Monthly Archives: February 2016

What type of corporation should Triton Ceramics be?

I’ve been spending a lot of time wrestling with some questions: What kind of company should I do water filter work under?  Should it be for-profit or non-profit? Can a for-profit company be a force for good?

Black and white thinking is not always helpful. . .

Black and white thinking is not always helpful. . .

Some of you may have noticed I’ve had some black and white thinking around non-profit and for-profit organizations. In my mind, it was non-profit = good and for-profit = evil. I was thinking that non-profits gave things away for the good of all people, and for-profits were set up to take people’s money and line the pockets of a wealthy few. I wasn’t alone in this way of thinking.

I’m realizing that the truth is much more complicated. It’s more like a spectrum, with all colors.

I cannot judge if a company is a good one or not just based on their profit motives alone. Some incredibly wealthy organizations are non-profits such as Cleveland Clinic Hospitals and the National Football League (NFL). At the same time there are amazing positive organizations set up as for-profit. For example, some for-profit companies have donations built into the sale of each product. You cannot tell an organization’s social impact just from the structure of their organization.

I’m not wild about some traditional for-profit companies. These are owned by shareholders, small groups of individuals, or even a single person. There is an acute demand from these stakeholders to make large profits. For-profit companies do many great and wonderful things, but only after they have taken care of their bottom line: PROFIT.  Sometimes even turning a profit isn’t enough. Often they need to perpetually increase their profit to keep their stock price up.  Apple Computer has been in the news recently–lets use them as an example. Apple in 2015 posted revenue of $234 billion, the most it has ever posted. . . by a lot. But even that isn’t enough to keep the stock value high. Apple just released information suggesting that it will have another fantastic year in 2016, albeit with slightly lower revenue.  Now the stock value has plummeted.  Not only does Apple need to make large profits, but they need to constantly increase profits for the stock value to remain high. I’m not eager to enter that world.

Ideally non-profits would be set up to do some kind of social good, but they can also end up straying from their noble goals of benefiting the society. For example, many non-profits now compensate their top executives in excess of ONE MILLION dollars. Not one million pennies. Not one million Japanese Yen. Not one million Algerian Dinar. We are speaking of US Dollars. Massive compensation packages for nonprofit executives are common and legal, but are they right?

. . .There is a whole spectrum of different kinds of companies

. . .When it comes to the type of corporation Triton Ceramics should be, there is a whole spectrum available

What if Triton Ceramics could avoid the negatives of for-profit organizations? What if we could create some of the good that non-profits strive to do (and avoid some of the bad)? What if we could do that by having multiple bottom lines, with most of those bottom lines having nothing to do with profit? Well we can. Luckily the path has already been blazed for us. Let me introduce a recent discovery of mine: A social enterprise.

What is a social enterprise? Well, it is an enterprise that seeks social goals as well as profit. These type of companies see profit as a necessary function to be sustainable and repeatable, but they want to use the bulk of their efforts to benefit the society. They seek a social impact.

Companies should have goals for the social impact they strive to make. What if all companies agreed on a set of standards that represented these goals? Well there already are many sets of standards available.  One example of social impact standards is the B-labs assessment.  B-labs looks at your company’s social impact on employees, the environment, community, and other things too. Every year, Triton Ceramics can take the B Impact Assessment, and B-labs will rate the social impact that we’re having. There are more than a dozen organizations performing similar assessments, and I’m not sure which will be the best fit for Triton Ceramics, but we will be finding one or more and be performing assessments annually. The results will be published publicly on the webpage. As I determine exactly which one is the best fit, I will write about it.

Another option which was just signed into law in New York is the B-Corporation. This is a type of corporation operating similarly to a for-profit, but with a mission for social impact as well as profit. These corporations are then held accountable and required to have transparency. They are required to have an external assessment such as the B Impact Assessment we already discussed.

I am currently doing the water filter work under Triton Ceramics, which I set up as a Limited Liability Corporation (LLC).  It might be best to move Triton Ceramics to a B-Corporation, or might be best for Triton Ceramics to remain an LLC. LLCs are special because they are allowed to be very creative in their corporate structure. We could write our own excellent LLC corporate structure, which meets these social impact goals. I’m not sure yet what option will be best for Triton Ceramics, but I’m not scared. Either option looks good.

I am building a company that makes the world a better place. A tall order, but accomplishable. The actual product we manufacture will make the world a better place. My product does just that. It provides clean high quality water while reducing reliance on fossil fuels for boiling water.  The details matter. The sourcing of the materials matters. The way the employees are treated and paid matters. The selling price matters. Having quality control matters. The waste from the manufacturing facility matters. If we don’t get these details right, they cloud our successes.

The following values are the ways I would like Triton Ceramics to have a social impact. (These come directly from the webpage):

  • Manufacture a product that is safe for use all over the world, including in our own homes
  • Create a product that is affordable for those in need
  • Strive for a more peaceful world, only supporting that which is positive and erodes the need for war
  • Practice ethical business models, e.g. conscionable investment enabling proper treatment of people
  • Participate in an economy providing non-military jobs.
  • Celebrate diversity in all ways in the workplace including: Ethnic, Cultural, Gender, Age, Sexuality, Political Beliefs, Religious Beliefs, and other marginalized identities
  • Implement equitable treatment of all genders in the workplace
  • Practice of environmental stewardship
  • Serve as an ambassador in the local community
  • Perpetuate right sharing of technological wealth

With careful attention to details, Triton Ceramics will have a great impact. We will make the world a better place!