(Illustration: Ashleigh Walker/Toby Morris).
(Illustration: Ashleigh Walker/Toby Morris).

PartnersJuly 31, 2020

Good business: how profit and purpose can coexist

(Illustration: Ashleigh Walker/Toby Morris).
(Illustration: Ashleigh Walker/Toby Morris).

The road to hell is paved with good intentions. The Mind Lab’s new leadership course is designed to replace those aspirations with action.

One of Nobel Prize-winning economist Milton Friedman’s best-known quotes is “the only business of business is business”. For him and many others who believed that the market should decide, doing good was all about the shareholders. Companies shouldn’t be concerned with social issues or even the negative environmental impacts they had on the communities they operated in. They should be concerned with making big, fat profits. 

For many businesses that’s still the main driver, but culture is dynamic. Movements grow, pressure is applied, tension rises and social norms and expectations eventually change. And, according to Dr Mandy Lacy, the programme director for The Mind Lab’s new course Leading Change for Good, there has never been more pressure to show that you care about things beyond making money. 

“There is a global consciousness around doing good,” she says. “Ten years ago, if you looked up social enterprise, you’d get charities and maybe government organisations, whereas now you get millions of results. We are seeing people doing business and running organisations with a huge social component to them. We’re seeing it in all sectors, across corporates, in community organisations, and startups with a real sense of what they’re doing and why they’re doing it.” 

Good is a notoriously difficult word to define, particularly in a time of increasing political polarity. One person’s good is another’s woke pixie dust, but for Lacy and The Mind Lab’s general manager Fee Webby, that doesn’t really matter. It’s up to the individual, group or business to decide what good looks like to them – something they call “authentic change”. 

“When we were asked by NZQA what ‘for good’ means, we had to unpack all that to get accreditation for the course,” says Lacy. “But it is also people’s definition. Whatever you’re into, you find the thing you want to do.” 

According to JB Were and Philanthropy New Zealand’s Support Report, which was released in February this year, “total giving in New Zealand is estimated to have grown from $2.7 billion to $3.8 billion between 2010 and 2018, an annual growth rate of almost 4.5%”. That number consists of private donations and bequests, grants from community trusts and foundations, and corporate largesse, but doesn’t include the significant value generated by volunteers.  

The Mind Lab’s general manager, Fee Webby (Photo: supplied).

So if there’s a growing desire to do good, why did they need to create this course? Much like The Mind Lab itself – which was founded by Frances Valintine in 2013 to “address the imbalance of what children were learning at school and the skills that the future requires” and now also helps teachers and businesspeople adapt to change – the pair say it’s about harnessing positive sentiment and giving students the tools to turn it into something that has an impact in a system that’s still prefaced on profit. 

“Leading change is exceptionally hard,” says Lacy. “Those people need support to manage things, to have their ideas fleshed out, and to have a forum to unpack their thinking. Often they don’t have the support where they’re working and yet what they’re wanting to do is really important. So they need to ask the right questions and send out the right information.” 

It’s often not enough that it’s right or good. You need to know the costs, the rationale, the emotions, the devil’s advocate point of view, and the markers of success, says Lacy. And the course offers students a framework to figure that out.  

“The change model pretty much stays the same no matter whose theory you’re looking at. There will be resistance, so how are you going to manage that?” 

The values chain

Recently, associate minister of state-owned enterprises Shane Jones loudly criticised Kiwibank’s decision to turn its back on what it deems to be irresponsible businesses. In his eyes, “woke banks are broke banks”. 

In Kiwibank’s eyes, moving away from sectors it believes are doing harm to New Zealanders and the environment fits with its values and will also be good for business. There is an inherent tension when organisations choose what to invest in, divest from or support, because not everyone will agree with them. But progress is a process and Lacy says this tension is often a requirement of change. She points to farming as a good example in New Zealand. Farmers believe they’re doing good because they’re providing food, while others believe they’re doing harm because they’re damaging the environment. 

“If these discussions hadn’t happened and awareness wasn’t raised around better farming practices, nothing would have changed,” she says. 

The Black Lives Matter movement and the protests around the world after George Floyd’s death have also led to a range of public statements from individuals and organisations professing their support for the cause. But a number of them have been criticised for falling short when it comes to actually exhibiting those values in their own lives or businesses. 

“I think that when companies do mission and value statements a question that needs to be added is ‘what does that look like in practice?’ It’s not just what it feels like, it’s how it’s acted out,” says Lacy. 

Increasingly, there is a financial incentive for businesses to embrace their inner ‘goodness’. Where consumers go, businesses tend to follow, so, based on consumer trends, larger companies are looking at ways to reduce their impacts and address some of their biases. They’re also constantly scouting for threats (and opportunities) and a number of startups have created models that are meaningful, better for the planet and also very profitable, which has forced them to pay attention. 

“You’ve got to start somewhere. It’s great that corporates are doing it. In the past, it could be challenged as being a little bit of tokenism. But now I genuinely feel that corporates are trying to do good, building it into their strategy, employing the right people who are in that space and then rolling it out.” 

Dr Mandy Lacy, is the programme director for The Mind Lab’s new course Leading Change for Good (image: supplied).

Deep impact 

One of the core components of the course is focused on how new business models can drive change. Lacy points to a new company called Tend, a remote health service that was started by Cecilia and James Robinson. The couple co-founded Au Pair Link and My Food Bag and, after experiencing the benefits of digital diagnosis themselves, created the new company to offer New Zealanders “easier and more affordable access to their GP

“It is often people who come in as pioneers and who keep at it who create change,” she says. “There is so much evidence that it’s right. And then people vote with their feet.”

Allbirds has experienced that quite literally. You could argue that having four pairs of very comfortable shoes (guilty!) isn’t ‘good’, but the company’s goal is to create ‘better shoes in a better way’. It has developed new, more environmentally friendly materials and it often pays more to use materials that are better for the planet. A principle is only a principle if it costs you something, after all, and while Allbirds is still a relatively small player, its success has started to apply pressure to some of the big, bad incumbents. 

Values are also becoming a “massively important” employment issue, says Webby. In addition to wanting safe, healthy and flexible workplaces, the best employees are also increasingly looking to work for ethical businesses that align with what they believe. And that means they want more than just a day off to go and plant trees. It needs to be deeper than that. She says younger entrepreneurs are also increasingly looking at their professional decisions through a personal lens.

Webby spent many years working in advertising and eventually realised she needed something more fulfilling. She met Valintine to chat about her career and left with a job. 

“I started that journey five years ago and I’ve seen it more and more since then. People are going down that purpose-led road and there’s much more focus on values now. I had to take a pay cut, but I’ve never regretted it once.” 

While there are courses that talk about the social and environmental impacts of business within a programme, they haven’t seen an entire qualification dedicated to it. And, with such a positive initial response, Webby thinks there is an opportunity to take it global. 

Measure twice, cut once

Lacy believes the ‘for good’ movement has been hampered by measurement issues. Economic indicators like GDP or profit growth are easily tracked, but she’s pleased to see new economic models like Kate Raworth’s Doughnut Economics or New Zealand’s Wellbeing Budget attempting to move other, harder-to-value social considerations up the ranks. 

The impetus to measure these things and shift away from engrained behaviours often needs to be driven by a passionate leader. And a major part of the course is about different leadership models, with a particular focus on indigenous leadership principles and kaupapa Māori values, which are embedded in the programme and The Mind Lab’s entire business. 

“My experience is that [indigenous leadership] is collaborative, it’s for the higher good, for the long-term good,” says Lacy. “There will be hui or gatherings where people can have their say. And I think contemporary models are moving towards that. I think we’re just catching up.” 

The Mind Lab is already a diverse organisation, with more than 27 nationalities on staff.  And, as part of its teaching and learning strategy Te Ara Kōtihi, 25% of its face-to-face teaching staff for the new course will be of Māori and Pasifika descent. This aims to reflect the diversity of the students it wants to attract. 

“If you hear a speaker who’s like you, you connect to that,” says Lacy. “Feeling like you belong is powerful … There will be mentorship from within the group as well because there will be a lot of cross pollination and learning from one another.” 

The Mind Lab’s Auckland campus (image: supplied).

Kill ‘em with kindness

Webby says indigenous leadership ideals are based on the idea of community coming together so that everybody succeeds. In comparison, the business and political worlds are renowned for being quite brutal, confrontational and very hierarchical. And Lacy says she has been shocked by the aggression and confrontation she’s seen in some sectors that profess to be about doing good. But, as Jacinda Ardern has proven, there can also be strength in kindness. 

“There will be a number of examples that come out about that in the course,” Webby says. “We see the softer skills within leadership coming through now.” 

In the process of establishing the course, Webby saw the need for these lessons everywhere she looked. But one of the most important lessons they hope to impart is “that you don’t need to be a leader to lead change”. 

Webby points to an example in her own office. A 21-year-old intern found their use of paper wasteful, so she examined the problem, pushed for a paperless solution and has saved both money and trees. 

“Going through the expressions of interest for this has blown my mind,” says Webby. “There is no trend at all. It’s so cool. There are people from corporate, iwi, government, charities, non-for-profit, education, the building industry, arts, tech as well.”

Many businesses are dealing with change at the moment and may be more focused on survival than doing good. But both Lacy and Webby believe Covid-19 will increase demand for the course, not reduce it, both because there are groups that are in need of more help due to the pandemic and, in many cases, the lockdown has led to reprioritisation of values. 

“It’s being offered at a really relevant time. People are looking at different ways of doing things,” says Lacy. 

She believes lockdown showed how adaptable we all are, particularly when we’re united behind a common goal and that goal is communicated well. 

“That’s what people want when you’re leading change and you’re trying to get people to come with you. It’s often seeing something in action that turns us. It could be a lot of talk, but when we see results, they speak for themselves. 

“With the programme we’ll have more and more case studies. It’s been so great opening the lid on this and the amount of amazing people and initiatives in New Zealand just heartens me. Every day I’m finding something. There’s such a groundswell in this area, so the unconverted will get dragged along anyway.” 

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