B Lab Forces For Good Podcast — Episode 10: How can business learn from mistakes and improve?
B Corp Certification is a journey, not a destination. Making your business a Force for Good – and ensuring it stays that way – means constantly working to improve your practices. Whether or not they are part of the B Corp community, all businesses looking to improve their social and environmental impact can benefit from a continuous improvement mindset.
In this episode we hear perspectives on:
What is continuous improvement and why is it important?
How can B Corps acknowledge mistakes and continue to improve even after certification?
What is the B Impact Assessment and how can it help your business become a force for good?
Kaye Matereke, Senior Partner, Lighthouse Capital and Member, B Lab Standards Advisory Council
Chris Marquis, Professor, University of Cambridge and Author, Better Business: How the B Corp Movement is Remaking Capitalism
We’d love for you to rate and review on the podcast platform of your choosing to help others find us more easily, let’s spread the word and start the conversation.
Listen to Forces For Good now, produced in partnership with Hueman Group Media.
Chris: [00:25:06] entrepreneurs around the world are saying, you know, we're demanding a new type of company that better aligns with our values. And they're taking what has been done before and introducing it to their context and improving it along the way. [00:25:24][17.9]
Femme: [00:07:22] we have this certificate that says, You performed in this way and obviously you want to keep going. it's a milestone, but it's also the beginning of our journey as a company to only level up. [00:07:45][23.4]
Kaye: [00:05:46] I think to do good is easier said than done. People who are in that space have to work ten times harder than somebody who will just purely look at commercial gain. [00:06:13][27.0]
This is Forces for Good, a podcast from B Lab, the nonprofit network powering the global B Corp movement. Forces for Good takes a hard look at how businesses are helping to solve the biggest social and environmental challenges of our time. I’m your host Irving Chan-Gomez.
On our podcast, you’ll hear from B Corp leaders, industry experts, and changemakers. We’ll tell you about what companies are doing to move beyond buzzwords--and change destructive practices across industries. We’ll ask tough questions to uncover how we can truly drive positive impact for people and the planet.
B Corp Certification is a journey, not a destination. Making your business a Force for Good – and ensuring it stays that way – means constantly working to improve your practices. B Corps acknowledge that they are not perfect. Their leaders, like all humans, will inevitably make mistakes and missteps in their business practices. And when they do, they recommit to mitigating their negative impact and striving to create a positive one; on people, communities, and the planet. They learn and get better – a process known as continuous improvement.
Whether or not they are part of the B Corp community, all businesses looking to improve their social and environmental impact can benefit from a continuous improvement mindset. The goal for every B Lab employee, non-profit leader, and business we’ve talked to on this podcast is not perfection. It’s focusing on learning, accountability, transparency, and a commitment to getting better all the time.
In this episode, you’ll hear from a professor who teaches social innovation, a sustainable development investor, and a sustainability manager from a B Corp that discovered a mistake, acknowledged it, and made themselves better.
Femme: [00:02:07] I think we were we started our responsibility journey in 2017, [00:02:14][7.1]
That’s Femme Van Gils (Fem-ah fa-hills), the sustainability manager at Ace and Tate.
Femme: [00:02:16] we really realized through seeing the waste in our supply chains and the impact that every product, every happy customer has on the environment that we wanted to do things differently. [00:02:30][14.0]
Before Ace and Tate became a Certified B Corporation, they started using the B Impact Assessment to learn and apply B Lab’s standards to their operations.
Femme: [00:03:56] we looked at the 80 points. We were like, no way over our heads. But yeah, you can use the tool before you decide to actually, you know, file for certification. So that's really what we did again. Okay. Like what are the topics that are being asked and how can we shape our roadmap in a way that it's build up for that success? [00:04:18][22.0]
Ace and Tate officially became a B Corp in 2021. In order to become a B Corp, they had to make huge changes. They sell glasses and sunglasses. They switched their materials, wrote entirely new policies, and made major environmental commitments.
Femme: [00:03:27] being a B Corp also means that you naturally become a part of this community that all has its nose in the same direction and is reporting in the same way. So I think the added value of the community was also really important for us and still is today. [00:03:45][18.2]
As soon as Ace and Tate had their certification, they published an article titled “Look, We Effed Up.”
Femme: [00:12:48] we tried to be really radically honest. And I think that's an approach that we'll continue to take and we are continuing to take on our responsibility communications in general because Yeah. Being all this is the first step. Um, and of course, tackling whatever you hold yourself accountable for is step two. [00:13:13][24.9]
The article listed every quote “bad move” Ace and Tate had made prior to achieving B Corp Certification; things like “overlooking social impact,” “aesthetics over real impact,” “setting an unrealistic carbon goal,” and so on. They explained how they plan to change their corporate policies and practices in order to meet B Lab’s standards, and ultimately be a more responsible, relevant, and credible business.
Femme: [00:06:59] The whole process of becoming a B Corp itself, going through the assessment, really unwrapping that, turning it into projects and implementing the changes, that was one thing. But for me, actually, the biggest sort of hurdle almost started when we became certified. I was like, okay, now we actually have something to lose. You know, we have this certificate that says, You performed in this way and obviously you want to keep going. You know, we really see this as the beginning almost again of our like it's a milestone, but it's also the beginning of our journey as a, as a company to, only level up. [00:07:45][46.1]
We’ve talked about the importance of reporting and transparency in several previous episodes. But publishing every mistake your company has made is a bold move! If you want to read the full article from Ace and Tate, we’ve linked it in our show notes.
Femme: [00:26:07] I think it's really important to be honest about the process as well as the end result itself, like the trade offs that we needed to make in order to get to an end product [00:26:18][10.6]
Femme: [00:22:03] on a daily basis, of course, it's do we choose this material over this material, but then what does that do to the margin? There's also the element of the long lead time or this isn't available in the quantities that we need. [00:22:17][14.3]
Femme says Ace and Tate learned a lot in their quest to become a B Corp, and they hope their transparency will help push them forward.
Femme: [00:15:48] No one person, no one team can tackle changing a business because to become a more sustainable business, you really have to turn it upside down and inside out and look at it from all angles. And that requires company-wide efforts. So I think in that sense, we're approaching that in the right way. We're definitely not there yet. But it's all about progress over perfection [00:16:17][29.3]
Continuous improvement is vital to push the B Corp movement forward. Chris Marquis is the author of the book: “Better Business: How the B Corp Movement is Remaking Capitalism.” He echoes Femme’s comments, and explains why more and more companies are joining our movement towards purpose.
Chris: [00:25:06] entrepreneurs around the world are saying, you know, we're demanding a new type of company that better aligns with our values. And they're taking what has been done before and introducing it to their context and improving it along the way. [00:25:24][17.9]
For companies just starting their journey, Chris says having a framework is critical
Chris: [00:13:48] one of the really important continuous improvement tools that I've come across in my career is actually the B Impact Assessment, the BIA. And, you know, many companies told me that, you know, that was really a learning tool for them. [00:14:04][16.7]
This is the exact experience Femme described to me. To know you’re improving you have to have a baseline, and the B Impact Assessment helps companies draw that baseline. The B Impact Assessment is a digital tool that enables businesses to measure, manage, and improve their impact and performance.
It houses B Lab’s ESG standards, categorised across 5 areas - governance, workers, community, environment, and customers. Companies answer a series of questions reflecting best practices, with each question assigned a point value based on their relative impact. In order to qualify for B Corp Certification, companies must score 80 points on the B Impact Assessment..
Chris: [00:14:04] they, you know, maybe were or were not able to get an 80 or above on their first time through it. But if they didn't, that actually gave them a roadmap to get better, to continuously improve. And then every year, every recertification, they would then have a new set of things like, maybe they did really well and they got 120 on the BIA. But they felt like, okay, maybe we can introduce these new HR policies or new benefits to employees or new ways of reducing the waste in their organization or reducing travel or whatever it is. [00:14:47][42.2]
But even once a company becomes a B Corp, the B Impact Assessment can help them target areas where they can still progress.
Chris: [00:18:08] a number of companies I've talked to that are very, very socially responsible may actually miss important areas just because of maybe lack of knowledge or maybe it just wasn't the focus of the entrepreneur. [00:18:27][18.9]
Chris told me about a B Corp called Preserve. They produce household items out of recycled plastics. Everything from toothbrushes to cups and bowls.
Chris: [00:19:08] As a company that's really focused on recycling, they had hugely advanced environmental goals but also didn't realize actually on some of the worker and social impact, more social impact areas, they were a little bit lagging. And so this was something that they learned and obviously improved over time. [00:19:37][29.0]
There’s no ceiling for impact driven businesses. They can always discover a better way of doing things or an area that needs improvement.
Chris: [00:11:52] Market conditions change. Technology changes. And if you're just sort of standing still, if you're not continuing to improve, then you're actually probably going to be less competitive in the market and less of a fit with the business conditions. [00:12:14][22.4]
In addition to being an author and expert on the B Corp movement, Chris is a Professor of Management at the University of Cambridge. As an expert, he says continuous improvement is just good business.
Chris: [00:05:50] they see that actually having a purpose of delivering some sort of social and environmental value gives much greater meaning to their work, gives much greater meaning to their employees. It creates a culture where people want to work there [00:06:10][19.4]
Chris: [00:09:15] I recall one person commented to me that they're in sort of a unique industry for a B Corp. This entrepreneur, she said to me, “many of my peers, similar companies say, why are you doing this B Corp thing? And her response: Because I basically don't need an HR Department. I never lose an employee. And whenever I'm, looking to grow, I have a line of people out the door wanting to come work at my company. So I think that a big reason why is that having a purpose really creates a system that is much more effective. [00:10:02][47.4]
Businesses have traditionally defined success based on profits and growth, but with the B Corp movement Chris says founders and entrepreneurs are finding new ways to define success.
Chris: [00:06:15] Being a responsible citizen and not just taking advantage and extracting from the environment and society, but actually giving back to it is essential for all businesses. But I think the ones that really will succeed over the long term are the ones that where the entrepreneur has found or the leader has found a much broader purpose that people can rally behind and organize their work. [00:06:46][30.6]
Accountability is vital to this new way of defining success. We had a whole episode on greenwashing that showed how hard it can be to intentionally transform commitments into measurable change.
Chris: [00:29:53] it's hard. For businesses, it's hard for individuals to know what's actually authentic. There’s a lot of the attention, very good attention on the need to actually be net zero or carbon negative. I think so many companies are announcing net zero pledges, but a lot of them are pretty questionable. To my mind, I mean, they frequently are goals that are very, very far out, like 2040 or 2050. You know, it's not really clear if the actual companies are changing their operations or just finding some way to buy offsets. [00:30:34][41.0]
Ambitious net zero goals to reduce greenhouse gas emissions, for example, are great. But companies have to then make progress toward those goals – continuous, sustained progress.
Chris: [00:30:41] I mentioned that just to say that it's a challenge as an observer consumer to, know what the real deal is. And are companies actually, being accountable toward these goals. [00:31:04][23.4]
Workers, consumers, civil society organisations, and others can in fact hold companies accountable. This is made easier through business standards, assessments, and reporting frameworks that are widely available to companies of all sizes.
Accountability is also made possible when companies are legally required to prioritise people and the planet alongside profit. This is known as “stakeholder governance.” It fundamentally changes the purpose of corporations and what they’re accountable for, in order to improve their impact.
Chris: [00:34:36] having an overarching framework where you can see best practices of other companies, you know, is a very useful mirror in some ways to always keep holding up to yourself where you can see, okay, here's what other companies are doing. And, you know, maybe that's not necessarily what you want to do because of whatever historical or, sort of vision of the leaders. But at least then you can actually think and reflect on what the other alternatives are and whythe company may choose it’s certain way. [00:35:15][39.0]
Continuous improvement means raising the floor and the ceiling. Social enterprises and responsible businesses, whose very business models create a positive impact – they set the bar, and they have to keep raising it. In turn, policymakers have to keep raising the minimum standards for all companies. And, if we’re truly going to transform our economic system for the better, all sectors have got to work together in this virtuous loop.
Kaye: [00:05:48] I think to do good is easier said than done. It is more costly People who are in that space They have to work ten times harder than somebody who will just purely look at commercial gain. And so it's shaped my to help people who want to add or increase social value for people around them so that more people have jobs, more people have access to meals, more people have access to natural resources. [00:06:28][40.8]
That’s Kaye Matereke (Kaye Ma-ter-eh-kay). He has years of experience working with small // impact-driven ventures. He’s founded them, consulted with them, and even worked for them. He got his start with the B Corp movement at SOKO. We spoke with SOKO’s CEO, Joanne Calabrese, in our living wage episode. They produce ethical, handmade jewelry by working with local artisans in Kenya.
Kaye is now a Senior Partner at Lighthouse Capital. He is also the Founder and Chief Impact Officer at Tactive Consulting. He’s also a member of B Lab’s Standards Advisory Council.
Kaye: [00:10:56] What we find is that there are a lot of indigenous companies that are not supported from a consulting standpoint. A lot of the knowledge vehicles that exist, they're designed to support much larger enterprises. So they do not get the same advisory support so they don't get to mature. And in the same breath, when it comes to capital, they're too early stage to provide substantial records that unlock financing. You know, and unless we are intentional about providing access to knowledge around building sustainable enterprises that create value for society. And unless we're intentional about speaking to funds that have access to capital, speaking to middle to high net worth individuals that want to invest in early stage ventures and really bridging the gap between where the business is currently today and helping people establish the opportunity. We want to see indigenous businesses scale and what we've found is the intention doesn't solve the problem. It starts the conversation which allows us to speak to different users about what is actually practically possible. And then we walk that journey with intention. [00:12:32][96.6]
Kaye says to foster continuous improvement it’s critical to give small, impact based ventures the right environment to grow. He illustrates this point with a story from his own childhood.
Kaye: [00:14:41] When I was much younger, I struggled with my grades. I struggled incredibly, I think, for five years. [00:14:53][12.3]
Kaye: [00:15:13] I pretty much gave up in school. I was just like, Mum, this is not for me. It's probably for other people. then I started playing sport. and rose to captain and my confidence came up. And somehow, because I was working on something, I started to feel empowered to actually improve. And I didn't want to give up, so I tried again, and I found myself sort of accelerating over and above what I thought was possible and what people thought was actually possible based on my track record. [00:15:57][44.6]
Kaye: [00:16:03] the idea of continuous improvement starts as a personal journey. And the thing that sometimes limits us from continuing on the journey is just the motivation. [00:16:19][15.7]
According to Kaye, an entrepreneur with a strong sense of purpose can be unstoppable if they have access to the right resources and advisors.
Kaye: [00:18:18] So you really have to put yourself in a positive state working on the things you care about. But secondly, consistently check the environment on that journey and they provide the right support. Everybody needs fuel from the outside, some encouragement, some confirmations, feedback, and these are the things that actually facilitate development in a meaningful way. [00:18:43][24.6]
Kaye says, when he works with a small business he tries to get them to focus on the process.
Kaye: [00:20:36] we think of companies like a playground. And oftentimes the teams are in the playground and their job is to sort of experiment and try to figure things out. And how they know they're doing well is when they can transform the value that comes from the playground. [00:21:01]
You could argue that there’s never a ‘final’ outcome for a business. There’s just stops on a continuous journey. Kaye wants leaders and managers to always be evaluating what’s working and what’s not. Does the leadership style work? Do teams work well together? Is everyone getting enough feedback? Success isn’t just measured by revenue.
Kaye: [00:22:13] whilst revenue is a demonstration of the value created, it is not a demonstration of sustainability. Right? And so you need to look at are we contributing to our environment? Are we creating enough social value? Are we able to attract partners that will facilitate the growth of the organization? And then if we look closely, look at the service level agreements that exist within the company and if they are actually met, the whole goal of growth is not necessarily to get things right, but to incrementally be better than yesterday. [00:23:04][51.2]
All business ventures need to be open to growth and an incremental journey. But Kaye says especially at the beginning, sometimes they overlook details that will help them grow later.
Kaye: [00:03:24] growth and development is driven by demand or by the pressure of needing to create, phenomenal results. And so we need to always weigh how to reward teams that are working on areas that may not seem as critical or mission critical early stage, but they're building foundations that support the business with scalability and sort of just balancing the people we think are creating the most value to the people who may be in the shadows. [00:04:00][36.0]
Kaye also says that experimentation is critical for success.
Kaye: [00:04:07] where we also find businesses struggle is they don't allow for space to fail. But when we interrogate that thought, when we, when we say we don't want people to fail, we actually mean that we don't want them to grow. And the tendency is to then create an environment where the team is pretending to know what to do instead of trying to figure it out. Right. And that just decelerates the growth of the organization because people are cautious and you could call it mindful. But the reality is they're afraid to fail. There isn't room to fail. And I think if we could start to sort of rethink how we reward teams and really look at where effort is being worked by, even though it may not create value today, but how do we strengthen that? We will unlock tremendous value when we create high trust environments, we unlock incredible value. And then when we sort of move from competition to collaboration internally, I think we will transform the spaces that we work, which will then translate into the results that we want. [00:05:42][95.2]
To start an impact focused business you need clarity on the difference you’re trying to make and where the business can go.
Kaye: [00:08:21] I think when we pursue the idea of being a social impact company or an organization that generates a positive impact. That's a very nebulous sort of way of doing it. It's really wrong, and the only way for you to be sustainable in that regard is actually to define what your true intentions. Some businesses have the capacity to achieve a number of the SDGs. And in some cases some businesses can only address a couple. And I think from an internal perspective, it's important that businesses are clear on what their core intention is, and they sort of take that as the first step forward and progressively as they build capabilities around forward [00:09:23]
As Femme and Chris explained, standards and benchmarks give businesses an opportunity to measure and manage their impact and their progress. As a member of B Lab’s Standards Advisory Council, Kaye agrees.
Kaye: [00:13:21] we have an opportunity to create conversations around advocacy with regards to sustainability, with regards to equity, with regards to inclusion, which would have a direct impact on how people build businesses, and then as they go through the process of certification, that they also have technical support that has global experience to help really look at different ways in which we can solve this problem because it's not easy. There isn't sort of like a template that could be used for every business. It's really driven by the intention to create social value and the technical support to think through how we can build processes that achieve those companies. [00:14:18][57.5]
Within the B Corp community, companies can look around for examples of how to improve. They can assess themselves, and publish results to help others. But, no issue is static. Even standards have to change and continuously improve – and evolve.
Kaye: [00:18:44] The world. Ten years ago did not take climate change seriously. And so the standards that could have been set ten years ago are not truly indicative of what may be required, given the state of natural resources today. And, you know, it's the same issue. Inclusion, gender. These are topics that are coming in the business of human rights. These are topics that are coming to the fore today. But 20 years ago, they weren't. [00:19:20][36.6]
B Corps have to recertify every 3 years. So they have to take the B Impact Assessment again and make sure they’re still meeting standards of social and environmental impact – and, ideally, improving. Femme puts the ideas of collective action and continuous improvement best…
Femme: [00:47:11] I think on the topic of systemic change this is also something that is so easy to overlook and so important to address because it's super easy to also get a tunnel view focus, you know, on like, okay, this is our stuff, this is what we're going to work on. But like I said earlier, with sustainability, I think interconnectedness and that's why we see it as a responsibility because you're part of this system [00:47:45][34.2]
Irving’s closing thoughts:
This is our final episode of Forces for Good, Season 1. As we bring our season to a close, I hope our guests inspired you to think differently about the agency each of us have to take a stand and push for business to become a force for good:
As a worker– how can you advocate for better social and environmental practices, within and beyond your organisation ?, how can you ensure that your voice and that of your colleagues has a place in the decision-making of your company ?
As a consumer– rethink the role that consumption plays in your life and remember, we won’t be able to consume our way out of the challenges we face. So, can you rethink consumption as a means to satisfaction and change that energy towards caring for other people and non-human species ?
As a business leader– what are you truly prioritising, not only with your words, but with action ? How are you pushing for continuous improvement ? And are you collaborating with others to have an even greater impact ?
And as a citizen– how can you push your leaders to take action and recommend policies that benefit people, communities, and the planet over profit ? And are you putting your individual interests above those of your overall community ?
More importantly, even though we use these terms: worker, consumer, business leader, citizen even – always remember that above all of those, we’re human. And the more humanity we put into our decisions and actions, the better equipped we will be to tackle the challenges ahead of us, not just for society, but for life on earth at large. All of it.
If you'd like to learn more about our standards and offerings, including B Corp Certification, or support B Lab in its mission, please visit BCorporation.net.
And continue to follow B Lab on social media for updates on our work, including the launch of Season 2 of Forces for Good.
Please subscribe, rate, and review the podcast on Apple Podcasts, Spotify, or wherever you listen. Your ratings and reviews help Forces for Good reach new audiences, so we thank you for your support.
The views and opinions expressed are those of the interviewees and do not reflect the positions or opinions of the producers or any affiliated organisations.
The podcast was brought to you by B Lab Global. Our team includes Sherri Jordan, Rebecca Field, Jude Wetherell, Tom Hedges, and Hannah Munger. Forces for Good is produced by Hueman Group Media.
For this episode, I’d like to thank Femme Van Gils, Kaye Matereke, and Chris Marquis.
I’m your host, Irving Chan-Gomez. Thank you for listening.