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Dec 28, 2021
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32. Founder, Actv8
32. Founder, Actv8
Jeff and his guest Lynn Yap discuss how the businesses we lead can actually become more sustainable and more profitable at the same time. They discuss how implementing strategies to benefit the environment can also improve company culture, customer loyalty, brand equity, sense of purpose, and ultimately profitability. Lynn Yap is the author of the book “The Altruistic Capitalist: How to Lead for Purpose and Profit.” Lynn shares how companies can create a positive impact for both people and the planet while continuing to satisfy the need to provide a return to shareholders. Lynn and Jeff discuss the difference between shareholder capitalism and stakeholder capitalism, and how to make the business case to the CFO who feels pressured to make decisions to minimize cost at the expense of sustainability. Lynn shares about what first steps leaders can take that have not implemented strategies before. Jeff and Lynn also discuss how companies can leverage their internal and external communication strategies for better differentiation and brand equity in their niche. Lynn discusses the role the B-Corporation plays in effecting change.

Transcript

Intro: Duration: (02:23)

Opening music jingle & sound effects

Jeff Hunt:

Hi everyone. I'm Jeff Hunt, and this is the Human Capital podcast produced by GoalSpan. My quest on this podcast is to uncover the deeply human aspect of work. Today we get to talk about how the businesses we lead can actually become more sustainable and more profitable at the same time. We will hear that these two are actually not mutually exclusive.

We're going to discuss how to implement strategies, that benefit the environment and also company culture, customer loyalty, sense of purpose, and ultimately profitability. And my guest today is Lynn Yap, who is the author of the book, “The altruistic capitalist, how to lead for purpose and profit”. She wrote this book to highlight how companies can create a positive impact for both the community and the environment and how to grow business in a sustainable way.

Lynn is also the founder of activate network, which is an ACTV8. ACTV8 works with companies to increase the representation of women in leadership, technology, and innovation roles. They use leadership programs for women, employees, and even high school students to solve business problems, learn empathy and curiosity, and collaborate with people who look and work differently from us.

Lynn started her career as a corporate lawyer after graduating from the University of Nottingham in the UK with a degree in law. And she also has an MBA from the Wharton School at the University of Pennsylvania. And has worked in innovation with companies such as Adidas and Estee Lauder. Welcome, Lynn.

Lynn Yap:

Thank you so much for having me today Jeff.

Jeff Hunt:

Great to have you on the show and I'm really excited to talk about this topic cause we haven't covered it on the podcast yet. And it's so relevant today. There's so much conflict for businesses around. How do we do this sustainability thing well, and still make money?

Lynn Yap:

Exactly. Yes. A lot of times we think it's mutually exclusive, but it's not.

Topic 1 Who or what originally inspired you? (02:24)

Jeff Hunt:

Exactly. So we're going to jump into that, but before we do take us back to the beginning of your career and share a little bit about if there was anyone person or thing that inspired you to get into this space.

Lynn Yap:

Good question. I don't think that was any one person or any one event that actually inspired me to get into business as a force for good.

I think there are two things that probably led me to where I am today. I started out on my first day. I started out my career in investment as a corporate lawyer and then later on in investment banking and then they drew moving into technology. Now, these are all fairly male-dominated industries. And as I was progressing throughout my career, I was looking out for women role models, who is it that I can look up to?

Who is it who can help me? And oftentimes there weren't that many women I could look out to or could help me. Or could coach me, to get into that next level. And the second thing is, as I was working in law and investment banking, I was also coming to a point where I was just working for the next big paycheck or the next promotion, and I was lacking purpose and meaning at work.

And so that was another reason why I started to look outside these areas and to see how is it that I could use, how I spend a lot of the hours of my day. To create purpose, to serve others, to create a positive impact for the community and also for the environment, how is it that we can be more sustainable in the way we live and the way we work, and how we are generally in the world.

Topic 2. The Altruistic Capitalist thumbnail (04:11)

Jeff Hunt:

Tell us a little bit about your book. What inspired you to write it? Give us the thumbnail on your book.

Lynn Yap:

The inspiration for the book came in the spring of 2020. When you know, the whole world is in lockdown. It was a really difficult time for me. I live alone and just so much uncertainty about the COVID-19 pandemic and what was going to happen.

Everything was just looking quite bleak at that point in time. But what I also saw was a lot of hope and a lot of hope and humanity, there were neighbors helping each other, helping each other to buy groceries, helping each other to take care of their family. Neighbors applaud and appreciate frontline workers.

There was a lot of community and helping of each other. And the other thing that gave me a lot of hope was businesses collaborating with each other, sharing knowledge, sharing research, working with governments, working with each other in order to come up with the best solutions for the pandemic. So that gave me a lot of hope and inspired me to actually learn more about these businesses.

They were investing their assets and resources to help the community to help solve this problem. And so I decided to interview entrepreneurs, social entrepreneurs, and also companies that believe in this concept of doing good for the community and for the environment. And what were the different mindsets that they had in order that they behave in this way?

Jeff Hunt:

One of the things that you mentioned in your book, The difference between shareholder capitalism and stakeholder capitalism. Can you explain a little bit about that?

Lynn Yap:

Of course. And I think this is a shift that is that's happened in the last few years. So shareholder capitalism really emerged when Milton Friedman pen and all bet.

And the New York Times in 1970, more or less say the sole responsibility of business is to maximize profit. And that is shareholder capitalism, where you are very, very much focused on increasing the returns to investors. Now, what's happened in the last few years and the business round table a couple of years ago. Also then said, well, no, it's not enough that we focus solely on increasing profits for the business.

We also need to create value for the other business stakeholders. So that's employees, that's consumers, that's community as the environment. Of course, there's also the investor. So how is it that businesses and companies can create value for everyone? It's about creating a win-win situation for all the business stakeholders and not just for investors.

Jeff Hunt:

So you're taking it to a multifaceted decision-making process.

Lynn Yap:

Yes, indeed. You have to start engaging more actively with investors with your employees, with partners, suppliers as well as, how is it that we can improve our supply chain to be more sustainable. If you're not behaving in a stakeholder capitalism way, you might have to start rethinking, okay. What are the partners that we need to work with an order that we can be more sustainable?

So there is a lot of communication and working together under stakeholder capitalism that perhaps might not be as necessary on the shareholder capitalism.

Topic 3. Cost vs sustainability (07:30)

Jeff Hunt:

For the CFO, if we can get really practical for a second, how do you make the business case for the CFO who feels so pressured to make decisions, to minimize the cost sometimes at the expense of sustainability.

So for instance, we might be launching a new product line where I have a choice on the different packaging that we use and one is 40% lower costs because it has less environmentally friendly materials versus the other. And so one of them is going to be more competitive or have a higher margin. How do you make the business case to somebody like that?

Lynn Yap:

I love that question. And that's one that often comes up, I think with leaders, trying to make a difference or make a shift in that business. It's always done then to the business case and trying to talk finance and ROI. In terms of sustainability there, of course, sustainability from an environmental perspective.

And then from a social perspective, think the environmental perspective, it's easier as an easier business case to talk about from an environmental standpoint, the example that you provided. I think what I would like to challenge as well as think about the business case in a different way, think about playing the long game.

There are a lot of things that you can not expect to get a return immediately. And especially with something that is related to sustainability, if you're investing in more sustainable packaging or developing a circular product, where there is creating a more circular economy that requires a longer-term in order to see the returns, at least three years, I would say, when you're investing in something that requires that longer term.

Another way to look at the business case. I went speaking to the finance community. I also like to say is what are the risks if you don't do this? And that could be looking at it from a cost perspective, whether the compliance issues that could come up if you don't comply with environmental regulations and second.

This could impact how expensive raw materials will be in the future. So if you don't invest in more sustainable packaging, more sustainable product or production could impact your profitability in the future.

Jeff Hunt:

Say a little bit about the social sustainability side and the ROI is more intangible, but what are some of the things that organizations can do? And what's the payoff of those activities?

Lynn Yap:

It's a really good question. It's very hard to measure the business case or to write the business case for social sustainability. We can say, all right, diversity will improve the business, but how is it that we can do that? We can invest in and check the box in terms of diversity, we have gender representation, racial representation.

But when we are talking about, say, investing in inclusion activities, or we are talking about investing in training from employees, we can invest in training, but what is the quality of the training that we're investing in? Those things are not measurable. But instinctively, we know that it should create a better business.

It will make for better employees will make for happier employees. And ultimately that will be better for the business, that they are more interested to stay at the organization that rotates organizational knowledge and that creates loyalty. And that creates more at a more engaged workforce. We instinctively know it's better for the business.

But it's hard to measure that. And so I would challenge then the audience to think about what is the social case of social sustainability, not the business case, because, if you're thinking about it from, from a tracking perspective and I'm quite data-oriented, how are you going to measure that? How are you going to measure inclusion?

How can you measure the quality of training and link that directly to align on the financial statement? It is not possible to actually measure those things, but instinctively we know. If we invest in quality training, if we invest in inclusion, rather than just checking the box exercise for diversity, we will have.

More engaged workforce, which should result in better products and services, happier customers, and eventually better business

Jeff Hunt:

Even though those direct connections are sort of intangible or I should say it's an indirect connection to the ROI. There are statistics that are very compelling about that. ROI.

For instance, Gallup has proven that highly engaged workforce companies are more profitable. Then disengage workforce companies. And so the case that you're making really does have a financial ROI, doesn't it?

Lynn Yap:

It does eventually, but it's hard to make that direct link.

Jeff Hunt:

Right. Makes sense. Well, it seems as though these types of decisions when executed well have to be taken into consideration.

All of the other aspects of the business that are so important, like the marketing department are, we actually communicating the fact that we're using more environmentally friendly materials and playing that up as a differentiator to our competition? Internal communications. Do employees actually know that we're working on some of these strategies because that could really improve our brand equity internally, especially as to how employees perceive us as a company?

Lynn Yap:

Yes, definitely. I think there was fear or they might be still up here about greenwashing, virtue, signally. And what I want to say about communication is two things, transparency and being authentic. I believe that you need to be transparent in everything that you're doing. So be transparent about all, these are the goals that we want to achieve in terms of sustainability.

And to be carbon neutral in X years. And if it doesn't look good right now, then outline the steps that you will get to that. And I think the community, whether it's employees, whether it's customers, whether it's the supply chain partners that you're working at will respect that. And one example I like to share is what Unilever did, what Paul Poleman did.

He said, okay, we're going to double our revenue and a half our carbon footprint in 10 years. And of course, this was a little bit of a shock to the community. But what it did as well as bring its employees together. His teams came together, you know, it was ambitious, but it was also a goal that gave them purpose.

So they came together, they worked together, and figured out ways in which they could achieve that. That also gave the push to their supply chain partners to become more sustainable. How is it that they could work together with Unilever in order to make the production more sustainable? So that transparency was also very important in order for them to shoot, to achieve their targets, which they did.

Jeff Hunt:

And it really goes back to what you said earlier about this long-term approach versus the short term, which is also something that Unilever did very well. In a recent podcast episode, we were talking about how they shifted away from reporting quarterly earnings. So those two are kind of hand in hand. Wouldn't you say?

Lynn Yap:

Exactly? Yeah. I think that's another issue with how we shift it from shareholder capitalism to stakeholder capitalism, because what happened with shareholder capitalism when we're so focused on quarterly earnings and quarterly returns that we become so focused on the short-term. And that means that we sometimes take shortcuts rather than thinking about what will happen in the next 10 years.

And that really is, doesn't bode well for the rest of the stakeholders, actually, even investors, because really as investors we want to, to be with the company for a long time, most shareholders want to invest in the business for a long time, rather than that volatile trading type investment.

Jeff Hunt:

You're really making a case or integrating these things into the strategic planning process. Aren't you?

Lynn Yap:

Exactly. Yeah. And it has to make sense. The other part I was saying about communication, has to be authentic. You have to communicate your purpose and your business activities that are in line with what you're doing with what your brand is known for, what your business is known for.

Topic 4. The first steps to becoming more sustainable (16:24)

Jeff Hunt:

So what if I am somebody who really hasn't thought much about this topic, what sort of the first step that I should consider taking as a leader? If I haven't thought about this much.

Lynn Yap:

I would say an hour borrow from Simon Sinek. Start with why? I think the most important place to start is to understand the purpose of the organization.

And leaders can do that by talking to people across the organization, not just at the senior level, starting to have conversations with different functions, different groups, the difference in your ideas, finding out what values are driving the people, what, what is important to them. And from there, develop a purpose for the organization.

Again, it should make sense. With the business itself, it should tie in with the product offering. It should tie in with a service offering time with the culture of the business. And from there, the strategy will evolve along with the processes, along with the operations of the business.

Jeff Hunt:

I love that start with why because oftentimes we're looking for complex answers to these things and it's usually actually quite simple and right in front of it.

Lynn Yap:

Yes. And I will go back to my story as to how I ended up here as well. I was, you know, it started on my journey. I was just working to the next promotion or the next paycheck, but in the end, what a lot of us strive for is purpose and meaning, how is it that we can serve? And how is it if we can create an impact for others?

Topic 5. B-Corps and mini mindsets (18:00)

Jeff Hunt:

Which leads to a much more meaningful life, in my opinion. Exactly. So, Lynn, let's talk a little bit about the BCorp for a minute. I'm curious about your thoughts on what the role of the B Corporation is in effecting change and just for edification for our listeners. I'll give you the definition of a B corporation for those of you that are less familiar.

Certified B corporations are businesses that meet the highest standards of verified, social and environmental performance, public transparency, and legal accountability to balance profit and purpose. B Corps are accelerating a global cultural shift to redefine success in business.

And build a more inclusive and sustainable economy. So, Lynn, what are your thoughts about the B Corp?

Lynn Yap:

I think the B Corp court plays two roles. One is a governance function in which then the companies that are certified as B corporations are fulfilling their purpose of, you know, protecting the environment and also delivering, creating value for the community.

And secondly, I think a very important role that they're doing is educating and creating awareness for stakeholder capitalism. And I think that's very important in order to shift because we've been operating on their state shareholder capitalism for a long time, focusing on profits, looking at the short term, how is it that we can get a return?

It was all about financials. And now they're shifting the conversation, shifting the way in which we do business. So I think the role that they play in creating that awareness and creating that momentum to shift towards a different way of operating business.

Jeff Hunt:

One of the things let's go back to your book for a minute in your book, you talk about the mini mindsets of mindfulness, curiosity, and grit.

I guess, first of all, what is a mini mindset? And then secondly, share a little bit about each of these three.

Lynn Yap:

Sure. Of course. So for me a mini mindset, it's a way of being, it's a way of thinking from a company perspective, but then governs the way, the way the company behaves, and the processes that it has.

And so in my interviews for the book and researching. There were three common threads that I pulled out from these interviews and the research. And that was mindfulness, curiosity, and grit. Mindfulness's really about being present about having empathy for another person. And so how that operates in business is when you have an understanding and empathy for another person, whether it's the customer or for your employees, I believe that that creates better products and better services for customers.

That's how mindfulness then helps businesses become better businesses. In terms of curiosity, this is really about listening. This is about looking for feedback, and again, this translates to being more transparent and enabling the business again, to improve on how it does the business. And then finally grit.

Take Angela Duckworth's definition of what greatness it is, purpose plus perseverance, and how I see perseverance manifesting and businesses that are a force for good is that they often are companies that collaborate that mindset of partnering with other people, whether that's other companies, even competitors, in order to solve a problem that could be for instance, in best buy. Best buy was at one.

Being written off by analysts at the doors of bankruptcy. And that was because Amazon was sealing a lot of market share for electronic goods. So instead what they did was they partnered with Amazon to deliver and to sell electronic products, electronic gadgets, and that's how they were able then to also serve their purpose, which their purpose at that point in time was then to improve the lives of others through technology.

They actually found a niche of helping the elderly market soupy to stay mobile for a longer time, to be more independent for a longer time.

Jeff Hunt:

Are there other examples from your research and your book of just great companies that have done this really well, this combination of sustainability and profitability, the whole stakeholder versus shareholder concept?

Lynn Yap:

Many more companies adopting stakeholder capitalism. And one of the earlier companies that started all of this is Patagonia. Patagonia has been for a long time, very much on the purpose of preserving the environment and creating an impact. And you can see that in terms of their employee retention, they retain their employees much more compared to their peers in the.

They are able to deliver more innovative products. People love their products and they are more sustainable as well. And that has resulted in the company growing its revenue, as well as profitability over the years.

Jeff Hunt:

There is a great example. In fact, I think they just donated a hundred percent of their daily, black Friday sales to charity. Correct.

Lynn Yap:

Yes. They have a partnership with a lot of grassroots organizations, focus on the environment and they donated that to those nonprofits. And I think that translates then to also their messaging, their communication, going back, they continuously support local organizations that protect and preserve the environment.

And that's consistency, that creates trust within the community, and there've been doing this for many, many years.

Jeff Hunt:

This really ultimately makes it easier for them in any organ or other organization, like them to attract better talent, to retain that talent, to be able to command higher margins and the products that they sell so that they can be more profitable and take care of their people better.

Lynn Yap:

Exactly. Yes. Yeah. The brand value increases because of that, trust it. If treated in that community, not just with their employees, but with customers as well. And the community, people who do not normally go because they are originally an outdoor company, also attract people who don't necessarily want to go hiking or mountaineering.

They also attract people like that to buy their products because they believe in the cause that's that they support.

Topic 6. Actv8 and affecting change for good (24:53)

Jeff Hunt:

Okay. So I'm going to throw another difficult question at you because these are going to just come up. But what should companies do when, the pricing competition is severe and competitors are undercutting them because perhaps those competitors are compromising in some of the decisions that they're making for instance, and it could be anything?

Compromise, as we said earlier on the types of products that they're producing, or maybe they don't have pay equity internally. So they're paying, they're paying female employees less than male counterparts or something like that. But there are so many industries that are highly competitive. Do you have any thoughts about how they can affect change?

Lynn Yap:

Sure. And that's a really good question. I think it's very hard for business leaders to decide what is it to do? We all have limited resources figuring out what decisions that we have to make to that. I would say again, think to play the long game. It's important to stay financially, discipline stakeholder capitalism.

Doesn't need to ignore the investor. I think it's still important to stay financially disciplined and to be responsible about that. So as long as you're maintaining that and thinking about the long term that is the decision that that should be taken because if you are compromising on, on your values, on your ethics, whether it's related to.

Hey, whether it's related to the environment, I think you'll come back and haunt you in the end. So think about the longer term. If you take care of your employees, you would have to invest less later on to recruit new people that affect your brand reputation that could impact how you recruit your talent, how you retain your customers as well.

So I would say. Let's think about the longer term, think about your brand reputation on your brand value, stay financially responsible and make decisions around those parameters.

Jeff Hunt:

Now, we haven't talked much about activate and your passion associated with that organization and helping women really enter into a greater presence in terms of leadership space.

And I'm assuming you're also looking to improve board governance around. Inserting, um, female leaders. But do you have any thoughts for our listening community about that and sort of your passions around that and what you're trying to do to affect change?

Lynn Yap:

Hi Chris, thank you for the question. So ACTV8 network is it's quite a special program.

Really? It's a program where women employees come together with high school students in order to solve a business problem. So actually recently I just realized it's not just about gender, talking about the gender equation. It's also about how different generations can work together and come up with more innovative solutions.

How we can learn to work with people who are different from us. We have, what is tradition? You know, what is stereotypically the younger generation that is known to be creative, but the older generation can be creative as well. And they have wisdom in which, we can use that where some, in order to scale and implement those crazy creative ideas that the younger generation might have.

So it's like bringing together different generations to come up with solutions. We see in the workforce today, we have so many different generations working together and oftentimes certain seniority. So as an experience, employees only work together. Senior and junior employees might not necessarily have so many touchpoints.

And how is it? Then we can increase that interaction and these programs because they are not related to the women's day-to-day dates. We have a mixture of junior and more senior employees again, how is it that we can bridge that gap across the generations to talk to together and help each other?

So thrills programs are creating a business value because they're solving a business, a real business problem, but as also the social aspect where increasing the confidence of the women to be better leaders, um, in the future, and also giving the. High school students, role models. Like this is someone I could aspire to be in the future.

Jeff Hunt:

That's so cool. Well, congratulations on the work that you're doing in that area. We've also seen, we've seen companies successfully implement mentorship programs. More senior employees and young employees. And it really does go both ways because the more seasoned veteran employees have this business intelligence and wisdom and knowledge that the younger generations typically don't have, but the younger generations are stereotypically more innovative and, uh, adopt technologies faster and confined information more quickly.

And so there's this mutual sharing that can have a tremendous benefit isn't there?

Lynn Yap:

Yes, indeed. Yeah. And it's also about learning to see things with a fresh perspective, because if you have done things for so long in the same manner, having, working with someone who hasn't done it before, or hasn't seen it before, could also then bring up questions like, oh, why don't we do it this way?

Is there another way to do it? And then the second thing that I've observed and these programs as well, it's the curiosity to learn inspiring, inspiring the women to also, well, let's learn something new because the students, for instance, in the programs, they're hungry to learn new things.

Knowledge to eggs to learn new skills. So I think that also at that energy, that enthusiasm to learn to continually learn is shared then with the more season.

Topic 7. Lighting round questions (31:13)

Jeff Hunt:

That's contagious. Isn't it? Very, very true. Well, let's shift into some lightning-round questions before we wrap up. So I'm going to throw some questions at you.

You give me top-of-mind answers. The first one is what are you most grateful for?

Lynn Yap:

Oh, good question. So it's so many things, but I have to say given where we are today, still with the pandemic, I'm grateful for the health, for my health, for the health of my family and my close friends and the people around me.

Jeff Hunt:

What is the most difficult leadership lesson you've learned over your career?

Lynn Yap:

That's another good one. I learn that sometimes. It's better to rate, to hire the person that's a right fit for the role that you're seeking than to hire someone that's just there. It is harder to undo that. And I learned a lesson that is perhaps better to wait until the right candidate comes along in order to fill the role that you need.

It's not good for the candidate that you hire. If it's not the right fit. And it causes you more headaches as well in order to make that work.

Jeff Hunt:

Patience always pays off. Doesn't it?

Lynn Yap:

Yes. That's a good word.

Jeff Hunt:

For sure. Who is one person you would interview if you could living or not?

Lynn Yap:

Michelle Obama, I think she's very inspirational.

Jeff Hunt:

Do you have any top book recommendations?

Lynn Yap:

So one book that I read this year, and I probably do a book a month. One book that I read this year was thirst by Scott Harrison and his, how he started charity water. The one sentence that resonated with me in that book is we cannot be afraid of work that does not end.

And when we are trying to solve problems like climate change or discrimination, we cannot be afraid of how big the problem is. We have to believe that if we do a little bit, every day, we will make a difference and we can make a difference.

Jeff Hunt:

Reminds me of the story of the person standing on the beach with all the clams that are they're dying and he's throwing them one by one back in the water and somebody comes up and says, well, why are you doing that?

You're not making a difference. And he says, well, I just made a difference to that one. So yeah.

Lynn Yap:

That's exactly. Yeah,

Jeff Hunt:

What, speaking of what's the best piece of advice you've ever received?

Lynn Yap:

Maybe it is something that my father told me when way back when I was a little girl, that it doesn’t matter what I choose to do as long as I put my entire effort into it. And it doesn't matter whether or not I succeed in that goal that I, that I set out for myself, as long as I know that I gave it my best.

Jeff Hunt:

What is the most important takeaway Lynn that you'd like to leave with our listeners today?

Lynn Yap:

I would like to say that no one is too small to make an impact, that we can all do something to make a difference. We don't know who is watching us pick up the litter on the street and how that influences someone else to do the same. So we don't know. Small actions that we have can impact someone else.

So I would say that just take a step, share with someone, what you, what could you have done today? Try and mentor a student in your community, anything at all, because that could really make a difference. It's back again, to like the clams story. You don't know how you can help someone else.

Jeff Hunt:

Exactly. Thank you, Lynn, for all you're doing to change the world and for coming on the show today to share all this wisdom with our listeners.

Lynn Yap:

Thank you so much for having me, Jeff. It was a lot of fun.


Outro(35:14)

Closing music jingle/sound effects

Jeff Hunt:

Thanks for listening to the show this week. We release new episodes every other Tuesday. Let me know what you thought of this episode by emailing humancapitalgoalspan.com. Human capital is produced by GoalSpan. Subscribe, wherever you get your podcasts. And please share this podcast with your colleagues, team, or friends. Thanks for being human kind.

Human Capital — 32. Founder, Actv8
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