There is an increasingly popular business concept known as the “double bottom line.” Effectively, the double bottom line advocates for measuring business success not just through the traditional measure of financial profit, but also through the positive social impact that a company makes on the broader community. Some term these actions as “corporate social responsibility,” but we prefer the double bottom line phrase because it emphasizes that in order to be generous, a business needs to be profitable.
The concept certainly isn’t a new one. From the beginning of time, some percentage of shopkeepers and merchants have gone out of their way to serve their community in more ways than commerce. The phrase “do well by doing good” [often attributed to Benjamin Franklin, as are most pithy quotes of unclear origin] is perhaps the most succinct description of the phrase.
We are thinking about the double bottom line this week for a few reasons. Our cover story is on entrepreneurship, or more specifically on how schools are teaching entrepreneurial skills. Also, a couple of local business announcements caught our eye. First, BJC Healthcare announced that it would impose a higher minimum wage for its employees, raising minimum worker pay to $15 an hour by 2021. Then, Schnucks Markets announced it will stop selling tobacco products in its stores next year.
The businessperson who focuses only on the financial bottom line might have trouble justifying these decisions. Tobacco is a profit-making product line for Schnucks, after all, and certainly BJC could save some money and hire cheaper workers.
Todd Schnuck, CEO and chairman of Schnucks Markets, said this about his company’s decision: “Our company’s mission is to nourish people’s lives. Tobacco products directly contradict our core mission and that means that they simply don’t belong in our stores.”
Rich Liekwig, BJC president and CEO, had a similar sentiment about his company’s decision: “We’re making these changes to help our team members and their families better meet their financial needs. BJC is an organization of people taking care of people, and it’s important that our 31,000 team members receive competitive pay and benefits.”
The more cynical amongst us might suggest that these are marketing decisions, the free press generated by these announcements outweighs the money lost by the decisions. Perhaps, but that is the point of the double bottom line. It has the potential to reward companies financially for taking socially responsible action.
The entrepreneurship teachers out there also would do well to point out that this is an example of the free enterprise system. Tobacco did not need to get regulated out of Schnucks stores, nor did a wage increase need to get mandated unto BJC. These companies made these decisions of their own will, driven by the market and their own consciences. These decisions might anger some consumers, and the free market will allow them to shop elsewhere.
However, we find it refreshing to see companies still focusing on the time honored tradition of doing well by doing good. We say kudos, Schnucks and BJC. Well done.