Many years ago, my team and I collaborated with the late Jeff Klein on Conscious Capitalism (CC), and we had many dinner discussions about what it meant to be a “conscious business.” Our largest frustrations came up around the fracture between intent and action. Even the most well meaning corporate managers, it seemed, continued to take actions to amplify the bottom line with little commitment toward civic responsibility. Many businesses even often opt out of democratic constraints on responsible production specifically to avoid supporting the commons (or the future of their own society) by moving production to countries where there are few environmental or labor safety regulations. But why? Where was the operational disconnect? Was it in the rewards structures? Was it in measurement? Today, in my own company, we work with a citizenship dashboard, one that is as vital to us as more common metrics like Customer Acquisition Cost or Returning Customer Rate. It’s one way to bring focus to these subjects and keep our eye on the ball.
The language we use to discuss businesses that try to do good in the world makes it seem like doing good is optional. Terms like B-Corps, Corporate Social Responsibility, and Conscious Capitalism have been developed to parse businesses who think about the commons and the long arc of a business’s role in the world out from the rest of business. But those terms bother me because their very existence implies that there is an alternative: that you can run a business or a corporation and not care about those things.
But that doesn’t seem wise to me. If you’re part of a business that’s not thinking about the commons, you’re removing yourself from life: from the shared ecosystem of humanity and the planet that we’re all a part of. “Conscious” shouldn’t be a separate category of company; rather, all businesses should think and act like responsible citizens.
I’m working with the term “Citizen Business” these days (even though Citizens United—which declared that corporations can legally be “persons”—corrupted this concept). Because to be a real citizen, a business has to act like a citizen. This means that, in your sovereignty and choices as a business leader, you’re responsible for both the commons and other people.
During the last couple of years running Rosebud Woman—my own intimate wellness company—our team has been translating the principles of good business citizenship into tactical practice: checking in with our progress, making adjustments, and improving as we go. Since Rosebud Woman is privately held, there are no shareholders clamoring “More for me!” Our sales are in the millions of dollars, but not (yet!) in the hundreds of millions of dollars, so we have a little more flexibility in making value driven choices than some larger firms. Since our launch in 2018, we have been trying to operate this business in harmony with a world we want to see.
Trying to “do the right thing” has indirect and direct costs. My estimate is that this requires a full 15% of our gross margin (while not a lot as a % of sales, it’s an immense portion of profits). But we think it’s worth it. And while I can’t say exactly how much having shared values with our customers increases our sales, I do know it’s an offset to the costs incurred. This money doesn’t disappear though: the margin moves into circulation, it goes to employees and sustainable ingredient makers, and supports the evolution of the supply chain.
Internally, we’ve developed a dashboard where we measure our performance on four fronts: Clean Making, Just Economics, Inclusivity and Community.
—Make things that are good for human bodies. I want to create products that are actually good for the people who put them on their body.
—Make things in a way that is accountable for the planet body. Use packaging that takes the least amount of energy to produce, can be recycled, and is as enviro-friendly as possible. Focus on packaging with a limited impact on climate change. In this regard, we made a lot of good strides right at the beginning. We use Forest Council certified paper. We use organic USDA-certified organic factories. We use, wherever we can, glass packaging instead of plastic, and recyclable plastics when we must. And recently, we joined a program with Cooler that offsets the carbon impact for our entire line, from production to delivery.
Another dimension of a citizen business is how your actions impact the people who work for you, or with you, while building out a company. In the case of Rosebud Woman, everybody has equity and/or a level of ownership. They’re being paid above market rate, or at a rate which allows them to live comfortably in the cities where we’re located.
For Rosebud Woman, this means showing women of different ages, colors, and body types in our advertising. It means making sure that there is an equitable share of voice in our outreach: on our podcast, the people we blog about, and the women we feature are representative of the underlying culture. It means that the people we hire are representative of the real world we live in.
There are many ways to help repair the world. We pick issues related to our corporate mission—like domestic violence and maternal health—and assist activist organizations in those areas with financial donations as well as exposure. Each company must figure out what that community impact looks like for them.
All of these steps require thought, strategy and process, and some come with an out-of-pocket cost. Some steps, like committing to inclusivity, don’t cost a lot in terms of cash, but do require an investment in terms of attention. As an individual with race, class, and educational privileges, I can sometimes be blind to those facts. So, I have to reverse engineer a checklist for myself: Where do we want to get to, and what steps—available now—will take me there? How do I measure or track success?
Other actions, like paying people well—or paying for higher quality ingredients, or more sustainable or recyclable packaging—actually do cost hard dollars
Sometimes these costs can be passed on to the end user. Sometimes they can’t, and it really hits our gross margin. That’s okay with me. It might mean our owners are taking home a little less, but we’re helping to create a more sustainable supply chain in a world that looks more like the world that we want to live in. Plus, I have enough. As a human, as a business owner, I have enough. Now, that’s a big statement, and we all might ask ourselves as founders, as well as executives at larger businesses, when do they have enough, so they can pass the gains down the chain?
In this era of climate change, species extinction, and social injustice, that is not an abstract concept.
If you’re doing business in a location or culture that says, “We want to have good roads. We want to have great schools for everybody. We want to have clean water and clean air. We want people to make a living, and have quality discretionary time,” you have the obligation to help support these values—both financially and in spirit. It is wholly unethical to sneak around your responsibilities, or to bypass democracy for shareholder gain.
I want all of my fellow entrepreneurs to make a commitment to being Citizen Businesses: an integral part of the fabric of the culture, and the institutions we create. And to promote, with every corporate decision, a world that works for everyone. A world where we do not take more than is our due, where we live nested in the commons, not as isolated actors whose choices don’t matter. We are all evolving consciousness and culture, one decision at a time.
I invite you to have a conversation about this with me at any point.