How can social businesses be scaled so that they maintain and enhance their mission after an IPO, acquisition, or any other transition? Judy Wicks, founder of White Dog Cafe, told her inspiring story during the final conversation at the Investors’s Circle conference this week: The White Dog started as a coffee and muffin take-out shop on the first floor of her home and grew to a 200 seat restaurant and store with gross sales of $5M.
Wicks made a conscious decision not to scale. If she grew larger, she would "lose the authenticity of my relationships with employees, customers and the environment. Business is about relationships; money is just a tool. So rather than grow wider, I grew deeper," Wicks explained. "I found many different ways to expand consciousness -- we created a solar house tour, offered energy audits, invited customers to the Dance of the Ripe Tomato … I use good food to lure innocent consumers into social activism."
Wicks shared her learnings and best practices with her competitors. "If we want to create the world we want, we need to work cooperatively to build that economy," she explained. Wicks is also working with B Lab to develop B Corporation restaurant standards.
When it came time to sell the business, Wicks created a social contract and then licensed the name White Dog Cafe to another entrepreneurial restaurateur in her community. The social contract laid out guidelines for operating the business in a manner that would maintain her mission. For example, one stipulation states that White Dog Cafe's must be locally owned and independent. It also lays out local purchasing practices, a ratio of highest paid to lowest paid employee and much more.
Like other panelists at the conference, Wicks stressed a focus on the local.
"We are still in denial as a society about how to prepare for climate change and peak oil. Why are we shipping basic needs around the world?" Wicks inquired. "Communities are vulnerable. Look in your own communities for investing opportunities - ask yourself what does my community need?" She spoke of a "living return," which is what you get when you reap the local benefits of your investment.
Wicks suggested a new P be added to the 3 Ps of people, profit and planet: Place. She keeps a short distance between herself and those who are impacted by her business decisions to maintain a sense of place. The model of "continual growth disconnects a company from a sense of place," she pointed out. "I purposefully did not scale my company. I did not think I could maintain relationships with more than 100 employees," so she capped it at that.
I left the conference inspired. One the one hand, the White Dog Cafe is just one restaurant, but on the other hand, it represents the ultimate social enterprise. If all businesses were run in a similar manner, engaging the local community, respecting natural resources, giving back in every possible way, imagine how our cities would thrive! We should all learn a lesson of two from the White Dog Cafe.