Good Companies Like Clif Bar: How They Do It

By Robert Girling Clif Bar & Company, an American business that today is one of America’s best known brands, started out as  a small bakery named Kali’s Sweets & Savories selling calzones. In 1990, owner Gary Erickson went on a day-long, 175 mile bike ride. Partway through the ride, despite his gnawing hunger, he could not take another bite of the chalky energy bar.  Erickson decided he could do better. Two years later, after much experimentation in his mother's kitchen, Erickson settled on a recipe for the Clif Bar, named after his father. In September 1991, Erickson introduced the Clif Bar in three flavors at a bicycle show. In its first year, fueled primarily by strong sales in bike shops and the growth of the health foods movement, sales of Clif Bar exceeded $700,000. Sales doubled each year, and by 1997, revenue surpassed $20 million. Today Clif Bar is among the leading makers of organic energy and nutrition foods. Erickson and his wife, Kit built their company using a business model that integrates its socially responsible values into every area of the business. They’ve achieved a remarkable 10-year compounded annual growth rate of 23 percent. The company gained national acclaim for its commitment to the environment and its support for important causes such as the fight against breast cancer. It is also renowned for its treatment of employees. Outside magazine named the company to its list of Best Places to Work in 2008, 2009, and 2010. Health magazine named Clif Bar & Company the “Healthiest Company for Women to Work For.” And Fortune Small Business added Erickson to its list of “Best Bosses in America.” Why all the acclaim? The company transmits its values. Since 2001, Clif Bar has doggedly pursued its goal to conduct every aspect of its business sustainably. "I have a responsibility to the people of Clif Bar,” said Erickson. “We want to sustain a business where people can live, not just make a living. We believe that if we provide meaningful work as well as something beyond work, people will do their jobs well and lead healthier, more balanced lives." In my book, The Good Company,  I tell the stories of the many businesses that look at how shareholders and investors reap rewards when the welfare of employees who produce the products and services (as well as those of its suppliers), the community that hosts the company, and the environment that supplies the natural resources are included in the company’s goals. There are literally thousands of companies that adopt this inclusive approach to business including well-known brands like Eileen Fisher, Google, Southwest Airlines and Patagonia. Each year adds a host of small companies like Traditional Medicinals, a maker of medicinal teas located in Northern California, Sierra Nevada Brewery known for its specialty beers and Benetech which produces reading machines for the blind. Good companies honor their employees by rewarding them fairly and giving them the freedom to solve problems and find creative solutions. Although a good company earns fair returns for shareholders, it refuses to do so at the expense of the legitimate interests of employees and the community. How does respecting employees and treating them fairly produce  such remarkable results? Globe Scan, a public opinion and business intelligence organization, found that the fair treatment of employees was the most important indicator of company success in the 26 countries surveyed, including the US, France, Switzerland, Italy, the Philippines, and all of Latin America. Beyond treating employees fairly, a good company is also committed to working with and supporting the community. Some support the community by providing donations and publicity for community events. Others provide financial support for non-profits and the arts. Some firms, like Dansko Shoes and Google, have established foundations that support a variety of causes and community development efforts. Others, like RSF Social Finance and Triodos Bank, directly finance community development. Give Something Back gives a portion of its annual profits away, while Proctor and Gamble pays for employees’ time spent working for charities. Good companies care for the planet The earth produces in abundance all the resources needed to sustain life for most of its inhabitants. Starting with the industrial revolution, we have developed a global powerhouse based on energy, machines, and technology. Unfortunately, these advances have come at great cost. Today, our planet is embroiled in a struggle with resources and pollution. Lester Brown, President of the Earth Policy Institute, reminds us of where our focus must be: “Our global economy is outgrowing the capacity of the earth to support it,” he said. “In our preoccupation with quarterly earnings reports and year-to-year economic growth, we have lost sight of how large the human enterprise has become relative to the earth’s resources ... As a result, we are consuming renewable resources faster than they can regenerate.” A good company is conscious of the sources of all raw materials and its environmental footprint on the planet. Its practices are designed to steward the earth’s resources, limiting and reducing toxic emissions in our water and air while working toward replacing non-renewable resources with regenerative materials. It may implement measures to reduce, prevent or eliminate environmental impacts such as reducing waste or redesigning production processes to conserve energy and raw materials. Clif Bar supports a broad range of programs and activities in an effort to reduce the company’s ecological footprint. These range from auditing and modifying its supply chain to finding products that are produced with organic or sustainable methods. Employees want to work for ventures they believe are contributing to a better world. The idea of simply earning a living is not enough. They also want the opportunity to support and work for companies that actively do good. And they will not be satisfied with less than the opportunity to work within noble companies. I have observed that when companies relegate the profit motive to its proper role—as one among several factors that guide business decisions—then employees will give their best. Employees today expect more from the workplace; they expect fairness, compassion, and respect for nature. We need companies  that act  the true purpose of business is to add value to the community.  In the words of Ben Cohen, co-founder of Ben and Jerry’s “The true purpose of business is to add value — not just by transforming raw materials into goods or providing useful services but also by adding value to the lives of employees, adding value to the life of the community, and adding value for the sake of future generations by treading as lightly as possible on the planet.” Robert Girling is a Professor in the School of Business and Economics at Sonoma State University. He is author of The Good Company [Hill Press, 2012] available at www.goodcompanys.com [Image credit: shortCHINESEguy, Flickr]