New England technology entrepreneur Kate Emery, 56, distinctly remembers when she realized she could either accept the business status quo or chart a path to put people and the planet over profits.
Becoming a parent a few years after founding the Farmington, Conn.-based IT services firm, The Walker Group, in the 1980s shifted Emery’s priorities. “Life became more about wanting to give back and contribute and less about the bottom line,” she recalls. “Also remember that this was the era of Enron, Worldcom and Tyco — a club in which I didn’t particularly want to be a member.”
Emery decided she had three choices: “get with the program and accept business as usual; sell my company or think differently.” A period of research and contemplation followed.
Tinkering With the Laws of Gravity
Emery learned that, in stark contrast to today’s business practices, “social utility” (the notion that some business output should benefit the community or society) historically had been an expected aspect of a corporation’s charter.
If we’re not profitable, there’s a lot of good stuff we can’t do. But people, purpose and planet add up to at least equal — if not more than — profits.
— Kate Emery
“What I came to appreciate is that the laws of business, unlike those of gravity, aren’t immutable,” she recalls. “For example, if employees are our best asset, why do they appear on the expense side of our ledger? Our corporate accounting structure is a convention, but business conventions can and do change, and they need to change again.”
To make her point, Emery says: Imagine if business-world sensibilities played out in our daily lives. “What if we sat around the dining room table and figured out who had contributed the most to the bottom line and then divvied up the dinner accordingly? Or what if we were fine with shipping our kids overseas where maybe they could be raised a little more cost effectively?”
Emery continues: “It seems ridiculous in our personal world, but that’s what we do every day in the business world. And somehow we all accept that it makes sense. But it wasn’t making sense to me, and I wanted to do something differently.”
Turning Her Company Into a Social Enterprise
Emery’s first step was to embrace the idea of creating a “social enterprise.” It’s a business that, rather than making profit its top priority, instead emphasizes benefiting society or the environment.
The Walker Group became a social enterprise in 2007 and formally committed to equally splitting distributed profits among employees, the community and shareholders. Three years later, Emery founded reSET, the Social Enterprise Trust, a Hartford-based incubator serving the social enterprise sector.
Last year, Emery — who has spent her entire working life in Connecticut — led the efforts lobbying her state’s General Assembly to pass the country’s most comprehensive social enterprise legislation. (Twenty-seven other states also have benefit corporation, or B Corp., laws allowing the formation of businesses whose goals include making a positive impact on society and the environment.) The Connecticut law also allows entrepreneurs to adopt a “legacy preservation provision” which can help ensure a company remains a benefit corporation in perpetuity.
A common misperception, Emery notes, is that social enterprises are nonprofits. Actually, making money is very important to them. “If we’re not profitable, there’s a lot of good stuff we can’t do,” Emery says. “But people, purpose and planet add up to at least equal — if not more than — profits.”
Assisting 300 Entrepreneurs
To better support emerging social entrepreneurs in Connecticut and throughout New England, reSET has grown both in size and influence. With a $1 million budget and eight employees, the organization has assisted more than 300 entrepreneurs to date.
reSET recently moved to new offices in Hartford, more than doubling the size of its previous location. For modest fees, it offers members desk or office space, professional services and a community of like-minded people available to network and brainstorm. Plans are underway to add a café and a media lab to help entrepreneurs market their companies.
“The goal is to take social entrepreneurs wherever they are in the process of launching or growing their business, and help them take the next step,” Emery says. “Over time, some of the businesses we help launch today will grow and even go public as social enterprises.”
She thinks the burgeoning social enterprise field “gives more choice to us as consumers, employees and investors to shape the future of business.” The key, Emery adds, is educating people “so that they realize there is a choice: profits can be your raison d’être, or a means to an end.”
Last year, Emery also started the Social Enterprise Investment Fund with private donations. “We hope to grow it to $10 million over the next several years and create an evergreen fund to support the growth of social enterprises,” she adds.
Seed Money for New England Entrepreneurs
One example of how her work is catching on: reSET hosts an annual Impact Challenge where New England social entrepreneurs compete for seed money to grow their companies. Last year, the prize purse was more than $50,000 and the goal is to double that amount this year when the awards are given Oct. 29.
“We want to attract and support a startup community geared toward social benefits and to make our region the Silicon Valley for social enterprise,” Emery says.
Only months after registering as one of the first benefit corporations in Connecticut, The Walker Group received the Connecticut Council for Philanthropy’s Nancy P. Roberts Award for philanthropic innovation. The Connecticut Technology Council named Emery a “Woman of Innovation” in 2014 and 2015 and The Hartford Business Journal has called her company one of the “Best Places to Work” in the state.
What the Future May Hold
Beyond her specific goals for social enterprises and New England’s role in them, Emery has loftier aspirations.
“If we question business conventions that don’t seem to make sense, and take action, then someday, social enterprise will be business as usual,” she predicts. “It may seem like a revolutionary idea right now, but I think we’ll look back and view public benefit corporations as an inevitable progression in our business evolution. And that’s our goal! Business can be a force for great good.”