NEW YORK B Lab wants to make the business world a better place. The Berwyn, Pa.-based nonprofit attempts to do this by setting social and environmental standards that companies must adopt if they want to be able to use the B Corporation logo and marketing. (The "B" stands for "beneficial.")
Fourteen years before co-founding B Lab in 2007, Jay Coen Gilbert, co-founded And 1, a basketball apparel company that branched out to include live events and a video game.
Gilbert, 41, talks about his street-ball days, why B Corporations aren't just hippy-dippy and knowing when to shut his mouth.
Q: NBA players Stephon Marbury and Latrell Sprewell were two of the early And 1 endorsers when you owned it. Tell us one memorable story from that period.
A: From the first time we were at West 4th Street [a famous street-ball court in New York], far and away the thing that got us fired up was seeing kids wearing our stuff.
Tell us a good story involving those guys.
There are none that I can say in print.
Crispin Porter + Bogusky handled the And 1 account for several years before it went to Fallon New York in 2001. What happened?
The best brand building that we did was all a result of what we did with CPB. Next to the ball players themselves, they were far and away our most important branding partner. [At the time of the split Adweek reported that it was partly due to the rapport established between new And 1 endorser Kevin Garnett, then a star player for the Minnesota Timberwolves, and Jamie Barrett, then CCO of Fallon, New York. Gilbert declined to discuss the change in agencies further.]
You sold And 1 to American Sporting Goods in 2005 for an undisclosed amount. What happened to your partners?
We are all still in touch. One of my partners in B Lab is Bart Houlihan, the president of And 1. And one of the other founders of And 1, Seth Berger, is still waiting for his shot at being a point guard for the New York Knicks. Other than that, he's a high school varsity coach.
How do you go from owning a street-ball brand to showing corporations how to behave ethically?
At And 1 we built a brand for serious ball players. At B Lab we're building a brand for good companies.
How, exactly, are you doing that?
And 1 was a great place to work. We took care of [the workers] whether they worked in the U.S. or they were factory workers in China. We had deep partnerships with a number of youth and educational nonprofit organizations in the Philadelphia area. And 1 has given away over $2 million in cash to youth and educational groups. We were creating a great place to work, and being a member of the community was important to And 1 and our partners. We wanted to support other companies that were doing even more than we were doing. One of the things that is different about us is helping people tell the difference between a good company and good marketing. That becomes harder with everyone claiming to be responsible, environmental and green. We're trying to create a way for consumers, investors, employees and suppliers to tell them apart.
How does that work?
To become a B Corporation a company has to achieve a minimum rating on the B Rating system, which assesses a company's social and environmental performance. Second, a company has to amend its articles of incorporation to include considerations of interest not only to shareholders but also to employees, the community and environment. Basically, B Corporations have to change the DNA of their business to be accountable to all stakeholders, not just shareholders. To be a B Corporation you have to meet a higher standard of performance: accountability and transparency.
What do companies get out of being designated a B Corporation?
Some of them want to benefit from the marketing that will help them differentiate their business. Others want to maintain their social mission as they scale their business or seek outside investors or plan for liquidity or succession. Others really value the services we provide to B Corporations to improve their financial performance or social impact. One of the things that's common among early leaders is they are seeking to influence the marketplace. That's the power of B Corporations: They are unifying and amplifying a multibillion-dollar marketplace so that it is more visible and thus more scalable.
What advice would you give to anyone just starting out in the nonprofit business?
I don't think starting a nonprofit is any different than starting a for-profit. Either you have an entrepreneurial gene or you don't. Just remain humble and flexible and be ready to change what you're doing based on the facts in front of you.
Who has influenced you most creatively?
I don't think I've ever had an original thought. If anything that happened at And 1 or B Lab has been perceived as creative or innovative, it mostly stems from listening, because most of the good ideas are already out there. And the key skill is being able to shut up long enough to listen. If you listen and have the courage to act on it, good things happen. When you stop listening, you stop being creative or innovative.
What are the penalties if companies don't follow the guidelines?
B Corporations have to recertify every two years. Those 50 founding B Corporations will have to recertify at the end of 2009. The standards will continue to evolve because our understanding of what makes a high-impact business will continue to evolve. Those standards are overseen by an independent board.
How does B Lab make money?
B Lab is a nonprofit that exists solely to support these B Corporations and to build this new sector of the economy that is harnessing private enterprise for public benefit. Companies that want to differentiate themselves in their market pay B Lab a licensing fee for the right to use the B Corporation logo on their packaging, advertising and any other form of corporate communication. The 50 founding B Corporations represent a marketplace of over $400 million. They agreed to pay B Lab 10 basis points of net revenues, which is one-tenth of 1 percent of sales.
I would expect organic, crunchy-type companies to get involved with something like B Corporation, but what about investment corporations or banks?
Among the 50 founding B Corporations there are financial services, technology companies, business to business, educational companies and telecom companies, as well as things you would more typically think about: food and organic health and wellness companies. There will be B Corporation banks and insurance and contractors.
Why do companies say they can't become B Corporations?
We don't hear too many reasons from people on why they can't. I hear "We don't know if we do enough to meet those standards." [Companies can check for free to see if they meet the requirements on bcorporation.net.] Some meet the standard and some don't, but the nice thing about a transparent ratings system is it allows them to move up the ladder quickly. We're giving people tools to do what they want to do anyway but don't have the time or expertise to do on their own.
Which company would you most like to see sign up with B Corporation?
I don't think we set our sights on any particular company. What we're focused on is making sure the first 50, 100, 200 companies represent leaders across a diverse array of industries and are examples of excellence in their environmental and employee practices. Any company can choose to run itself that way.
Who has had the greatest influence on your career?
My parents and my partners at And 1 and, obviously, at B Corporation. My parents are both entrepreneurs and ran successful businesses in their own right.
What's the smartest business decision you've ever made?
Working with people smarter than me. Rule No. 1: Find people smarter than you. And then the other good rule is that most of the best decisions we've made are decisions we didn't make. Deals we didn't do, products we didn't launch, actions we didn't take. The more glaring examples were on major business partnerships or bringing in an endorser, things that involved a significant outlay of capital.
And what's the dumbest?
Too many to count. If you're honest, you make way more bad decisions than good. You try to fail forward and keep on going.
Where do you get your inspiration from?
My family. I want to do something that's worthy of the gift my family has given me and respect what's been given me.
How do you get past a creative block?
Two seemingly contradictory approaches: The first is to be quiet and don't force it; and the second is to talk with as many people as possible that have a different perspective on what you're doing.
Name one person you're dying to work with.
I've gotten to work with some amazing people in my time. Not only my partners at B Lab and And 1, but all the founders and CEOs of B Corporations. They are all incredibly inspiring people. If I'm working with 50 of them now, soon to be 100, I'm looking to work with the next 100 because they're doing stuff way more interesting than what I'm doing.
What is your dream job?
I'm doing my dream job. This is it. Working with your best friend and doing something meaningful, it doesn't get any better than that.