When a Pandemic Puts Purpose to the Test: Grove Collaborative Tackles COVID-19 Changes by Prioritizing Stakeholders

B Corp Considers Long-Term Effects on Workers and Mission When Weighing How to Respond to Surging Demand

Orders jumped by 50% at Grove Collaborative early in the COVID-19 pandemic, raising questions about which stakeholders—including customers, workers, and environment—to prioritize. (Photo courtesy Grove Collaborative)

When hand sanitizer and foaming soap became hot items early in the COVID-19 pandemic, Grove Collaborative saw demand for its products skyrocket — and faced new decisions as a mission-driven business. The Certified B Corporation — which offers soap, skin care, pet food, and other household products from brands like Seventh Generation, Method, Mrs. Meyer’s and Badger Balm — had to weigh potential business growth and profit against potential long-term effects.

The company’s stakeholder-driven values as a B Corp have served as a stabilizing force during COVID-19, says Stuart Landesberg, co-founder and CEO of Grove, who recently shared more about the decisions the company faced and its long-term goals during an interview for my upcoming book, Better Business: How the B Corp Movement Is Remaking Capitalism. In the excerpts below from our conversation, Landesberg shares more the company’s goals as a B Corp and a sustainability-minded business that records more than $200 million in annual sales and counts thousands of loyal customers.

As Grove has grown, how have you balanced the benefits and demands of various stakeholders — workers, customers, communities, investors?

Stuart Landesberg, co-founder and CEO of Grove Collaborative, a Certified B Corporation. (Photo courtesy Grove Collaborative)

People come to Grove for different reasons. My company’s mission statement is to help all families create a home that reflects the best of themselves. Our long-term vision is that consumer products will be a positive force for humans and the environment as well. One of the things that’s made us successful is we’ve attracted employees who want to do the mission part, not just the job part. That’s made us successful in keeping our mission strong, and I think it’s also been a huge advantage for growth.

The smartest people in the room today understand that if you’re not mission-driven, you’re never going to be able to hire the best talent.

From the senior executives, to our investors, to who we put on the board, to the way that we build practices — going all the way out to from me down to the intern who started this week — all of that is being built by people who subscribe to the belief that mission-driven businesses is way that business should be run. And it’s not mutually exclusive with value creation, but in fact it enhances value creation for all participants. That’s the only way that I could imagine it working. Because when we have to make tough choices, everybody understands that we’re using a shared sort of moral code.

Why do you think customers care about Grove’s social mission and values?

A lot of people come to us because the products and prices are great, customer service is good, and it’s really convenient. And they wouldn’t necessarily self identify as super high on the sustainability spectrum. There are a lot of other folks who come to us super charged up about sustainability. The thing that these people have in common is that they’re all trying to be thoughtful about getting the best product for their home and their family.

As a company, we really want to be approachable to people from all backgrounds. I’m a big optimist and believe that people want to do the right thing. There’s a bunch of pretty obvious benefits that are sustainability and mission-related. But really they’re just things that are better for the world we all share.

How did Grove Collaborative adapt to market changes driven by COVID-19?

The principles we laid out in the beginning were: Stay true to our values, serve our community to the best that we possibly can, and create as much flexibility as we can to keep people safe.

The hardest choice was what to do in March when we had all of this volume, all of a sudden. Do you maximize profit? Do you maximize the number of new customers? Or do you show up for your existing customers? If you’re delivering on your promise to your community, it doesn’t maximize profit but is what we ultimately decided to do. We keep the product in stock for our existing customers.

And all of a sudden orders grew by 50%. You can ask for overtime, you can even mandate overtime. But is that the humane thing to do?

Knowing that every hour worked equates to several extra orders, the ROI on those hours is really big in the short term. But those were people, too. Ultimately we ran a number of different programs where we let people run really negative on their paid-time-off, didn’t do any mandatory overtime, and put in a number of other policies to give the folks in the fulfillment center some flexibility. We definitely didn’t maximize revenue or profit through that period, but I think we did right by our team and by our community.

The long-term benefits of having shown up properly in that moment will outweigh the short-term lost revenue. You have to be able to play the long game, and we are lucky to be big enough and have the support of shareholders so we can think long term in that moment.

The community of Certified B Corporations knows that profits don’t have to come at the expense of other stakeholders. Learn more in this downloadable report.

How has the pandemic affected your relationship with companies in your supply chain?

One of my favorite parts of my job is the people I get to work with on the supplier side. The company is called Grove Collaborative deliberately, because we are reliant on the work that so many other people in the ecosystem have done. There are a bunch of awesome companies doing awesome stuff, and we’re really lucky to be in that ecosystem.

When things change, the integrity of all the participants in the supply chain is particularly important and it’s hard to do due diligence real time. And so that level of trust is super valuable. I can trust that whoever I’m doing business with is not price gouging. Through the ups and the downs, it’s important to have people across the table with whom you believe. And we do for all of our suppliers. These people are here for the same reasons we are: to make better products.

I believe that business is the single most important organizing principle in modern society, outside of the nuclear family and potentially even more important. Humans don’t organize ourselves in tribes anymore; we organize ourselves in businesses. Businesses are incentivized to maximize profit and push out externalities to defenseless groups, to the fullest extent possible. It’s a terrible system, and the only way that this is going to change, or that we’re going to get the change we need in the world, is through business participants.

B The Change gathers and shares the voices from within the movement of people using business as a force for good and the community of Certified B Corporations. The opinions expressed do not necessarily reflect those of the nonprofit B Lab.

When a Pandemic Puts Purpose to the Test: Grove Collaborative Tackles COVID-19 Changes by… was originally published in B The Change on Medium, where people are continuing the conversation by highlighting and responding to this story.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.