Sustainability for small businesses...a cost too far?

It all starts at home

Attitudes in the UK have changed over recent years. Smoking in public is more and more reviled, fat in the diet now has to be unsaturated, the numbers of people taking regular exercise has increased, and the sales of Fairtrade products in the UK rose by 12% in 2011 alone. We are also changing our approach to throwing things away, too. More and more of us actively recycle our household waste, use bottle banks and battery bins, and are generally more conscious of our impact on the environment. 

Larger businesses are reflecting public attitudes

In business, the greatest impact of these changes has been on big ‘household name’ businesses. At first, they all scrambled to generate Corporate Social Responsibility statements on their websites to try to persuade us of their green credentials, but now, as a result of the interactive nature of the internet and sites like Facebook and Twitter, these businesses have to ‘walk the walk’ as well. It doesn’t take much for the public to create a Twitter Storm about a product or service that isn’t seen to be ‘playing fair’. And these businesses are now quick to respond to such criticism and improve the product or service, fearful of the impact of negative publicity on their financial performance.

Becoming environmentally and socially responsible is easier for large businesses with deep pockets. They have huge reputational risk as well as the significant bottom line impact to consider. But what about smaller businesses; what are they doing to reflect these changes in public attitudes; can they afford to be sustainable?

Do small businesses need to follow suit? 

For many small businesses the thought of ‘going green’ can be very daunting. They don’t have the time or the money to spend changing their modus operandi. They often see reducing their environmental impact as having a real cost, which at a time of economic downturn is a simply one cost too many. It would seem that what is becoming standard business practice for large corporates might still seem like pie in the sky for some small businesses.

It doesn’t have to be that way though. After all, many of us have changed our attitudes to our personal carbon and environmental footprint and started switching off electrical appliances, washing our clothes at lower temperatures, using less water by showering more and bathing less, changing to energy efficient light bulbs and recycling not only our waste but also our clothes and mobile phones. It may not on its own save the planet but it can make us feel that we are contributing to a greener environment and saving a few quid into the bargain.   

The reality is that similar savings from reduced energy consumption are available to businesses, too. The Carbon Trust Advice Line’s free guide (see link below) is a good place to find out how to start.

The Triple Bottom Line

But in today’s changing world it isn’t enough just to think about the financial impact of business activity. The key for small businesses is to start to think about the Triple Bottom Line, that is the performance of the business against Social and Environmental as well as Economic factors. Think of it as how the business operation directly affects the 3 P’s: People, Planet and Profit.

But given that some small businesses are struggling to engage with relatively simple ‘green’ concepts why should they consider these other impacts? Well, in addition to the fact that going green can actually save the business money, there are two other key reasons for doing this. 

Reasons why small businesses must become sustainable

Firstly, as the customers and potential customers of these businesses change their attitudes to social and environmental issues in their personal lives, so they will start to expect similar attitudes from the businesses they buy from. As mentioned earlier, this has already started with large corporate organisations that are liable to lose customers if they aren’t able to demonstrate their Corporate Responsibilities. Customers will start to apply these conditions to smaller businesses, too. 

Secondly, more and more businesses are selling their products and services through supply chains and in partnership with other organisations. The reputational risk to the partner organisation, the next buyer up the supply chain or the end customer in sectors as diverse as the Public Sector, Retail, Construction or Professional Services will mean that businesses who don’t think about People and Planet as well as Profit will not be asked to tender for the business. In effect, such businesses will be left out in the cold.   

The truth of the matter is that becoming sustainable isn’t an option anymore for smaller businesses. It is now an essential part of future success. The question isn’t ‘can small businesses afford to be sustainable’; rather it is ‘can small businesses afford not to be sustainable’?

Further reading

Carbon Trust Advice Line free guide: http://www.carbontrust.co.uk/cut-carbon-reduce-costs/products-services/technology-advice/energy-saving/pages/energy-saving.aspx

The Triple Bottom Line: How Today's Best-Run Companies Are Achieving Economic, Social and Environmental Success -- and How You Can Too by Andrew W. Savitz and Karl Weber

Branding and innovation – the keys to unlocking long term future success

Marketing cowboys?

When I was a boy I wanted to be a cowboy, riding my horse across the Great Plains, driving a large herd of longhorns to the distant rail-head; all that beef on the hoof, all marked with my own brand to show they were mine. Like many a small boy’s fantasy, nothing of that dream ever became reality apart from the fact that I did end up working with brands, although in the marketing rather than the ranching sense.

They may have been developed for use on cattle but really brands are all about being human. They are about ownership, recognition, identity and even personality. They have become the standard way in which 21^st Century mankind recognises the product of human endeavour; a fundamental part of life from Tynemouth to Timbuktu. They identify all sorts of products from those around me right now such as Toshiba and Tetley, to the most far-flung of human objects such as NASA’s Voyager spacecraft. They are so familiar to us that we don’t even think of them as brands, they are just part of our everyday lives.

Hoovers aren’t all Hoovers

For the marketing executive, the ability to get the brand name into our everyday lives is a constant quest. I remember at business school learning that the ultimate in branding was to get the brand name to become the generic object, with Hoover being the example cited at the time.

But Hoover also serves as a great example of how a brand can be impacted by negative publicity. Their free flights promotion from 1992 saw the business overwhelmed by demand for the flights and resulted in a lengthy court case, directors losing their jobs, Hoover in the UK being sold and the brand being seriously damaged.

Having a great brand isn’t a guarantee of lasting success

More recently, there is the example of Eastman Kodak. For a century or more Kodak was the world leader in photographic film but is now struggling to compete in the world of digital photography. This shows that a great brand in a great business without great innovation can eventually lead to great problems. 

And then again, a great company with a great brand can try to innovate unnecessarily. Remember when Coca-Cola tried to introduce New Coke in 1985 in response to the growth of Pepsi.  Innovation, for a while, actually damaged both the brand and the business.

Look to technology giants to show the way forward

The trick is to get the brand right within a business that both protects and nurtures what it has, while having the culture to create and encourage new ideas. Such an approach lies at the heart of technology companies today. Because companies like Microsoft and Apple were set up and operated by young people with little regard for the old school working arrangements, they adopted a culture from the start that actively encouraged the development of the brand in parallel with true innovation. The commercial results have been startling in both cases. 

Today, technology giants like Google are forcing further ahead with its 20% Time rule, compelling their employees to spend one day per week working on new concepts and ideas. These businesses are fully aware that ‘game changing’ ideas often come from outside established businesses where focus on developing and commercialising existing ideas is fundamental to stakeholders. They are determined to buck that trend.

Application to smaller businesses

Finding small businesses that have the focus on brand building and commercialisation as well as having the space to support innovation isn’t easy. But these will be the key businesses of tomorrow. The key is to learn from the technology companies and embed these concepts into the business from the start. If you build in time to innovate from day one then it can become a fundamental part of what you do. It is surely much easier to create such a culture from scratch than to introduce one into an existing business.

But even if your business is up and running, it is never too late to validate whether you have that balance right. Invest a proportion of your time on a regular basis being creative, researching your competition, gaining a better knowledge of your market and its future direction, and generating new ideas to serve it better. But remember, whatever you do should always serve your brand.

I wonder if I was a child of the 21^st Century whether I would still dream of being a cowboy. Given the technological world we all now live in, I might dream of building a successful and innovative business instead. But I am sure it would still bear my brand.

Are small businesses being failed by traditional marketing methods?

Essential marketing?

When I set up my own small business, I remember all the focus at first being on creating the business itself – finding a name and a web address, getting advisors in place and getting the business registered. Of course, money was tight and I wanted to buy in only the bare essential services while I built up the business.

One of those essentials seemed to be some form of promotional marketing. As a new business offering professional services it was no good relying solely on existing contacts and networking opportunities. These had to be aligned with a decent website and some targeted marketing to let the world know about my existence. And all this had to be augmented by the considered use of social media outlets such as Facebook, You Tube, Twitter and LinkedIn, and even sites like Pinterest. 

The ‘push’ marketing model is broken

However, it didn’t take long for me to feel that something was wrong. The system wasn’t working for me. I was becoming just another consultancy service showering prospective clients with sales messages they didn’t really want. Instead of winning new customers, I was in danger of seriously putting them off completely.  At first, the only way I could see to get over the problem was to spend more time and money on marketing communications to make my content different, be smarter about how I focused on the market and be even more targeted on potential clients.

Then it struck me. It wasn’t that my messages were wrong; it was that the model of marketing communications itself was wrong. And it wasn’t just wrong for a services business like mine. It was wrong for many businesses and small businesses in particular. As a small business owner, I just couldn’t afford to spend the time and incur the cost pushing out my messages to potential clients in the vain hope that they would happen to land in their inboxes and doormats at just the right time. Traditional marketing communications lore deemed it a success if there was a 2% positive response to flyers and if 35% of emails were opened. Well that just wasn’t good enough for me. It wasn’t generating what counted – new clients.

The marketplace alternative

What was needed was a way for me to gain access to businesses and individuals who had an actual need for my services, in the right location and with a valid budget. If I could focus on real unmet demand then my success rate would be much higher. And if I could pay for that promotion on a commission basis only when I concluded a deal then I would have greater control over my spend and increase my margins.

If only a Marketplace model had been there for me back then. The ability for my prospective clients to easily discover my services when they had a real need for them and for my business to attract these real prospects through one on-line marketplace would have been ideal.  I certainly wouldn’t have spent as much time and money on ineffective marketing.  

Isn’t it about time we moved away from the traditional ‘push’ marketing method and embraced a Marketplace model that really attracts customers and favours small businesses?

Passwords bloody passwords....

Privacy Protection vs. Identity Theft

Now that Google has actually changed its privacy policy, the internet is alive with speculation that Californian giant may already be in breach of data protection codes in Europe at least. The French data protection authority has written to Google saying: "Our preliminary analysis shows that Google's new policy does not meet the requirements of the [1995] European directive on data protection."

Now I know that privacy of information and how companies like Google use what they have access to is very important but frankly I am still more concerned about the security of my identity online.

Can the war against Identity Theft be won?

In the wake of several articles over the recent years describing how businesses have lost user password details in hacking raids, I noticed in an archive article on the Chicago Tribune website that President Obama had last year urged the private sector in the US to come up with alternatives to passwords for user security.  

It appears the war against identity theft isn’t going too well and the cost to individuals averages around £450 and takes 130 hours to recover from. The bad guys are winning too often. Time for the cavalry to arrive!

Apparently, some of the biggest names in the US software industry are now looking seriously into the possibility of developing methods that consumers can use instead of passwords to identify themselves online.

Beyond passwords?

Now I don’t know about you but I hate internet passwords. I know you aren’t supposed to write them down and I know they are supposed to be difficult to guess but my problem is that there are so many applications requiring passwords that if you keep them all unique there are just too many to remember. 

And the websites themselves don’t help matters. There are no standards in the format of passwords; some insist on 8 characters, some insist on alphanumerics, some are case sensitive and some even prevent the use of certain characters. No wonder the most popular passwords used today include: 123456, password and iloveyou!

So now I am waiting expectantly for the likes of Microsoft and Google to make things a lot easier for me. No more passwords (or user names, for that matter) to remember and some new, sexy technology to solve my memory problem and keep my data secure.  

Is Big Brother watching you?

But maybe I will have to wait a good while yet. Maybe it isn’t as simple as that. One of the alternatives being suggested by the Obama administration would be to provide all users with some physical credential to generate a one-time digital password. Hardly a new idea but one that is already being met in the US with a chorus of public concern about their government promoting Identity Cards in a different guise. And you thought we were sensitive to having ID cards in the UK!

So the ball is now well and truly in the well-funded techies’ court. The Holy Grail is to come up with a solution that is completely secure, easy to implement and use, is acceptable to fair minded people and which is very difficult to hack. Simples!

My brain hurts...
So here’s to the new generation of password-less authentication and biometric fingerprinting. It all can’t come soon enough for me even though I get the feeling I could be waiting for several years. In the meantime, I guess I will just have to dust off my brain trainer and remember those bloody passwords.