Building Sustainable Legacies

Reflections about the B-Corp movement launch in Europe

The importance of unintended consequences when creating change

The B-Corp movement in Europe was officially launched yesterday, at the corporate headquarters of Triodos Bank, in the Netherlands. Triodos is the European posterchild of the B-Corp movement, much like Ben & Jerry was in the U.S. We celebrated the founding 70 B-Corp companies across Europe, a cohort of mostly small, often start-up entrepreneurs in a variety of sectors including consulting. A few stand out: Fairphone and Dropper are good examples for the kind of DNA these founding companies share – coming up with innovative solutions to environmental or societal problems, looking at the business value chain and governance structure in a holistic way.

I represented Business School Lausanne as B-Corp country representative for Switzerland, a position we share with Codethic in Geneva. BSL is not (yet) a B-Corp. We completed our accreditation with the Economy for the Common Goods (ECG) movement in 2014, a slightly more profound and progressive movement with otherwise very similar ideas as the U.S. initiated Benefit Corporation. More profound in the sense that its starting base is a matrix that measures the contribution of a company to the common good (or society) in a holistic outside-in way. More progressive in the sense that the ECG is based on values derived from many European constitutions whereas the B-Corp frames doing good within a broadened business paradigm (of triple bottom line). The difference simply depicts the philosophical differences of the two continents: Europe is generally acknowledged to have a much deeper sense of sustainability and responsibility, whereas the U.S. is generally acknowledged for the innovation power of business and an inane sense of embracing opportunistic effectiveness. This may sound judgmental, but it isn’t. Both approaches are hugely important and relevant. From where I stand, they are hugely complementary and mutually enriching. I would love for the two movements to join forces and double the pace and scale of change we need business to deliver for the benefit of society and the world. Will this ever happen? Probably not; for many reasons that have prevented similar parallel initiatives to join forces. I recall that it took one third of the time to get similar initiatives on talking terms when we initiated the 50+20 movement – a compound name reflecting the need to give up individual brands for a larger cause. Quite a challenge!

Another thing that strikes me is how differently the two movements have gone about expansion and growth. On the one hand, the ECG has spent much time and probably too much energy on building a bottom-up democratic base structure with carefully discussed governance in every member country, honoring transparency and dialogue at the expense of speed and effectiveness. On the other hand, the B-Corp movement appears to have operated in a nearly diametrically opposed manner. Selection of regional partner (entire continents) or country partners (for example across Europe) has happened haphazardly at best, instilling little transparency in the process and investing little to nothing in building relationship across countries in regions (I can talk for Europe). Communication is scarce and the information gap between those in the know and those wondering, is significant. Both processes have their advantages and disadvantages. While the ECG movement frustrated me with their endless discussions and internal organizational focus to the point that I largely withdrew from the community, the B-Corp movement caused frustration due to overlaps and multiple uncoordinated country representative appointments. While the ECG movement decided to first built up a strong community at the expense of speed and impact, the B-Corp movement decided to focus on accrediting as many companies as possible in a short a period as possible at the expense of a coherent and transparent organizational operating structure. One may be tempted to say that these very different approaches themselves may be indicative of the different operating modes in Europe and the U.S. But that would be too stereotypical and easy.

What I find interesting is to reflect on the impact of the two very different types of frustrations which really reflects so-called unintended consequences of otherwise meaningful and well-considered decisions. If I could choose if I rather be frustrated because I cannot seem to be able to move into action because of the slowness of the ongoing internal alignment process (ECG), or if I prefer being frustrated because others are stepping on my toes in an effort to move ahead and implement change (B-Corp), I must say I much prefer the latter. And this is important: it is not about attempting to prevent frustration at all – that would be not only mission impossible but would require a degree of reflection and preparation that would kill any movement before it would ever get started – but to choose the least damaging unintended consequences. And here, I must say that the B-Corp movement is light-year ahead of the ECG movement. It is important to outline that there is also – unsurprisingly – a downside: namely the risk of partners angrily leaving or dropping out and the initiative needed to relaunch in a given space. Yet that downside is very similar to the reaction I had experienced in the other approach.

For the moment, both movements are quite comparable, have achieved similar adaptations and accreditation of leading small and medium-sized companies and have started a process of global outreach. Yet, of my students, 80% know of the B-Corp while only 20% know of the ECG. It may be a language thing: the B-Corp benefits from English being such an international language and the ECG movement still stuck in mostly German and Spanish with few efforts beyond what our BSL students offered as voluntary help 3 years back when they translated the measurements into English. It may be more. I think it is more than just language. I would suggest here in closing my reflection of the two movements, that the B-Corp movement has been fortunate enough to create frustrations that trigger action and advancement, as compared to the ECG movement that created frustrations that triggered non-action and retrieval.

This is an invitation to be mindful about the kinds of unintended consequences our attempts to “occupy the common space” have. How can we step up and embrace change and err in the direction that will result in more action and more engagement rather than in less action and less engagement? I like dilemmas and what I describe certainly is one. It also demonstrates that perfection is neither important, relevant nor desirable – a focus on unintended consequences (or risks to be mitigated) is much more relevant when choosing an implementation strategy. Remember, you can always adopt and change. Or to use the words of the founder of the Jesuits: “It is better to ask for forgiveness than to ask for permission”. My B-Corp vs. ECG case study is a clear demonstration of the upside of such a radical (maybe even unconscious) choice.

Advertisements

Author: Dr. Katrin Muff

Dr. Katrin Muff is a thought leader in the transformative space of sustainability and responsibility at Business School Lausanne, where she acted as Dean from 2008-2015 until self-organization made such a title redundant. Under her leadership, the school focused its vision on entrepreneurship, responsibility and sustainability in education and research. Her business experience includes 10 years at ALCOA (GM in Russia, Industry Analyst for Global M&A in the U.S. and Business Analyst Europe), 3 years as Director, Strategic Planning EMEA at IAMS Europe (Procter&Gamble), and 3 years as a co-founder of Yupango, a coaching consultancy dedicated to start-ups and training management teams.

Comments are closed.