Have you ever thought about blending social responsibility with business? A B-Corp is a corporate structure that would allow you to do just that!
In this interview, Russ Stoddard talks about companies today that are focused on people, planet, and profit. He also answers questions to help you decide whether a B-Corp status might be right for your business.
About Russ Stoddard
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This transcript was auto-generated from the original video recording using Otter Voice Meeting Notes. While the transcript has not been human edited, we hope it will still help you to quickly find or reference useful information from the interview.
Welcome to Deliberate Leaders. I am Allison Dunn, your host. And today with us we have Russ Stoddard in the house with us. Russ is the author of Rise Up: How to Build a Socially Conscious Business. He is also the Founder and President of the Oliver Russell Firm, which is both a marketing company as well as a certified B Corporation. Oliver Russell is here in Boise and is a branding company as well as a company that focuses on brands that are purpose driven. Yes. Thank you so much for joining us.
It’s great to be here.
Yeah. So I love all of the discussion about what B Corp is. And I just, you know, for our listeners, I just want to make sure so like how would you define a B Corp.
A B Corp is a company that’s gone through a rigorous certification process that measures its social and environmental impact.
Okay. And my understanding is you are also a B Corp.
Yes, we are a both a certified B Corp and a legal benefit corporation.
What’s the difference?
Difference? Is that a legal benefit corporation as an actual governance structure that commits you to creating a public benefit with your company, it also gives you the flexibility to pursue bottom line outcomes that go beyond just a financial profit so that you’re serving stakeholders rather than just shareholders.
Oh, that’s amazing. So you have both certifications. And what, what caused you to want to do that?
Oh, well, I’ve always operated our business in a socially responsible way. We’ve been around coming on 29 years now when I discovered B corpse. It’s like wow, a What an amazing foundation or platform to actually certify from a third party perspective that you’re doing this in the community. And it gave so many tools to actually improve upon your performance in these ways that I just like, that’s me. And I’m a B Corp guy.
Yeah. How many B corpse are here in the United States?
And the United States? I’m not certain about the US there are 3600 internationally. Okay. We were number 299. So we’ve been involved in it for a while. Congratulation. Yeah, so it is growing considerably. Okay.
That’s so your number 299.
What? Why do you think it hasn’t taken off more just out of curiosity, like what would be some of the drawbacks that people would go I’m not sure if this is for me.
Oh, I think number one is good intentions. I think there are far more people interested in it then who go through the certification process. And part of that is you know, being an entrepreneur is tough and challenging. And it’s not like you necessarily need to add one thing to your plate to go through the certification process. So there’s a lot of work involved. Although I see that starting to change now. It’s almost as if we’re at a tipping point. I think there’s demand in the marketplace that recognizes B corpse as a differentiator, whether you’re a consumer, or it’s a b2b play. So I think it’s really just starting to catch on now.
Okay. So I think that’s, I hope that that’s the case that having more demand than you know, people who can qualify for it, and what are some of the steps that someone might need to go through in order to receive this certification?
Oh, you know, the first thing to do is to go to the B lab website, I think it’s B Corp. dotnet. B lab is the nonprofit that operates the certification process, and log on and create an account and then they’ve got some very interesting tools there that help you go through the process. Just even See if you’re interested in it, they have an abbreviated certification process that you can go through separately that I’d say like find some B corpse in your community, whether you live in Houston, Texas, or you live in Bozeman, Montana. There are lots of big corporations out there. And the entrepreneurs who run these companies are always open and welcoming. So I would just call them up, send an email and see if you could actually get a time to get together and ask some questions.
Fantastic. From the standpoint of this is, this is a certification focused for profit,
For profit, and it focuses to do environmental, conscientious type work correct. With the last No, please?
Yeah, I was gonna say not only environmental impact, which is everything from managing your waste stream to trying to minimize environmental output, but also how you interact in the company. Unity how you treat your workers, a lot of it starts with your workers. What sort of customers? Are you serving? Are there underserved communities that you’re actually placing an emphasis on, they’re benefiting. So it’s a kind of a very holistic process. It also gets into your governance as well.
Okay. And forgive my ignorance on this because I have a lot of understanding of like LEED certification from the environmental sustainability component of it. And the way that I look at it, this is a B Corp is you choose that versus being an LLC or an S corp, or C Corp. Correct? Or is it different?
No, you can actually be both okay, right. So you have to be a company, a for profit company, it doesn’t change your tax status or your designation there. So it’s really just about adding a voluntary certification. So it’s really you brought up the LEED certification. That’s for construction and buildings, and this is for a company same sort of a deal.
Yeah, that’s fantastic. So a lot of the work that you do at Oliver Russell, is it focused primarily on serving B corps?
We serve B corpse whenever we can. There is a very large community out there, of course of social enterprises that have a product service or business model that attentionally benefits society. And that can be everything from a certified B Corp to a large national nonprofit, to say a company that has a very strong Mission and Service orientation but has not been certified or changed. Its legal status.
Okay. And in branding and helping companies markets to position this properly, what has been some of the greatest success stories that you’ve been to kind of be able to wrap around, tell the story of and have it launched a company?
Oh, gosh, well, I would say a couple of examples there. One would be the Smithsonian. certification for bird friendly coffee that actually preserves biodiversity when you buy coffee that’s been certified in this way, and has had hardly any market recognition at all, even with the Smithsonian behind it. And we came out we rebranded them we came out with new messaging and a complete campaigned to actually help create more awareness with consumers around us been very, very successful. Another one is we’ve been working with a company here in our hometown happy day brands, which is a benefit corporation on its way to certification as a B Corp. And they have a one for one by one given model to help eradicate hunger in the community through its products, which are everything from coffee, to chocolate to just some of the most amazing all natural oatmeal products. And we’ve been helping them kind of blow it up and they’re doing fantastically well.
That’s cool. Now you just brought up by one gift So are we referring to B one g one when we’re talking about that are different. differ, okay?
Yes. What makes sure yeah. Different. I realized that the audience doesn’t know what I just asked is similar and related to but different.
Okay. So buy one get one. So when I, when I purchase a product, it’s also being given to someone else in who needs it.
Yes. Okay. That’s awesome. And that’s right here in our beautiful Idaho State. Yes, yeah. Cool.
Um, since you started all over Russell in 1991, when did you start focusing on purpose driven companies? Or is it been a natural?
Oh, I guess it would be an evolution we started with social responsibility is one of our core values. We became a B Corp in late 2011. When I first found out about it, I just jumped right into it. And we always had a bent for working with nonprofits and others but really, probably five years ago is when we decided you know, being a business person for starters is like a I think there’s an opportunity here with a niche market of B corpse and other purpose driven organizations that we can differentiate our brand around and serve very well. So about five years ago is when we really started focusing on it. And now we work with purpose driven organizations from Silicon Valley to the Smithsonian, companies in Singapore and New Orleans and all around the place, which is pretty interesting. And more often than not, they come to us.
I personally do a lot of my buying based on values that are near and dear to me. And I, you know, I can’t speak for my parents generation, but I don’t feel like that that was the case. Like, I feel like this is kind of a new wave of things. In Do you find businesses start as a B Corp or evolve and recognize that they are one
Well, there’s both kinds, okay. And I’d say increasingly many are starting as B corp And that’s because you have generation of younger entrepreneurs who want to align their values with their work their values, with their purchasing their values with their financial investments, and make it kind of a holistic thing. So you’re getting so many young entrepreneurs that could be anywhere from say, like 25 to 35, who are starting companies with this intent, then you have a generation of more established companies who either their private and there’s a succession of generations there as far as leadership goes, and the younger ones are now in charge, or you just have older entrepreneurs who are there and they recognize this is the way business is working. We need to change along with it.
Corporations for so long, especially for profit are obviously based on the profitability figure the bottom line, right. And so when I think about launching a business or converting a business to B Corp, do you see that is a value proposition in the selling model that increases sales or that? Meaning does the profit line suffer by making an investment in doing good?
Oh, super good question. And it’s tough to necessarily say, I mean, what I can tell you is it’s tougher, they’re running a traditional business. So how so you have to serve many different masters instead of one, right? So you have to consider what’s going on in your community? How are you improving it? What are you doing as far as the environment goes? So many things that traditional businesses typically Haven’t they look at, like how can we make sales? How can we be very efficient with our costs? And then how can we deliver as much as we possibly can to the bottom line, but that’s all changing, and it’s changing in a huge, huge way.
And I’d say the late or mid 1990s, feel camp date myself a little bit. There was an organization called business for social responsibility. And we had a New Hampshire chapter in which I was very active in, but it didn’t survive.
It didn’t survive. If we’re talking about the same one, it was almost a creator or a stimulant for the B Corp.
Okay, so just to get to the next level,and I think it might, if it didn’t survive, it might be around in some ways. They’re in Vermont, and Vermont really has a huge, huge population of B corps there. Okay, so I think it might even still be they had a New Hampshire, Vermont like, yeah, that’s kind of what I think that’s exactly right. And I think it’s still exists. And Vermont. Okay.
Yes. Yeah. Interesting.
I feel like this has definitely become a hotter topic. Certainly, you’re saying like 2011. Right. So that would have been almost, you know, nine years ago. How have you How could you compare like what’s going on right now to like, five years ago?
Oh my gosh, I should say even To like two years ago, okay, I think some of the big changes that are that you’re seeing the rise of shareholder activism in a new way, as far as like, publicly held companies go, I think one of the high watermarks of Larry Fink of Black Rock investments, which is the world’s largest investment firm and invest trillions of dollars, he come out and said, you know what business needs to change, we need to take an approach that honors stakeholders, rather than shareholders. And the primary reason for that is it’s going to make you sustainable in the long term minimizes a lot of risks. And this ties back into a question you asked earlier, and I didn’t fully answer. There’s a lot of research coming out now that companies that behave in these new ways are actually outperforming the traditional set of investments.
I am not surprised by that at all. Honestly.
How much do you think that the current marketplace is buying their purchases based on whether or not they’re in alignment?
Good question. I think it’s still small when it comes down to it, but it’s growing. And I’d say it’s still important though, because even though it’s small, you know, most companies margins are pretty thin, right? So it doesn’t take a whole bunch of movement as far as a shift in purchasing goes to actually affect more than the top line revenue, but actually profits. Right, right. So you could see like, maybe a company has 3% of its shares of its sales shift away because people move to different companies that align with their values, that 3% could be as much as 50% of their profits at the bottom truly. Yeah, I think two other things you’re really starting to see is in the workforce, you know, there’s a definitely a very tight supply of talent in the workforce. Right now and people are actually picking and choosing where they decide to apply their talent and their time as far as like values alignments. So that’s really starting to affect some change. And then the whole impact investment piece of it is really starting to move some things when capital starts getting allocated to companies that behave in these ways and not to others then it’s a it’s a it’s a huge hammer is changing.
So people profit and purpose. The three the three P’s well, profits, people, planet.
Planet, okay, thank you for clarifying that. And who, what is like the number one brand that’s doing it best?
Patagonia. Without a doubt, Patagonia it’s loving it, and it’s succeeding wildly because of it.
Where is Patagonia located?
They’re headquartered in Ventura, California, okay. And most people recognize Patagonia, you know, great outdoor clothing and gear manufacture. They’ve been around a long, long time. They just switched about two years ago, their purpose statement. And their new purpose statement is we’re in business to save the planet. They’re huge as far as the environment goes. And people are really rallying around the values and the way they activate them in the marketplace, the way they really live these things and think about a year ago, they actually crossed the billion dollar mark as far as sales and it’s just been going like that.
They’ve been around since at least a couple of decades I would say they probably started in the 70s.
Unknown Speaker 16:39
A billion dollar company? Yeah. And doing good. Doing great. That’s fantastic. Is there any particular upcoming startups in our area? And you know, youmentioned on happy brands? Yeah, yeah. And are there any others that you know, we should follow or listen to listeners should follow to just see what B corpse actually how they impact our community.
Oh, you bet there are two that recently certified as B corps within the last year. One of them’s called salt. It started by a couple of super accomplished business women and they make reusable period cups for women. And they’re just really, really kicking butt. And it’s refreshing to see because they’re supporting women in particular schoolchildren in developed in the developing world, many of whom have to drop out because they don’t have the proper sort of sanitary care and they’re providing period cups to them. It also eliminates a huge issue as far as the landfills go. And they’re just really killing it in the marketplace. So that’s really fantastic to see. Another one is a company called Andy dwell, which was started by a couple. There you go, super accomplished business guys from here in the community, and they make Affordable Housing that’s modular in nature using shipping containers. And they can build a one bedroom unit for about $70,000. And they’ve got huge interest from investors from communities. They’ve been around for two years. And I think they just opened their second manufacturing facility. First one was here in Idaho, and the second one is in Denver, and they’re just going great guns.
Oh, I didn’t realize they opened a second one. Good on. That’s great. What could you say are some of the favorite ideas from a branding standpoint that you’ve seen that you’ve been able to position?
Oh, I think like, favorite ideas, whether that be like activations or just strategies, strategy?
I mean, like you. Yes, yes.
So, I guess what I’d say is to use p er, okay, and influencers, because it’s always more powerful when someone else tells your story. Then when you tell the story. So that’s probably my key insight that if I were at offer it up to the audience that you have, it’s like get other people to tell your story, and it’ll be far more impactful.
It’s a good one, I’d say. The one thing that companies can always do a better job at telling your story, but to have someone else tell it.
And I oftentimes also tell people, especially in the social impact space, be the story. Don’t just tell a story. And you become the story when you actually do good things in the world.
So your family has the Oliver Russell company and then your wife is also doing something if she be corporate at just out of curiosity. You’re not a B Corp yet.
She just started a business a couple of years ago called Dream Farm Flowers. Yeah.
Okay. I see that as a future. Yes. Good to see that in her cards.
My daughter has a business that is becoming a B Corp and Excellent.
What is that?
She makes seasonings using crickets.
How’s that? cCickets being far more sustainable than many other protein sources? Interesting. Yeah. And she’s gone. She’s doing spectacularly well with it. She lives in a very small community and I know Salmon, which is out in the middle of nowhere. And she’s now in Albertson. She’s doing collabs with Boise Fry Company. She’s been featured in Ink magazine, and she’s becoming a big corporation. Well, congratulations. It’s in the family for sure.
For sure. Crickets. Crickets.
I have to check that out. What’s the name of that orchestra provisions? Okay, so a group of crickets is called an orchestra. Okay.
Yeah. That’s, that’s wonderful.
When would you suggest her guide someone to not consider a B Corp.
Oh, you know, I think there’s two instance in that sometimes their mission might require a different revenue models. So they might want to become a nonprofit as opposed to a for profit kind of looking at startup situation. And then for other startups, oftentimes I’ll say, plan and prepare to become a B Corp don’t jump into certification right away, because you need to make certain that you’re going to succeed as a business first.
And you bring that up, because there’s a long term commitment. I mean, once you’re a B Corp, what like Why? Why would someone wait?
Why would they wait just to make certain they can succeed as a business, you know, before they have to do what is it like, one in seven succeeds past seven years or what have you. And I think those early, early days are so critical that you need to make certain that your business is going to be sustainable.
That makes sense. Do people get rejected? Oh, yeah. Okay.
So this is an elite step. That don’t be I don’t want to use the word Yes. Like you absolutely have to profit. You just get it.
No. So you have to get a there’s a Mac score of 200. Okay, and you have to get 80 in order to be certified. And a traditional company by the same measures would just be at 60.
Okay, so a business that is fully functioning in a model would only be at 60 to 60.
And that would be like the average sort of score there. And first time I went through the assessment did not make it.
It was great to me because first of all, I had the shock factor of like, holy crap, I’m not as good as I thought I was. I thought I was behaving a lot of these ways. But then it actually showed me like, Oh, this is the real deal. This is not just a layup. This is not greenwashing or what have you. This is a real deal. So then went back and took another run at it made some changes to policies and procedures and the way we acted on and and made it and then every time we certify cents, and you have to recertify it’s now three years. It used to be two years between tried to use that as continuous improvement program to where we get better.
Yeah, that’s fantastic. Does the requirements of all are they pretty dramatic. So you could be corporate, they take it away.
They could take it away if you don’t, if you don’t score as much, and then it’s kind of it gets not necessarily complicated, a little bit confusing. If your B corporation is headquartered in a state that has public benefit corporation legislation, there’s legal benefit, like like we are, then you have two years to actually transition into becoming a legal benefit corporation as well.
So once you’re a B Corp, and it has legislation in the state you have do have to Okay, wow.
And a very high profile case around this was Etsy, the online retailing market for crafts people and what have you. They were a B Corp, I believe state of New York enacted legislation for public benefit corporations. So is also a public company and its shareholders voted no, we do not want to be come illegal benefit corporation. So they lost their B Corp status.
That’s a shame, but I also get it at the same time. Do you think that’s…?
I don’t know. I’m guessing it probably has hurt them in some art and seminars, I guess probably more internally than it is externally. Yeah.
What have I not thought to ask you that is a really important part of this conversation.
Oh, important part of the conversation is I was put on the earth to help other people. So if you ask me a question and be like, how could I be of help to people? My door is always open. I’m a mentor to people. I’m open for conversation. So phone call email, LinkedIn, or what have you.
Excellent. And I found you very accessible. So I think that I appreciate that and Appreciate your time here today. What is the best way for people to follow the impact you’re making through Oliver Russell with companies?
Oh gosh, well, it’d be follow me probably on social media, whether it’s LinkedIn, Instagram, Twitter, Facebook, or what have you. And then our website also does a pretty good job of it oliverrussell.com
Fantastic. Excellent. Thank you so much for joining us here today and sharing that idea of what B corpse can do for our community.
You bet. Thanks for having me. Absolutely.