October 22, 2019

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The Four P's of B Corporations: Building a High-Impact Venture Using B Corporation Metrics

B Corporation metrics across policies, procedures, practices and programs help companies evaluate their impacts.

Dirk_sampselle

By Dirk Sampselle

Part of the Becoming a B series

The B Corporation assessment analyzes a venture’s impacts across Governance, Workers, Community, Environment and Business Model. And it does so by analyzing what, at B Revolution, we refer to as the Four P’s of B Corporations: Policies, Programs, Practices and Procedures. Below, we explain what each means for an impact enterprise, and some examples of how to leverage them to achieve high impact performance.

Policies

Vanguard firms planning for a sustainable future first define their goals and values in writing, and then allow those forces to drive firm infrastructure and the culture of exchange between individuals, departments and external stakeholders. Fortunate firms survive the early stage and begin to achieve scale.

As scaling occurs, pressures test the firm’s values and challenge the firm’s commitment to achieving its impact goals. Turnover is inevitable. Pivots are frequent. Adaptability is key. But a strong policy infrastructure can guide internal process changes and assist generational knowledge transfer. The B Corporation can be used to integrate BCorpgoals, values and policy infrastructure to smooth the path to scale, with values in tact.

Policy Case In Point: Supplier Selection Policy

One of the most critical decisions companies will make when growing their business is their selection of suppliers. The B Corporation metrics carefully monitor ventures’ scrutiny of suppliers – through criteria, preferences, application of third-party metrics, site visits and supplier audits.

By developing a supply chain policy architecture that sets a concrete baseline for supplier impact performance, companies will mitigate risk throughout their value chain by eliminating or substantially reducing ethical hiccups and their consequent press debacles. By clearly identifying supplier practice preferences, companies can achieve a clear decision-making protocol for how to compare potential suppliers, and select the one that is most likely to match the venture’s mission in the long run.

Finally, by establishing a set of protocols for evaluating supplier impacts – whatever level of scrutiny that may be – the organization can concretely define the level of risk it assumes in its supplier screening process. The more supplier visits and the more robust analysis is undertaken, the less risk inheres. Comprehensively identifying intersections between values and supplier selection and allowing that intersection to feed into a supply chain policy architecture will smooth scaling and mitigate risk as a venture grows.

Procedures

Procedures define the nature and form of dynamic exchange between internal and external stakeholders. Process informs and embodies the culture of that exchange. Not every procedure needs to be defined on paper, but a strong understanding of the appropriate procedures for undertaking key exchanges can breed efficiency and, more importantly, institutional integrity within firms seeking scale.

Why are Procedures valuable? Because they define which exchanges are most important to the firm - which types of exchanges require oversight and which don’t – and they preserve the integrity of the brand and the values it embodies.

Procedures Case In Point: Board Stakeholder Consideration and Decision-Making Process

Benefit corporation statutes crystallize what decades of CSR research has told us about engagement: firms BCorp-csr-stakeholdersthat consider their stakeholders – and effectively engage them – are more financially stable and less susceptible to risk than organizations that blatantly ignore, fail to engage, or actively harm stakeholders. That crystallization comes in the form of a Duty to Consider Stakeholders.

Boards most effectively uphold this duty by structuring a board-level consideration process that balances interests, highlights synergy between impact and competitive strategy, and prioritizes stakeholders that are crucial to the organization’s desk. Advanced management decision-making tools like Multi-Attribute Decision Analysis allow organizations to define values and variables, weight interests, and reach optimal decisions to achieve high-impact performance.

Practices

Practices are the one of the clearest iterations of organizational culture. Practices are the routine, internal activities that ventures employ in order to implement strategy and stay focused on mission. Impact practices in particular are essential to fulfilling and embodying mission, and are a key focus of the B Corporation metrics.

Practices Case In Point: Annual Town Halls

Annual town halls foster stakeholder engagement and serve as an opportunity to gather targeted feedback. Effective town halls gather diverse stakeholder groups, and diverse members within those stakeholder pools. They have a clearly-defined path towards integrating feedback into venture operations – whether that’s improving worker practices, enhancing product or service design, or increasing engagement with local non-profits.

But town halls can be an inherently effective practice regardless of change created therefrom: stakeholders want to feel heard, and hosting a town hall appeases that desire while also providing the venture with critical feedback. A useful tool for leveraging the town hall practice for high impact performance is creating a stakeholder advisory board, comprised of stakeholders and board members, tasked with summarizing feedback, identifying areas for improvement, and translating feedback into concrete plans for change.

Programs

Programs are firm activities that gather groups of individuals around focus areas key to the firm’s culture and competitive strategy. Programs are effervescent: they are internally-developed activities that spill over out of departments and value chain segments to bridge gaps between stakeholders through a particular area of focus.

For example, employees may develop a clean-up-the-beach program to strengthen internal ties between employees and build a stronger relationship with BCorp-businessesthe local community and its environmental concerns. Another example: the procurement department decides to host a conference on sustainable product development to inform current and potential suppliers on best practices, strengthen relationships with the supply element of their value chain and negotiate more values-aligned engagements with their suppliers.

Programs are often discrete, fixed-interval activities that may not continue ad infinitum, but they are potent sources of impact innovation and problem-solving throughout the value chain.

Programs Case In Point: Charitable Partnerships

Charitable partnerships can help organizations keep an open ear and clear line of communication to key stakeholder groups. By having charitable partner and beneficiary representatives on the venture’s board of advisors, the organization can show commitment to the objectives of the partnership, and create a structured process by which charitable partners, beneficiaries, and other key stakeholders can provide feedback to the venture.

Critical to any charitable partnership is this ongoing feedback and monitoring element: without effective oversight, impact measurement, and beneficiary feedback on the partnership’s efficacy, organizations risk wasting a great deal of time and assets.

The opinions, beliefs and viewpoints expressed by CSRwire contributors do not necessarily reflect the opinions, beliefs and viewpoints of CSRwire.

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