Vignettes
Should business be personal?
Trish Karter
CEO and President, Dancing Deer Baking Company
How can managers integrate their values into business decisions? Trish Karter '82 talks about the decision to keep her company's headquarters in inner-city Boston, and how it grew from her sense of self.
"We've had some real critical, defining moments," says Trish Karter, looking back on the history of Dancing Deer Baking Company, a maker of all-natural cookies and cakes with about $10 million in sales in the last year. "Happily, my instincts have always been to do and be who we are and not lose sight of that.
"When we formed this company it was kind of a hobby investment but it was also a place where my ex-husband and I wanted to invest our ideals about what a business could be. We had ambitions for creating an organization that was better, happier, smarter, faster; where there was ownership at all levels, and where we played a positive role in the community, as well as lived up to our promise to make a very pure, quality product. In the early days mostly what we were trying to do was stay alive. But, in a way, we were making choices every day about how we'd stay alive."
One defining moment came in 1998. Dancing Deer was only four years old, with about 20 employees shuttling back and forth between two cramped bakeries. "We sold some business to Williams Sonoma that we couldn't produce from our facility. We had totally maxed it out."
Karter looked at two options for Dancing Deer's new home, one in inner-city Boston and one in the suburbs. "The suburban one was clean, inexpensive, it had growth potential. It would have been easy to move into," says Karter. On the other hand: "Our workforce came from the inner city." Karter wanted to hold onto the people who baked brownies and tied ribbons on the packaging as well as her managers and accountants. She calculated the cost of busing employees to the suburbs. But beyond the decision's impact on employees and profits, Karter saw implications for the identity of the company. "We were hip, forward-thinking, always doing something innovative in food, always pushing the boundaries in marketing. What kind of a company would we be if we moved out to the suburbs?"
The inner-city location was a former fish processing plant in need of repair, with an unpaved parking lot, set in a neighborhood with high dereliction and crime rates. What could have been viewed as liabilities appealed to Karter. "I'm an artist, too, so the idea of bringing a wonderful old brick building back to life appealed to me a lot." She explains that she comes from a "scavenger family," and her father ran a pioneering recycling business. "We were always collecting bricks from fallen-down buildings and saving mansions and restoring old houses."
Dancing Deer moved into the old brick factory, having replaced the floor, the windows, the plumbing, the electricity, and even the paint. The company also settled into its community, in part by developing a clearer philanthropic mission focused on the problem of family homelessness, which Karter saw every day around her business's new home. "It wasn't all altruism," Karter says. "We became part of this community. And we eventually realized how powerful that was in itself—powerful for us, powerful for the community."
Karter goes on, "Investing your personal values in an organization, I think, is terrific. There was a time when the professional management attitude was that you have your personal life and what you do at home for philanthropy and community, and then you run your business and you're businesslike in it. The definition of 'businesslike' didn't have much to do with those kinds of personal values. There was a very narrowly defined sense of what the bottom line was. We just define it much more broadly."
Karter says that in hindsight, the decision to stay in inner-city Boston was obvious (if not easy), because it was consistent with who she was and what she wanted Dancing Deer to be. "If we walked away from that identity we'd just be lost, we'd just be another brand bouncing around the marketplace."
In an excerpt from the interview that formed the basis for this piece, Trish Karter talks about how she hopes financial success and greater scale will advance her social goals.
Q: Can you separate your business decisions from your sense of Dancing Deer’s social responsibility?
We’ve certainly knitted the commercial objective together with where our hearts are and what we’re trying to do in the world. It’s not a perfect formula, by any means. But it’s become so much a part of us that it’s taken on a life of its own.
In fact, I think that we get too much credit for it. When people stop me on the street and say, “Dancing Deer is such a terrific company. I love your products. I love your philanthropy, and your creativity, and the way you treat your people, and how you interact with the community,” I’m just thinking that there’s something wrong with this picture, because when you break it all down, we don’t do that much. We just do stuff that’s obvious—commonsense, logical, economically sensitive, marketing-smart, people-smart decisions. To think we get singled out as an innovator and symbol of social responsibility is a sad commentary.
Of course, there are a lot of companies that do good in the world. It’s telling that we garner so much consumer loyalty from it. I think people are looking for that. Little scraps of good-hearted, golden rule behavior count for a lot.
Every CEO, shareholder and board of directors could easily make these kinds of choices. If you’ll indulge with me in a bit of utopian daydreaming—it doesn’t take much to imagine a dramatically different world. We don’t do anything that’s really that hard — open-book management; taking care of people; committing to the community and the environment; having a philanthropic cause; making ethical decisions; asking ourselves if our products, packaging and practices pass through our values filter
Q: Do you see more businesses coming closer to the principles you started with?
Definitely. It’s fashion now and people want to be seen wearing it. That’s OK. Substance will likely follow. There’s a lot of PR fluff and many pasted-on Social Responsibility mission statements. Ultimately, if it’s not at the core of the organization and demonstrated by the leadership, it’s not meaningful., But there is also real change taking place and more CEOs, I believe, taking a broader constituency of stakeholders in to their thinking. Not that long ago it was a fringe concept.
Then you had ten years of cause marketing where, in the consumer-goods area anyway, brands like Patagonia, Ben & Jerry’s, Stonyfield Farm, and Annie’s Homegrown committed to a higher ethical and environmental bar. These were powerful marketing tools. You can’t separate the success of any of those companies from the good will they created with consumers through progressive practices.
It may be a small stratum of society that studies whether a company behaves well in the world, but it’s a broad band that is aware and beginning to demonstrate that it cares. It’s not just the Public Radio crowd. The controversy about Walmart’s bad behavior is a debate amongst intellectuals. It’s interesting, but in the meanwhile Walmart shoppers are still enjoying bargains. What’s more interesting is that Walmart decided to jump on the organic wagon. That is not about narrow segments, it’s a reflection of big shifts in buying behavior.
Parenthetically, as with all fads and revolutions, there is a lot of bunk and it’s hard not to over steer. The right answer in food, for a sustainable planet, is going to be a portfolio of solutions including organic along with a mix of technology from all the sciences, including behavioral. People will ultimately be forced to change their daily choices. We’ll run out of margin to be as self-indulgent as we are today. Maybe we don’t get to eat organic grapes in the middle of February, shipped from Chile, in pristine, highly durable protective petroleum-based packaging.
Q: The movement isn’t watered down when big companies come in and —?
Actually, big companies coming into the organic and natural world, in the long run, will be very beneficial. One of the reasons we haven’t been able to go organic is that the cost structure isn’t there. You need volume to drive down the cost. It doesn’t happen until raw material producers commit their resources to finding ways to do it competitively in terms of land utilization, quality, and productivity. .
In the short term there are lots of challenges. You’ve got these crazy supply things going on where a big player comes in and suddenly nobody can buy natural, unbleached, unbromated flour. The market works those things out really well.
Q: You said you’ve only done what’s easy in terms of having the company do good —
Well, when I say “easy,” I say that in the sense that these are choices that anyone can make. There hasn’t been much that we’ve done that’s really been easy.
There have been times when to stay true to our values we had to turn down large pieces of business or commit to a higher Cost of Goods. Or we had to work harder at communicating our message or forego faster growth because our business model was different and we stumbled in uncharted waters. But who doesn’t?
The fact that we were fresh baked from scratch with all natural ingredients has really limited how quickly we could grow as a national brand. First of all, we needed markets that could receive, rotate, and merchandise our product, and consumers that wanted to buy it at a premium. There continues to be a much bigger market for less expensive product that lasts longer on the shelf, i.e., has preservatives, largely because that’s the way the food distribution system is set up. Walk down the grocery aisle and you can see what I mean. We could have dumbed down the product and put in preservatives and ramped up much more quickly. It would have been a totally different company and I wouldn’t have been running it.
Sticking with our principles is rewarding and we’re building something wonderful. Now that we’re getting more traction in the marketplace, we’ll be able to convert it to be a more powerful market and economic force. That’s my dream: succeed according to conventional metrics while using a whole different algebra to define and deliver values beyond the first bottom line.
Q: Do your employees here have to share in the values of the company?
Well, “have to” would be the wrong term. People seek us out because they share those values. It’s a powerful recruiting tool. Folks we wouldn’t otherwise have been able to afford step in and say, “I really, really want to work here, and I know you can’t pay me what I make in the marketplace, but I’ll take a cut to be part of this effort.” As we grow, just like any other bootstrap venture, we continually raise up those financial standards and get to market levels. But the opportunity came from having something of greater value than a salary to offer talented people, something bigger.
Generally speaking, we have a group commitment to who we are and it’s very articulated and not something you could miss. You’re not going to get a job at Dancing Deer without sitting down and talking with me about the big picture.
One of the things that I’m sort of maniacal about is making sure that I put all this stuff on the table with people who are considering jumping aboard. Because, along with this great mission come challenging aspects of working at Dancing Deer. We’re small and under-resourced and growing fast. Organizational change resulting from growth is hard enough in itself when you’re following a well established model. Being unconventional just adds to the complexity.
So, we’re solving a lot of problems that we create for ourselves. One such problem is that we have incredibly high expectations. This sets us up to be doubly disappointed when we falter.
It’s worth it.
Q: It sounds like you’re working on growing the size of the business in order to expand the impact of everything you do.
I’m committed to growth.
A lot of people tell me that what we’ve already accomplished is fantastic. And I think that’s nice. It’s nice that we have a good brand, and it’s nice that we’ve staked out a place in the market and that there are people who are inspired by what we do. But it’s just not big enough.
I feel I haven’t really delivered yet. We’ve created this amazing brand. There’s no question. I give us an A+ for building a beautiful product and a company personality and mission people relate to for its positive force in the world. But I’m giving myself a D- for scaling it. I want to accomplish both.
Q: And so do you have a target in mind for what makes it a powerful economic force?
In the short term we’re shooting for $50 million. But I would sound silly if I told you where I think it can go.
Q: You’ll probably keep moving your sights up higher and higher.
Yeah. I’m sort of genetically incapable of leaving the bar in the same place. So whatever hurdle we cross, then I just notch it up.
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