How Altruism Doesn't Have to Be One-sided in Business
Serving others can stem from being self-serving just as easily as from being selfless, and there's nothing wrong with that.
Paul quotes Jesus in Acts 20:35, “It's more blessed to give than receive.” This is clearly a sentiment worth repeating, but whereas it is a fantastic guiding principle for individuals in their private lives, many business ventures cannot get to the point where they can justify partaking of efforts that on the surface amount to pure cost.
But what if corporate-sponsored “good works” were actually thought of as investments? What if putting some amount of financial resources into “pay it forward” strategies with the intention being to ultimately generate additional sales dollars, to create revenue which would never have materialized otherwise?
CASE STUDY: It’s Said You Have to Learn to Walk Before You Can Run
Have you ever heard of the shoemaker TOMS? I bet you have. And would you say that it is because the company’s simple canvas shoes are so stunning to behold that it is they have sold in excess of 100,000,000 pairs? Doubtful.
Instead, I suspect that impressive statistic might have a little to do with this…
In 2006, TOMS founder Blake Mycoskie pioneered the One for One® model—giving away one pair of shoes for every pair sold, supporting larger health, education and community development programs through strategic partnerships.1
But in business, as in life, sometimes it isn’t about your intentions so much as your execution, and just because you get off to a hot start doesn’t mean that it will be sustainable. Unfortunately, the TOMS success story more or less turned out to be a fad. That the company went from high heights (valuation of over $.5B) to even lower lows (mired in debt) in less than 15 years is something of a cautionary tale about relying too heavily on a single product/idea, no matter how good it is. But I can think of over 100,000,000 kids that got a fresh pair of kicks thanks to a kind-hearted stranger who don’t give a care about debt-to-income ratios. [By the way, the current ownership group decided to transition from its groundbreaking One for One giving model over to a $1-out-of-$3 is donated to a worthy cause approach, so the “Shoes for Tomorrow” story is not yet complete.]2
On the other hand, Nike, a company you’d have to have been living under a rock to have not heard about, regularly sells 800% more shoes in a single year than TOMS has since its founding in 2006.3 That means the Portlandian company, that extolls us to “Just Do It” and which has brought in just over $479,000,000,000 in that same 17-year period, is apparently more of a “just do as we say not as we just do” outfit, as it is over 100 million pairs of donated shoes behind its tiny LA-based competitor. (One might reasonably think I mistakenly have those headquarter locations reversed, but I don’t.) On a side note, the wildly successful aspirational lifestyle brand has traditionally had a rather different reason for its interest in the children of the third-world,4 but I digress….
Sadly, the founder of TOMS was replaced at the reins by 2019, at which point the brand’s momentum had slowed to a crawl and the corporate coffers had shrunk to the point where the funds weren’t there to cover upcoming loan payments. But don’t feel too bad for the Amazing Race alum, as he personally is worth upwards of $400M these days, and has continued to do good works.
Meanwhile, Phil Knight, who owns a mere 3.3% of the company he co-founded (which sounds small, but which actually amounts to a whopping 51M+ shares), can also afford to eat out from time to time, as his fortune is more than 100X that. FUN FACT: It would take someone about 500 years more than have passed since the first Christmas to count his money if it was all singles.5 (Wait, that’s not right though, since the wealth would continue to grow while the counting was happening… Point is, that’s a lot of cabbage.)
It’s worth noting, of course, that both men are philanthropists, and though one might come across as being a bit more of a populist, Mr. and Mrs. Knight have donated considerably more money to charitable causes than Mr. Mycoskie is currently worth, so in any case these particular cobblers have done very admirable things with our money.
The Moral of the Story of Why It Pays to Infuse Your Story With Morals
Kindness and generosity are traits we all should aspire to cultivate in ourselves and others as they are virtuous, but that doesn’t mean they can’t also be good for business. On the one hand, it might seem as though the comparison above is a clear indication that the Nike model is the winner, but not so fast. The running shoe is big business, but it is also the brainchild of said megacorporation. If we used the analogy of a race, which seems appropriate under the circumstances, Nike had been on the track that they built for over four decades before TOMS was even conceived. That is a significant head start. By the time Mr. Mycoskie made his trip to Argentina and saw an opportunity in the wider utilization of the alpargata style shoe that was for a distinctly different market and customer and price point, he was looking to not only catch up but in a position to have to run through a crowded pack of others who had also joined the race. From that perspective, he did very admirably for himself as an entrepreneur, as a business founder and boss, and as a humanitarian. In my view, that sort of success is even more meaningful than one measured by profitability alone.
So, if you are reading this and in a decision-making position which allows you to help those in need, you probably should give it significant consideration, as what is good for others might well prove to be even better for you and your business concerns.
Our Story: We’ve always been in business to improve lives.
BUSINESS INSIDER: How Toms went from a $625 million company to being in massive debt
Nike Shoes Statistics: Nike dominates the shoe market of the 21st century.
How Ethical Is Nike? Nike sweatshops and its brand image