Introducing the Economics of Kindness

^{This article is part of our series on the Economics of Kindness. Find out how we're changing the way that business sees kindness in the workplace.}

Most of us would agree that the world could do with a little more kindness right now. Environmental disasters are ravaging all corners of the globe, inflation is emptying pockets, and more people than ever before are relying on food banks. But, especially in times of such uncertainty, what place does kindness have in business? Can we afford to be kind and invest in our people, or should we be focused on ensuring survival at any cost? We have a clear view: kindness should be the foundation of good business, regardless of anything else the world throws at you.

But we’re biased; kindness is a core tenet of how we conduct ourselves. We’re not talking about being soft or fluffy, and we don’t just mean being ‘nice’. We mean giving everyone a voice, being honest, saying the hard truths and tackling tough challenges head-on. We mean thinking ‘big picture’, balancing the needs of all stakeholders and doing the right thing, even when it’s not necessarily the easy thing. Kindness builds trust and creates a lasting, positive impact.

"Kindness should be the foundation of good business, regardless of anything else the world throws at you."

Graph with upwards trend with buildings and coins

Does kindness pay?

We believe kindness in business pays. But do others share this belief? We’re going to explore the economics of kindness through a series of different perspectives – including those that may challenge our notion – examining the practicalities of putting people first, and what happens when reality gets in the way, so it’s not just our view. We’ll hear the academic and expert view of being a ‘kind’ business or leader. We’ll hear from leaders themselves to understand the challenges, opportunities, benefits and risks of being kind. We’ll get the personal thoughts and experiences of our own consultants, and we’ll be asking the general public what they think and whether kindness influences their decisions.

We don’t know what this will unearth, but together we’ll explore the role, relevance and importance of kindness in this moment. Should it take a back seat? Or is it an enduring quality and guiding light through dark and challenging times?

Kindness. How good businesses behave.

Kindness has been part of our DNA since Baringa’s inception, and still runs through everything we do. It’s a cornerstone of how we treat our people and how we support them at every stage of their career – we’re honest and transparent with everyone, which helps them trust us, do their best work, and want to stay and develop here. That togetherness has helped us through the good times and the tough.

We marry that with how we work with clients. We care deeply about their businesses and the individuals within, and we want to help them improve. That builds trust and means we can have honest conversations about what’s working and what isn’t.

Those two sides – our internal and external approaches – overlap, and we believe this is distinctive.

Our approach means our people tend to stick around for the long haul and bring their knowledge and experience to our clients. And our clients want to work with us because that experience and kindness shines through – we’re not just great at the consulting bit, we’re also role models for how they should treat their own people and customers.

Kindness also helps us decide who we work with, and the kind of work we do. We’re helping companies pivot to sustainable energy sources and to focus on decarbonisation, so they can make a difference to society and the planet. And, while we’ve had some fascinating discussions about interesting work we’d love to take on, we’ll always say ‘no’ if our ethical compasses don’t line up.

"Kindness helps us decide who we work with, and the kind of work we do."

Cupped hands holding a plat pot with seedling in pile of coins

Kind businesses are better businesses

People care about purposeful business. The evidence exists. Look at IBM’s 20,000-person study that found most consumers choose purpose over value, and Zeno’s ‘Strength of Purpose’ study quoted in Forbes, revealing consumers are four to six times more likely to buy from, trust, champion, and defend companies with a strong purpose.

People might be mindful of greenwashing and virtue-signalling, but they’re absolutely demanding more from the brands, businesses and services they spend with. They want to feel good about their purchases, and every company needs to live up to that or risk extinction.

At Baringa, despite our progressive culture, we’re the first to admit we’re not yet doing enough for our people or the communities we work in. But we’re getting there. We’re B Corp certified, which is stretching our thinking, challenging us, and forcing us to change and adapt to meet higher standards.

We’re also advocating for change in the sectors we work in. Energy companies, for example – including our own clients – have rightly taken a beating in recent years. Our role is to be honest with them and help them fix their problems, as well as encouraging better debate within the industry about what a long-term societal solution looks like.

"Consumers are four to six times more likely to buy from, trust, champion, and defend companies with a strong purpose."

Woman with umbrella raining money on her

How kindness makes good business sense

We’re not just talking about kindness for the sake of it. Businesses are there to make a profit, so the only way kindness will ever make financial sense is if it pays. And it will, if you’re willing to put in the work.

Kindness is a long-term commitment that has to be felt and reciprocated across your whole organisation, from leadership to frontline worker, and right through to your clients or customers. If a single part of your business is out of whack – if your teams don’t buy into it, or if your processes and structures aren’t particularly kind or fair – you’ll pretty quickly get found out.

That means making long-term investments in individuals, by treating them with kindness and helping them through short-term moments – whether that’s illness, financial difficulty, the loss of a loved one, or any number of challenges people face in their lives outside work.

"Kindness is a long-term commitment that has to be felt and reciprocated across your whole organisation."

When you treat your people well, there’s an emotional ‘contract’ that grows between employer and employee in those moments. It’s not a true contract you can hold someone to – more of an unspoken, intangible agreement – but it’ll pay you back in spades.

And, when you’re not in a position to do as much as you’d like for your people – as so many of us have experienced over the past few years – you’re transparent with them, and you hope you can call on the goodwill you stored up when times were better.

It’s inevitable that you’ll have to make tough decisions at some point, and they won’t feel too kind. But kindness can still influence how you do what you need to do. If the worst happens and you face the excruciating last resort of letting people go, how do you let people know their job is at risk? How do you support them in finding their next role, or relocating? Can you team up with other organisations to make things easier for everyone?

When it comes down to it, the equation is simple: Kindness equals happy people, which equals better performance, which equals profitability. The key is how you make that money, and what you do with it.

The antithesis of all this, of course, is the stereotypical, ruthless tycoon – the exploitative ‘baddies’ of business who put cold hard cash before everything and everyone. They tend to get plenty of attention, but these are usually stories of one person finding success and happiness (or money, at least) while leaving a trail of damage and devastation in their wake.

We don’t often hear as much about the ‘goodies’, perhaps because they’re less divisive or exciting, but we think they’re far more interesting. We hope to uncover a few more of them throughout this series.

Join the #EconomicsOfKindness discussion on LinkedIn here.

About the authors

Anya Davis

Anya Davis supports corporates and investors with their transition to a low-carbon world. Anya has 15+ years’ experience in the energy sector. She has helped established players transform, and new entrants invest and build businesses in this market. She has extensive experience across the investment lifecycle and value creation. She is also responsible for ensuring the Baringa culture evolves to continue to be a great place to work.

Learn more about Anya

Ellen Fraser

Ellen Fraser leads Baringa’s global Energy Retail, Networks and Water practice and has the responsibility for Baringa’s portfolios in the UK, Europe and Australia. She’s sat in boardrooms with the CEOs of every major UK energy supplier, and even informed policy with energy regulator Ofgem. She’s a familiar face commenting on the BBC, and quoted everywhere from the Financial Times to The Guardian.

Learn more about Ellen