[Name]: Dermot Hikisch
[Areas of Expertise]: Corporate sustainability, Third party evaluation, Business Development, Forest Ecology
“One of my earliest memories is from a hot summer in Canada, where there was a major forest fire that broke out twenty miles from my parent’s house. There’s this one photo of me where I’m standing in the little kids paddle pool and there’s a giant column of smoke behind me and I have this little hat on and I’m smiling away, half toothless, just a beautiful 90 degree day. Later that summer we got our first cat, and I named the cat “Smoky” and that always stuck with me. Fortunately, I was able to live one of my two childhood dreams: I didn’t go to the moon or anything, but I fought forest fires for eight years. The camaraderie of working in that industry was really fun, but it was also a nice step into ecology and conservation.”
Don’t fear the beard. It didn’t last long. Dermot Hikisch, Director of Business Development for BLab and long-time Hub member, attended a close friend’s wedding this weekend, repping a moustache along with the rest of the wedding party. “I waited to shave until the day before,” he explains. But the Canadian transplant didn’t always know he would grow up to be Ron Jeremy (Hulk Hogan? Hugh Jackman? Vote here…). As a child, Derm wanted to be an astronaut, or a firefighter.
“I think the magic of being an astronaut came from seeing the right stuff from a very young age and really getting excited by the stars,” Dermot reminisces, “I grew up in rural Northern Canada, where there’s a lot of starlight and not a lot of cable television, so your imagination wandered with the books you were reading and everything else.”
Derm’s inspiration for fighting fires came from an early memory of a hot summer in Canada where there was a major forest fire that broke out twenty miles from the Hikisch’s house. “There’s this one photo of me where it’s 90 degree weather, and I’m standing in a little kid’s paddle pool. There’s a giant column of smoke behind me, and I have this little hat on and I’m smiling away, half toothless, just a beautiful day. Later that summer we got our first cat, and I named the cat ‘Smoky’ and that always stuck with me…”
Fortunately, Derm was able to live out one of his two childhood dreams. While he never made it to the moon, he did fight forest fires for eight years. “The camaraderie of working in that industry was great,” he remembers, “but it was also a nice step into ecology and conservation and looking into all that. It was really really fun, I learned a lot, and it was hard work.”
But after eight years of living the dream, Derm started to notice the darker side of firefighting. “We were trying to do the right thing and all, trying to be stewards of the Earth when Joe-Schmoe left his campfire burning or was careless with a cigarette butt,” he admits, “but it ended up that we were part of the problem instead of part of the solution.”
Derm realized that from a fire-ecology standpoint, the firefighters were being too aggressive with putting out fires. Every now and then Derm and his squad would save urban houses from meeting their ashy end, but largely firefighting was serving to preserve the logging and forestry industry’s ability to make money.
“A lot of these fires are started by lightning, they’re supposed to run through and get rid of all the dead wood,” he explains. “But we were running a 97% success rate in putting out fires for the a stretch of seven decades, and the forestry industry wasn’t able to cut down these trees quick enough. That meant there were more dead trees and more sick trees, which turn into great food for beetles, and next thing you knew the pine beetle population was exploding.”
What’s more, although firefighting was putting Derm through college, he began to see the systemic effects of climate change compounding the effects of zero-tolerance firefighting. The province of British Columbia is 75% covered by forest, predominately pine, but in recent years the pine beetle population blew up and killed close to 70% of the forest cover. The unnaturally large collection of dead trees was partially responsible, but climate change was also to blame.
“Our summers were getting longer, there was less water, less snowfall, so we were getting longer fire seasons. I was skipping my first month of school by the end to stay longer, and I would end up working six months at a time. Because of warmer winters, the beetles were able to reproduce over the winter months. We weren’t getting that minus 40 Celsius or minus 10 Fahrenheit cold snaps, so the winter months didn’t put them into remission. They were able to double up and double up.”
Derm’s observations on climate change, coupled with his disappointment with the fire department’s approach to managing forest systems, led him to make a significant career leap.
“I knew I needed to take a step away from the situation of being reactionary, and get more in a position of sustainability,” he explains. “I had a good grasp on how business worked from my undergrad, and wanted to jump into that as a mechanism for change and making a difference. Money is making the world go around, especially the Western cultures. We either have to do a little Aikido and change its course to make it work for us in the way it should be in the first place, or we’re going to see it bring us down.”
So Derm stepped away from the trees, and into the buildings. He was hired by Red Bull to launch the now famous energy drink in Canada, before moving on to work in sustainability for a large corporate division of Proctor & Gamble. While Derm was frustrated by new management at Red Bull that wasn’t particularly supportive of staff, he notes that “Proctor & Gamble treated me really well and was a joy to work for.”
But trouble was brewing and it wasn’t long before Dermot’s moral compass began spinning in a new direction. “I spent a year speaking to doctors and specialists on pharmaceutical products through women’s health,” he recalls. “But after 3 months of doing it, I had a lot of trouble talking about these drugs–even though scientifically they were the best on the market– because they were more expensive than what my grandma would be getting from her health care coverage for generic, and only offered a slight increase in benefits.”
Derm also believed that both migraines and osteoporosis are largely preventable problems, thus increasing his discomfort with selling an “end of pipe product” and prescribing drugs for health problems that could be better solved by addressing poor diet, lack of physical activity outdoors, and unhealthy attitudes and lifestyles. “Three months in, I was already talking to doctors about all these issues,” he recounts, “But the doctors were treating the sick people and couldn’t reach out to the masses that were causing this problem.”
While Derm was at Redbull and Proctor and Gamble, he was involved in several initiatives of recycling, waste diversion, and greenhouse gas emission reduction, but felt it wasn’t enough. “I knew that the impact of big corporations like P&G was great,” he allows, “But they were moving too slowly and I wanted to move fast.” At the time, he was volunteering at the Sierra Club in the evenings and reflects:
“There were a few times when people would ask what ‘So, what do you do at your day job?’ That was pretty comical to explain. But I’m really glad I worked in a big-pharma setting for that year. It’s one thing to have an opinion through reading about it and hearing people talk about it, but it’s another thing to really get in there and know the in and outs of it.”
In the end, corporate pharmaceuticals was an area that Derm just couldn’t muster passion for, though he was paid well and loved the people he worked with. Derm didn’t know of social enterprise by its proper name at that time, being more well versed in environmental issues, but it wasn’t long before he was introduced.
After leaving Proctor and Gamble, Derm moved to Sweden to complete a Masters in Strategic Leadership towards Sustainability (alongside our very own beard Tim Nichols!) and worked for a consultancy using the Natural Step, a program he recommends highly to anyone looking for achieving sustainable development. (See Chris Pemberton’s Hub Story for more on Natural Step.) He then ventured to Dublin for a stint in sustainability consulting, then moved to Edinburgh where he joined a joint climate change program between the University of Edinburgh and a media company called Haymarket Media.
“Our mission was to carbon benchmark companies within certain sectors and get into the details of how they can compare their carbon emissions against one another. The UK and Europe are probably about 10 years ahead of North America because they have environmental regulations, and cap and trade, already in place and the initiatives there are showing a return on investment, especially in energy efficiency measures. Supermarkets, for example, have used it as their thing to champion to customers, because UK customers are really cocky about climate change,” he laughs.
During his Eurotrip, Derm was aware of B-Lab going on in the US. “This is a great idea,” he thought to himself, “It’s not only getting to the root of measuring all the issues, it’s also thinking about integrating sustainability into the DNA of a company, and getting that legal piece in there so people can actually talk about this at the Board of Director’s level every time they make a decision, rather than once a year.”
After four years of living in the UK, Derm decided to move to somewhere sunnier– and not just in terms of climate.
“The country is beautiful, but there are a lot of naysayers,” he explains, “As opposed to Californians, who are uber-optimists. I mean, this is entrepreneur-land. People are just so positive – everybody has a great idea, it’s pretty magical that way.”
Derm started courting B-Lab right before he moved to the Bay Area, and is now the Director of Business Development for B-Lab, the nonprofit that certifies and provides a framework for B Corporations. “B stands for benefit,” he explains. “Basically, we act as the third-party agent that certifies companies on how much good they do. We measure their positive impact on people and climate.”
Just as Aikido is performed by blending with the motion of the attacker, and redirecting the force rather than opposing it head-on, B-Lab uses synergy to blend companies’ immense drive to make money with their humanistic desire to innovate for social good.
“We look at how the company treats their employees, how they interact with the community, whether they have efficiencies within their facilities that are reducing greenhouse gasses, what they do with the waste, etc.” Derm lists, “We’re basically the LEED equivalent for companies.”
The Hub boasts a unique set of certified B-Corporations. As Derm points out, there’s no shortage of companies that do great things within their supply chain, or one product, or one facility management area. “But B Lab takes a holistic approach to certification,” he assures, “making sure that each company operates within the constraints of the environment, appreciating society, helping people get along, and keeping all the stakeholders happy.”
While some companies are great with their community, employees, and environmental factors, they’re still just building houses or creating bricks, Dermot qualifies. “It’s fine that they might still be certified as Benefit Corporations, but it’s business as usual– they’re not unique in that space.”
“When you look around the Hub, though, all the social enterprises here are really beneficial business models. Exponent, for instance, focuses on nonprofits by providing Salesforce integration, and Emerge focuses on non-predatory micro-finance and payday loans. These are great examples of companies right here that are doing it.”
BLab doesn’t just certify corporations and then abandon them to fend for themselves in the cutthroat jungle of red tape and corporate requirements. According to Derm, reforming the legal landscape is a crucial part of what sets B-Lab apart from its predecessors. “We’re essentially working on amending companies’ governing documents to say we shall consider stakeholders interest in our business decisions. Which sounds like a really simple one-liner, but it means a lot.” Without a binding legal agreement to honor non-monetary interest, mission-driven leaders in corporate structures are unable to pursue initiatives that could detract anything from the yearly margin.
“This gap in the corporate model that we have right now means that a lot of different companies are really dissatisfied that they can’t do as much as they wanted to originally,” Derm explains, “We’re trying to develop a corporate form of benefit corporations that allow companies legally to say ‘I’m a for-profit social enterprise and it is written into my governing documents that I’m considering stakeholder interests.’ So instead of a C-corporation or S-corporation, it’ll be called Benefit corporation.”
Legislation has already passed in Maryland, Vermont, Virginia, New Jersey, and Hawaii, and New York is through both the Senate and Assembly. “We’re waiting for the governor to sign there, and it’s being sent around the Senate in California right now. It’s real movement in these states,” Derm declares, “It’s going to be a great differentiator, so customers and procurement offices and clients can decide what kind of company they are looking for.”
The third pillar of BLab’s work, along with third party certification and policy work, is impact investing. The Global Impact Investment Rating System (GIIRS), the platform that B Lab uses to measure the positive impact of companies that are looking for capital investment, is also a close partner of SOCAP and GoodCap. B Lab is now working with financial investors to set up 25 funds using the GIIRS rating system for venture companies. In theory, Derm explains, “this will allow people who want to move beyond social responsible investing and traditional investing to invest in companies they know aren’t just making horrible things like landmines but are actually making something that’s great for people.”
Derm admits that a great deal of the work he does with BLab is data-centric. When asked about his affinity with the nuts and bolts of business, he draws a sports analogy explaining that,
“I definitely have always been a numbers guy, but I think it’s human nature… we like statistics and figuring out ways to measure performance to improve and compete.” Derm guesses that his sporting background may have groomed him for business; he notes that “business is a giant competition.”
While numerical figures can seem boring for those who haven’t learned to read them, Derm insists that there’s more to it than just number-crunching. “I like to describe it as taking a bunch of data, cleaning it, and making it dance,” he muses. “It’s creative businesses that are going to survive these days, and the ones that have a strong vision and are also operationally strong are going to be the super efficient ones. So I got into ratings and measuring company performance for that reason.”
But all dancing aside, Derm admits that the work of third party certification can get messy. “Tim and I had a professor who used to say that ‘we seek knowledge but we’re drowning information.’ And that’s true. Everyday, we see more emails, we see more ratings, we see more reports until we are drowning in information and digging through Salesforce to get to the insight and the connections that we need to grow to build awareness. Almost every business these days that’s has access to the Internet is being inundated by twitter feeds.”
So how does Derm find meaning in the madness? “There’s a lot of great stuff out there,” he answers, “We all know we can consolidate and aggregate it. But sometimes you just need to step back and be like,
“Wait a second, I’m in the business of being creative and all this stuff is a distraction. Step outside or go into the Hubble, take out a pen, and start jotting things down and see what you can create with being informed by things that are relevant to what you’re doing. There’s a lot of noise out there. You have to break through it.”
Sound advice for all of us. In fact, clarity is oftentimes one of the hardest goals to achieve in the world of social enterprise. Derm reflects that “Social enterprise is growing and it has become sexy so quickly that there are a lot of profit takers in the space. It’s really hard to determine who is doing it for personal gain, and who is doing it for the gain of the commons.” While Derm acknowledges that good intentions abound in the space, he guesses that a significant number of people are in it primarily for personal gains.
There’s no denying that money is a strong motivator in entrepreneur-land. “Whether its celebrity status, or they want to maximize their profits,” he reveals, “Whenever I get into a conversation with companies, the focus inevitably turns to certification and how the stakeholder piece comes into play. My knee jerk reaction is that ‘you’re in the wrong space, you’re doing this for the wrong reasons altogether,’ but there’s going to be a point, especially once your company starts making about 6 figures, where that urge for greed and self interest becomes stronger and stronger.”
“As you are a smaller company, your sense of nobility is good, but once you start, for the first time in your life, to get to that million dollar level, there’s a huge desire inside of most in people in the developed world to take money for themselves.”
Until you’re the size of Bill Gates or Warren Buffet, that is, and you have more money than you know what to do with. At that point, Derm explains, maybe you are willing to give half of it away. Until then, enormous profit retains its status as the Holy Grail of business and enterprise. B Lab tries to take that lofty goal back down to Earth.
“There are a lot of people who want to resist a framework for saying ‘no matter what size I am, I will donate 10%,’” Derm says. “We’re not saying you have to donate 100% of your profits, but we want to make sure it’s proportional. It’s up to your business, how much they want to donate, give away, or invest. But if they don’t want to even set up a framework for keeping themselves accountable, or keeping the compass towards sustainability, rather than for profit off of business ventures, then it could be a real problem.”
As with anything, there’s a diverse spectrum of motivations in the population Derm works with. “There’s more than one type of human out there,” he admits, “But the business-minded people tend to be the ones who go for profits, and that’s why they’re successful.” Desire for growth is not necessarily an evil force, he points out, it’s just something that needs to be tempered by a third party. “It’s like driving on the freeway,” he poses, “I want to go 200 miles an hour, so the government has to put a limit on 100 miles an hour so I don’t inadvertently run over anybody or careen off the road.”
Despite the challenges, Derm can’t see himself working in any other space.
“If you don’t believe in what you’re doing, you just won’t be able to get up in the morning and look at yourself in the mirror. That’s how it was with my pharmaceutical role. Such a valuable sector, but I just wasn’t happy with my day to day. In this space, I’m working for a cause where I can make money and make a difference, and that means a huge amount.”
Though it gets a bit too much sometimes, (and you find yourself rolling your eyes, like, ‘dude, that’s never going to work,’) Derm insists that social enterprise is a fantastic space to work and operate. “Everyday, I’m inspired by someone different. I mean, you have at least 3-dozen people in the Hub, or it might be someone screaming down the street,” Derm laughs. “It might be that down and out guy that inspires me more than anything.”
Though he got his start in Canada, it seems that Derm may be here to stay. “The Bay is beautiful and culturally amazing,” he marvels. “It’s such a cluster for sustainability and thoughtful people.” When he’s not putting out fires at B Lab, you’ll find Derm reading, drawing, or spending time outdoors. He also belongs to the notorious “Hub Whiskey Klub,” of Lindsey Franklin fame. Keeping in mind that not everybody will have a chance to sit down with Derm for an hour of riveting conversation, I offer this: http://www.bcorporation.net/faq. You might even consider becoming a B Corp! And if you’re hungry for more, check out Derm in BLab’s new upstairs office at Hub SF, in our exciting new upstairs expansion.
You all inspire me. Thanks for reading.
Samantha, Your Hub Stories Correspondent
Samantha is a staff blogger for the Hub Bay Area. She designed and launched the Hub Stories Project in January of 2011 in an attempt to capture the unique narratives of Bay Area change-makers as they help to build a better world from within the Hub community. She also writes a travel blog and is currently based in Tel Aviv, Israel.