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Today’s leading brands are combining purpose and profit to earn consumer loyalty, goodwill and growth as conscious shoppers prefer to support companies that share their beliefs. Purpose is a key ingredient to carving out this competitive advantage, delivering value across strategizing marketing, employee engagement, attracting investors, and driving growth. Yet, marrying purpose and profit is not easy to execute authentically. Purpose takes dedication and planning to activate profitably. Traditional Medicinals (TM), an herbal tea company, is an exemplar of a company that delivers value to the bottom line and society at large.
“Our purpose is important to the 2 million people that follow us on social media,” Blair Kellison, Traditional Medicinals’s CEO, shared at the recent Momentum Summit that honored the Real Leader 100 award winners. “It’s an important part of why – in our 44th year – we are the fastest growing tea company in the United States, it’s why top talent Kellogg’s, Nestle, Coke and Mars leave their jobs and move across the country to come work with us, and it’s why I work for the company. We’re not making tea, we are deeply dedicated to changing lives.”
TM supplies North America with sustainably grown, non-GMO, plant-based herbs and teas. It uses 100 percent renewable electricity in its manufacturing facilities. The plant-powered, purpose-fueled business also supports underprivileged indigenous communities in India. The brand is supporting education, health care, economic development, eco-friendly transportation and more.
Traditional Medicinals built a thriving business around an ecologically responsible product. That ethos supports human health and TM has expanded that core across its supply chains, corporate culture, and communications. The company is leveraging its business to catalyze authentic social and environmental impact and, as such, TM’s journey is a prime example of how to intertwine social impact with consistent financial growth.
Here are top tips from Traditional Medicinals on uniting purpose and profit:
Articulate your values:
To integrate purpose into your business you must establish guiding principles to operate by. Clarifying your values is the first step. The next step is implementing a language and ethos throughout your stakeholder community. Traditional Medicinals worked for 6 months with “different people from different levels of the company,” says Kellison. They outsourced a moderator to help the company refine its reason for being and its core values. What emerged was Traditional Medicinals’s six values: “Quality, collaboration, humility, respect, innovation and sustainability.” These foundational values inform how the company communicates across all departments and locations, always weaving purpose into all aspects of the business. To achieve the same, you must ensure your leadership is on board with your purpose and then work on integrating purpose into all internal and external communities.
Cultivate a culture of community:
Once you’ve defined your core values, it’s time to implement them into your internal culture. “Every company has a ‘why’ and every company has a ‘way’. Your why is your purpose and your way is your culture,” Kellison states. Traditional Medicinals uses its why to find its way. It utilizes its values when sourcing talent and even letting people go. “We call it the ‘no jerks rule,’” Kellison said. “If people don’t believe in the mission and don’t embody the culture, they should work somewhere else”. As a result, everyone at the company is truly invested in the company’s core mission to “connect people to the power of plants to change lives.” The company further encourages employees to live healthy lives, travel sustainably, and provides paid volunteering days. As such, TM is a powerful example of how by connecting employees to a higher purpose, you can strengthen your company culture.
Implement a purposeful business model:
In today’s business environment, purpose is critical to corporate success. “We believe that competition today is not between products but between business models,” Kellison said. Traditional Medicinals calls its model the “Circle of good intent.” The tea maker is dedicated to “ethical sourcing, treating employees well, wellness and healing products, and investing in our communities.”
As a result, they’ve achieved social and environmental success while growing the bottom line. TM was the first tea brand to be awarded NON-GMO project verification. Most of its products are Fair Trade certified. It was instrumental in founding Fair Wild. Fair Wild “promotes the sustainable use of wild-collected ingredients, with a fair deal for all those involved throughout the supply chain.” Roughly 99 percent of its teas are certified organic. It operates on 100% renewable energy and has implemented schools, bicycle programs and clean water access in a stakeholder community in India. Further, TM “sold 12.7% more product in 2016, purchased only 0.4% more herbs, and actually purchased 6% less packaging by weight,” explained Kellison. “We believe that our forward thinking, sustainable, stakeholder centric business model is our single most competitive advantage.” By doing so, TM’s purpose-driven business strategy acts as a guiding light for the company’s expanding impact and profits.
Share your impact:
People want to connect with companies that support things that matter. “What consumers are buying today is ‘How you make it and why you make it,’” Kellison states. TM shares how they craft sustainable, fair trade teas and wellness beverages with their constituents. In this way, they are able to connect around their shared values within their consumer’s values. What’s more, consumers are eager to help shape the stories of the brands they love. “We are lucky to have more followers on social media than the top 10 tea companies combined. And we have engagement with those people,” Kellison shares. “They want to tell others about this company they discovered that’s doing this great work out in the world.” By sharing your social impact story and how you live your purpose, you too can connect with consumers on an emotional level and earn their brand advocacy.
Refine financial efficiency:
Social responsibility and environmental sustainability are integral pillars to running a purpose-driven business. That said, financial sustainability is paramount to scaling your impact. TM set a mandate to not increase prices for 10 years. This forced the company to assess where they are spending money and search for more efficient ways to cut costs and scale growth. Kellison made key operational changes like IT integration and high-speed tea processors. He also increased the marketing budget and more. “After 10 years, in 2017, we took a 3 percent price increase and during that time we quadrupled the size of the company, and we moved profits 500 percent all from internal capital. We are an efficiently run company today, but it was really hard,” Kellison explained. Yet TM is a powerful example that if you aren’t running an efficient business, it will be ever more challenging to scale your impact, let alone your bottom line.
To lead in today’s market you must leverage your business for a higher purpose. At the same time, you have to be financially efficient to be environmentally and socially sustainable. A persistent focus on purpose and impact has made this possible for Traditional Medicinals and today they serve as a leading example for companies that want to do well by doing truly impactful things.