It seems we rarely go a few months without coming up with some sort of new way to radically rethink our way of working. This shift feels like it’s going to be an even bigger one. Here’s the message I sent out to the team last week, to kick off the discussion…
“So you’ve all probably noticed that I’ve spent quite a bit of time talking to Matt in the last week or so. We’ve had some really productive conversations about some stuff that has been driving him for a while, and in the last few months I’ve increasingly started to find that I share many of his views.
I’ve always had 2 very clear goals for Hanno:
- On a personal level, to build a sustainable business that would give me an escape from the world of law, and allow me to do work I enjoyed.
- To build a team that would be able to do big, world-improving things. That’s part of the reason I’ve always been against taking investment and giving up equity: because I wanted to keep the ability to drive Hanno in a direction I felt was genuinely good.
But survival was always the top priority. When we first started the business, about 7 years ago, and when I was working with Sergei and Arnas at the beginning, it was tough enough just to earn a living, let alone find the resources to help social causes.
That was the case even when Matt joined, and I remember having conversations with him about how, while we both wanted to do great things with Hanno, there was no sense in trying to do that if it meant that the business would fail. So for the past few years, getting stable and keeping it running has been the top priority.
And perhaps we weren’t even good enough at the time. I’ve always been sceptical of that whole thing where gap year kids go to Africa to help build houses and schools. There might be some positives that they take from the experience, but in terms of actually getting schools built, it’s hard to deny that they’d be better off sending the money so that a real, local builder, can get the job done. Those sort of projects often seem like more of a personal feel-good thing, rather than being the most effective way to drive meaningful social change.
So for the past few years, getting stable and keeping things running smoothly has been the top priority. We’ve had our heads down, focused solely on making Hanno work, and building up our own skills.
But things have gradually been changing
As we’ve overcome the very worst of those tough early days and grinding 18-hour days, we’ve started to make some positive changes, and get a little closer to doing more good.
First, we started to get much more selective about projects, and began to veto any which don’t fit with our beliefs. Those which were more socially beneficial, immediately became more desirable to work on.
We all agree that UX design is something which can make our world a better place, and some of it can even be life-saving.
I’ve been reading and thinking a lot in the last few months, and all of a sudden it seems we’re not really maximising the good we could do.
We might have the intention to get there eventually, but are we now pushing ourselves in that direction as hard as we could?
Does doing what amounts to a CSR programme (as we’re doing right now), giving a bit of our profits to social good causes, really go far enough?
I think many of us on the team are feeling a similar way–I’ve known this about Matt for a long time. I also think that it’s true for all of us, that given the opportunity to only work on socially positive projects, we’d jump at the chance.
“Do Good” has always been one of the most important messages in our Hannifesto, but we really want to maximise it. I think that the time has come for us to no longer see doing good as a ‘nice extra’ if we can find the time and money to do it, but rather, consider it to be our biggest focus.
I’d argue that there’s ultimately not much point in Hanno existing unless we feel we’re making the biggest possible impact on the world.
Having thought about this a lot, and read about the different options, I think it’s time for us to decisively shift to becoming a Social Business
What is a Social Business?
Social business is a term that has been pushed by Muhammad Yunus, who founded a very well known microfinance organisation in Bangladesh, called the Grameen Bank. He’s won the Nobel Peace Prize for the work he has done in breaking the cycle of poverty in the developing world, by creating economic and social development.
Yunus says that a Social Business is:
- Created and designed to address a social problem
- A non-loss, non-dividend company, i.e.
- It is financially self-sustainable and
- Profits realized by the business are reinvested in the business itself (or used to start other social businesses), with the aim of increasing social impact, for example expanding the company’s reach, improving the products or services or in other ways subsidizing the social mission.
The goal is to cease to be maximising profit, and instead, to focus on maximising the social good that we do. On top of that, business owners shouldn’t receive any dividends from the business’s profits.
But a social business:
- is self-sustainable
- is not dependent on donations or on public grants to survive and operate
- is not a charity
I’d highly recommend reading his book, Building Social Business, for a really good look into what’s involved in building a social business.
So what does this mean for Hanno, in the short-term?
For the work we’ll be doing
The first thing to say is that it’s not something I think any of us could realistically be ‘against’. It’ll have a major effect in the long term, I hope, but in the short term, shouldn’t lead to any immediate, drastic changes.
It’s not like we’re doing anything which is bad right now–we don’t have investors extracting huge profits, and our profits all go to our team and to social causes already. What we’re doing here, is just accelerating our direction towards doing far more social good.
This to me, is a statement of intent and a shared commitment to further social causes, and also to cease being a profit-maximising company.
But we’re still a design team, and we’re still working with our clients. We’re not immediately about to launch a bunch of social businesses or quit what we’re doing and move to different countries. Design is still at the heart of what we do.
We don’t have a definite roadmap here. This is not a pre-defined route in itself, but I think we have to make this commitment in order to stay on the route we need to be on. The team is now at a certain size, and we’ll be coming up to big decisions soon about growth and priorities. I think that this commitment to being a Social Business, should guide us better, and keep us on track.
By committing Hanno to being a force for maximum good, I think we can create a real legacy that we can be proud of.
“What you leave behind is not what is engraved in stone monuments, but what is woven into the lives of others” Pericles (Greek Statesman, c 420BC)
For our clients
This is by no means a demonisation of startups, nor our current clients. We’ve been fortunate enough in the last year or so to get ourselves to the position where we can be selective about working with companies who share our values and are doing worthwhile things. We’ve avoided working with companies whose missions we felt were not delivering a net positive.
But we can simply do more. Right now, our current model of working with larger clients who can afford our rates, and using that income to fund other work, seems like the best model. At least initially, anyway.
Becoming a Social Business will affect the type of clients we’re looking for, no doubt. We’ll want to be far more proactive about seeking out clients who fit with our ethos, and those which do, will obviously be more attractive to work with. When we can find larger companies who are also social businesses, that’ll be particularly appealing. But just because a company isn’t a social business doesn’t mean we won’t be keen to work with them.
I wouldn’t be pushing us in this direction if I didn’t think it was totally possible to find the clients and the business model to make it work.
For the team
A key principle behind running a social business is that you make it sustainable. A social business is not a charity. We all know that if you want good people, you have to pay for that. While purpose and culture is a big differentiator, you can’t expect people to be paid poorly, and still expect to hire those good people that you need.
So the shift shouldn’t affect team salaries hugely. Perhaps in the long-term, it’ll affect where team members choose to be based, in order to engage with projects more, but it definitely doesn’t change the financial status in the short-term. We have a commitment to paying at least market rate salaries, and that won’t change.
And how about further ahead?
Matt and I were really just talking about how to kick things off in the short term, rather than figuring out a locked down plan. Here’s a massively helpful sketch and clear guidelines about how a Hanno might look in 3 years ;)
So the point is that there is no limit to what we could do. There are virtually infinite ways of doing social good. We’ll obviously discuss all of those as a team in the next few weeks and months. Just as we’ve been doing already, when discussing how we can do more social good work.
Matt’s going to explain his thoughts on this in much more detail in a bit, but from our very initial thinking about it, we think it comes down to 2 big factors:
- Enabling social good
- Multiplying social good
The goal is of course, to seek maximum impact, and maximise social good.
Going back to the idea of building schools in Africa, there’s no sense in us using our design abilities to do flyer and leaflet design for eco-charities. That’s not using our skills to maximum effect.
We’re good with startups, tech, user experience and service design. So it makes sense to use those skills.
There are tons more options. Some general ideas about things we could do might be:
- Launching our own social good startups. We talked about Hanno Social Labs, previously, conceptualising and funding our own startups and initiatives which might make a difference.
- We could mentor those who need our help.
- Or we could incubate and accelerate other social businesses. Maybe we could launch our own incubators.
- We might launch conferences or workshops to find ways to enable and multiply even more people
- We could do something like IDEO have done with IDEO.org and Open IDEO–finding ways to use their team skills to address these challenges.
- We could even build a digital incubator that would operate remotely with social good companies around the globe.
Obviously, all of this is to be figured out in time, and depends on what moves would make sense as part of Hanno being a sustainable business.
Okay, so what do we need to do next?
- The first thing to do is to start the conversation. As a team, there’s lots to be discussing and thinking about.
- We should all be looking to educate ourselves, as this will help us find more opportunities. There’s no way to say exactly how to do this, but reading Building Social Business and perhaps This Changes Everything. Matt’s going to be thinking about some sort of suggested reading list which might give some ideas.
- We’ll need to redefine our Hannifesto to represent this shift, putting more emphasis on social good. I have my own ideas about certain additions, and think that we’ll probably end up adding an environmental point to the Hannifesto, too.
- We’ll need to define a new set of guidelines about the causes we want to help, and the global problems we want to solve. A social business is “created and designed to address a social problem”, so we need to define which problems are to be our top priorities, where we can make maximum impact. There’s no sense in throwing our time into any cause which sounds like a decent idea. It might even make more sense to spend time on figuring out our own social good strategy, before we give away more pro-bono sprints.
- We’ll also need to define more thorough guidelines for the sort of larger clients (and those who aren’t social businesses) that we’ll be looking for. We’ve done this a little, by prioritising certain industries to focus on, and this should most likely continue.
- We’ll need to make a few structural and legal changes to the business, including changes to dividends and salaries. Once we have a clearer picture of what we want to do, it would make sense to enact a shareholder declaration (relatively simple, as I currently own 100% of the shares) about the purpose of Hanno Limited. This will give us a bit more of a formal basis for it all.
And then, I think we can begin to plot a course for genuinely maximising the good we can do on the world.
I’m really excited about this, and I think it can be the start of something really significant. Now I think it’s time for the whole team to join the conversation and we can see where we can take it. Let’s do some good!”
This is a big new thing for us, and a lot of it is going to depend on the people who join us on our journey. We’d love to hear from people who can help. If you have any advice or helpful reading, please tweet me–I’d really appreciate it.
We’re going to be extremely open about the transition, and will be writing lots about our progress and struggles. As always, you can sign up for email updates from the Logbook or follow us on Twitter if you want to keep up with what we’re trying out.
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