The Fourth Priority (drum roll please)

Thanks to everybody for all the guesses about what Homestead's fourth priority is in running our business.  Congratulations to the four people who got it right--your free months of service are on their way.  Now on to the answer (drum roll please)...

It's the community.
In my opinion, after employees, products and customers comes the community.  As a business, you have a synergistic relationship with your surrounding community.  By community I don't just mean your local community, but also your community of customers, suppliers, partners, and those people or groups that you touch who contribute to your success but are not directly compensated for it.  This responsibility to your community starts as local as the people you see walking outside your office window every day, and is as global as worrying about the impact your company has on big, critical issues like the environment, world politics, poverty, and the global economy.   The best part is that I'm utterly convinced being a responsible and proactive community member--at the macro and micro levels--is very good for your bottom line.  And it feels great, too.

Start locally
At Homestead, since our customers interact with us virtually (web, phone, email), they are located all over the globe (at last count, in over 150 countries).  But, our offices are located in a sleepy neighborhood in Menlo Park, a suburb of San Francisco.  And our 100+ employees drive through the neighborhood every day, use the neighborhood gym and park, and eat at the local restaurants (we seem to do a lot of that).  So while there are only a few dozen Homestead customers who live within a 1/2 mile radius of our offices, we still have an obligation to be a responsible member of this geographic area where we work.  Over the years we have built the neighborhood kids a park and play structure, agreed to change the color paint on our buildings at the request of some neighbors across the street, befriended the local restaurant providers and tried to send them major meal orders on a regular basis (Henry, the owner of the local Quizno's, makes us 125 sandwiches to order once a month).  We also have offered internships to local high school kids from one of the most economically depressed parts of the Bay Area, which is only five minutes from our offices.  Still, there is much more we could do.  As I'm writing this I find myself wondering why we don't have an "open house" for our neighbors so that they can see Homestead from the inside after spending so much time watching us from the outside.  We'll have to get on that.

The best ways to give back are free
I am involved with an organization called Entrepreneur's Foundation, which now has over 100 companies who have joined by giving small amounts of stock and a commitment to be actively involved with their communities.  In exchange for joining, EF helps them craft custom community involvement (CI) programs that match local volunteer activities with the interests of the company.  From that perspective, and my own experience in building Homestead's Community Involvement program and the Homestead Foundation, I can tell you that nothing has as big of an impact on a company's culture and employee morale as weaving philanthropic passion into the fabric of the business.  Employees come and stay because of it, customers like doing business with you because of it, and partnering companies respect you for it.

Local non-profit organizations are starved for resources in a way that makes even the most basic start up business look flush.  They need help doing their books, making phone calls, setting up an office, administering their computers, building a website (wink), and even delivering their actual services.  If you spend two hours a week working with a non-profit organization, you can make a serious impact.  If you have each of your employees spend two hours a week, you can change their chances of success dramatically. 

From day one, we allowed employees (okay, at first it was just me) to spend two hours a week or one day a month volunteering for any cause they found important.  In theory they got paid to do this, although most people just spent more time working to make up for it.  Fast forward to this year, and now we spend a few thousand hours collectively volunteering, which is like donating a couple full time employees!

Pocket change adds up
Luckily for all of us, many corporations create giving or matching programs that distribute money to their community charities.  This is a great thing, and it serves as an important means of funding local non-profit organizations in many communities.  Homestead has the Homestead Foundation, which is our financial giving arm.  You may be thinking that's "easy for him to say" now that Homestead is financially established and has more resources to give with, but I created our foundation when I was the only employee and I couldn't afford to pay myself much more than minimum wage. 

I thought it was important that, as we pursued the "for profit" world of business, we didn't forget about the other types of organizations who were also trying to change the world but without the pot of gold at the end of the rainbow.  So, I would stick a few dollars in there whenever I could, instead of giving it to Starbucks.  I also encouraged our early employees to give a little here and there.  Finally, I wrote into our corporate charter that we would donate 5% of our pre-tax profits to the Foundation from then on.  Before you knew it we were turning a modest profit, and the Foundation had over $10,000 in it!  It felt great to give away that first $10,000.

Over the years, the Homestead Foundation has given several hundred thousand dollars and has served as a vehicle to support the organizations that are important to our customers and our employees.  Last year the Foundation granted $75,000 to organizations that were serving the small businesses in the Gulf Coast region affected by Hurricanes Katrina and Rita.  Much of that money came from Homestead and its employees, but much also came from Homestead customers who joined in our efforts. 

We have also given sizable donations to organizations such as Habitat for Humanity, Bay Area Action (a local environmental organization), Boys and Girls Club, RAFT (Resource Area for Teachers), and many others--all of whom our employees spent time volunteering with first.  After we build connections with them by giving our time and non-monetary resources, we then feel comfortable that our money will be well utilized and make an impact. 

My point is, start by finding organizations in your area that you think are doing important work, and support them any way you can (time, "pro bono" services, help with fund raising, $50, whatever).  As you become more successful, it will be programmed into your life and the life of your organization, and then you can give more financially.  Ironically, it's easier for us to give money than time these days, but the organizations often value our continued volunteer efforts as much or more than the checks that we can write.  They remember us as the small, committed company with lots of energy and heart, and that's what they want more of!

Think globally
Being a responsible member of the community doesn't just mean giving your company's ancillary time and money.  It runs deeper than that, to the core of your business and the decisions you make as you build it.  For example, you can choose to start a business that is not a drain on the environment.  Given technology today (and the power of services such as Homestead, yea!), you can set up a virtual office or  store that doesn't have a physical presence, which means no building or store to air condition, heat, clean, etc.  You can also choose to sell services or virtual products, which means there is little or no impact on the environment when your customers purchase.  At Homestead we are proud that no boxes, packaging, manuals, CD's, or other materials are consumed each day when the thousands of new customers come on line to try or buy our products/services.  Of course, if a customer requests a CD we'll send it to them, and they can print out the manual if they want, but you can design your business to make those types of activities minimal or on-request only.  I LOVE that certain utilities and credit card companies allow me to only receive my bill via email for this exact reason--I don't open the physical bill anyway and it just fills up our recycling bin at home.  Be like those enlightened companies with every aspect of your business!

Another way to be responsible is in your decisions about "outsourcing" certain aspects of your business.  I've vowed not to get political in this blog, so I won't take a stance on this sensitive political issue, but please realize even the smallest decisions can have global impact.  Outsourcing customer service or manufacturing or computer programming to foreign countries or non-local areas has both positive and negative impacts on your local community and the communities where those outsources are located.  You may not be making these decisions directly yet, but your vendors and partners probably are.  Look into why one vendor's prices is so much lower than the others--are their business practices in line with your own philosophy of building a community-sensitive business?

There are dozens of other ways that your business has global impact: whether you offer benefits to some or all employees, whether you adopt industry standards or practices that are not law, whether you offer a 401K and/or match, whether you reward employees who bicycle or car-pool to work, whether you diligently respect intellectual property rights, whether you promote these efforts to your customers.  If you and the millions of small business owners like us participate in new trends, it will create a new standard, and eventually influence policies and laws and even global relations. 

I won't tell you how I stand on all of these issues, but I do urge you to consider them and evaluate your business from a local, global, holistic, community-responsible perspective.  Even if you're a single entrepreneur with a dream and a prayer, your decisions on these issues will make a difference.  Trust me, I was one, and it has mattered.

Finally, as always, I'm eager to hear your viewpoint--leave a comment if you have a feeling one way or another.  Next week: the fifth and final priority.
--jsk

Comments

[Officiant Nancy Cronk]

Dear Justin,

First of all, let me thank-you for Homestead. I tell people how much I love it all the time. As a middle-aged Mom who never took a computer class in her life, you have made it so easy, I am now the webmaster of many websites. I am hooked and I love it! The only suggestion I have is that it would be great if you had an alphabetizing element for lists.

I wanted to comment on this 4th principle, and share my own story of how important it is. I have always had the philosophy that a person should do what they love, and somehow they will be compensated for it. I love studying various religions, although I never got a degree in it. (My degree is in Psych.) I worked at both a synagogue and a local church, so I could be with my kids as much as possible while they were in preschool, years ago.

A friend asked me a couple of years ago to perform her same-sex, interfaith, non-affiliated wedding, so I got ordained (too easily over the internet, I might add) and performed it. It was wonderful! I loved it. I was able to combine elements of two very different faiths, while reflecting both women's true natures in their ceremony.

Since then, I took more coursework in religion, studied at a distance-learning seminary, and decided to serve nondenominational, interfaith, secular and nontraditional folks through my on-line "ministry". I had a great product (my knowledge, compassion and open-mindedness) and I knew I would had what it took to serve my customers. I have no employees. For me, community was the biggest key to my personal success in what I am doing now.

I have used Homestead to build a pretty large network of interfaith and nondenominational clergy across the Uniteds States, and now I am adding some Officiants from other countries, as well.

Here is where the 4th principle comes in: 78% of the wedding industry gets their information online. Since I started as a single unexperienced officiant, I had practically no web presence. I didn't have any money to advertise on yahoo and google, so I needed to do what I could for free to advertise.

I searched my heart for the answer to what to do. Against many warnings from friends, I decided to "serve" my competitors. Crazy, I know. I figured if I am good to others, they will be good to me. What goes around, comes around.

So, I offered free webpages to everyone else who did what I did. I live in Colorado, and I even started the Colorado Association of Wedding Officiants, a group which shares networking, support, knowledge and fellowship. I offered all of my competitors a chance for professional and personal nourishment. Since last year, I have made hundreds of friends in many religions, all over my state and all over this country.

And guess what, just like I thought, I started getting lots of calls to perform weddings! It seems that everyone I helped, helped me. Everyone I spent time with on the phone, sent me phone referrals. Everyone I shared information with, shared more with me. Everyone I helped set up webpages for, sent me information to put on our site and to share with others. Every link on my site (well almost) wanted to link back with me. Every kindness I showed, was returned to me ten-fold. Now, I have a pretty impressive web presence in the wedding industry, and it was built on COMMUNITY.

It really works, and I am truly blessed.

Yours in friendship,
Officiant Nancy Cronk

Chair of www.Interfaith Officiants.com, Chair of the Colorado Association of Wedding Officiants, Chair of the American Association of Funeral Officiants, and Chair of the American Association of Wedding Officiants Southwest region.

[Officiant Nancy Cronk]

Oops - I forgot to mention my favorite website on animal ministry:

http://www.interfaithofficiants.com/CompanionAnimalPages/CompanionAnimalClergy.html

[adria]

Oops. I guessed before I noticed that you had already posted your answer. I didn't cheat, I promise.
So here is a question: what happens when the needs of one group (employees, customers, community) conflict with the needs of another?

[Justin]

Adria,
This conflict happens continually, and it's the job of the leadership team to sort it out and prioritize. It is a balance, so you end up trying to align the needs of the different priorities (you forgot products, btw), and then give all of them some care and feeding. When they truly butt heads, however, you need a schema (such as the one I'm proposing) that helps you choose. So, if a certain decision is going to help a lower priority but damage a higher priority in the process, and we can't find an alternative, we won't do it (like if the only way we can make our revenue numbers is to overcharge our customers, or tighten up our refund policy).
--jsk

[adria]

Thanks for taking the time to reply to my comments. I didn't forget products, I just thought it didn't fit into my sentence because products don't have "needs" in the same way the people do. I guess in this case the "needs" of the products are actually the needs of the company itself.