Lilly Tench, author of Good Business: An Entrepreneur's Guide to Creating a Better World

Lilly Tench, author of Good Business: An Entrepreneur's Guide to Creating a Better World shares the many ways that businesses can do good in the world and make a positive impact while also delivering a profit for their shareholders.  

Episode Transcript

Speaker 1 (00:01):
This is What's at Risk with Mike Christian on WBZ
Boston's news radio. Hi, Mike Christian, here of What's at Risk.
First up on tonight's show, we speak with Lily Tench,
the author of Good Business, An Entrepreneur's Guide to creating
a better World. She shares the many ways that businesses

(00:22):
can do good in the world and make a positive
impact while also delivering a profit for their shareholders. And
in our second segment, we welcome Talmich Boston, author of
How the Best Did It. Talmich provides an accessible and
insightful exploration of the leadership traits of eight iconic US presidents,

(00:42):
delving into their unique leadership styles and providing practical takeaways
for contemporary leaders. With a climate crisis, a growing population,
and diminishing natural resources, the need for socially minded innovators
is greater than ever. Recent report by Deloitte described the
social enterprise as a profound shift facing business leaders worldwide.

(01:08):
Lily Tench believes in using innovation and entrepreneurship to address
the world's most pressing problems. Over the past decade, she
has worked with hundreds of social entrepreneurs in industries from
energy to agriculture and gain crucial insight into the opportunities
and complexities of mixing mission and money. Hello everyone, we're

(01:41):
here with Lily Tench, author of Good Business and Entrepreneur's
Guide to Creating a Better World. How you doing, Lily,
I'm doing well.

Speaker 2 (01:49):
Thanks for having me here.

Speaker 1 (01:50):
Thanks for joining us. Maybe a good way to start
with you it would be view to tell our listeners
about your background A.

Speaker 2 (01:55):
Little bit, sure, happy to I'm from Brea, Kentucky. I
spent several years living and working in New York City
and started out working in sustainability environmental nonprofits and then
was actually when I was working in a coworking center
I got exposed to the world of entrepreneurship. I was
just fascinated by the personality type and by people who

(02:19):
kind of looked at the world in that way of
trying to seeing problems as opportunities and trying to taking
risks and introducing new solutions. Pivoted to supporting entrepreneurs, and
I've done that in several different ways over the years.
I worked at Columbia University and their Tech Transfer office
and helped start a place called New Lab in Brooklyn.

(02:40):
Then a couple of years ago. Five years ago now,
I moved back to Knoxville, Tennessee. I went to grad
school at the University of Tennessee and now I am
working as director of the Spark Innovation Center at the
UT Research Park, where we support entrepreneurs working in advanced
tech fields like energy and materials.

Speaker 1 (03:01):
That's great. So maybe just for our listeners, you can
tell them exactly what social entrepreneurship is and how does
it differ from being in the nonprofit world.

Speaker 2 (03:13):
Absolutely, yes, So social entrepreneurship is trying to solve a
social or an environmental problem using a market driven approach.
The real difference there is when you say nonprofit, you
automatically make the assumption that the organization is not trying

(03:35):
to make a profit. It's inherent in the name and
a social enterprise, the business is both trying to make
a profit and trying to make a social environmental impact simultaneously.

Speaker 1 (03:47):
And do you think that model is more efficient than
the typical philanthropic nonprofit model when you look at at
solving social issues in the world.

Speaker 2 (03:58):
Well, there are a lot of different opinions on that,
and I think it depends on what exactly you were
trying to address. So part of what I talk about
my book is trying to figure out what model makes
the most sense considering what problem you're trying to solve
or what solution you're introducing. But personally, I think when
it can be a social enterprise, I do think that's

(04:19):
a more efficient way of addressing social environmental problems.

Speaker 1 (04:24):
And what are some of the reasons that you think
that just out of curiosity.

Speaker 2 (04:28):
Well, one reason is through financial sustainability, because we need
good jobs and we need also to be able to
solve these problems. I think one thing about a social
enterprise is that the mission is tied to generating income,
which means that they are able to focus on both simultaneously.

(04:50):
While I don't know if you've worked at a nonprofit before,
but often you're trying to on one side, do the
work and on the other side you're trying to raise
the funds and write grants, and so in a social
enterprise or your social impact is more directly tied to
the funding. There are many reasons that businesses could be
considered to be a more efficient vehicle for solving problems.

(05:15):
There are social environmental problems. It's a common misconception that
they have to be separate that if you want to run,
if you care about making a positive impact, it has
to be a nonprofit. You can't have both mission improfit.
And I think that it's a dangerous conception, both for

(05:35):
our world and for people who want to both make
a good living and support their families and also make
a positive impact.

Speaker 1 (05:43):
Now and a lot of investors when they make investments,
they see the term environmental Social governance ESG for short.
At its heart, you're not talking about that necessarily. You're
talking about people that start companies. Maybe that's part of
what the culture of the company is, but you're talking
about people that start companies focused on issues in the world,

(06:05):
whatever they are. It could be environmental, it could be social, anything.
So it's beyond ESG from my perception.

Speaker 2 (06:12):
That's right. Although what I consider a social enterprise is
if the mission is linked to the core function of
the business. So depending on how that is structured. There
are a lot of different organizations that could be considered
a social enterprise, and I think it depends on what
the mission is, what their intention is, and then what

(06:35):
they measure. I would say that in my book, I
start by talking about the different business models that can
be used for social enterprise, and then the second section
is about the twelve ways that mission can be integrated
into a business. So that could look like anything from

(06:57):
material sourcing to product design, to hiring and labor, to manufacturing,
to voice and giving back. So I think the point
I'm trying to make there is that, yes, I think
with your core products and services, that your mission being
tied right and your core function, I think that's probably
the most efficient and effective way of being a social enterprise.

(07:18):
That it can look a lot of different ways.

Speaker 1 (07:20):
So how do they satisfy their shareholders and stay true
to their mission? How do they strike that.

Speaker 2 (07:26):
Balance is a great question, and I think that's where
some of the disconnect comes from. We're thinking you can't
be focused on a social environmental emission and still be
a profitable company. But I think that is incorrect. Mission
and money don't always align, but often they can if
done purposefully and strategically. So I think with a social

(07:50):
enterprise can potentially even be more profitable than a regular business.
And that's for a few different reasons. One is top
line growth, so they can companies with a strong reputation
in social and environmental impact can reach a broader group
of customers. They can also have more customer loyalty. And

(08:13):
then there's cost reduction, so efficiency and environmental impact usually
go together, so decreasing waste, water, energy, et cetera. There's
regulatory and legal innervintions, interventions, and risk reduction, so you
know they can get ahead of some regulations and then
also potentially access additional government subsidies, et cetera. Companies with

(08:36):
a strong mission are more likely to have loyal and
productive employees, and this is becoming more and more true
with millennials in the workforce today. They have a higher
expectation of using their skills to make a positive impact,
having some post studies that ninety four percent of millennials
are interested in using their skills to make a positive

(08:59):
impact on the world. And then just companies who were
focused on their mission in addition to the profit tend
to have more of a long view of their business
as well, which turns to more likely to do long
view planning, optimized resources, et cetera.

Speaker 1 (09:19):
And then maybe at this point you can give a
few examples for our listeners of some social entrepreneurial companies
you alluded to. Environmental and of course there's a lot
of companies that are focused on that. But what are
some actual names of companies that you would term a
social entrepreneurial company.

Speaker 2 (09:38):
As I mentioned, I consider they're pretty broad. So some
of the companies that I highlight in my book are
someone called sky Nano pulls carbon out of the atmosphere
to turn it into viable products. There's refilleries, like there's
one here in Knoxville called knox phil fil that it

(10:04):
refills soap and shampoo and things that allows people to
come bring their own bottle and refill there at the
shop so that they can eliminate plastic. Then there's some
ones that are a little bigger, more well known, like
Graystone Bakery that hires people through an open hiring model,
so they make brownies, but they are just as focused

(10:28):
on giving workforce development and giving jobs. So they're open
hiring model means that you sign up on a list
if you want a job, and they are every time
the job opens, the first person on the list is hired,
so they don't do background checks, et cetera. And which
means that they gives people a chance, first or second

(10:48):
chance who might not find one otherwise. And I could
go on and on.

Speaker 1 (10:53):
But a social entrepreneurial company can also be not so
much just the product that they're doing. It can be
the style in which they manage, the company, culture that
they aspire to, all those types of things. Yeah, that's
a good distinction. I think. Are any of these companies transformational?
Can we think of any companies that are social and
a company that's looking at doing good and making money

(11:15):
that have done things from a transformational standpoint?

Speaker 2 (11:20):
What do you mean by transformational?

Speaker 1 (11:21):
Well, I mean come up with a product or an
approach that really is a leading edge type of thing.
I'm sure there must be some. I can't think of
any off the top of my head, but.

Speaker 2 (11:32):
Yeah, absolutely, Well, it depends on what exactly you mean
by transformational. And so there are a lot they're creating
new technologies now from these smaller startups that could really
be game changers. The carbon capture is an example there.
And then there are ones who have really been pioneers
in the social enterprise and environmental manufacturing and more sustainable manufacturing,

(11:56):
et cetera. Like some examples that that would be Patagonia
or Interface Carpet. I don't know if you're familiar with them,
for sure.

Speaker 1 (12:04):
Patagonia is a good example. I mean a company that
aspired to have a good culture and do good in
the world. I think the owner of the company really
has donated most of his money to doing good things
in the world as opposed to making more money.

Speaker 2 (12:18):
That's right. Have you heard of Interface Carpet.

Speaker 1 (12:21):
I have not.

Speaker 2 (12:22):
They're another example who are just a real pioneer and
sustainable manufacturing. And you wouldn't necessarily think Carpet, yeah, like
that's going to be the groundbreaking thing, but what they've
done has been really cutting edge in terms of sustainable
manufacturing and the impact that they want to make in
the world.

Speaker 1 (12:42):
We'll step away from our interview with Lily Tench to
feature just two examples of effective social enterprises. After a
trip to Argentina in two thousand and six, Blake Mikoski
became the chief shoegiver and founder of Tom Shoes, using
some of his own money to actually launch the company.

(13:03):
Tom's pledged to donate one pair of shoes for everyone
sold and now expands that one for one campaign to
support water, site birth and anti bullying initiatives. Through Tom's brand,
Miikoski has raised awareness about issues like global poverty and health.
They've donated money to provide mental health services to those

(13:25):
in need and gave away well over one hundred million
pairs of shoes. Professor Muhammad Yanis is renowned for the
popularization of microfinance and micro credit, which serve as the
cornerstones of the Grammin Bank, founded in nineteen eighty three.
In two thousand and six, Janis was awarded the Nobel

(13:46):
Prize for creating the bank, which is based on the
principles of trust and solidarity to empower under resourced villages
with the funding to create businesses and generational wealth. According
to the Grammy US Bank, as of May two, ninety
percent of it's roughly nine million borrowers are women, who

(14:07):
pay their loans back at a rate of ninety seven percent.
That's a recovery rate far higher than any traditional banking system.
And now back to our talk with Lily. If somebody
wants to start a company that's more focused on doing
good in the world, or at least balanced in doing

(14:28):
good in the world and making money, how does one
raise capital to start the company or to continue to
grow the company. Because a lot of these companies either
they bring an outside investors or they're not don't necessarily
go public right off the mark, but you know, bring
venture capital in or something like that. How do they
find investors for that type of organization.

Speaker 2 (14:50):
What depends on what kind of company you're trying to build.
Some of these more tech based companies might start with
government grants first to do some of the technical development.
If they're looking to raise outside investment, like equity investment,
there are social enterprises can still reach out to any

(15:13):
kind of VC firm, but also there are a lot
of impact investors or those who are specifically interested in
investing in companies that have a social environmental impact and
that could be There are angels who are angel investors
who are most interested in this. There are sure capital firms.

(15:34):
There's also crowdfunding. I'm sure familiar with that, but there's
several different models, some that are specifically for social enterprises.
Then there's also a lot of accelerators and incubators out
there that are targeted at this kind of company that
can offer sometimes some funding or some investment, and then

(15:55):
also other resources guidance, mentorship, maybe free space, access in turns,
et cetera.

Speaker 1 (16:01):
You reference to the terms of incubator and accelerator maybe
for our listeners, just to describe what those are, because
I know a lot of these companies they're startup companies.
They go through an incubator or an accelerator.

Speaker 2 (16:14):
Well, unfortunately, everyone has a slightly different definition of these
two things and how they're different. But at the core,
these are programs that are meant to help businesses get started.
So they often offer things like curriculum on how to
start a business, how to find funding, how to prepare
for investing, how to create a business model, financial model,

(16:37):
et cetera, how to connect with industry mentors, so someone
who has built a business or knows your particular industry
really well. They might give you space to work out
of and some come with some investment or grants as well.

Speaker 1 (16:52):
And do you think these entrepreneurs that start companies like this,
do you think they're more adaptable and create then you know,
sort of traditional type organizations because they're trying to solve
a problem in the world, or at least create a
company that's that's socially responsible. How do you think about
the attributes of the CEOs or the founders of these companies.

Speaker 2 (17:15):
Yeah, so I think they have to be a little
more creative and adaptable because when they're doing something new,
kind of by the nature of what they're doing. And then,
you know, to be an entrepreneur you have to be
pretty creative and adaptable in the first place. And there
are tons of challenges just to starting a business, but
then if you're trying to start a social enterprise, you've
got a whole extra bucket of things to work through.

(17:39):
You know, you have to figure out how you measure
your impact, how you build a business model that maybe
the person who's receiving the benefit from your company is
not the sayings, the people who are able to pay
for it, et cetera. So they often do have to
be a little more agile and creative in their approach.
But I think is one entrepreneur that I interviewed for

(17:59):
this book described that it can also be a bit
of a superpower to have that mission too, because starting
a business, any kind of business, is incredibly hard, and
to have this mission kind of driving you and making
you kind of go over those extra humps and go
the extra mile can also be really beneficial.

Speaker 1 (18:16):
How do the CEOs of these companies, how do they
tread that balance? And we talked about it earlier in
the interview, but just with their investors trying to balance
that mission with making money. What superpowers do they have
to try it to be able to do that in
an effective way over a long term, because you're constantly

(18:36):
going back and forth between impact and making money.

Speaker 2 (18:40):
Well, I think ideally, if you've structured it right, you're
serving both at the same time. And I think that's
part of the beauty of having a social enterprise, rather
than say a nonprofit that is that a business can
donate to or something. Is that in a social enterprise,
when you're suing your mission, you should also it should

(19:03):
also be helping contribute to your business financially, and vice versa.
That said, you know, I think any social entrepreneur will
tell you that that's not true one hundred percent of
the time. So I think you have to have some
kind of structure or process internally for when these two goals,
your mission and your profit are not aligning. You know,

(19:24):
how you make decisions, how you handle that.

Speaker 1 (19:27):
You talk about millennials, but what about gen Z. They
seem to be that they're they're coming up now and
they were they were, They're going to be more technologically
proficient probably than any generation because of their age and
you know, the blossoming of technology well through their childhood
and into young adulthood. I've read that many of them

(19:47):
want to start companies, and certainly they almost all say
they want to do good in the world. What are
your thoughts about gen Z and the next generation of
social entrepreneurs.

Speaker 2 (20:00):
That's a great question. I feel like they make me
feel really hopeful. I think, you know, they're going to
have their own way of looking at the world and
approaching problems, and some of the things that we see
is kind of the way things are, nothing you can
do about it. I hope that they will be able
to rethink and approach in a different way. And you know,

(20:23):
they're growing up through some pretty crazy experiences like being
super young during COVID nineteen, and you know, I think
they'll just start I think they'll come at it not
only with that kind of textonal larity that you mentioned,
but willingness to consider and rethink some of the things
that we consider to be settled.

Speaker 1 (20:46):
It's their future that we're all hoping is so they
can take the mess that we have today and maybe
make it a little better. And we're all rooting for them,
and that's for sure. What about other countries, It seems
like I see a lot of you know, sort of
fresh ideas coming out of Africa and other places outside
of sort of the traditional places where, you know, not

(21:09):
at Silicon Valley and not the usual places where innovation
came from, but from other parts of the world. Do
you see that also in the social entrepreneurial area.

Speaker 2 (21:18):
Absolutely, Yeah, you mentioned Africa. I think there's a lot
of exciting stuff going on there around social enterprise, and
I mean many places in the world that you know,
we've not traditionally thought that business helps, I guess, but
I think are really making a mark in this area
and even different parts of the US, you know, rather

(21:39):
than Silicon valleys. I think we're seeing I'm biased, but
I feel a lot of interesting stuff coming out of Appalachia. Yeah.
So I think, you know, living in a time and
place where you're facing some of these issues more directly,
I think enables you to more effectively bring about potential solutions.
So I think that's one reason where we're seeing some

(22:00):
of these social enterprise leaders coming out of places that
have not traditionally been seen as places for startups. But
but that's it. Also, the world is much more mobile
these days, you know, we can all communicate much more easily,
and you have more access to resources and information no
matter where you live.

Speaker 1 (22:20):
A couple more questions, just do you feel like these
types of organizations they're more community focused and community oriented
just because of the nature of the culture that they're
trying to create.

Speaker 2 (22:32):
I think so. But that's said, there are a lot
of different kinds of companies and that would fall into this,
And for me personally, I think of companies who have
a social or environmental mission to be social enterprises because
the environment is where we live, so what happens to
it annext all of us. But where exactly people try

(22:55):
to or business leaders focus on for their impact I
think can be pretty different. But I think by nature
of putting your mission front and center in your business,
I think they do tend to be much more community
focused and aware of the impact that they are having
with their business and where it's located.

Speaker 1 (23:16):
Yeah, And I would think that the younger generations, in particular,
because they are focused on, you know, doing better things
in the world, would be more apt to support companies
like that.

Speaker 2 (23:28):
I think so. And it's also the amount of information
that is out there and that you can access about
companies have changed dramatically, and the expectations that people have
of companies to do more than to just create the product,
you know, we expect them now basically to have some

(23:48):
kind of statement about their ESG goals or corporate social responsibility.

Speaker 1 (23:53):
Well, Lily, now that you wrote the book, or what's
your company going to be when you take all your
own advice and go out, it's going to become a
social entrepreneur.

Speaker 2 (24:02):
That's a great question. But what I get to do, actually,
which is a really fun part, is I get to
work with entrepreneurs and so I get to have a
little bit of input or guidance on so many different
amazing ideas. So at the Spargannovation Center, we run a

(24:22):
clean tech accelerator and then also an incubator where we
have companies working year round. So I get to see
all sorts of amazing ideas and people who are going
to change the world.

Speaker 1 (24:33):
Yeah, that's awesome. Well, we've been talking to Lily Tench.
She's the author of Good Business, An Entrepreneur's Guide to
creating a Better World. Lily, thanks so much, a lot
of great insights I really appreciate you spending some time
with us.

Speaker 2 (24:43):
Well. Thanks so much for having me. I appreciate it.

Speaker 1 (24:48):
We'll be right back after the news at the bottom
of the hour.