While TOMS was once the darling of the social impact world, bashing the brand has become ubiquitous and de rigueur. The greatest issue has been around the company's disruption of local markets by importing shoes to less-developed countries. It's not criticism without merit -- assessing the challenges of TOMS' business model when one looks past the adorable, happy kids with new kicks is worthy of discussion.
But let's pause and look at the positives. This week, TOMS announced a plan to manufacture one-third of its shoes in donation countries by 2015. According to founder Blake Mycoskie, "Some of the criticism we've had is that we're not using our company to create jobs…and I think that it's a fair criticism." What few people know is that TOMS has tried to manufacture in some of these countries before. It's easy for critics to throw stones, but implementation can take years to get right, and underdeveloped infrastructures are a huge obstacle. TOMS' new commitment expands the company's mission to include economic development (the number one issue global consumers are looking to companies to address), and will likely require additional investment in manufacturing capacity in some of these markets. Not only a major shift in company operations, this latest commitment provides two important insights for social impact practitioners to consider:
- Listen to your critics: Hubris has ruined many a great brand (and individual). Trumpeting your message so loudly that you don't hear anything else can be extremely dangerous – Abercrombie's plummeting sales following its CEO's comments is one example. A better approach is that of Dan Cathy of Chick-fil-A calling and befriending his biggest critic, Shane Windmeyer of Campus Pride. In this case, TOMS clearly heard what critics had to say about its model, and waited to make a public response until it fully understood the problem and potential solutions. The result is a more comprehensive approach – not a Band-Aid solution, but a systems approach that involves infrastructure, capacity building and multi-stakeholder engagement.
- Share your failures: For many organizations in the social impact space, admitting failure is unthinkable. When competing for donor dollars or consumer hearts, there's no room for mistakes. It's so groundbreaking, in fact, that creating an online forum for nonprofits to share their failures (Admitting Failure) warrants a TED talk! The surprise isn't that there are mistakes in the model – any risk (e.g., starting a company with a new business model like TOMS) results in some missteps. It's owning up to and fixing those mistakes that is much rarer. Mycoskie is not a footwear guru, and never claimed to be, so it's not shocking that his idealistic passion to help kids in need didn't have an airtight strategy around issues like manufacturing and job creation. And he admitted as much in his recent announcement. But those issues haven't prevented TOMS from incredible success in its mission to give away shoes, (they just reached 10 million) and its willingness to reinvent itself from a philanthropist brand into an investor in developing economies certainly seems to be a positive evolution.
A healthy dialogue and critical thinking about approaches that do and don't work is always welcome and recommended. And TOMS will need to continue to improve – they still have the other two-thirds of their manufacturing to consider. But no matter where you stand – let's congratulate TOMS on this commitment and then, as a community, hold the company responsible for making good on it. TOMS will have to report on the return this investment brings to the company and those it seeks to serve.
- Emily Nichols, Senior Account Supervisor, Social Impact
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