The following is a conversation between Lorna Davis, Global Ambassador for B Corp, and Denver Frederick, the host of The Business of Giving.
Denver: Exceptional government programs and the outstanding work of nonprofit organizations can help address the most vexing social problems facing us, but perhaps, there is no greater force for good than business when that force is channeled in the right way. B Corp is leading the movement to see that happens. And it’s a pleasure to have with us, Lorna Davis, the former CEO of Danone Wave, and currently serving as the Global Ambassador for B Corp.
Welcome to The Business of Giving, Lorna!
Lorna: Thanks, Denver. Good to be here.
Denver: For those who may be new to all of this, what is a B Corp?
Lorna: So a B Corp is a certification for business. I guess the best comparison is sort of like fair trade for business, but it is more powerful in the sense that it is given to organizations with the highest level of environmental and social performance. You have to get more than 80 points out of a maximum of 200. And you also need to change your legal framework so that you declare your commitment to the broader community as well as to your financial stakeholders.
We’re really interconnected in the most obvious way really, just as all humans are. And the Declaration of Interdependence makes it clear that companies are no different from us as humans.
Denver: That’s a pretty high hurdle for companies to come up and cross. Also, companies who aspire to be a B Corp, they have to sign something called the Declaration of Interdependence. What does that commit them to do?
Lorna: It’s actually a fantastic statement, and perhaps those listening could go on the website and have a look at the Declaration of Interdependence. It makes an explicit commitment for people to run their businesses in a way that is interdependent with the broadest level of stakeholders.
And I think that what’s powerful about it really is actually the heading, which is predicated on the assumption that if you really are going to use business as a force for good, you’re deeply interdependent on everybody upstream from you — all of your suppliers, and everybody who’s actually delivering you anything; everybody downstream from you — your customers, your consumers, everybody around you, for example, the government, for example, not-for-profits, and everybody inside your company, people that we conventionally call our employees.
So we’re really interconnected in the most obvious way really, just as all humans are. And the Declaration of Interdependence makes it clear that companies are no different from us as humans.
Denver: When a company decides to become a B Corp, what impact has that had on the investment community? Do they shy away from companies who are not solely focused on maximizing shareholder value, or is it quite the opposite?
Lorna: Well, it’s changing dramatically, and it’s changing more in some countries than in others. I think it’s fair to say that the pension funds have been very interested in organizations that are committed to something more than just short-term financial returns. There are definitely shareholders that are only interested in the short term and interested in maximizing the buck and don’t care about anything else. But increasingly, that’s a question that people are asked.
I think that companies are asked by the investors. I think I‘ve noticed that European companies, and Latin American, and Australia and New Zealand companies are more enthusiastic about this subject and are very, very interested in the Sustainable Development Goals of the United Nations, and are using the Sustainable Development Goals as a leverage point, if you like, to inquire about the way that the companies are seeing themselves in a broader context.
Sadly, American companies are less excited about the Sustainable Development Goals, and American investors are less excited about the Sustainable Development Goals as a whole. But I think it’s fair to say that it’s a growing interest for almost all investors and, particularly, young investors… anybody who’s under 30, under 40, really. This is kind of an obvious thing for people to be asking.
We have discovered B Corp certification because we were looking for metrics that were really powerful, and I think it’s fair to say that corporates are metric-achieving systems. We liked that. Rhetoric is fine, but actually, we want metrics.
Denver: The vast majority of B Corps are relatively small companies. I think about 95% of them have 250 employees or fewer. So the significance of a multinational corporation, such as Danone, heading down this road is monumental.
You were there. Tell us a little bit about the journey and some of the challenges that a multinational has to address to become a B Corp.
Lorna: So the first point I want to make is that I think it is the way of the world, that small companies lead big companies in all of these ways. Startups generally lead legacy companies, and they kind of are a beacon of light for bigger legacy companies to follow.
Danone has always been interested in purpose. Like many family-oriented companies, Danone has a family history. There is a solid grounding in the broader environment. In fact, the founder of Danone used to say that the responsibility of a company doesn’t end at the factory gate, which was quite a radical thing to say in France in the ’60s.
I was there when the third CEO started, only the third CEO since the early ’60s, and he really wanted to double down on this journey. We started the journey in Europe by really engaging our younger people. We wrote a manifesto, which we then launched to a hundred thousand people. And then the young people in the organization, mostly young people in the organization, got really engaged, and we launched the V2 of that manifesto, which basically said, “This is the company that we want to be. This is the kind of company we want to be.”
It’s funny. American companies might have a vision; French companies have a manifesto. It all depends on your cultural context. And we have discovered B Corp certification because we were looking for metrics that were really powerful, and I think it’s fair to say that corporates are metric-achieving systems. We liked that. Rhetoric is fine, but actually, we want metrics.
And so, we had been experimenting with B Corp certification in Europe. We had got Danone Spain certified, which is about a billion-dollar business. And we were really impressed. There are tough questions around everything from how you pay your workers, to the gap in income between the top and the bottom of your company, renewable energy, carbon footprints, animal welfare, whatever you want. So, we were impressed.
It was tough, but it was also kind of multilayered. So, you can really double down on some things, and you can be less extraordinary in other things depending on the status of your business. And if you’re in the manufacturing business, it’s really important that you get people in your supply chain engaged. So that was kind of a longer journey for us.
So we were impressed, and then I came to the US when we bought WhiteWave, which was a big business and was very consistent with some of the values that we had. And we decided that we would try and make this huge $6 billion entity a B Corp. And we made it within the first year of integration, which was pretty impressive.
So we got just over 80 points — a combination of environmental and social performance. Of course, there’s a long way to go because Patagonia is like 152 points and Dr. Bronner’s is like 185 or something. But we got over the bar, so it was a big thing.
If COVID has sent a message to any of us who are thinking — and there are obviously some who are not — but I think the notion of us being able to survive as a single entity and not being interdependent has been swept away now.
Denver: So as a Global Ambassador for B Corp, when you’re asked, Lorna, “What are the top reasons for me to be a purposeful company?” What do you tell them?
Lorna: Well, I’ll tell them that you’re going to struggle to hire really good people in the long term if you don’t have a grounding and a meaning in your organization that people in your company can feel proud of. If you speak to, again, I said this earlier in the podcast, anybody under 35 is basically saying, “Well, it’s obvious that a company would have some sort of purpose.” So I say that you’re not going to have good employees if you’re not grounded in purpose.
I think you are going to struggle to have a solid customer base over time because, increasingly, I think, if COVID has sent a message to any of us who are thinking — and there are obviously some who are not — but I think the notion of us being able to survive as a single entity and not being interdependent has been swept away now. We’re clearly interdependent. So I think that customers are increasingly asking these questions and are going to ask more and more of these kinds of questions.
So those are the two big reasons. I do think that over time, investors will not invest in you as an organization if you don’t have a proper purpose agenda. And I think, in general, in order to have a contemporary, diverse, and inclusive style of leading, you need a purpose agenda. And I think, increasingly, organizations that are not paying respect to diversity and inclusion are not going to survive or thrive.
Denver: I think you’re right.
You have lived in seven countries, which I’m sure provides you with a great multi-perspective on so many different issues, but a really interesting period that maybe perhaps influenced what you’re doing today was the time you spent in China, followed by the time you spent in the US. Tell us about that time and the impact that it had on you.
Lorna: There’s no doubt that China changed my life dramatically. I lived there for six years, and it changed my life in a couple of important ways. The first thing is I’ve never felt more vulnerable and more unable to operate from some historical playbook than I did in China.
My dependence on other people for everything, from being able to speak the language, to just genuinely understanding the culture, led me to understand collaboration and interdependence in a way that I had never really understood before. I had always been able to wing it from a cultural point of view. And so I found myself reaching into myself and finding different ways of connecting with people and different ways of leading than I had ever imagined.
And I think the second thing that China did to me was to show me, at hyper speed, what would happen if we continued on the environmental path that we were on. Because you’ve got a billion people at least in China, and they only want what people in the West have had. And up until very recently, there was no economic reason for them to be able to do that. There was no economic means.
And as I saw China getting richer and richer, and as I saw the people wanting what the West had, I just saw the wholesale destruction of the planet — the way roads were being laid, the way food was being consumed. And I thought, “My goodness. If we carry on the way we’re going, we are on a path to nowhere.” And I hadn’t really got that before China. I was just kind of wandering along, doing my best.
Denver: And then you came to the US. How did that add onto that story from China?
Lorna: It’s funny because I always thought that I’d lived in China for six years; I thought I could live anywhere, and I’d never lived in the US before. And I came to the US, and I found the US harder than China, much harder than China. And people ask me why, and I think it’s because I had spent most of my life in a French company, which is a very… the French culture is more collective, if you like, much more socially connected. China, obviously, had a deeply collective culture.
And then I came to the US, which is an incredibly individualistic culture, a lot of focus on individual rights, a lot of resistance to relying on other people. And I found it lonely, and I found it mysterious really. I had never lived in such a powerful country, of course. China was a powerful country, but sort of emulating being a non-powerful country, just kind of behaving like No.2 or No.3, whereas the US was so powerful.
And having watched the US from outside for my whole life and understanding at some level so many things about the US, like I understood everything about, for example, what is a prom, and American football and stuff like that, and then coming into this country realizing that actually Americans knew very little about other countries… it was kind of a shock to me.
But then I got over it, and I have now come to see this country as a very important place to be. This is the most powerful country in the world. Its impact on the rest of the world is breathtaking. I’m very concerned about what I’m seeing in this country right now, around environmental issues and around social issues, and I think it’s super important that all of us who have anything to say make a big difference in this country because the rest of the world needs us.
The lesson that you need to learn is that everybody doesn’t see the world the way you see it. And once you’ve learned that lesson, you don’t really need to keep relearning it.
Denver: It really sounds like those different perspectives have informed the way you look at issues, and so many of us never have that opportunity. In fact, we don’t ever leave our hometown. It’s not even going to different countries. We sometimes don’t go to Texas or California or Alabama. Would you advise people, particularly young people, to make that part of their plan?
Lorna: No doubt. In fact, and it’s so great that you make that point, Denver, because, this great HBR article, which has finally actually proved the impact of living in another country, the beneficial impact of living in another country. And interestingly, it makes the point that after the first country, there’s really no incremental benefit.
The lesson that you need to learn is that everybody doesn’t see the world the way you see it. And once you’ve learned that lesson, you don’t really need to keep relearning it. I do think that it is as easy to learn that lesson if you come from New York, if you would have moved to Alabama, or if you come from Iowa, if you would have moved to San Francisco. So, I think that this country’s big enough that you could have that lesson by shifting to an environment that’s radically different from the one that you grew up in. Because once you get that other people don’t see the world the same way as you grew up, you don’t ever lose that sense of respect.
Denver: That’s a great point. Too many of us have a certainty that the reality that we’re seeing is reality. And there’s a million things in our environment, and we’re picking up on 10, and we think that everybody’s picked up on the same 10 so that must be the truth. And we now have a country that has one movie on the screen, but we’re watching two different movies.
There’s something about the transparency and the invitation for outsiders to be part of the journey that really does change the language.
Denver: So now being part of this B Corp community, how do things change? How does the language change, Lorna, the kind of questions that people are asking compared to, let’s say a more traditional business culture?
Lorna: It’s a great question because actually I think these are the most powerful elements of the transformation.
The first thing is once you acknowledge that you’re on this journey and once you announce that you’re on this journey — and I don’t know if you saw my TED talk, but in my TED talk, I talk about how important it is to declare your interest in the subject before you know how to get there. Because once you’ve actually told people what you’re trying to do, the unintended consequence is that people get invited into the journey with you. And in the case of an organization, that means your most junior people, and so you will find junior people asking questions that they wouldn’t otherwise ask because they’re passionate about the subject.
And I remember early on in the B Corp journey in Danone North America, we were about to close a factory, and closing a factory is always a difficult process. And in our kickoff meeting, a young woman who would not normally speak at such a meeting put up her hand and said, “What’s the B Corp way of closing our factory?” And by the way, we didn’t know the answer to that, which was terrific. And so that caused us to go down a really interesting inquiry.
The second thing is you get people outside your company being part of the process. So when we were doing B Corp certification, Patagonia was extremely helpful to us. We had an advisory committee of people who are outsiders asking challenging questions. Our customers and our suppliers were on the journey with us in a way that they pushed us. So, for example, Walmart, who had been really big on environmental questions for some time by then, obviously became an important part of the journey. So, I think it’s fair to say that the people outside your organization really become part of the system.
And one of the things that I encourage people to do, and I speak to companies all the time about becoming a B Corp or pursuing this journey — I don’t like people to get obsessed to get the certification because it’s actually the journey that’s really more important — is get yourself an excellent advisory committee that asks hard questions. And now, Danone global level has got a really challenging one. I’m on Seventh Generation and Sir Kensington advisory committees, and our role is to provoke and to challenge and to ask hard questions. And so there’s something about the transparency and the invitation for outsiders to be part of the journey that really does change the language.
And then, of course, just the questions that people ask become part of the game. So I’ll give an example. At Danone, we discovered that we had almost no renewable energy. Why? Well, we just really hadn’t thought about it. And we had lots of factories that we could have put solar panels on the top of, but it hadn’t been part of the capital budget. And so, we just hadn’t asked the question. As soon as we started going down this path, of course, every time the capital budget conversation comes up, we now say, “OK. How many solar panels can we afford? How can we kind of build out a sustainable or renewable energy capability? So pretty much everything changes.
Denver: Yeah. Yeah. No, I hear that. In the nonprofit sector, I talk to a lot of organizations. I say, “Your board is really going to have to think differently about what success is because success just can’t be the number of meals you serve or the people you help. It’s going to have to be, in your particular case, let’s say, food insecurity, and you’re part of a system. So if you’re going to measure it by the old metric about what we did and not what we did as part of a community to address the issue, we’re never really going to be able to change things.”
And it sounds the way you describe B Corps being part of that system, that people understand that it doesn’t end at their front door. Their part is something much, much bigger, and the issues that they need to contribute to or are negatively impacting have to be factored in.
Lorna: I do think that transparency or the ability for fresh air in your organization is really important because not only can you not keep secrets — and big organizations are designed to be opaque; they’re designed to keep secrets — as soon as you can’t really keep secrets anymore because you’ve got outsiders calling all over your business to do your certification, everything changes. But it also means that you really are opened up to unintended consequences of your business that you might never have thought about, that people would never have mentioned if you weren’t on this journey.
What I’ve discovered is the things that I can do on my own are almost always not really worth doing. They’re tiny. They’re not interesting. They’re puny.
All the big, important things that are worth living for need other people, period.
Collaborative leadership is a more natural way of leading for humans… it’s about stopping trying to pretend that you can do it on your own. And it’s about being brave enough and big enough in your goals for you to then invite other people into them, and then the natural human capability kicks in.
Denver: Let’s go back to that TED talk because I really did enjoy it, and I did watch it. And it really was your journey from being a hero leader to being a collaborative one, and I think you’ve touched on some of the points — the way you set your goals, how you announce them to invite people in. That, Lorna, is not an easy road to take because leader mind traps are there — We want to be the one in control. We want to take charge. We want to be right. Our ego. How are you able to let that go and become a collaborative leader?
Lorna: I think it all comes down to pursuing something that you think is important enough, meaningful enough, interesting enough. What I’ve discovered is the things that I can do on my own are almost always not really worth doing. They’re tiny. They’re not interesting. They’re puny.
Denver: What a great word.
Lorna: I haven’t used that word for a long time. All the big, important things that are worth living for need other people, period. I haven’t discovered a goal that’s interesting enough that I can do on my own. So as soon as you’re interested in something that is big and important, you’re immediately in the land of interdependence. Immediately. In fact, then it goes the other way. It’s like the unnatural way to do things is to do it on your own. When you get beyond tying your own shoelaces and making your own sandwich, independence is actually not naturally human. We are all interdependent.
One of the things that I love about COVID is everybody started off trying to pretend that they were living in some little perfect cell, and they kept their kids and their dogs and their husbands and wives out of the picture. And now, we’re seeing how random everybody’s life is and all the stuff they’ve got behind them and all the things that they’ve got in their world. Because that’s how humans are. We all need each other to do all sorts of things.
And so, I think that collaborative leadership is a more natural way of leading for a human. And so, it’s about stopping trying to pretend that you can do it on your own. And it’s about being brave enough and big enough in your goals for you to then invite other people into them, and then the natural human capability kicks in.
I don’t think it’s easy, by the way. And I say in my TED talk that I’m passionate about rhinos, and I’ve spent the last more than a year working on the rhino issue. And it’s been really challenging for me because I haven’t been able to lean on my kind of CEO chops, and people have been suspicious of me and wondering what I’m trying to do, and I don’t know what I’m talking about in rhino land. And so I’ve been humbled and constantly humbled again by my lack of history, power, credibility, knowledge. And yet, we have made really good progress, and I’ve learned a lot, and it’s been wonderful because I care about it so much.
When people ask me, and many individuals obviously come and speak to me about what they want to do with their lives, and I always tell them, “Go where your heart breaks.” Where your heart breaks is the place of access to power and influence and making a difference.
Denver: And when you care about something that much, I guess some of the headaches we have just become little tiny headaches. The mission will carry you forward, and you say, “Oh, I just have to deal with this as opposed to be consumed by this.”
Lorna: Indeed. And so when people ask me, and many individuals obviously come and speak to me about what they want to do with their lives, and I always tell them, “Go where your heart breaks.” Where your heart breaks is the place of access to power and influence and making a difference. Because as you stumble and struggle and I still…I can’t speak about rhinos without getting choked up. And so every time I think, “Oh, I just want to kill these people because they’re not doing what I want them to do. Because I’m a human, I think that. I think, “Oh. My beloved rhinos.” I settle down, pick myself up, and I start again. And rhinos happened to be my jam, but everybody’s got a different thing. And that’s your place of action.
Denver: And what you just did there, too, I think is so important for a leader, is that sense of stillness and being centered. Because I have found the importance of self-observation, that we’re all…because we have habits. And you fall into those habits because those habits have served you really, really well, and you don’t think about them. And to the extent that you can just sort of stop and almost have two of you — you acting and then the other you watching that movie and observing — that makes a big, big difference in terms of how you can change who you are.
Lorna: We all have our own technique, and what I do is — or our own insight, I guess — whenever I feel bad… stood up… I feel like a snow globe, that I’m stirring up my thinking, I just know there’s nothing to be done now. Do not make any decisions. Preferably, do not open your mouth. And as soon as the thoughts settle, something new emerges.
I think that the misunderstanding is that this way of leading is hard and something new to be learned. I actually think it’s an unlearning.
We are constantly stumbling, making mistakes, and learning as we go along. That’s how we learn to walk. That’s how we learn to feed ourselves. That’s how we learned to talk. That’s how we learned to do everything. So, this basic human ability to stumble and try, and stumble and try and learn is an important part of corporate learning or corporate culture, if you like, that we just need to kind of re-remember.
Denver: Let me ask you a couple of things about corporate culture. Because we sort of touched on this a little bit about speaking about language, but you’re not a big fan of corporate language, which is, in many ways, military language — it’s officer, deadlines, all those pretty hard-edged words. Why don’t you like it? And what would you do to replace it?
Lorna: It’s one of my favorite subjects because I do think that words create our worlds. And, interestingly, somebody the other day asked me how he could “deploy” his purpose, mission, and his company. And I started to hyperventilate because this is a classic example. Just the use of the word “deployment” says so much. It says, “I am broadcasting. I’m broadcasting down, and I’m telling you what to do. You’re just a soldier.”
I like family metaphors a lot because, as I said to you earlier, I think that the misunderstanding is that this way of leading is hard and something new to be learned. I actually think it’s an unlearning.
As humans, we grow up doing a few things that are important. First of all, we are constantly stumbling, making mistakes, and learning as we go along. That’s how we learn to walk. That’s how we learn to feed ourselves. That’s how we learned to talk. That’s how we learned to do everything. So, this basic human ability to stumble and try, and stumble and try and learn is an important part of corporate learning or corporate culture, if you like, that we just need to kind of re-remember.
The second thing is that in families, there are a whole lot of agreements — some spoken and some not spoken — that we all understand. So we learn to listen to each other. We learn to negotiate with each other. So I think family metaphors are really useful ‘cause they kind of re-remind us of our natural humanity and our natural skill. And so, people don’t feel so scared about their ability to lead or to operate like this because they go, “Oh yeah, that’s what I do at home. I’m constantly negotiating with my kids or with my granny or whatever.”
I love gardening metaphors. Because the thing that’s great about gardening is some things grow that we never planted, some things don’t grow that we did plant. There are all sorts of useful metaphors in gardening.
I think sports metaphors can be useful, although they’re often too competitive for my liking, and they’re kind of…
Denver: It can be military a little bit, depends on the sport.
Lorna: They can be. Indeed. But I think everybody finds their way. What I think is important is just understanding how powerful our language is.
Denver: Leadership is language, and, as you say, with a family, it almost gets into the territory of love. And really, in some ways, we do love the people that we work with, although so many of us would never dare say it in the fear of what the reaction would be.
Lorna: I’m so glad you said it. I use it a lot. And in fact, my favorite quote, maybe of all time, is Martin Luther King’s quote, which says, “Power without love is abusive and destructive, and love without power is sentimental and anemic.”
And I do think that business is a dance between power and love, and the use of the word love in business is interesting, and we all get to kind of use it depending on where we come from. Now, that I’m an old lady effectively, I just basically say whatever I like, and if they don’t like it, I don’t care.
I like the word dance. I think that’s important. There’s a really great article about systems by a woman called Donella Meadows, and she talks about dancing with systems, and about listening to the beat of a system, and about understanding how the beat of a system works before you start to influence it. So I think dancing is a good metaphor, and I do think that power and love is the best way to sum it up.
Denver: Absolutely. I’m going to close with this and revisit your passion because I am so interested in rhino poaching. What’s going on? How serious a problem is it? And what can be done to address it? What can listeners do to become involved in it?
Lorna: Oh, that’s so great that you asked that. Thank you very much. So the listeners can go onto the website of my partner in this subject, which is Wildlife Conservation Network and it’s wildnet.org. We’ve launched a rhino fund with them. We’ve quietly done it over the past year, and we’ve given away $833,000 to nine projects which we care about a lot. We’re big believers in treasuring and respecting rhinos and working with communities rather than militarizing the subject. We don’t believe in just building big fences and putting guns and helicopters, which is a fairly common response to rhino poaching.
Every day, three rhinos are poached for their horns. Most of their horns go to China or Vietnam where they’re believed to have all sorts of properties that, of course, they don’t have. They’re just made of the same stuff as our hair and our fingernails. So, it’s a terrible problem, and our view is that our collaboration with communities is the most powerful way of rectifying the challenge.
It’s been interesting that in COVID time, we’ve learned a lot because, of course, a lot of activity dropped. And as the water level of activity dropped, we saw some places where rhino poaching had in fact been blamed on communities, but the communities were still there and rhino poaching dropped dramatically. There’s a lot of corruption in the subject. There’s a lot of government corruption in lots of places in Africa. So if anybody wants to contribute, it would be really great. Wildnet.org is the organization. 100% of your donation goes directly to the field.
If rhinos are not your jam, we also have a lion fund, an elephant fund, and a pangolin fund. All of those species are under enormous pressure.
Denver: Fantastic. So Global Ambassador, if a company is out there and they’re listening, and they want to learn more about this B Corp journey for their company, where should they go, and how can they get started?
Lorna: So they can go on the website, which is bcorporation.net. There is a fantastic free tool on that website called the Business Impact Assessment. You can check out your own organization’s performance on that. And if you reckon you could be a B Corp, fill it out and press submit, and people will come back to you to verify you and check you out. But if not, just have a look at those questions that they ask about your company, and you’ll learn a lot about your performance.
Denver: Like you said earlier, it is as much more about the journey as it is about the destination. Thanks so much, Lorna, for being on the show. It was a real delight to speak with you.
Lorna: Thanks, Denver. It was a pleasure.
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