In an era when it was the norm for business owners to look for any way to keep salaries low and margins high and few were concerned with the welfare of employees, Henry Ford had a better idea.
On January 5, 1914, the Ford Motor Company announced that it was doubling employees’ salaries to $5 a day. “It is our belief,” explained company treasurer James Couzens, “that social justice begins at home. We want those who have helped us to produce this great institution and are helping to maintain it to share our prosperity.”
This single change, says author and executive coach Verne Harnish, remains to this day the greatest business decision of all time. Ford proved that doing the right thing can also be good for business. Higher wages not only made for better, more committed, more responsible employees and helped compensate for the pressure and monotony of repetitive assembly line work, but Ford employees could afford to buy Model Ts.
“We increased the buying power of our own people,” Henry Ford wrote in his book Today and Tomorrow, “and they increased the buying power of other people, and so on and on.”
Production rose. Employee turnover fell. Ford soon outsold all other automakers combined and doubled its profits between 1914 and 1916.
Turns out, “doing the right thing” may be the best business decision you ever make.
Greed is NOT Good
Contrary to Wall Street’s Gordon Gekko, it’s not greed that “clarifies the evolutionary spirit” but the ability to find the point of convergence between what you produce and your impact. Aligning these two ends is social enterprise.
Distinct from a socially responsible company that may choose to contribute a percentage of revenues and/or encourage employees to give of their time for a cause, the social enterprise has:
- One Mission. The social goals are embedded into the core business and equally reflected in everything from the mission statement to the business plan. Take Husk Power Systems. Through the installation of easy-to-operate, rice husk-burning power plants, the company is bringing affordable, sustainable electricity to parts of rural India with the expressed outcome of delivering greater comfort, safety and the energy backbone necessary for economic development.
- Two Bottom Lines. The business’ social impact is as critical a measure of success as revenue or ROI. At the same time, both bottom lines are inextricably tied. Having the desired social impact is dependent on financial sustainability. At Toms, it all started with shoes and a one-for-one giving program. For every retail pair of shoes sold, Toms gives another pair to a child in need. With its growing success, the $625-million company has kept pace with its social agenda to help one person for every product purchased and even expanded its mission to improving eyesight, drinking water and maternal healthcare in impoverished nations.
- A Penchant for Big Problems. Social enterprises focus on big problems—the environment, health issues, quality of life and access to opportunity for underserved populations. While a social enterprise startup may focus on a single outcome in a specific geographic region, the vision is often far-reaching. Today Indosole has its sights on collecting a million of Indonesia’s waste tires before they can clog landfills, provide breeding grounds for mosquitoes or release toxic fumes while being burned and upcycling them into virtually indestructibleflip-flopss and shoe soles. Its mission, however, is to become the most responsible and “ECOnomical” footwear company in the world.
More than ever, these and other social enterprises are resonating with employee values and conscious consumers. Millennials are especially drawn to enterprises where they can align their careers with a greater purpose. In a recent survey, Bain & Company found that more than half of MBA students would willingly put having a positive impact before financial reward. But it’s not only Millennials. Many Baby Boomers are transitioning into encore careers that offer an opportunity to make a difference. At the same time, 56% of US consumers admit to having stopped buying from a company they considered unethical.
Our experiments in Social Enterprise
Our experiments with social enterprise started in a graduate course at UC Berkeley which encouraged students to think about building companies that leverage new technologies to add value to shareholders as well as stakeholders, community, and broader society. (Between LeadGenius and Captricity, the “success” of this class has been off the charts).
LeadGenius decided to pursue an idea that leverages the power of crowdsourcing and distributed labor and combines it with machine learning to create the most accurate, in-depth and flexible data mining solution.
We found our niche providing marketing automation and top-of-funnel lead generation. It’s a field in which we can:
- Combine the best functionality of both technology and human intuition.
- Help vanquish traditional spray-and-pray tactics—buying lists and qualifying leads by dialing for dollars (cold calling) and generating email blasts (spam)—by delivering accurate, tightly focused leads and contact information.
- Free sales and marketing from the labor-intensive tasks of creating an ideal customer profile, defining the total addressable market and pinpointing the appropriate decision makers inside those companies and, instead, allow them to focus on the critical work of fine-tuning messaging, personalizing content, building relationships, closing business and adding greater value to the buying process.
While artificial intelligence and machine learning can process large datasets and identify leads quickly and at scale, people are best suited to improvising and thinking on their feet. Because only people can understand the WHY behind buying decisions, conduct white space analysis and validate custom data points, we rely on our employees to apply their unique innovation, intuition and intelligence to tasks.
The trick is to do both at scale.
Crowdsourcing and the Democratization of Employment Opportunity
Crowdsourcing proves the Aristotlian rule that the whole is greater than the sum of its parts. When crowds are organized to work in parallel on tasks, they bring scalability to the job. Crowds also can collaborate to find the best solution, create a rich community of sharable experience and expertise and draw on their disparate, multivariate backgrounds to apply new ideas to old questions.
Although the term crowdsourcing is relatively new, the concept of democratizing problem solving and extending an open call to the citizenry to find solutions is much older. In 1714, faced with needing a way to measure longitude and make maritime navigation safer, the British Board of Longitude announced a £20,000 prize to the first person to solve the seemingly unsolvable problem. Within 15 years, Yorkshire clockmaker John Harrison had a design for a sea clock that measured longitude—defying the best efforts of scientists, including Isaac Newton.
More recently, scientists have been bringing problems and challenging tasks to the Internet and inviting citizen scientists to assist them. The University of Washington’s Foldit project, for example, challenges a crowd of some 250,000 citizen scientists to bend and fold proteins into stable 3D structures.
And since 2011, the Ancient Lives crowdsourcing project on Zooniverse has been speeding the translation of the half-million pieces of papyrus found in the Oxyrhynchus trash dump outside of Cairo. Since the original find in the late 19-century, translation has been a slow slog. But within months of opening the online challenge, the crowd had translated more than all the researchers had completed in the last 100 years.
Other popular tasks to take advantage of crowds include species sightings and mapping galaxies. While the success of popular crowdfunding and crowdfinance platforms—such as Kickstarter, Indiegogo and Kiva—are opening opportunities to first-time entrepreneurs and new businesses worldwide.
From our perspective, crowdsourcing complements technology. It allows us to apply the best uses for both technology and human capital and deliver the best possible product to our clients. We have greater flexibility, high data accuracy and potentially infinite scalability. We also can scale up our business operations to match the growth needs of LeadGenius and our clients.
At the same time, LeadGenius is meeting its social mission and extending employment opportunity to a global digital labor force. We’re helping to democratize employment opportunities by broadening the base of participants, extending it to remote areas of the world while expanding the available talent pool. Location becomes irrelevant as talented people in Kiev, Bangalore, rural Alabama or a small town in Europe can contribute to the bottom line of top companies in major metropolitan centers around the world.
While we’re tapping into the collective intelligence of our researchers, it’s our responsibility to make crowdsourcing a rewarding experience for our crowd members. As Henry Ford knew, happy people are more productive.
The four key commitments we make to our crowd align with Abraham Maslow’s Hierarchy of Needs and support their basic requirements for salary, security, community, esteem and self-actualization:
- Living Wage—Not to be confused with a minimum wage, we pay our crowd members a living wage that’s based on the local living requirements for each individual. Unlike traditional outsourcing, LeadGenius is not a platform for bringing freelancers and companies together. Although the crowd works on our clients’ projects, LeadGenius takes responsibility for paying everyone fairly.
- Community of Collaboration—The LeadGenius crowd is a community of digital workers who don’t have to compete against one another for work. We’ve created a digital workplace for our distributed workforce. We designed and manage an online community that makes members feel they work for our company and provides the tools for collaboration, including forums, email, online chat, help and access to a support team of top-performing crowd members to whom they can bring any questions or issues.
- Relationship—Although the LeadGenius crowd is our distributed workforce, they are an extension of our Berkeley-based business. We are concerned for the people in our community and take steps to treat everyone fairly. Crowdsourcing is not a sweatshop approach to digital labor; we have a relationship with our crowd members, reward good work and promote top performers to supervisory positions within the crowd.
- Level Playing Field—There’s an inherent problem with digital freelance and outsourcing platforms that sets up people living in high-cost cities to lose out to their rural cousins. Income disparity, which enables a freelancer in say Mumbai or Pakistan to underbid someone in Mountain View or New York. Our crowdsourcing model and paying our crowd members a living wage removes the problem of income disparity. Instead, it’s a level playing field, and work is allocated based on expertise and availability. Not the lowest bid.
I am often asked whether the mission of a social enterprise can really survive growth. Is the ideal of a true social enterprise realistic?
My answers is an emphatic “yes”.
A social enterprise’s original mission can endure and thrive as it grows. Just look at for-profit companies like Toms, etsy, Patagonia, Ben & Jerry’s. These companies all have a positive impact in very different ways, and to varying degrees, but the important thing is that they were able to maintain the integrity of their mission as they grew.
To improve your chances of making a long-term social impact:
- Embed your social mission into the company’s DNA.
- Give equal attention to planning your financial sustainability as your social mission.
- Measure success based on your two bottom lines using both business/financial and social metrics.
- Hire people that are a good fit for your culture, and that includes your board members. You can still support diversity and encourage wide-ranging discussion and ideas as long as there is a basic commitment to your social mission.
Just has Henry Ford found in 1914 and social enterprises know today, the right thing to do is good for business. At LeadGenius, we see this as a win-win-win for the global workforce, our company and our customers. We’re providing value to the market while expanding opportunity to a digital labor force with a model that may just help to point the way to the next big wave of employment opportunities.