companies--Ben & Jerry's and Mal Warwick & Associates.

For example, Mr. Cohen sings the praises of a low worker-to-manager pay ratio as a motivational tool as well as a tangible commitment to undoing the social injustice of income and wealth disparity. It is with a degree of bitterness that Mr. Cohen explains how the ratio at Ben & Jerry's was upped from five-to-one to seven-to-one and later "scrapped."

"Ironically, Ben & Jerry's eliminated its salary ratio in order not to put itself at a disadvantage in its first outside search for a CEO," Mr. Cohen writes. "Later it became clear that the quality of CEOs at Ben & Jerry's was roughly in inverse proportion to the amount of money they were paid."

In an era when the Securities and Exchange Commission (SEC) is currently drafting regulations to reign in out-of-control executive compensation, this perspective is a fresh reminder that social responsibility may also be good business sense, plain and simple.

The book brims with case studies on specific aspects of socially responsible business from various SVN members. Jean Pogge of ShoreBank discusses how community investment and environmentally conscious banking can be profitable.

"For us, community development, profitability, and conservation are compatible," Ms. Pogge says. "We believe that trying to do all three makes us better at all of them."

Judy Wicks of Philadelphia's White Dog Cafe explains how she uses a restaurant as a vehicle for social change and community-building.

"I use good food to lure innocent customers into social activism," Ms. Wicks says. "It's obvious to me that people are not just hungry for food, they're hungry for meaning and the opportunity to discuss issues they care about as part of a community."

Susan Schor, chief culture officer of Eileen Fisher, tells of the abundantly generous benefits package (full health, dental, and life insurance) and company culture (chair yoga in meetings) used to inspire employee loyalty.

"We firmly believed that by encouraging employees to take care of themselves, they would be healthier for it, and that would show up somehow on the job," Ms. Schor states. "Another result we hoped for was that healthier, happier employees would lead to lower health insurance costs."

"We don't know yet if this is the case," she adds. "Still, in light of the other positive results, and because wellness is central to our company culture, we anticipate only opportunities for maintaining and/or growing the program."

Each chapter ends with a checklist of concrete strategies for implementing socially responsible business practices, distilling the wisdom conveyed anecdotally into hands-on tools. For example, the chapter on employees suggests assessing and discussing ways to improve workforce diversity and inclusion. The chapter on suppliers recommends surveying vendors' use of natural, non-toxic, organic, and recycled ingredients, or if their products contain known or suspected carcinogens.

Clif Bar founder Gary Erikson's discussion on how to build a sustainable business reveals perhaps the most striking absence from the book.

"We don't have an exit strategy or plans to sell out to a multinational corporations," Mr. Erikson says.

While this mode may work perfectly for Clif Bar, it overlooks the reality faced by an increasing number of socially responsible businesses. Just recently, Tom's of Maine sold out to Colgate-Palmolive (CL), and L'Oreal bought out the Body Shop. Mr. Cohen does not try to mask his disappointment at losing the battle to try to keep Ben & Jerry's independent, but he does not pass along any of the tactics he tried to keep Unilever (UN) from scooping up his company. Even a discussion of the issues to consider for maximizing the chances of retaining social responsibility after a buy-out would be helpful. It is surprising that the book does not address this key issue more comprehensively.


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