Saturday, October 16, 2010
About 10 years ago the strategy guru from Harvard, Michael Porter, was advising the Central American governments on how to develop national competitiveness.
He analyzed the coffee industry and found us. He then wrote a case study about how Café Britt went from being a commodity-based business that exported green coffee, a raw material, to a branded, value-added competitive business that roasted, packaged and sold its own gourmet coffee. This became known as the “Café Britt Model.”
Since then, other analysts from academia, non-governmental organizations, and the private sector, have come to us to get a better understanding of this process. Using Britt’s example, they began to envision roadmaps that developing countries could follow to add more value to their products and become part of the developed world.
There are more than 10 “Britt Case” studies being taught in universities in places like Costa Rica, the United States, and Croatia. All of these analysts consistently write about our ability to innovate with new products and services and how this skill is one of our core competencies. Both companies and nations welcome innovation as a source of competitiveness and sustainability. The Global Competitiveness Report (World Economic Forum) describes the most advanced economies as “innovation driven”.
I know we have done a good job transforming coffee, the most traditional agricultural product in Costa Rica, into a modern business that does not depend on the Brazil crop or the Vietnamese coffee policy.
What our business does depend on is offering great products and outstanding service to our customers, keeping them happy and constantly surprising them with new products, excellent service and promotions that offer real value. We see this as part of our nature, not as a business theory, but rather as part of our day-to-day work.
In this newsletter you will read about our new cookies, the most recent product category under the Britt brand name. Coffee and cookies are long time friends, so these are a natural addition to our growing line of products. I recommend you try the different cookies and let me know what you think of them and what your favorite ones are.
People always ask us why we just don’t settle for selling great coffee. They also often ask us how far we want to go. My answer to both these questions is, “I don’t know.” If the listener is up for some serious conversation, I add that at Britt we were born to keep going. We never stop. We always question ourselves, and we always try to find new products, new services and new ventures.
We love experimenting with new flavors, tropical fruit, chocolate and coffee combinations. I am actually writing this letter on a plane leaving the Dominican Republic, that beautiful Caribbean country where I just signed a contract to build and operate five Britt Shops in three airports.
We at Britt live for creativity and innovation. New product development is a key element of our innovation efforts. You will soon hear more about our new developments in the Dominican Republic. New products, new services, new cultures, new flavors, new ventures. You will get more of that from Britt in the near future. Stay tuned.
Well, I hope to get home soon, and I am looking forward to a cup of Founder´s Blend coffee with some Britt guayaba cookies!
Let me know what you think of the cookies at email@example.com, all feedback is welcome.
Thursday, February 25, 2010
Pablo E. Vargas
CEO, Café Britt
I recently spoke with a customer from New Jersey who wanted to know what our company was doing to be a socially and environmentally sustainable business. I explained our approach to sustainability and the many programs and activities that we do to support the environment and our communities. He felt intrigued as to why we don't make more effort to communicate these efforts to the public.
Days later, a U.S. student who attended the CoffeeTour asked me a profound business-ethics question. She wondered what I thought was the role of a thriving business like ours in society. Are we satisfied to simply pay our taxes and comply with the local laws and regulations of the countries where we do business, or do we have a deeper responsibility toward society?
I will try to answer both concerns in this entry, even though I am aware that a thorough answer would deserve something that would look more like a book than a column. Let me address first the business-ethics question.
The role of business in society
In the developed world there's a constant debate as to whether corporate responsibility should go beyond maximizing profits and shareholders’ returns by simply paying taxes and complying with the law.
The "traditional approach" (let me call it that way for the purpose of this column) teaches that a firm's responsibility toward society is determined by law. A business has to comply with applicable laws and regulations, especially when it comes to paying taxes.
Under this model, the government, through the distribution of tax revenue, is responsible for all other aspects of society. This includes guaranteeing that conditions for workers, market conditions and pricing are fair, and that social and environmental equilibrium is preserved.
In this way, all law-abiding, tax-paying firms can dedicate all their energies toward maximizing profits and returns to shareholders, regardless of any "externalities" they may cause to society or the environment. The taxes they pay will partially be used to correct any negative effects resulting from the "externalities."
Compare this with the "modern approach" (again, the term is used only for illustration purposes in this column). Under this model, businesses also have to pay their fair share of taxes and abide by the law. They have the same goal of maximizing profits and shareholder value, however, they’re also expected to fulfill a more active role in society.
Not only shareholders but also customers, suppliers, the communities where the firm operates, and even the media have a voice in business decisions. Businesses are expected to help the government, get involved in educational projects and participate in technological transfer activities.
All good firms have a "philosophy." Company leaders, explicitly or implicitly, position their companies somewhere in the continuum that I described above, between the "traditional" and the "modern" approaches. It’s a mindset that usually stems from the founder or the CEO of a Company. It permeates all aspects of business activity and, most notably, it influences the way the employees think about their jobs and about their contribution to society.
Developed vs developing countries
Since developed countries tend to have better-run governments than developing countries, the firms based in developed countries may feel more comfortable letting the government handle the externalities they cause. These governments, through regulatory actions and taxes, can direct the actions of the firms, establish mandatory business practices and finance projects to improve the environment and society in general. On the other hand, governments in the developing world have a more limited capacity to effectively do all these activities. A responsible business in a developing country will, in general, end up taking a more active role in society than a similarly responsible business in the developed world.
Where does Café Britt stand?
At Britt, we have a high sense of responsibility. We’re based in developing countries, but we have a strong customer base in the developed world. We fit the profile of the “modern approach” I described above.
I believe the societal and environmental issues we face today are too important to leave to governments. We cannot be indifferent to challenges that might make, not only our company, but the world itself, unsustainable. Café Britt wants to contribute. Café Britt wants to make a difference. It's a lot easier to run a company using the "traditional approach," but we have chosen the difficult path. We still want to maximize profits and shareholder value, but we also want to help our society to find sustainable ways of doing business.
Likewise, we want customers who are aware of ethical and environmentally sound business practices, and we want to help our suppliers to improve their processes. We want to be a good citizen wherever we operate plants, stores or offices. We want to help increase the business standards so that other businesses might also get on the wagon of sustainability.
Now let's address the first question in the introduction, what do we do and why we don't we talk more about it?
So what is Britt doing?
Our Social Responsibility report starts with our Mission and Quality Statements because they guide our actions.
Café Britt's Mission:
To anticipate our customers’ needs and satisfy them in a fun and informative way with products and services that conserve and respect the environment, reward our investors and create benefits "from the plantation to your cup."
Café Britt Quality Statement:
We offer gourmet coffees, fine food products and specialty gifts in customer-friendly environments. We are committed to constant improvement and environmental protection, always following fundamental principles:
Communication: We work as a team, communicating constantly in a simple, sincere, honest and timely manner.
Commitment: We exceed the expectations of our customers, coworkers and investors by producing results on time, in full and with close attention to detail.
Creativity: We anticipate needs and desires to create innovative and profitable ways to ensure satisfaction.
Character: We believe in doing the right thing. We respect and adhere to all applicable regulations and are accountable for the use of resources and knowledge.
It's clear in our mission statement that our products and services have a very high goal -- to conserve and respect the environment. Our Quality Statement explicitly talks about our commitment to environmental protection. We talk not only about our shareholders but also our customers and co-workers. In the value of “Character” we touch our ethical values. We hold ourselves accountable for the use of resources, and we believe in doing the right thing. From those principles, words and values we take specific actions, like these:
Our Customers and the environment. We back our quality statement with an independently audited system. Our company is ISO 9001 certified. This means we have a quality assurance system in place that is certified every year to meet the international standard ISO 9001. Our quality statement is more than just nice words, it's hard work! In a similar way, we have implemented an environmental-management system under the international ISO 14001 standard, again, audited every year. This means we measure our impacts to the environment. We focus on our critical impacts and do something about them to reduce our environmental externalities and preserve the environment.
Transparency and Corporate Governance practices. We do formal benchmark analysis to make sure we compare favorably to other reputable businesses. We voluntarily adhere to the BASC (Business Alliance for Secure Commerce) standard, a security standard that is audited annually. We have a board of directors with five external members and only two internal board members. We promote transparency in all our business dealings and will dedicate the rest of this year to increase awareness of our Ethics Code, and train our staff in its application.
Our Co-workers. We do benchmarking to make sure our company pays above-market salaries to our employees. We promote the internal development of our employees so they have access to open positions within the company. We believe in training and do an annual employee satisfaction analysis to measure and improve the company's culture. We have emergency brigades prepared to handle most expected emergencies that could take place at our facilities, including fire, earthquake and terrorism attacks. Brigade members are trained in cardio-pulmonary resuscitation (CPR).
Coffee growers. Our growers commit to Britt's social and environmental standards. We motivate them by paying above-market prices for their quality harvest. That’s our Britt Fair Price Policy guarantee. We provide technical training to growers. We have pioneered organic coffee practices in Costa Rica. We also promote the fair trade coffee label.
Artisans. Under the Program for Artisan Development, Café Britt joins efforts with the Costa Rican Ministry of the Economy, and the Costa Rican Technological Institute (ITCR), a local university, to improve the handicrafts produced by our base of suppliers. The artisans work for six months with industrial design students to improve existing handicrafts or innovate with new ones. Many of these improved handicrafts are then sold through our stores.
Our employees engage in many volunteer programs supported and organized by the company. They do specific community projects to improve schools, reforest lands and improve parks.
We recycle, produce organic fertilizer, save energy and water, reduce our carbon footprint and celebrate our annual Environment Week in June.
We support many other organizations. In fact, companies come to our facilities to learn from us. I lecture to about 500 students a year and to about 100 entrepreneurs about different aspects of how we apply best practices in our business.
I don't like greenwashing. I don't like people who overpromise and underdeliver. I feel more comfortable underpromising and overdelivering to exceed expectations. However, if we want to change the world, as our customer from New Jersey showed me, we will have to talk more about what we do. I hope we can influence some business people and convince them to introduce some sustainable practices in their own firms. I hope we can influence customers to learn about and identify sustainable practices and demand that their goods-and-service providers implement them. Let's change the world while it's time!
Café Britt at your service,