The Uncelebrated Double Bottom Line Business

My father is a furniture manufacturer. This was something of which, as boy at a private English boarding school, I was not very proud. As pure money-makers, and many self-made, businessmen were somewhat looked down upon. Better that your father was a professional - such as a doctor or lawyer - and a good portion of his wealth inherited from the previous generation. However, I found that in the United States, this mild but perceptible stigma did not exist. Many of my classmates were from opportunity backgrounds not dissimilar from the privileged boys at my boarding school, but their parents had pursued a wider range of careers. There were the doctors and lawyers, but also scrap metal dealers and farmers. There were a lot more business people in the mix. Business and money-making was fine, and entrepreneurial fathers and mothers were celebrated.

My sense of the United States’ embrace of entrepreneurism grew stronger as I graduated at the peak of the dot com boom. Entrepreneurs were glorified in the media and seemingly everyone wanted to be one (except for me - I stuck to my public sector guns). Yet, there was still a segment of society which frowned upon pure profit-making motives, and their voices grew as the dot com bubble burst and the misdeeds of the likes of Enron (then) and American International Group (AIG) (now) were exposed.

So, a new breed of entrepreneur is gaining profile: the for-profit social entrepreneur. This is a business person who is interested in making-money, the bottom line of every business, but is also concerned with spreading good in the world. For example, she may manufacture bed nets, selling many thousands and making a decent profit, but in the process also helps to save people from malaria carrying mosquitoes. The money-making and life saving are of equal importance: she has a double bottom line. Being a social entrepreneur with a double bottom line is increasingly becoming the thing to be for young bright things launching themselves into the world, replacing the dot comer as the trendy entrepreneur.

However, the degree to which a business is a double bottom line business is difficult to clearly define. It is relatively easy for many businesses to make the case that they provide important social goods. With some obvious exceptions, such as businesses that produce valued (by some) but unhealthy narcotics, the very fact that people buy a business’ products can be taken as proof that what they produce has social value. If not, they would not be in business. In fact, businesses that were previously simply meeting a market need, such as providers of irrigation systems, are now recasting themselves as businesses with social missions. They are not about selling pipes; they are about helping farmers access reliable water supplies to feed their families and the larger nation. What was previously just good business is turning into being a good business. With a bit of spin, previously single bottom-line businesses are finding additional bottom lines.

However, being lost in this rebranding process are businesses that have for generations had double bottom lines, businesses that are vehicles of both economic advancement and social well being: the family business.

Family businesses are owned and run by members of a single family or small group of families. The children may go to Berkley to study Anthropology, but invariably eventually come back home to take up a position of responsibility in, say, the edible oils factory. The business is there to make money, but equally to offer a livelihood to the next generation of owners. In fact, they are often there to employ previous generations too. My friend’s grandmother has no clear title or responsibility in their family business. It is not entirely certain that she is a necessary part of its daily operations. But she nonetheless has a definite place there: staff are expected to respond to her suggestions; she takes a monthly pay cheque home; and she delivers her grand-daughter written applications for leave two weeks in advance (on her own insistence). My friend and her mother know that so long as cu cu (pronounced sho sho, meaning grandmother) is actively employed, she will have a more fulfilling and, likely, longer life.

This ethos does not only apply to family members of the business’ owners. Many of the workers in my own family business are related to one another, because as one received steady employment in our firm he asked that other family members also be included. The same applies to our workers’ children, some of whom joined the firm as apprentices on finishing high school and have now been with us for many years. This means that our business is making a second-generational transition not only at the ownership/management level (predictably, I’ve chucked in the whole public sector thing and become a rough around the edges manufacturer), but throughout. Like my friend’s cu cu, we have a number of older staff on payroll who would have been retired years previously purely from a productivity stand point, but who are kept on at work to stave off the boredom of retirement.

Family businesses are not only about profit maximization. They are also safe havens, places where young and old alike can find a source of income and meaning through work. In various and not always insubstantial ways, these businesses make efficiency trade-offs to find a place for members of the family to employ themselves. Often, this concept of family is drawn quite widely to extend beyond the owners to include all of the people who have contributed to the growth of the business over decades and even generations. The social good that they generate - their second bottom line - is not so much in terms of what they do, but how they go about doing it.

It is time that family businesses realize this about themselves, and begin to put some spin as they go to market on their natural - almost inbred - commitment to a double bottom line.