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Hi, Kevin Coupe here, and this is FaceTime with the Content Guy.
We talk here on MNB often about the advantages of having a business model in which employees have skin in the game. Whether it is through direct ownership of the company or some sort of profit sharing plan of the sort that usually only senior executives get, I’ve always felt that this is one way to bridge the gap between labor and management and even put to rest much of the debate about minimum and living wages.
Now, I’ve been made aware of another fascinating construct that seems to have as its goal an even higher purpose.
The company is Organically Grown Company, which is using trust law “to structure its operational and funding model to support purpose-based entrepreneurship, ownership and succession … Previously employee- and grower-owned, OGC is making a bold move to buy back all the shares from its stockholders and transfer them to the Sustainable Food and Agriculture Perpetual Purpose Trust. The Trust, created by the company, will eventually hold 100 percent of the ownership rights and will ensure that the company delivers positive economic, social and environmental impact and maintains its independence into perpetuity, never to be sold.”
Organically Grown says that this new structure will allow it to “focus 100 percent on its founding purpose: to deliver a positive impact on people and planet through its products and services.” Those are considerable - it says it moved “more than 100 million pounds of fresh fruit and vegetables across the Pacific Northwest region” last year alone.
It also says that the new structure will eliminate “the pressure to maximize short-term quarterly profits and exit-value for shareholders … Instead, OGC will maximize ‘purpose’ by creating long-term returns to mission-aligned evergreen investors and sharing the balance of profits with their stakeholders, including farmers, coworkers, customers and community.”
As important as it is for employees to feel like stakeholders in a business, I think it is just as important for companies to be perceived by consumers as having an authentic purpose; I really do believe it gives companies a leg up with a percentage of shoppers.
By the way, you can define “purpose” a lot of ways … but I think the sustainability of brands such as Newman’s Own and Ben & Jerry’s prove what I’m saying. Recent efforts by the Land O’Lakes cooperative are taking this same approach, focusing on how important women farmers are to the brand.
And that’s certainly what OGC seems to be doing - putting purpose above profit, and then establishing an organizational structure to support that radical notion.
I like it.
That’s what is on my minds this morning. As always, I want to hear what is on your mind.
- KC's View: