There is a growing debate today between two different camps within capitalism: the shareholder capitalists and the stakeholder capitalists. Shareholder capitalists emphasize the need to generate value for investors and others who financially benefit from the company’s success. Stakeholder capitalists balance creating financial value with creating value for other company stakeholders, including employees, customers, and communities. Under the leadership of a man who sought to bring together both schools of thought, one successful company has joined a growing movement of businesses that create value for shareholders and stakeholders alike.
On the cusp of earning his degree in Industrial Engineering from Georgia Tech, Jeff Russell was faced with a career dilemma: to pursue his passion to work in the non-profit sector or a more lucrative career in the business world. As he put it, “I had to decide if I wanted to make money or help people.” For ten years Russell’s solution was to compartmentalize these two aspirations, working during the week as an outsourcing consultant at Accenture with clients like DuPont and Nike, and volunteering on weekends with non-profits. “Then one day I had an epiphany,” he said, “[t]here had to be a way to merge personal desires and experiences.” Mr. Russell’s epiphany led him to resign from Accenture, earn an MBA at Yale, and start Easy Office, a for-profit business dedicated exclusively to working with non-profit clients. Russell’s new company allowed non-profits to significantly trim administrative costs by outsourcing their accounting and financial management needs, thus saving the expense of additional staff and infrastructure. According to Russell, Easy Office allowed their clients “to focus more of their time and resources on what matters most, achieving their social mission.”
Russell’s commitment to a merger of shareholder and stakeholder philosophies led him to a monumental decision to change the name of Easy Office and reorganize it as a B Corporation. B Corporations (short for Benefit Corporations) are a relatively new type of corporate entity legally required to create general benefit for both society and shareholders. To receive a B Corp certification, companies must take into operational account how their decisions affect their employees, community, and the environment, while demonstrating they have a positive material impact on society. The poster child of the B Corp movement is Ben & Jerry’s Ice Cream. Long known for its support of local Vermont dairy farmers and its early adoption of Fair Trade practices, the sale of the company 12 years ago to global food giant Unilever generated significant angst among its founders and supporters who feared the beloved ice cream maker’s social values would be lost. Recently, Ben & Jerry’s became the first wholly-owned subsidiary to be B Corp certified, helping to ensure that their long track record of positive social impact will continue into the future.
It was while working in Thailand that Russell was inspired with a vision to provide non-profits with the best practices of back office shared services, enabling them to operate more efficiently and effectively carry out their missions. This experience also inspired the new name his company adopted in December 2012: Jitasa, a Thai word meaning “the spirit of serving others.” “This word summarized what being a B Corp is about,” said Russell. This notion is further emphasized on the Jitasa website: “Nothing feels better than combining our love for numbers with your passion for making a difference in the world.” The move to B Corp status provided an ideal window of opportunity to re-brand Easy Office with its new name Jitasa, a name that reflects the company’s mantra, “Numbers For Good.”
The B Corp philosophy also directly impacts how Jitasa does business. For example, as part of their total compensation package, employees are provided up to five days of paid time off to volunteer at a nonprofit of their choice. “Employees who do not value that benefit may feel under-compensated, thus are less likely to come to us,” says Russell. “Our goal is to have our incentives align with our values. So as we recruit employees, we find the ones who match our values.”
In an increasingly uncertain economy, adopting a more rigorous and restrictive corporate charter might be seen as a risky move, but Russell’s decision to become a B Corp has proved overwhelmingly positive. “[Becoming a B Corp] puts us inside the non-profit world—we are seen as someone who shares their values,” says Russell. The B Corp designation also provides two other important benefits: accountability and recruitment. “Becoming a B Corp didn’t change anything about who we are, but validated what we are already doing and helps hold us accountable to maintain our values and vision,” Russell said. In terms of recruiting talented staff, he notes, “[t]he Millennial Generation is very integrated. They see work and life as a whole, not compartmentalized like Boomers.” He also noted that becoming a B Corp has strengthened Jitasa’s base for recruiting and retaining employees in that demographic. Further, in keeping with a B Corp approach to operations, each Jitasa team works side by side with other teams in an open office environment to encourage collaboration and the sharing of best practices.
Jitasa is currently growing at rate of approximately 60% per year, demonstrating that their decision to embrace the B Corp mantra of doing “good” business was also smart business.