BBB Part One: How the Better Business Bureau is helping to define integrity and honest business practices
The Better Business Bureau helps define integrity and honest business practices. When we see the BBB designation, it increases our trust and belief in an enterprise. Today, as consumers demand more social, sustainable, and community impact from the companies they do business with, the BBB plays a larger role in helping us determine and feel the elements of trust in business.
The following Q&A with Jonathan Liebert and Mel Trumpower provides insight into how the BBB is creating new programs of trust to meet this current moment in time.
In your own words, tell us why the Better Business Bureau got involved with building the Trustmark for good?
It really came down to a couple of different things. Before I came to BBB, I worked for another organization here in Colorado Springs, and I actually ran social enterprise operations for them for many, many years. I have started about 12 different social impact businesses throughout my career, and then did a career change and came over to BBB.
I was probably on the job six months before I started getting two types of questions from the community: "Hey, we need education. We need training on this. Would BBB be the one to do this?" And my response was, "Well, no, there are other organizations out there you should talk to, like the Chamber. Just chat with them about training you." The common reply: "Well, we talked to them. We talked to SCORE. We talked to the nonprofit committee. We talked to everybody. They said, 'Come talk to you.' So it's like, okay. Well, I'll do a little bit, but that's not really my primary job."
The second question was from our actual accredited businesses. In the current system right now, if you're a business, you get an accredited business designation, the Trustmark. Then if you're a charity or a nonprofit, you get a charity designation. What I saw right away was: this is confusing. We have a missing middle here. If you are a social enterprise business, a mission-driven business, etc., sometimes you're a for-profit. Sometimes you're a nonprofit. I got questions from our nonprofit organizations that were social enterprise businesses, and they were frustrated because they said, "I am a business. My tax status just happens to be a nonprofit. I want to advertise my business on your BBB accredited business page. I am not looking for donations. If I wanted donations, I'd do the charity thing. I'm super frustrated because you should know how this works, and how do we fix this?" My response was typically: "Wow, that's a really good question."
I went through our business profile on BBB in Colorado Springs and realized there were several others that were in the same situation, where you have a nonprofit that is acting like a business, and wants to essentially put themselves out there and advertise as a business. This is where the genesis of the idea came, just realizing that with this new sector of the economy rising and this new way of doing business, we at BBB need to evolve to change our thinking. It's taken a long time to get this done due to CEO changes at the national level. We changed organizations. We used to be the Council of Better Business Bureaus, and now we’re the IABBB, the International Association.
In a nutshell, consumers are asking for it. They want to know more and more what businesses they can trust that are going to do good work, but also do more than just make a profit. And at the end of the day, I think that's the most fundamental question because it's about trust.
In speaking about trust, a lot of people throughout the community, throughout the country, and internationally know the Better Business Bureau for their standard of trust for businesses. I'm curious where you feel like BBB believes the intersection of that trust is with the social impact space or the social impact that's needed within that space.
We know that the sector of conscious businesses and social enterprises continues to expand. We expect that to continue to expand in the years to come. As more and more businesses move in this direction, consumers have questions about which ones are truly incorporating purpose into their business models. We have sought to provide a list of these businesses so people can make that decision, and find those businesses, and spend their dollars for good.
There is a marketing advantage when a business starts to make these types of social impact claims, and I think what we've tried to do, similar to accreditation, is really seek to confirm that the business is doing what they say they're doing so that we can provide people with that list that they can say, "This business really is doing what they say they're doing, that this purpose they put out there... they're really committed to that purpose," and allow people to then spend their dollars with a business that matches their value.
I think that from our perspective at Better Business Bureau, we've been doing this for a long time with accreditation, and this is a new area where we can provide transparency and do some sort of verification where we can confirm that these businesses really are living up to the claims they're making and make that transparent so consumers can make solid decisions.
When you're talking about the businesses that you're looking to be part of the BBB For Good Trustmark, what kinds of businesses is BBB looking to incorporate into that program? Where's your focus area?
This is an interesting topic that I want to chat just a bit about. I think, number one, what we're looking for is purpose-driven businesses. There are a lot of names for this out there, whether it's conscious capitalism, social enterprise, social impact. I've heard accountable capitalism, ESG. In a nutshell, there are a lot of companies out there that do corporate social responsibility. Even CSR is changing. They are kind of adopting more of the stakeholder model of capitalism, which is yet another name for this.
At the end of the day, it's really about, are you embracing a purpose-driven philosophy and baking it into your business model of your profit-making ability. You have to do both. We're not looking for people that are doing cause-related marketing. We're not looking for people that are doing an add-on to their core business model. We're looking for people who are really doing the good work because they care, because it's part of what they believe in, and that's not just a marketing scheme. We do want to make sure that we're engaging with the right people, but at the same time, there are a lot of people out there who want to get involved, and don't know how to do it quite the right way.
This isn't just about being green. This isn't just about sustainability. Sustainability's baked in already. We're also looking for social impacts. You want environmental or social impact. There are oil companies doing good things. There are oil companies doing bad things. Conversely, there are probably solar panel companies doing good things and bad things. We want the right people doing the right thing.
Here's a great quote I want to read that Larry Fink, the CEO of BlackRock Inc, puts on an annual letter every year. He said, "Stakeholder capitalism, social impact, high-purpose-driven businesses, whatever you want to call it, is not about politics. It's not about a social or ideological agenda. It is not about woke. It is capitalism, period, driven by mutually beneficial relationships that benefit you, and your employees, your customer, suppliers, and community. And it relies on the company to prosper. This is the power of capitalism."
Again, we want to make sure that this is open to all who are doing the work they say that they are doing. It's not about politics. It's not about just focusing on a green business or some type of agenda. It's not. It's about capitalism, but again, people that are using this business model to do good things and provide value and impact for their communities in a way that's social or environmental and that they can prove it.
Thank you. I love that. I love that quote. There have been a lot of reports out there around the growing lack of trust of government, lack of trust in organizations. What needs to happen in your mind for the level of trust to rise? And that's for either organizations or nonprofits…
It's true, trust is kind of at the heart of everything BBB does. From the very beginning, over 100 years ago when we were founded, the focus has been to foster trust in the marketplace. The reason is, we're seeking to have both consumers and businesses succeed. When there are fraudulent and unethical practices, it not only hurts consumers who are impacted, it hurts those legitimate businesses as well. That's been the focus from the beginning.
In our history, we have what we call BBB Standards of Trust. Those were created to help businesses build trust with their customers. There's a whole list of things that we look at for accreditation, for example. Things like be honest, be transparent, be responsive, honor your promises. There are other things on that list. These are all really important. By delivering on those things, businesses can build trust with their customers, and they can also gain champions for their products and services. BBB For Good is a program that builds on that idea. The idea isn't that there's never a problem. It's not that a business doesn't ever make a mistake. It's about when those things happen, how do we address them? Do we respond? Are we transparent about what happened? The BBB For Good program is building on accreditation and on those standards of trust that we promote for a good business.
There's a lot of different aspects to building trust. I think from my perspective, I think that it gets back to transparency, fulfilling your promises, and again just when things go wrong, standing up and making them right. That, I think, will help build trust. If we can all get behind that, I think that makes sense. This program, I hope, will help with this as well.
Trust is the number one form of currency. It's like that Capital One commercial, "What's in your wallet?" If you don't have trust in this day and age, you're done. I mean it's pure and simple. Because we've got distrust in media, a distrust in government...we're in this trust crisis if you look at some of the research. Edelman is a great source for that. They do a trust barometer every year, but what's also interesting is that while we have seen the lowest levels of trust ever, business is the highest of the four institutions that they measure in terms of trust by the public.
People are looking to CEOs. They're looking to businesses. They're looking to their employer to tell them what to do, what's going on. It's local. It's, who are those leaders in business to tell us to help lead the way? And so I think, number one, that's interesting.
I think for this to rise to another level, business does need to step up. Whether they're on one side of the fence or the other doesn't matter. What's your opinion? What do you think? Give me your thoughts, and then let me make sure I know.
Twenty years ago, that was taboo. You didn't do that. You just stayed out of it. Now, people are asking for people to step up because they vote with their wallets. They want to support a company that aligns with their values, that aligns with what they believe in, and so they want to know where businesses stand on tough issues, tough political issues.
I think another big one too is where they stand on the climate crisis. That's something we keep seeing again, and again, and again. Business is responsible for 47 percent of emissions in the world, so they have a stake in this too. I think specifically with the younger generation, that's a deal-breaker for them if a business doesn't have a sustainability plan. Now, again, it's not about politics. It's just about what we're seeing in the research.
We live in a free market economy and if people are not starting up businesses, failing, starting up others, being successful, we're all in trouble. So when you have the younger generation, the future of the country that doesn't believe in business because there are bad actors out there doing negative things, I think this discourages the youth. That's a problem.
I do think that when we're talking about trust in business, specifically, it is about gaining the trust of all Americans, but I think specifically the younger generations. We're talking millennials, Gen Z, and then the next generation after that. They've got to believe in business. They've got to want to go and support business, start their own businesses. A lot of that, I think, is going to have to gain their trust. Again, going back to the sustainability piece. It's about doing more for your community and for them.
I teach at university and talk to students there. I get a focus group every single week. I ask them these questions. For the last four years, they've been telling me the same thing. They want to work for a company that has values. They want to work for a company that creates impact. They want to work for a company that they like, that they trust.
It's about legacy. They don't want to wait until they're 65 years old, maybe make millions of dollars, and then give to a nonprofit or a charity. They want to do it now, right out of the gate. They want to work at a job that's going to let them volunteer for a charity that they choose, to create impact in their community. It's all these things that are important to them. And why not? I mean, it makes sense. They want to work for a company that treats people well and pays them what they're worth.
It's basic stuff. It's common sense, but it's not commonly practiced yet. We're seeing that change. We're seeing that shift starting to trend in the other direction. So I know it's a longer answer to the trust piece, but it's a complicated question. There's a lot that goes into it.
Do you think that the role of a company is amidst a massive transformation from not being only revenue, profit or shareholder-focused, but, in part, because COVID has accelerated the distributed workforce, companies now have an obligation to participate differently through their employees in the community?
That's the million-dollar question. I mean that is 100 percent the million-dollar question. The answer is, yes, it's changing. Before COVID, it was trending in this direction. We are moving away from, in the United States, the shareholder model of capitalism. We're moving to the stakeholder model. The shareholder model just makes money for your shareholders. That's the number one important thing. We're moving to the stakeholder model, where making money for your shareholders is important, but it's also listening to your employees and to your customer, having an ethical supply chain, and giving back to your community.
Research done by Porter Novelli in 2020 showed this – the Executive Purpose Study. It's phenomenal. They went and surveyed Fortune 500 company C-suite executives and asked them what they think about purpose, adding purpose into the framework of their business model. Here's just three quick numbers for you that are phenomenal. 91 percent believe that business must benefit all stakeholders, not just the shareholders alone. So 91 percent of these Fortune 500 believe that the shift from shareholder to stakeholder is the way to go.
I think this is a big one: 85 percent of Fortune 500 company C-suite executives say companies must positively impact society as well. I think that's a huge statement. 85 percent of traditional capitalistic companies are saying it's no longer okay just to make money. You have to do both. And again, it's not a political statement. It's not a political agenda. It's about paying attention to the free market and where customers are going.
Then I would add this piece here too. When you look at the data about millennials, 75 percent of millennials agree with everything I just said. Look at the same research, same questions. When you look at Gen Z, it's 90 percent. So CEOs are paying attention to their employees, but I think they're also paying attention to the customer base that is saying we have to do things differently.
I think companies are trying to take stands on certain things that they feel are important issues for their customers and for their employees.
I think there's a couple factors at play. Again, we as consumers have more power than we've ever had in the history of business primarily because of social media, and there's a two-way communication that goes on now versus just a one way from business. So we have power to influence, and go online, and tell people this company sucks or this company's amazing.
I also know for a fact that we're in the middle of the Great Resignation that's still going on right now. Employees are speaking up. They're quitting their jobs. They're protesting. They don't like it or maybe they're just tired. They’ve got family issues. There's a lot of that too, but a lot of them are pissed off because they're not getting paid what they're worth, they don't have a higher purpose or they don't know what the why is. It's not something they believe in.
I think companies are listening to their employees, too, so they don't lose people At the same time, how do you recruit people into a company that doesn't stand for anything? Whatever you may stand for, some people are going to hate it. Some people are going to love it. Either way, you're going to recruit the right kind of people to you, which is not a bad thing.
Tell me about BBB for Good.
We are wrapping up the pilot program that Prosono helped with. We are at the tail end of that so we can make final recommendations to our board on what this program is, and what the final standards are.
Following that, we'll be doing a soft launch with the pilot BBBs. In the communities where they've already started doing this work, we would do a test launch to test our messaging, test everything that we put in place, our technology, all of the pieces that go into this to make sure that it's working well. From there, we'll take the learnings from our soft launch and plan a national launch of BBB for Good, which is very, very exciting for us.
For businesses looking to get involved, we do have an online presence for BBB For Good. Not all communities are currently online with the program, however, they will be. We'll have this available for everyone in the United States and Canada. I think that the message would be to go to the BBB Institute website, bbbmarketplacetrust.org, to find BBB For Good and reach out to us.