How Ethical Corporation got started and some key lessons learned

Here’s a few notes from a non-PowerPoint presentation that I gave recently in Crete, Greece.

For once I was talking about Ethical Corp rather than other, larger companies.

The below might be of some vague interest to readers.

Crete presentation notes: Speech to European Sustainability Forum, September 2012

Who I am

– founded Telematics Update in 2000 (now 5 million euro turnover)

– founded Ethical Corporation in 2001 (now 2 million euro turnover)

– co-founded ClimateChangeCorp.com in 2007 (now shut down)

– founded Stakeholder Intelligence in 2011 (profitable but small, use to generate ideas for EC)

– 2009-2012 board director of FC Business Intelligence, turned over 35 million euros in 2012: my role was in setting up renewable energy intelligence business units: CSP, PV, Wind, Waste, Tidal

– Lecturer at University of London in corporate responsibility, supervise msc research and researching my Phd

– Involved in several start up ventures as advisor (hot water in Africa, gourmet/sustainable foods)

The Ethical Corporation story

Began in 2001: originally “ethical business” wanting to focus on East London SME’s

BUT very quickly realised we couldn’t have a business on that, and began to think about how CSR can use the power of large companies to do good, particularly in the supply chain

Learned by failing: Lost 200k in the first year on the magazine…

…But knew how to sell and generate event cash: tried to push the agenda also from a ‘right wing’ perspective to get conservative companies interested using conference titles such as: “what’s the point of corporate responsibility?”. Idea to add rigour to the debate.

Gradually spread risk across three sets of products: events, subs, reports

Always focused on being half a step ahead of customers: pushed the agenda and be useful to managers

Always hired young graduates for their energy and enthusiasm, more female than male

Key lessons learned for Ethical Corporation:

Constant trialling and testing of new ideas: many did not work (ClimateChangeCorp.com!)

Struggled to empower and keep people, but also to find them

Had to take some chances to survive: lost 40% of revenue in 2008-9

Understood the limitations of our ecosystem: forced growth never worked

Now a sustainable business and brand: now understand brand value in tough times

Understand more than ever that engaged customers will drive innovation

You and your vision

Ideas matter less than your ability to execute them: hard work and persistence are the keys

You have to feel it to do it: passion is everything

You have to be obsessive: work all day, then work in the evening

Purpose matters: you only get one life, and people need a reason to come to work in hard times

It’s really hard! Don’t over romanticise entrepreneuralism: You need to be mentally tough

Be flexible: few business plans or even models survive first contact with the market

Remember to recharge: breaks matter!

Your people

Good people are very hard to find and replace: you have to inspire them and keep them

If it’s not “hell yeah” it’s no. That goes for who you hire too!

Your best people should earn as much, or more, than you (or be able to)

Prevariction costs profits: tough decisions must be taken quickly

You can never do enough training: standards can slip in a week or two:

Trust, but verify..

Your investors

Most advice you are given unsolicited is wrong: don’t listen to it

You need investors who are prepared to lose money for two years and have a five year horizon

Avoid those who want to be too closely involved, or too distant

Leverage their networks for mentors and experience

Your competitors

Respect, talk to and watch them, but never copy them

Success breeds complacency: watch out for the arrogance trap – others will overtake you!

Don’t get angry if they copy you: innovate and get further ahead

Never argue with them in public or do them down: praise is best, it’s mature

Your exit and what next

Have a clear idea of what your investors expect when you start

Understand that others can manage better than you

Be prepared to step aside from some tasks

Consider what a sale might mean beyond money: on your deathbed money won’t matter…

Cultivate broad personal interests: this allows you to find what may be next…