Will Butler-Adams, CEO of Brompton Bicycles, on why the VE Index matters for SMEs.
Transparency is changing the business world. Customers are interested in much more than the products and services they're buying. They want to know about the companies they’re buying from.
They’re asking, how does this company treat their staff? Do they care about the community? Do they look after the environment? Do they pay their taxes? Businesses that aren't aware of how they contribute to society are failing to recognise that this is going to become a measure that customers care about. As businesses, we need to look beyond short-term profit and bonus incentives and focus on the cost to brand and reputation. This will ultimately have an impact on the bottom line.
Seeing the bigger picture
Over the past 10 years, different threads of the corporate social responsibility agenda have come to the fore. Ethical supply chains, carbon footprints and air pollution have all been ‘the latest trend’. The Vibrant Economy Index sits above this. It shows that it takes a whole set of things to create a place where people and businesses can thrive: how you care for the environment and your staff, how you integrate with the local community, how you support schools and so on.
Responsible businesses are interested in all these things. They think about how they contribute to the environment, at a local level where their staff work and live, and at a macro level, in more distant places where they source, make and sell. The world is getting smaller, and this increases our recognition of the contribution we make to the wellbeing of the planet.
The Vibrant Economy Index creates a way to measure how healthy our communities are. If we start measuring vibrancy, it will give it visibility and allow us to do something about it. It will create a new level of enlightenment, if you like! For me, it reflects a new stage in the progress of business. Before HR existed, we didn’t have job descriptions, reviews, career development. Then we started to measure the impact of people on business performance. Now it goes without saying that HR is a core part of business strategy.
It’s the same with the vibrancy of place. The companies that will be around in 10 or 20 years' time will be companies that care about community and vibrancy. So if you're a company that cares, you need to measure it and you need to understand the impact your business has on it.
Can an SME make a difference?
The index raises questions that lone SMEs can’t answer on their own. But if the UK’s 1.3 million small business employers1 all made a change – perhaps each creating one additional job – the impact would be huge, far bigger than the decision by one multinational about where to locate a new facility.
Even SMEs that can’t create a job can think about how they use apprenticeships and how they recruit people. The scale of change that can come from a small shift in thinking is quite profound. Is this self-interest? Yes. But the reality is that if lots of businesses start caring about their people and their communities, collectively their response would have a big impact on a place's health and wellbeing.
This mental shift means you stop thinking about your office as a location and start being part of the community. If you talk about vibrancy with your colleagues, issues might come out that make you act differently as an organisation. For me, it's about challenging assumptions I may have about what’s important to my staff, and discovering the challenges they face and what they really want. I can then adjust the way we run the business accordingly. I can align how my staff work or how they're rewarded with what they really value in life. This impacts the bottom line. If you have great people that care, you’re much more likely to have happy customers.
All power to the consumer
Technology has already played a huge role in changing consumer behaviours. That will increase in future. Consumers will have even more visibility of how companies operate and will have the capability to respond even faster. Imagine an app that lets consumers remove a company from their investment portfolios, easily and instantly, if they hear a company is paying less than their fair share of tax. This would be a real incentive for some corporates to change their behaviour.
This is a specific example, of course. But that technology is shining a light on our businesses is undeniable. As SMEs, we need to ask what consumers will find when they can look under the surface.