The CEO of Ben & Jerry's says executives keep making the same mistake when it comes to defining their company's mission
- The ice-cream brand Ben & Jerry's, which has been part of Unilever since 2000, has been known for over 30 years as a pioneer in linking business with a social purpose - to the benefit of business' benefit.
- CEO Matthew McCarthy told Business Insider that executives often make the mistake of forcing a social purpose onto their company, saying employees and customers will see through a lack of authenticity.
- He said a purpose has to emerge naturally and that every business, not just ones like Ben & Jerry's, could benefit from having one.
- The Better Capitalism series tracks the ways companies and people are rethinking the economy and role of business in society.
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If you're an executive who studies what's polling well with employees and customers and has decided it's time to pick a "touchy-feely" cause to align with your brand, you're already working against yourself, Ben & Jerry's CEO Matthew McCarthy told Business Insider.
McCarthy's warm nature and long hair lend themselves well to a brand started by two former hippies, but that doesn't mean he's sappy about Ben & Jerry's social mission. It's a subject he takes seriously and thinks more executives should too.
Many businesses and chief marketing officers are struggling to find the perfect brand-cause fit, and McCarthy encourages them to "stop all that madness!" He laughed at what he sees as brands trying to seem like they're doing good because he has seen plenty of efforts in that vein over his three decades in business, and not as many results. Employees and customers will eventually always see through fakery during our age of "hypertransparency," he added.
"If you have the privilege of leading a business, make your values explicit," he said - but always act in a genuine way.
Over the past few years, various advocates have increasingly championed the idea of "stakeholder capitalism," which replaces a focus on short-term profits at all costs with one of long-term value creation through initiatives that benefit workers, communities, and the environment.
The philosophy has had advocates like World Economic Forum founder Klaus Schwab since the 1970s, and the nonprofits B Lab and Just Capital have been measuring companies' performance on such metrics for the past decade. And in the past year, it fully entered the mainstream in the US when the Business Roundtable, a collection of about 200 CEOs of America's largest companies, promoted the philosophy and when Larry Fink, the CEO of the institutional investing giant BlackRock, dedicated his last two annual letters to CEOs to it.
Over the past 10 years, Gallup has found that customers and employees want the businesses they interact with to have a purpose beyond making profits, and a 2018 study from Brand Finance showed that around the world, an average of 52% of a business' value came from intangible assets, like its culture.
In the '80s, Ben & Jerry's was an early proponent of linking business with social and environmental causes, so looking to it and McCarthy for stakeholder-centric insights is a safe bet. The ice-cream brand, which has been part of Unilever since 2000, has undertaken various initiatives, including taking steps to ensure the health of dairy cows and a program for providing people who have been convicted of crimes with jobs. McCarthy said every business' leadership needed to construct a set of values while avoiding two common mistakes.
Businesses force a purpose rather than let one naturally emerge
Ben Cohen and Jerry Greenfield started their ice-cream business in Vermont in 1978, and as it took off, they were mindful of how it grew. Within its first decade, they began donating to communities they operated in, and as they scaled, they implemented a policy of not working with dairy farmers who used growth hormones on their cows. When Unilever bought the brand in 2000, Cohen and Greenfield made the deal contingent on creating an independent board that would comprise social-activist members who would ensure the brand's mission to link its growth to social-justice causes would continue growing. For instance, on the brand's website, each board member's profile lists their affiliated nonprofit or social or environmental cause.
Today, Ben & Jerry's has around 600 employees across 38 countries, and its goals now include such lofty subjects as criminal-justice reform, fighting climate change, and racial and LGBTQ equality. McCarthy said that when there is a natural push within the brand toward a new issue, arising from discussions with employees and the board, he and his leadership team seek out new partners, rather than assuming they can handle it themselves. "We happen to be pretty good at ice cream and marketing," and those new partners are the experts in the topics at hand, he said.
McCarthy added that no one-size-fits-all solution exists to solidify a brand's mission. If it doesn't come naturally, look toward those who are on the front lines, he said. Everyone will see through a business forcing an identity seen as trendy or calling in a marketing consultant, according to McCarthy.
"If you're not sure what you want to do, start with your team," McCarthy said. "Go do a community project together. It doesn't matter whether you all love the Humane Society or not. Go do something. Go work at a soup kitchen. Go build a playground. When you allow yourself to be touched as a person by doing something good in the world, that's way more important than hiring an agency to help you figure out."
They assume only some businesses are suitable for it
"It would be a real mistake for any business leader to say, 'Well, businesses like Ben & Jerry's or Patagonia, they are made [to be socially conscious]," McCarthy said, referring to the outdoor-apparel company that has similarly pioneered the business-with-purpose model since the '80s.
One major mistake, McCarthy said, is to see some brands as "purposeful" and others as not. Sure, Ben & Jerry's cofounders - like Patagonia founder Yvon Chouinard - had personal interests beyond making money. But, McCarthy said, it probably would have been much easier for both brands to grow their businesses without incorporating social causes into their identities or to drop them at some point. The reward to employees and customers outweighs the difficulty of this approach, he said.
McCarthy also said he was aware of his place in a traditional business power dynamic as a white man and has responded to that by staying open to what his stakeholders want to see associated with their company. It's about "being willing to be a little bit vulnerable" without the "touchy-feely" corniness of an inspirational pose, he said.
"It's absolutely essential in order to engage in this process," he added.
He's seen how it has created stronger teams.
"Leadership will feel connected to everybody in the business," he said. "And people in the business will feel more connected to the leadership."