Ben & Jerry’s: a Role Model in B-Corp Innovation

Ben & Jerry’s is an American company that manufactures ice cream, frozen yogurt, and sorbet. “It all started in 7th grade gym class.” writes the co-founder of the now-iconic Ben & Jerry’s Ice Cream. Their little ice cream store, which started in an old gas station, went on to change the definition of business. The company was founded in Vermont by Ben Cohen and Jerry Greenfield in 1978 and was sold in 2000 to Unilever. When Ben and Jerry’s ice cream business started taking off, they decided that, if they could not grow the business by spreading the wealth across the community, they did not want to do it at all. This required a change in management techniques, new metrics, and a new way of thinking about the role and importance of a business in a community. Finally, Ben & Jerry’s social mission, which influenced and was influenced by the companies it partners with, shows how its transformative partnerships make Ben & Jerry’s a values-led company.

Their support for family dairy farms, as outlined in their Sustainable Model of Linked Prosperity, operates on a three-part mission that aims to create prosperity for everyone connected to their business. Some of the more well-known, long-standing examples of linked prosperity include their livable wage policy, ongoing support for family dairy farms, commitment to supporting small-holder agricultural producers by purchasing Fairtrade-certified ingredients, and investment in values-led sourcing partnerships, among other things. Moreover, Ben & Jerry knew from the start that they couldn’t make quality ice cream without milk from quality cows in the care of quality dairy farmers. Therefore, in 2010, the Ben & Jerry’s Caring Dairy™ program was established to offer a practical framework for understanding, evaluating, and improving the sustainability of their partner farmers’ dairy operations. This shows how a successful, mission-driven business can influence and be influenced by other mission-driven businesses as they grow together over the years.

Their support for family dairy farms, as outlined in their Sustainable Model of Linked Prosperity, operates on a three-part mission that aims to create prosperity for everyone connected to their business. Some of the more well-known, long-standing examples of linked prosperity include their livable wage policy, ongoing support for family dairy farms, commitment to supporting small-holder agricultural producers by purchasing Fairtrade-certified ingredients, and investment in values-led sourcing partnerships, among other things. Moreover, Ben & Jerry knew from the start that they couldn’t make quality ice cream without milk from quality cows in the care of quality dairy farmers. Therefore, in 2010, the Ben & Jerry’s Caring Dairy™ program was established to offer a practical framework for understanding, evaluating, and improving the sustainability of their partner farmers’ dairy operations. This shows how a successful, mission-driven business can influence and be influenced by other mission-driven businesses as they grow together over the years.

In 2012, Ben & Jerry’s became a Certified Benefit Corporation with B-Corp legal status, which measures and benchmarks the social impact of a company. During the same year, they started the Producer Development Initiative (PDI), which is the process of mapping their whole value chain, starting with supporting farming communities around the globe, and working with them to improve their environmental footprint. Its dairy farmers follow strict environmental standards that get stricter every year, and Ben & Jerry’s helps the farmers cover the cost of meeting these increasing standards. Like Ben & Jerry’s, benefit corporations don’t get special tax breaks. The difference is that decision-making at a traditional corporation is usually focused on maximizing profits for the benefit of its shareholders, and pursuing a public good may be viewed as inconsistent with this motive. Benefit corporations, on the other hand, have expanded their purpose beyond shareholder value to explicitly include general and specific public interests and social causes.

Thus, Ben & Jerry’s is committed to paying all of its workers a livable wage, and their Livable Wage Policy covers all full and part-time employees. They defined “livable” wage to mean the amount needed to sustain a reasonable quality of life, which includes expenditures for housing, utilities, out-of-pocket health care, transportation, food, recreation, savings, taxes, and other expenses. Since 1995, they have adjusted this livable wage annually to ensure the relative value is sustained in today’s marketplace. For instance, in 2015, it was set at almost $17 per hour, compared to the Vermont minimum wage of $13.

Furthermore, Ben Cohen had courage and a deep, intuitive connection to his customers. He was a pioneer of the Benefit corporation, which requires a balanced consideration of the impact of their decisions not only on shareholders, but across all the community. The movement for marriage equality, which now seems to be a solidified societal achievement, was supported by Ben & Jerry’s since its early stages. In the late ’80s, they began offering health and insurance benefits to all domestic partners, . In the UK, they support community empowerment via their partnership with Bob Marley’s 1Love Foundation. In Jamaica, they partner with with Partners for Youth Empowerment, and in Australia, they advocate for the Great Barrier Reef.

Since 2011, Ben & Jerry’s has also partnered with the social entrepreneurship organization Ashoka to run Join Our Core, an international competition aimed to find and help support the best young social entrepreneurs. Innovative businesses with strong financial sustainability and a positive social and environmental impact are invited to apply for the prize. Ben & Jerry’s has a progressive, nonpartisan social mission that seeks to meet human needs and eliminate injustices by integrating these concerns into their day-to-day business activities. All of the suppliers for Ben & Jerry’s ice cream are expected to follow practices consistent with the Code of Business Principles of their parent company, Unilever.

In 2015, Ben & Jerry’s defined a comprehensive climate justice strategy, which includes a self-imposed price on carbon. These revenues are invested in projects and innovative technologies to help achieve their ambitious long-term goal of reducing the absolute carbon footprint of their business by 80% by 2050, which is in line with globally established targets. Today, Ben & Jerry’s B Lab score is about double that of an average sustainable business, while maintaining the $1,232 billion (global sales) business economically healthy, showing that it was not only one of the first to become a model for the benefit corporation, but also that it is still among the best.


Lionel Coezy is an exchange student from Guadeloupe, a French island in the West Indies, and is studying at Rensselaer Polytechnic Institute. Lionel studies in Paris at ESSEC Business School. The multiculturalism of his native island Guadeloupe built the open minded person he aims to be. Therefore, the comprehension of the world as a whole is his top priority.

Photo by Opacitatic from Wikimedia Commons

Innovation and the Gig Economy: Could the rise of the gig economy lead to an increase in the number of breakthrough (revolutionary) innovations?

Innovation within an organization may be impacted by a variety of different external factors, such as the economy, industry regulations, labor strikes, etc. One major external factor that could impact innovation within a specific company significantly is the rise of alternative work environments. An example of this  is the gig economy.

As defined by techtarget, the gig economy is “an environment in which temporary positions are common and organizations contract with independent workers for short-term engagements.” Some industries and occupations lend themselves to the gig economy, including ride sharing (i.e. Uber, Lyft), delivery driving, consulting, computer programming, and engineering design.  What’s the impact of this new work option on innovation?  We don’t know yet, but I believe it will be positive. In other words, we should expect to see more breakthrough innovations as a result of the rise of the gig economy. Here’s why.

Increased Collaboration

With the gig economy gaining much traction in the last few years, with it comes an increase in collaboration between independent contractors (commonly referred to as freelancers) and gig clients (often established companies). In an effort to support strategic intent and define/identify potential new business domains that might be crucial in the future (but which might not be possible now), these companies invest heavily in what is known as the “discovery” phase of innovation. As part of this investment, these companies look both internally and externally for new, breakthrough ideas. Participation in the gig economy is one way of doing this. By hiring external, independent contractors, larger organizations are able to (as mentioned by Fortune) use “freelance workers as a source of fresh ideas and ‘knowledge transfer’ from the wider world (better yet, their broader industry)” and tackle the same problem in order to come up with a variety of solutions. This increase in collaboration between established organizations and external parties (as a result of these idea-generation investments) lead to increased teamwork and more free-flowing ideas from the company’s perspective, since hiring independent contractors pushes the company to coordinate with multiple parties and gives them a wider perspective on and more diverse solution set to major issues they might face, thus increasing the likelihood for both evolutionary and revolutionary innovation to occur. As Ian Morley mentioned in his article, The rapidly expanding gig economy is not merely a response to changing economic conditions, “Just about everyone agrees that more collaboration is what’s needed in the modern workplace. That’s because teamwork generates more and better ideas, driving the innovation needed to be competitive in the global economy.”

Autonomy

By allowing for people to not be restricted to one sole employer, the rise of the gig economy gives independent contractors the freedom to work with many different organizations within an industry (and not be constrained/limited by one specific organizational culture). By doing so, their perspective is widened to a variety of industry and market issues. This diverse perspective may then be leveraged by and used to benefit established organizations, exposing them to a different, unique way of thinking, allowing them to gain access to expertise they don’t currently have in-house, and aiding in the facilitation of identifying breakthrough opportunities through extrapolation and application of these diverse solution sets (created by independent contractors) to major industry issues. As previously mentioned, this significantly supports the “discovery” phase of innovation (which can often be very costly, as shown by the pharmaceutical industry) and allows companies to increase their chances of identifying potential breakthroughs. Upon identification and proper evaluation, these ideas then have the potential to be incubated and commercialized (accelerated) using organizational resources and investors.

Drawbacks

Although the gig economy brings with it an increase in collaboration and the exchange of ideas, there are definite drawbacks to organizations seeking to commercialize externally-generated innovative ideas. A major disadvantage is that the opportunity recognizer does not work for the company.  Does this “innovation migration” lead to an overall increase in breakthrough innovations within industries? Or does it ultimately deprive brilliant innovators of resources necessary for them to change the game and subject these breakthrough ideas to those who don’t fully understand them?

Resources


Shaeed McLeod is a student at Rensselaer Polytechnic Institute pursuing a master’s degree in Systems Engineering and Technology Management. A native of Jamaica, NY and brother of Alpha Phi Alpha Fraternity Incorporated, Shaeed has been active in a multitude of on-campus organizations such as the Multicultural Leadership Council, Black Students’ Alliance, and the National Society of Black Engineers. After graduation, he will be working at Deloitte’s New York office as a Business Technology Analyst.

Photo by Jakub Gorajek on Unsplash

Should Strategies for Breakthrough Innovation be Reversed?

During the past decades, most large established companies have struggled to develop a platform that allows them to continuously develop breakthrough innovations and bring them to the market.  Instead, many companies focus on incremental innovations that bring short term profits but lack new and revolutionary technologies or entrance to a new market. Realizing the need for breakthrough innovation, many companies have tried different techniques to sponsor corporate entrepreneurship and help commercialize breakthrough discoveries and ideas. However, most efforts have been carried out in vain since the fundamental problem lies in the organizational and financial lack of tolerance for the risks and uncertainties associated with developing such innovations.

In Innovation: The Classic Traps, Rosabeth Moss Kanter offers a strategy aimed to help corporations establish a sustainable way of innovating. The strategy called the “innovation pyramid” suggests that corporations should structure their ideas so that at the top, there are a few “reach” ideas. These ideas could offer new viable directions for the company to pursue. In the middle section of the pyramid, the author suggests companies should have an archive of hopeful ideas that are assigned to teams and are constantly being developed and tested. Finally, the base of the pyramid should consist of incremental innovations that allow for rapid production and product improvements.

This strategy shows promise because it allows for the financial comfort and competitive aspect of constantly having new products to release and improve upon while also permitting time and funds to develop large scale breakthrough innovations. However, the middle section allows for a lot of creativity in problem detection which companies and their employees often limit to the scope of the societies and environments in which they are operating in; lacking perspective and restraining possibilities for breakthrough.

reverse_innovation_triangle.pngThe idea of reverse innovation is “the strategy of innovating in emerging markets and then distributing/marketing these innovations in the developed markets” and could be added as a layer in this middle section to broaden the ideas and problems that first world companies tackle. Innovating in emerging countries first could allow companies to achieve breakthrough innovation not only by expanding into new markets, but also by creating new market items and technologies that are likely to be much more simple than what the general idea of breakthrough innovation suggests. Some examples of breakthrough innovations developed for the third world market include the shoe that grows, the water-gen, and more.

People in first world societies face many “elemental” problems that are often overlooked by the demand and competition of adapting to the high end technologies being developed.  Reverse innovation would allow for these simple but impactful innovations to be tested and developed somewhere where the need might be greater and a “lower end” project might be given priority. Once the project is completed and tested in an emerging market where impact is greater and cost is lower, the technology can then be brought to the developed countries with fewer risks and uncertainties. In addition, innovating in emerging markets also allows for companies to create and engage in social good, possibly creating more jobs and worldwide benefits. Overall, the idea of implementing reverse innovation as a strategy in a big corporation could be considered a breakthrough innovation in itself, offering wholly new benefits to a current organization. Therefore, like any other breakthrough innovation, it would also require a good amount of tolerance and testing but could lead to remarkable outcomes that promote more constant breakthrough innovations but also equality through innovation.


Andrea Ramos is a student at Rensselaer Polytechnic Institute pursuing a master’s degree in Technology Commercialization and Entrepreneurship. Her background is in mechanical engineering and design innovation & society. Andrea is passionate about using technology and innovation to promote social and economic change.

Corporate Venture Capital’s New Investment Thesis: Diversity & Inclusion

If corporate venture capital has one thing on traditional venture capital, it is social impact investing. There is a palpable movement emerging in CVC to include more investment in diverse teams and socially relevant projects but will these bets really pay off? Overall, CVC is a growing source of startup funding. According to a study by CB Insights, “75 of the Fortune 100s are active in CVC, and 41 have a dedicated team.” In 2017, the most active CVC’s were Google Ventures, Qualcomm, Salesforce Ventures and Intel Capital according to the same study.

It is important to note that there are some key differences between CVC and traditional VC. For instance, corporate venture capital arms often invest in new companies for strategic reasons rather than simply for quicker returns or higher IRR. They are often looking to (pardon the pun) diversify their own approaches to emerging technologies, capturing new audiences and corporate social responsibility. By working with and investing in newer, more agile startups to research and implement new strategies, they can often save themselves enormous amounts of time, capital and pain to get to bigger wins faster.

Intel’s Diversity Fund

Intel Capital is a +$1B fund which has made over 1,000 investments over the last 26 years across the enterprise software, mobile, and manufacturing industries. It’s top co-investors include traditional VC firms New Enterprise Associates (NEA) and Sequoia Capital. The number of diversity investments at Intel Capital has increased 22% in 2017 and all told, Intel has invested $70 million in diverse startups. The legacy tech giant launched a dedicated Diversity Fund in 2015 with a $125M commitment to find diverse teams. Wendell Brooks, senior vice president at Intel Capital, said recently that it had ​already met its 2020 goal for diversity.

The diversity of the founding team plays an important factor in Intel Capital’s investment decisions as each investor looks for diversity no matter the vertical. The logic being that a startup with a diverse founding team is able to pull from a range of different backgrounds, experiences and skill sets. The fund’s definition of diversity has expanded over the years. Managing Director Christine Herron explained, “We want to pay attention to not only women and underrepresented minorities. We are actively looking for people with disabilities, members of the LGBTQ community and those in military service.”

It stands to reason that Intel’s overall hiring practices have set them apart even from other industry heavyweights like Facebook and Google. Paying special attention to include professionals from all backgrounds and walks of life certainly has its benefits. Building a reputation on the ability to identify and operate against the need for increased diversity is extremely valuable when it comes to acquiring and retaining diverse talent. In the long run, this could be the biggest benefit of all as more and more women and people of color earn advanced degrees, start companies and ultimately add enormous amounts of value. According to 2015 McKinsey study, “$28 trillion, or 26 percent, could be added to global annual GDP by 2025” by diversifying labor markets.

So What?

AOL and Comcast have also recently launched vehicles focused on diversity. Last September, Salesforce Ventures introduced a $50 million Impact Fund looking to “invest in companies that enable equal access to education, develop tools to promote equal opportunity and economic empowerment for women and underrepresented groups.” But what does this all mean?

It means that corporate venture teams see the value in diverse teams and diverse perspectives and believe that the payoff will be huge. They are doubling down on diversity not just in their communications or their advertising. They are putting significant money where their mouth is. And as current venture trends show, the amount of invested capital dedicated to this emerging deal stream is not decreasing any time soon. With competition from traditional VC to capture both ideas and spending power of the multicultural millennial and generation Z consumer, it looks like it’s a wonderful time to be an entrepreneur from a “non-traditional” background!

Resources


Marcia Mitchell is is currently pursuing a master’s degree from Rensselaer Polytechnic Institute in Technology Commercialization & Entrepreneurship. She graduated from Tufts University with a bachelor’s in economics. She is currently working on the IBM – Cognitive and Immersive Systems Lab (CISL) team at RPI and will be hosting a workshop in the spring to address the needs of tech entrepreneurs; specifically women of color and diverse teams. Her goal is to create a destination for women like herself; talented visionaries from diverse backgrounds – and provide them with the tools, connections, and opportunities they need to succeed.

The Stolen Billion Dollar Idea

Snap, Inc, one of the faster growing companies of the decade, went public in 2017 for $3.4B and quickly rose to a market cap of $24B. However, as the company claimed its place in tech startup folklore, major product flops and interesting news events created an environment of skepticism and distrust amongst the financial analyst community, but its application, Snapchat, continues to be viewed by millennials as an icon of bubbling innovation. The controversy surrounding this company that has brought breakthrough innovation to the world of instant communication raises the question: Can a company formed on the basis of someone else’s idea make a go of it?

The idea for Snapchat came one evening when Reggie Brown, a student at Stanford University, was deep in thought about how he wished he could send disappearing photographs while sending intimate photos without having to worry about the photograph’s future. He ran his idea by two of his former fraternity brothers, who offered a lukewarm reaction.. Evan Spiegel, a third frat brother with a reputation for being quite an operator, grasped the concept and thought it was outstanding.  So outstanding in fact, that Evan eventually became CEO of Snap Inc. What started as a simple idea has now blossomed into a nearly $25B company and resulted in many breakthrough innovations, however frivolous they may seem. However, Evan is the CEO, and Reggie is out. As of December 2015, Snap Inc. has paid Reggie Brown $157.5M as compensation for the misappropriation of his idea. Brown claimed that Spiegel stole his idea and ran with it, and, in fact, Spiegel agreed. After forcing Brown out with no compensation, and as the valuation was rising, Brown was awarded a hefty sum for his idea.

Snap is regarded as a highly successful enterprise as indicated by their lucrative funding rounds and IPO. The company has pumped out some of the decade’s most innovative products, including Spectacles (sunglasses that snap photos), Bitmoji (personal emojis), and Zenly (an app designed to provide real-time information about where your friends are and what they are doing). These efforts have led to crazy valuations of Snap and a rat-race to work for what is considered by some to be one of the most innovative companies in the world.  Evan spearheads the innovation charge at Snap, leading his company to introduce products like Snapchat, Snapchat Stories in 2013, and Snapchat Discover and Spectacles in 2015.

More recently, Snap garnered significant backlash from its customers after they redesigned their mobile app, and Evan’s response was essentially deal with it, a telling sign that the company produces innovation, but its timing is not always perfect. As we can see, the C-suite at Snap is clearly innovative, as are the products the company produces. But the question is—if Snap has all of these great attributes regarding innovation, why do their products seem to fail?

For example, the Spectacles at the moment of release were regarded as a breakthrough innovation, but soon sputtered and disappeared. The leading reason for this failure was the botched delivery of the Spectacles.  Besides limited availability (popup shops were it),  there were few influencers willing to back the product, a lack of content, limited content portability,  and poor timing given the flop of Google Glass.

All of these failures are a crucial part of innovation in addition to C-suite guidance and overall product innovation including Snapchat, Zenly, and Bitmoji. What can be learned with Snap’s mounting problems is that innovation can turn out bad or good depending on implementation and execution.

Since innovation can be attached to c-suite management, product design and development, and the idea itself to name a few pathways, that raises the question — Can you steal innovation by stealing the idea?

Instagram may offer the answer.


Peter Kloss is a master’s student in the Technology Commercialization and Entrepreneurship program at Rensselaer Polytechnic Institute’s Lally School of Management.

Will Boards of Directors please wake up?

I came across this article in Harvard Business Review the other day, titled “The Board’s New Innovation Imperative.”  Authors Linda Hill, a Harvard Business School professor and George Davis, Executive VP at MacAndrews and Forbes and formerly Global CEO and Board Practice Leader at Egon Zehnder Executive Search firm, interviewed a number of Fortune 500 Board members and CEO’s about the topic of…..you guessed in…breakthrough innovation.  They found what we already know…That CEO’s, already lacking confidence in their ability to benefit from investments in longer term, potentially game-changing innovation, are reluctant to push it unless their boards are in tune with the idea, and most are not.

Hill and Davis identify four reasons for the reluctance of board members to encourage real innovation:

  1. An Outdated Innovation and Risk Agenda: Board members believe their job is to protect companies from taking undue risks, and so they spend time on finance, operations and incremental innovation to sustain the core business.
  2. Insufficient Time: Boards don’t make time on their meeting agendas for strategic innovation. They are overwhelmed with the need to attend to compliance and financial monitoring.
  3. Lack of Expertise: Board members lack industry expertise or innovation experience, and so cannot make informed assessments about strategic innovation proposals.
  4. Unproductive Interactions between the board and management. The relationship between the board and senior management is shallow at best. Boards don’t want to press on touchy questions (such as, for example, how much time are we spending on the future?), and managers view the meetings as a time to “Tell and sell” rather than to have open, honest discussions about the opportunities and threats that lie ahead.

They make several suggestions for CEO’s, including setting the culture for honest dialogue, and reconsidering the board’s composition to ensure the talent needed is there.  Both are powerful ways to address the problem, though neither will work immediately.   Boards and Executive leaders of companies need to partner, and board members should extend themselves into their networks to help create new markets that the firm is working to enable.

It’s encouraging to see this article, especially given the turbulence that large companies have experienced of late with activist investors.  The severe shakeups that DuPont, GE and now P&G are undergoing given Trian Partners’ involvement seem to be having an effect. It’s easy to say that Activist investors invest to flip companies for short term gain of the partners.  But it’s hard to know for sure.  Trian’s white paper on P&G, detailing their rationale for their interest and recent investment to win a sit on the company’s board, for example, claims that the lack of breakthrough innovation is one of their chief concerns. We also know that Larry Fink, CEO of BlackRock investors, wrote a letter to Fortune 1000 CEO’s in 2016 decrying the short termism they exhibit in their innovation strategies and other governance decisions.

Could it be that large institutional investors, who are expected to deliver growth to those whose money they manage, will be the force that gets large established companies’ attention to breakthrough innovation?  I hate to see the iconic companies broken up in the heat of the battle.  Lots of Intellectual property is being tossed to the wind.  But maybe companies will finally learn that they can actually create new business platforms borne of breakthrough innovation if they have a persistent, high performing innovation function.

Introducing our New Book: Beyond the Champion: Institutionalizing Innovation through People

Companies lose their most talented innovation people all the time, due to frustration and the many challenges they face.  Not only is it a loss for companies, but also a threat because, as we show in the book, most of those people find jobs in innovation roles for other companies.  This doesn’t need to happen.  We know better.

We’re proud to announce that our third book has just been released.  Based on four years of research in eleven companies, and interviews of nearly 180 people, we’re making a bold claim in this book. And that is that Innovation has to become a business function, just like R&D, just like Marketing, just like manufacturing, just like engineering, in order to succeed for the company.

Ample evidence exists now to show that the processes, metrics, governance, organizational structure, skills and talent needed for breakthrough innovation are substantially different from those required of other business functions and processes.  Companies need to develop expertise in Discovery, Incubation and Acceleration.  Each is different in its own right. Companies also need to have a Portfolio of breakthrough opportunities, organized into domain areas, or strategic buckets, tied to the company’s vision of the far future and what it will be bringing to the market then.  Each domain area must have a variety of projects percolating along. They’re little experiments within Discovery to flesh out an opportunity landscape of that domain.  In incubation, they’re experiments to test out market, technical, resource and organizational uncertainties associated with each emerging business opportunity.   All of this needs to be orchestrated and led.  And it needs some support help, in the form of strategic coaches.

That’s 12 new roles. Yes. Discovery, Incubation and Acceleration roles at the project, domain, and portfolio level.  Add an orchestrator, strategic coaches, and the Chief Innovation Officer and you’ve got them all.  In Beyond the Champion: Institutionalizing Innovation through People we describe each of those roles, how to select people to fill them and how to measure their performance.  We also provide suggestions for career paths for innovation experts.  Companies should not be losing these people.  We need to figure out how to create a permanent source of expertise for breakthrough innovation, and how to strengthen it over time.  Champions are great, but we need to move beyond that as the answer.