Group 5_La Fageda Report

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Business in Society: Business Mindset La Fageda 1 BUSINESS MINDSET LA FAGEDA GROUP 5–MARKETING MANAGEMENT ANDREA BIFULCO DIANA DOUGLAS ALBA MOLINERO AME OLVERA PHILIPP ROSENBAUER

Transcript of Group 5_La Fageda Report

Business  in  Society:  Business  Mindset                                                                                                                                La  Fageda      

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ð  BUSINESS  MINDSET  

LA  FAGEDA  

GROUP  5  –  MARKETING  MANAGEMENT    ANDREA  BIFULCO  

DIANA  DOUGLAS  ALBA  MOLINERO  AME  OLVERA  

PHILIPP  ROSENBAUER  

Business  in  Society:  Business  Mindset                                                                                                                                La  Fageda      

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Table  of  Contents    INTRODUCTION  .............................................................................................................................  3  BUSINESS  MINDSET  ........................................................................................................................  3  

Philosophy  .............................................................................................................................  4  Motivation  ............................................................................................................................  5  Business  approach  ................................................................................................................  5  Actions  ..................................................................................................................................  5  Business  mindset  matrix  .......................................................................................................  7  

IMPLICATIONS  ...............................................................................................................................  8  Underperformance  trap  ........................................................................................................  8  

RECOMMENDATIONS  .....................................................................................................................  9  REFERENCES  ...............................................................................................................................  10  APPENDIX  ..................................................................................................................................  11  

Appendix  1  –  Key  figure’s  la  Fageda  2010  ..........................................................................  11  Appendix  2  –  Business  Mindset  Comparison  .......................................................................  12  Appendix  3  –  Interview  transcript  (english  translation)  ......................................................  13  

 

     

Business  in  Society:  Business  Mindset                                                                                                                                La  Fageda      

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Introduction  La  Fageda  is  a  cooperative  with  a  social  initiative.  It  was  founded  by  Cristobal  Colón  in  1982  with  the  aim   of   integrating   people  with   intellectual   disabilities   from   La   Garrotxa   region   (Girona,   Catalonia,  Spain)  back  into  society.1  

La   Fageda’s  mission   is   to   provide   labor   and   social   integration   for  mentally   disabled   people   while  creating   a   long-­‐term   sustainable   business.   It   currently   employs   276   workers,   of   which   160   suffer  some  form  of  mental  illness  or  severe  mental  disorder.2  

The   business   activities   of  the   cooperative   are  predominantly   agricultural  and   are   organized  under  the   administrative   framework   of   a   special   “Special   Work   Centre”   under   Spanish   law.   La  Fageda’s   business   operations   are   dairy   production,  cattle   care   activities,   gardening   services,  a  nursery  and  a   craft  workshop.   Specific   to   its   dairy   production   La   Fageda   produces   18   flavors   of  yogurt  and  several  different  kinds  of  ice  cream  and  puddings.  

In  2009  the  cooperative  totaled   9.8   million  Euros   in   revenues,  which,   in   2010   grew   to  10.75  million  Euros  (see  Appendix   1   for  Company   Statistics).3    La   Fageda   reinvests   all  its   earnings   to   provide  worker   assistance   and  improve   the   company‘s  facilities.   The   following  graphic  summarizes  La  Fageda’s  business  model.    

La  Fageda  not  only  provides  the  mentally  disabled  people  employment  opportunities  but  more  with  a  purpose.  The  cooperative  implements  a  policy  of  creating  job  openings  for  all  applicants  that  suffer  from  mental   illness   in   the   region;   for   that   reason   La   Garrotxa   has   an   unemployment   rate   of   0%  among  people  with  mental  illness.4  

La  Fageda  has  become  an  emblematic  company  in  La  Garrotxa,  with  a  high  reputation  in  Catalonia.  The   company’s   brand   dignifies   and   enriches   the   primary   sector   of   Catalonia   and   each  month,   La  Fageda  sells  3  million  multi-­‐flavored  yoghurts,  made  from  only  natural  ingredients.  The  cooperative  distributes  its  products  within  the  Catalonia  region,  and  until  recently  has  expanded  its  distribution  to  Andorra  and  Menorca.  

Business  mindset  In  order   to   identify   the  business  mindset  of   La   Fageda,  we  analyzed   the   company’s  main   features  within  the  four  categories  Philosophy,  Motivation,  Business  Approach  and  Actions  to  help  determine  La  Fageda’s  position  in  the  business  mindset  matrix.                                                                                                                            1La FagedaSustainabilityReport 2010: Memòria de Sostenibilitat 2010, p.2-3. 2Albert Riera (Communications Director), personal communication, November 7, 2011. 3La FagedaSustainabilityReport 2010: Memòria de Sostenibilitat 2010, p.7. 4La FagedaSustainabilityReport 2010: Memòria de Sostenibilitat 2010, p.7.

Figure  1:  Business  Model  

Business  in  Society:  Business  Mindset                                                                                                                                La  Fageda      

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Philosophy  The  cooperatives’  primary  goal  is  to  create  social  value  and  its  business  activities  are  understood  as  a  means   to  achieve   this  value.  One  of   the  main   reasons   for  La  Fageda’s   success   is   the  cooperatives’  founder,  Cristobal  Colón.  Colón  was  elected  Social  Entrepreneur  of  the  year  2005  Spain,  by  Schwab  foundation5.  After  working  in  mental  hospitals  for  more  than  a  decade,  Colón  founded  La  Fageda  in  order   to   improve   his   patients’   conditions   by   applying   work   therapy   in   a   business   context.   Colón  himself   describes   the  business   as   a  mere  means   end   and   states:   “We  believe  we  don’t   just  make  yoghurts  here;  we  are  here  to  help  a  group  of  people  to  live  a  better  life”.6  He  has  also  stated  that  if  the  business  does  not  become  sustainable  he  would  simply  try  something  else  to  help  the  mentally  ill  in  the  region.  

As   such,   the   cooperative   focuses   on   the  well-­‐being   of   its   key   group  of   stakeholders:   the  mentally  disabled  community  from  La  Garrotxa;  and  works  to  provide  them  with  professional  treatment  and  daily  monitoring  according  to  their  specific  needs.  

The  following  organizational  values  are  the  pillars  from  which  La  Fageda  builds  its  welfare  approach  policy7:    

• The  person  as  the  axis.  This  value  defines  the  organizational  culture;  it  focuses  on  the  person  on  the  first   level.  This   is  the  first  value  of  La  Fageda,  thus  it   is  the  final  aim  of  the  project:  making  the  life  of  the  people  working  there  better.  

• Integrity.   It  sets  the   relation   to  the   remaining   shared   values,   the   consistency  and   compliance  with  them.   ”If   we   are   not  complete,   we   cannot  build  confidence  in   people  or   even  in   the  project”.8  

• Trust.   Every   person   involved   in   the   project   is   taken   into   account   and   accepted   as   they   are;  everyone  has  different  capabilities  and  working  with  mentally  disabled  people  can  represent  a  challenge,  but  trust  is  essential  in  a  project  like  this.  

• Responsibility.  With  regard  to  social  responsibility,  the  project  assumes  that  the  function  carried  out  in   society  is  more  than  the   generation  of   capital  assets,   as   it  is   responding  to   the   needs   of  people  who  are  not  able  to  work  properly;  the  project  responds  to  those  needs  in  a  responsible  way  creating  job  opportunities  and  a  work  environment  of  the  highest  quality.

• Effort.  To  make  a  project   like  La  Fageda  succeed,  there  are  several  challenges  that  need  to  be  overcome  and  the  only  way  to  do  this  is  with  effort.  “Effort  is  an  attitude  that  goes  hand  by  hand  with  growth,  and  the  growth  of  the  company  is  only  possible  thanks  to  the  effort  of  the  people  who  work  here”.9  

• Illusion.  When  an  organization  is  able  to  generate  enthusiasm  among  its  members,  it  motivates  them.  This  can  be  defined  as  the  mental  effort  to  do  things  just  because  the  work  force  enjoys  doing  these  things.  This  illusion  stems  from  the  confidence  of  the  people  involved  in  the  project.  If  people  have  faith  in  the  project  they  will  be  motivated  to  perform  their  functions  as  good  as  they  can.  

                                                                                                                         5Social Entrepreneur Profiles, Retrieved from www.schwabfound.org, November 25th 2011 6 Arenas, D., Lamolla, L., &Vernis, A (May 2009). Social Enterprise Knowledge Network: La Fageda Case, p.9. Purchased from Harvard Business

School. 7La FagedaSustainabilityReport 2010: Memòria de Sostenibilitat 2010, p.10. 8La FagedaSustainabilityReport 2010: Memòria de Sostenibilitat 2010, p.15. 9La FagedaSustainabilityReport 2010: Memòria de Sostenibilitat 2010, p.18.

Business  in  Society:  Business  Mindset                                                                                                                                La  Fageda      

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Motivation  As  mentioned,   the  motivation  to   found  La  Fageda   is  purely  social.  The  cooperative  was  created  to  solve   a   specific   social   problem,   the   ‘social   and  work   integration   of   disable   and  mentally   ill   people  from  La  Garrotxa’.  Its  primary  purpose,  therefore,  has  always  been  to  improve  the  quality  of  life  of  its  employees  and  this  is  implied  in  all  the  initiatives  La  Fageda  undertakes.  

Business  approach  As  La  Fageda  is  driven  by  Cristobal  Colón’s  humanistic  values,  the  social  responsibility  undertaken  by  La  Fageda  is  part  of  its  understanding  of  doing  business.  Coherently  with  its  motivation  of  integrating  the   local   community,   it   has   a   zero   discrimination   policy,   for   which   it   is   committed   to   provide  employment   to  all   the  mentally  handicapped  people   from  La  Garrotxa  holding  a  valid   certification  document   that  allows   them   to  work.10   The  organization  does  not   cap  employment,   therefore,   the  number   of   potential   employees   and,   in   fact,   the   unemployment   rate   amongst   handicapped   and  mentally  ill  people  is  zero  percent  in  this  region.11  Consequently  it  can  be  stated  that  the  social  goal  is  ranked  above  all  business  matters.  

Actions  When   La   Fageda  was   founded,   the   Spanish   government   viewed   it   as   unfeasible   to   run   a   business  with   mentally   handicapped   people   as   employees.   La   Fageda’s   business   model   is   the   core   of   its  innovation   and   is   considered   radically   innovative   at   the   time.   The   company   provides   mentally  disabled   people   with   jobs   and   makes   them   a   productive   segment   of   society   when   society   fears  and/or   suspects   them  of  not  being  competent  and  able.  This   is  an  example  of  how  La  Fageda  has  used  second-­‐order  innovation  to  focus  on  the  root  of  the  social  problem.  

The   company   provides   employment   opportunities   for   these   people   and   helps   them   become  proactive  members  of  the  community.  

Instead   of   following   a   triple   bottom   line   approach,   the   company   focuses   more   on   its   social   and  environmental  performance  than  on  its  economic  return.  For  example,  this  is  demonstrated  by  the  fact  that  they  reinvest  all  their  annual  profits  in  the  company  to  keep  improving  the  social  services  they  offer   to   their  employees  and  maintaining   its  100%  environmentally   sustainability.  This   is  also  reflected   in   the   business   model   which   is   composed   of   two   parts:   economic   and   social   and  environment  services.  

 

 

 

 

 

 

 

                                                                                                                         10Arenas, D., Lamolla, L., &Vernis, A (May 2009). Social Enterprise Knowledge Network: La Fageda Case, p.9. Purchased from Harvard Business

School. 11La FagedaSustainabilityReport 2010: Memòria de Sostenibilitat 2010, p.10.

Business  in  Society:  Business  Mindset                                                                                                                                La  Fageda      

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Economic  services  

The  profits  generated  by  operations  are  reinvested  into  the  company  allowing  it  to  offer  social  and  environmental   services.   The   primary   operations   of   the   company   include   dairy   production,  landscaping   services,   nursery,   and   cattle   care   facilities.12   These   operations   allow   the   company   to  provide  social  services  and  environmental  services.  

Social  and  Environmental  services  

La  Fageda’s  social  services  mainly  revolve  around  providing  professional  and  personal  development  for  the  employees.  The  company  employs  three  psychologists,  five  social  workers,  social  educators,  and  monitors.13  These  employees  support  the  mentally  disabled  employees  through  assisting  them  individually  and  offering  therapeutic  prescriptions.  A  key  feature  of  this  is  the  job  rotation  policy  at  La   Fageda.   If   employees   are   overwhelmed   or   desire   to   switch   jobs,   their   preferences   are   of   high  priority  and  action  is  taken  in  transferring  them  to  other  jobs.14  Also,  monitors  provide  assistance  in  work  and  supervision.  Monitors  are  knowledgeable  in  dairy  farming  and  have  leadership  and  conflict  resolution   skills.15   They   play   a   primary   role   in   supervising   employees   and   helping   them   with   the  assigned   tasks.   Furthermore,   rehabilitation,   recreational   and   therapeutic   activities   are   always  available  to  employees.    

La   Fageda   also   provides   complimentary   social   services   through   its   private   foundation   called  “Fundación  Privada  de  ServiciosAsistenciales  de  La  Garrotxa”.16  

La  Fageda  is  located  in  a  natural  reserve,  La  Fageda  d’en  Jordà,  in  the  middle  of  the  Parc  Natural  de  la  Zona  Volcànica  de  la  Garrotxa.17This  means  they  have  to  abide  by  restrictions  on  its  activities  and  take  certain  precautions  to  preserve  the  environment.    The  company  complies  with  the   ISO  14001  environment   quality   standard.18   It   practices   energy   and  water   conservation,   waste   reduction   and  treatment,  and   recycling  activities.   La  Fageda   reaches  out   to   the  community  by  providing  cleaning  and  maintenance  services  of  public  green  areas  with  its  landscape  services  and  reforestation  plants  grown  in  its  nursery.19  These  projects  are  highly  regarded  to  in  La  Garrotxa  region.    

 

     

                                                                                                                         12La Fageda. 2010. Retrieved from www.fageda.com, 8 November 2011. 13Arenas, D., Lamolla, L., &Vernis, A (May 2009). Social Enterprise Knowledge Network: La Fageda Case, p.8-9. Purchased from Harvard

Business School. 14Albert Riera (Communications Director), personal communication, November 7, 2011. 15Arenas, D., Lamolla, L., &Vernis, A (May 2009). Social Enterprise Knowledge Network: La Fageda Case, p.9-10. Purchased from Harvard

Business School. 16La Fageda Sustainability Report 2010. Memòria de Sostenibilitat 2010, p.15. 17Arenas, D., Lamolla, L., &Vernis, A (May 2009). Social Enterprise Knowledge Network: La Fageda Case, p.11. Purchased from Harvard

Business School. 18La Fageda. 2010. Retrieved from www.fageda.com, 8 November 2011. 19La Fageda. 2010. Retrieved from www.fageda.com, 8 November 2011.

Business  in  Society:  Business  Mindset                                                                                                                                La  Fageda      

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Business  mindset  matrix  Taking  into  account  all  above  considerations,  La  Fageda  can  be  identified  with  the  Idealist  mindset,  as  it  is  driven  by  humanistic  values  and  its  value  creation  is  focused  on  just  one  dimension,  the  social  bottom-­‐line.  Therefore,  as  we  can  see  in  the  image  below,  La  Fageda  is  placed  in  the  upper-­‐left  part  of   the   graph,   the   idealist,   representing   an   altruistic   mindset   and   a   “We   do   business   for   society”  approach.  

As   can   be   seen   from   the   graphic   it   is  difficult   to   compare   La   Fageda   with  other   companies   from   the   food   and  beverage   industry   described   in   the  Business   in   Society   course,   as   their  positioning   in   the   matrix   and   size   of  their   business   is   very   different   from   La  Fageda’s.  

The  business  mindset  matrix  also  shows  the   positioning   of   other   companies  from   the   food   and   beverage   industry  that  were  described   in   the   course.   It   is  worth   mentioning   that   most   of   these  companies   have   undergone   a   shift   in  business   mindset   in   the   past.   Today  

many   companies   from   the   food   and   beverage   industry   incorporate   multi   dimensional   goals   and  values,   something   that   can   especially   seen   in   companies   such   as   McDonald’s   and   PepsiCo,  companies  that  have  been  stereotypical  American  for  profit  corporations  in  the  past.    Naturally,  as  most  companies  were  initially  founded  on  a  for  profit  basis,  contrary  to  La  Fageda,  these  companies  mainly   focused   on   financial   performance   in   their   actions   and   where   of   the   economist   type.   It  appears  however,  that  a  shift   in  business  mindset  has  been  taking  place   in  the  whole   industry  and  social  and  environmental  values  are  today  an  important  part  of  companies  in  the  food  business.    

Most  relevant  for  La  Fageda  is  the  positioning  of  Nestlé  in  the  matrix,  as  the  two  companies  directly  compete   for   market   share   in   the   Diary   super   premium   market   in   Catalonia.20   While   Nestlé   is  positioned  as  a  strategist  that  has  a  financial  goal,  La  Fageda  is  able  to  produce  a  superior  product,  even   to   large   multinational   companies   because   it’s   different   focus.   La   Fageda   produces   superior  quality  dairy  products  in  terms  of  taste/flavor,  texture,  and  acidity.  It  controls  the  whole  production  process   from   raw   material   usage   to   manufacturing   and   uses   milk   from   its   cows   and   runs  microbiological   tests   on   the  milk   for   quality   control   purposes.   This   is   what   La   Fageda   calls   a   real  yogurt  farm.  To  further  provide  a  clear  summary  that  compares  La  Fageda  with  the  idealist  type  of  business  mindsets,  Appendix  2  describes  the  main  features  of  the  idealist  mindset  and  how  they  are  applied   in   La   Fageda.   The   comparison   is  mainly   based   on   the   self-­‐understanding   of   La   Fageda,   as  provided  in  the  personal  interview  we  undertook  with  Albert  Riera,  Communications  Director,  and  in  the  most  recent  corporate  documents21.        

                                                                                                                         20Extracted from Brand Management Lecture: Retail Branding, Professor Oriol Iglesias, 10th November 2011. 21 Appendix 3 – Interview transcript (English translation)

Figure  2:  Business  Mindset  

Business  in  Society:  Business  Mindset                                                                                                                                La  Fageda      

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Implications  The  following  discusses  the  implication  that  the  business  model  and  mind-­‐set  of  La  Fageda  has  for  its  operations  and  long  term  sustainability.  

Underperformance  trap  As  it  is  common  for  organizations  located  in  the  idealist  part  of  the  business  mindset  matrix  to  suffer  the  risk  of  running  into  an  underperformance  trap,  La  Fageda  does  so  too.  The  combination  of  the  following  three  aspects  creates  a  risk  to  fall  into  this  trap.  

• Scope  of  business:  The  Company’s  focus  is  limited  to  La  Garrotxa  region  in  Spain.  The  position  of  the  cooperative  in  the  natural  reserve  poses  a  barrier,  as  the  possibility  to  expand  operations  is  naturally   limited  to   the  area.  Further,   the  size  of   the  operations   is  unclear  as   there  could  be  a  natural  limit  to  the  ability  to  employ  mentally  ill  in  a  larger  scale  business.  Thus  far  La  Fageda  has  been   able   to   employ   all   mentally   ill   that   applied   to   work   for   the   business,   but   in   terms   of  organization  unforeseen  challenges  may  occur  beyond  a  certain  size  of  the  operations.    

• One-­‐dimensional  goal:  La  Fageda  reinvests  100%  of  its  profits  back  into  the  business.  In  the  long  term,  the  purely  social  focus  causes  it  to  miss  out  on  generating  revenues  that  can  be  reinvested  to  improve  care  services  and  increasing  added  social  value.  By  applying  all  earnings  to  improving  the  social  cause  the  cooperative  might  fall  short  on  business  oriented  investment  that  allows  La  Fageda   to   further   improve   and   expand   business   and   therefore,   long   term   sustainability   of  operations.  

• Financial  dependence:  Although  the  2010  income  statement  reported  more  than  800,000  Euros  in   earnings   this   number  has   to  be   interpreted   carefully.   In   the   financial   statements   La   Fageda  currently   reports   about   1.4   Million   Euros   in   subsidies   and   donations.   Although   these   two  numbers  might  suggest  that  the  cooperative  is  currently  not  sustainable  with  negative  earnings  of  600,000  Euros  the  situation  is  not  that  simple.  Being  a  “Special  Work  Center”  under  Spanish  law   entitles   La   Fageda   to   receive   certain   advantages   such   as   a   very   low   tax   rate   and   further  subsidies.   Therefore   it   would   be   inaccurate   if   these   subsidies   and   donations   were   simply  deducted  from  current  earnings  to  try  and  determine  the  sustainability  of  the  cooperative.  That  being  said,   the  company   receives  certain  government  support  but  also  private  sponsorship.   La  Fageda   is   probably   financially   sustainable   because   of   its   special   status,   but   it   is   vulnerable   to  economic  conditions  because  of  private  contributions  from  local  entities  such  as  La  Caixa.22  This  vulnerability  can  also  be  seen  in  the  statement  made  by  the  communications  director  during  our  personal  interview.  Because  of  current  economic  conditions  La  Fageda  is  not  sure  whether  it  will  be  able  to  uphold  its  policy  to  employ  all  mentally  ill  applying  to  La  Fageda  in  2011.    To   conclude,   La   Fageda   has   a   special   business   status   that   provides   the   cooperative   with  advantages   that   allow   it   to  be   financially   sustainable.  At   the   same   time   it   is   still   vulnerable   to  external   factors   that   determine   the   amount   of   private   contributions   that   it   can   attract   from  sponsors.  

   

                                                                                                                         22La Fageda Financial report, 2010

Business  in  Society:  Business  Mindset                                                                                                                                La  Fageda      

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Recommendations  Given  the  structure  of  the  business  La  Fageda  has  been  able  to  create  a  sustainable  business  that  is  successful  in  addressing  a  social  problem  in  La  Garrotxa  region.  The  analysis  showed  that  the  mind-­‐set  of  La  Fageda  is  highly  innovative  in  terms  of  business  model  and  that  many  of  the  multinational  food  companies  are  now  shifting  their  business  mind-­‐set  towards  a  more  integrated  approach  that  also  incorporates  some  of  La  Fageda’s  ideologies.    

Being   a   pure   idealist   type   organization   however   poses   the   threat   of   financial   dependence   on  external  sources.  Also,  the  initiative  and  vision  from  the  founder  Cristobal  Colon  plays  an  important  role   in   the  success  of   the  organization.  For  La  Fageda   it  will  be   important   to  become   independent  and  therefore  sustainable  in  the  long-­‐term,  as  the  current  economic  situation  in  Spain  already  poses  a  threat  to  the  business  model.    

Financial  independence  

In  order  to  become  less  vulnerable  to  external  conditions  La  Fageda  should  try  to  position  itself  in  a  larger  network  of  companies  and  organizations   in   its   industry.  By  creating  a  strong  network,  based  on   long   term  partnerships   it  will   create   a   situation  where   other   companies   and   organizations   are  dependent   on   it   as   they   are   an   essential   part   of   each   other’s   business.   In   that   sense   La   Fageda  becomes   less   dependent   on   donations   and   contributions   from   others   as   the   support   it   receives  would   shift   towards   non-­‐financial   services   rather   than  mere   financial   aid.   The   goal   for   La   Fageda  should   be   to   create   a  mutually   beneficial   relationship  with   other   businesses   in   order   to   decrease  financial  dependence  on  currently  one-­‐sided  donations  from  others.  

Management  independence  

La   Fageda   has   been   founded   by   Cristobal   Colón,   a   visionary   social   entrepreneur  who,   to   this   day  commits   100%   of   his   time   and   energy   to   the   business.  Much   of   the   past   success   of   the   business  model  can  be  attributed  to  his  person  and  it  appears  that  La  Fageda,  to  an  extent,  is  dependent  on  Cristobal   Colón.   In   order   to  become   really   sustainable   in   the   long   term   it  will   need  people  with   a  similar  vision  and  motivation  and  it   is   important  to   look  for  these  people  early  on.   In  order  for  the  business  model  to  be  fully  independent  it  will  be  important  for  La  Fageda  to  find  ways  that  allow  the  cooperative  to  become  less  vulnerable  to  the  current  management  of  the  organization.  

   

Business  in  Society:  Business  Mindset                                                                                                                                La  Fageda      

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References    

Albert  Riera  (Communications  Director),  personal  communication,  November  7,  2011.    

Arenas,  D.,  Lamolla,  L.,  &Vernis,  A  (May  2009).  Social  Enterprise  Knowledge  Network:  La  Fageda  Case.  Purchased  from  Harvard  Business  School.  

La  Fageda.  2010.  Retrieved  from  www.fageda.com,  8  November  2011.        

La  Fageda  Sustainability  Report  2010.  (Memòria  de  Sostenibilitat  2010).  

La  Fageda  Financial  Report,  2010  

Profile  of  Colon  Cristobal:  Schwab  Foundation  for  Social  Entrepreneurs.  Retrieved  from  http://www.schwabfound.org/sf/SocialEntrepreneurs/Profiles/index.htm?sname=168495&sorganization=0&sarea=0&ssector=0&stype=0,  9  November  2011.    

 

   

Business  in  Society:  Business  Mindset                                                                                                                                La  Fageda      

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Appendix  

Appendix  1  –  Key  figure’s  la  Fageda  2010    

Main  magnitudes  (31.12.2010)    

Total  number  of  assisted  people  and  workers     276  

People  with  certificate  of  disability   160  

People  who  receive  residential  services   60  

Unemployment  of  mentally-­‐handicapped  people  in  La  Garrotxa   0%  

Annual  Turnover  in  Euros   10.750.970  

Evolution  regarding  the  previous  exercise   10%  

Annual  units  (yoghurts)  produced   40.000.000  

Number  of  Friesian  Cows     500  

Investment  in  euros   816.000  

Job  positions  created  in  2010   8  

People  employed  in  other  companies  of  the  region     17  

Source:  Sustainability  Report  (Memòria  de  Sostanibilitat  2010)  

 

 

 

 

 

 

 

 

 

 

 

 

 

Business  in  Society:  Business  Mindset                                                                                                                                La  Fageda      

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Appendix  2  –  Business  Mindset  Comparison    

  Idealist  mindset   La  Fageda’s  implications  

Philosophy   -­‐   Main   purpose:   to   create  social  value  -­‐   Enterprise   is   embedded   in  society,   organization   for  society    

• “We   believe   we   don’t   just   make   yoghurts  here;  we  are  here  to  help  a  group  of  people  to  live  a  better  life”.  

Motivation   -­‐Drivers:   social   agenda   and  humanistic  values  -­‐   To   help   solve   social  problems,   responsibility   as  an  end  in  itself  

• To   provide   the   best   care   solution   for   adults  with  mental   illnesses  and  mental  disabilities  from  the  region  of  La  Garrotxa,  based  on  the  therapeutic  aspects  of  work.  

 Business  approach   -­‐Social  cause  

-­‐  CSR  part  of  DNA  -­‐   Guiding   question:   How   to  help  stakeholders  in  need?  

• “We   will   grow   enough   to   guarantee   the  project’s   survival.   To   accomplish   that   goal,  we  are  working  in  many  future  projects…  but  we   are   atypical   businessmen,   as   our  business  operations   serve  a  higher  purpose:  to   enhance   the   living   conditions   for   the  mentally-­‐challenged  people  who  work  in  this  project”.  

 Action   -­‐Social,   environmental   or  

humanitarian  bottom-­‐line  -­‐  Proactive  CSR  approach  -­‐   CSR   driven   by   social  purpose  

• La  Fageda  has  undertaken  a  business  project  with  the  goal  of  offering  a  paid  job  to  these  people   in   order   to   give   them   the  constitutional   right   of   having   a   decent  working  position.  

• “We   take   care   of   our   people,   because  human  capital   is   our  most   significant  asset.  And   the  people  who  work  here   feel   there   is  no  greed  in  our  organization.“

 

 

 

 

 

 

 

 

 

 

 

Business  in  Society:  Business  Mindset                                                                                                                                La  Fageda      

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Appendix  3  –  Interview  transcript  (English  translation)    

Interview  to  Albert  Riera,  LA  FAGEDA  Communication  Director    

7th  November  2011  

 

Do  you  have  a  Corporate  Social  Responsibility  annual  report?    

No,   we   have   the   Sustainability   Annual   Report,   which   includes   the   social,   economic   and  environmental  aspects  of  the  company.  We  currently  have  the  2009  report  available  in  Spanish  and  Catalan,  but  we  have  not  finished  the  2010  report.  

Is  La  Fageda  a  non-­‐profit  cooperative?  

Yes,  it  is  a  social  business.  It  is  a  company  based  on  people  and  a  set  of  values  that  has  to  work  in  a  specific  area  in  collaboration  with  the  local  agents  at  the  social,  economic  and  even  political  levels.  Furthermore,  it  works  with  the  so-­‐called  “allies”,  strong  companies  which  provide  us  with  things  that  we  cannot  afford.  These  companies  collaborate  with  us  because  they  find  the  project  interesting  and  we  receive  market  research  reports,  technology  for  the  factory  or  marketing  reports.  

Do  these  companies  act  as  donors?  

No,  because  we  understand  donors  as  passive  agents  that  just  contribute  with  money.  Our  allies,  on  the   contrary,   are   involved   in   the   project   and   take   advantage   of   it,   sometimes   through   their  foundations.  With  the  increasing  CSR  development,  a  lot  of  companies  have  a  foundation  nowadays.  This  is  like  the  social  part  of  the  business,  where  social  actions  are  undertaken  and  sometimes  they  find   that   La   Fageda   is   in   line   with   their   actions   and   they   decide   to   collaborate   with   us.   They  contribute  money,  or  hours  of  a  senior  or  junior  consultant,  studies,  knowledge,  etc.  

¿Do  these  companies  have  activities  at  a  national  level  or  just  in  Catalonia?    

We  collaborate  with  different  kinds  of  companies.  There  are  some  big  companies  such  as  Accenture,  Kantar,  financial  institutions…This  is  our  way  of  working.  

We   are   a   non-­‐profit   organization,   but   this   does   not   mean   that   we   are   not   interested   in   making  profits,   because   otherwise   the   business   would   not   be   economical   sustainable.   All   our   profits  however  are  reinvested  in  the  organization.  There  are  no  shareholders  because  it   is  a  cooperative.  The  owners  of  the  company  are  the  working  partners,  who  contribute  with  their  work  and  own  the  company,  but  they  are  not  investors.  There  is  no  capital,  so  capital  is  not  the  most  important  asset,  but  the  employees.  

Which  are  the  main  financial  resources?  

They   are   basically:   profit   reinvestment,   donations   and   leverage,   because   we   also   ask   banks   and  other  official  credit  institutions  for  lines  of  credit.  

Business  in  Society:  Business  Mindset                                                                                                                                La  Fageda      

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And  do  you  also  receive  subsidies  from  the  Spanish  government?  

Yes,  we  receive  subsidies,  as  we  are  a  Special  Working  Centre,  which  is  a  type  of  company  protected  by  the   law.  Since  more  than  the  70%  of  the  total  employees  are  disabled  people,  the  Government  gives  us  12,000  euros  for  every  new  job  position  and  it  pays  half  of  the  basic  interprofessional  salary,  which  are  300  euros  per  month  for  every  worker  with  a  disability  certificate.   It  also  helps  us  hire  a  psychologist  per  100  employees.  

Comparing   us   with   other   companies,   we   have   a   more   developed   social   activity,   as   we   have   3  psychologists,  4  or  5  social  workers,  social  educators  and  monitors.  They  support  all  the  production  activity  at  a  human  level.  

Do  disabled  employees  have  their  work  tasks  and  also  daily  assistencial  services?  

Yes,  the  assistencial  services  are  included  in  their  daily  work.  We  do  not  provide  a  medical  treatment  because  we  are  not  part  of  the  health  network,  but  we  work  in  collaboration  with  the  public  health  care  services.  We  undertake  a  tailored  monitoring  linked  to  the  work  they  do  and  we  provide  them  with  accommodation  in  case  they  do  not  have  family.    

Are  there  just  three  psychologists  for  all  the  employees?  

Yes,  but  there  are  also  social  workers.  We  have  10  pure  assistencial  professionals  in  the  production  area,   plus   the   ones   who   are   in   the   houses.   There   is   more   assistencial   part   than   in   any   other  company,  even   in   the   factory.  There  are   two  or   three  assistencial  monitors   that  are   taking  care  of  the  employees,  monitoring  the  work  shifts  to  ensure  everything  is  in  order  and  that  employees  are  not  stressed.  

Are  people  from  other  regions  joining  La  Fageda  or  is  it  restricted  to  La  Garrotxa  inhabitants?  

Legally,   we   can   just   hire   people   from   the   area   of   La   Garrotxa,   which   is   a   region   with   50,000  inhabitants.  This  is  because  the  social  services  in  Catalonia  are  divided  by  regions,  every  region  has  its  services  and  we  act  as  part  of  these  social  services  of  La  Garrotxa.  However,  we  hire  all  the  people  from  La  Garrotxa  who  hold  a  valid  disability  certificate,  there  is  no  waiting  list.    

The  problem   is   that   now,  with   the   current   crisis,   the  Government   is   telling   us   that   it  will   not   pay  more  to  the  new  position,  so  without  the  governments  help;  we  may  not  be  able  to  hire  new  people.  But  this  is  how  we  have  been  acting  so  far.  

 

La  Fageda  is  made  up  of  a  cooperative  and  two  foundations,  could  you  explain  us  the  role  of  each  one  of  them?  

Yes,  this  a  bit  complicated.  The  cooperative,  La  Fageda,  was  created  in  1982.  With  the  development  of  the  houses  and  the  purely  assistencial  activities  that  were  not  related  to  the  work  framework,  a  

Business  in  Society:  Business  Mindset                                                                                                                                La  Fageda      

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new   foundation  was   created,   to   be   in   charge   of   all   the   assistencial   part   and   separate   it   from   the  production  area.  

Five  or  six  years  ago,  we  decided  to  create  another  foundation  to  concentrate  the  general  services  of  La   Fageda.   This   allowed  us   to  organize   the   company  better   and  allocate  part   of   the   cooperative’s  patrimony   in   the   foundation   as  we   started   to   earn   a   lot   of  money.  As   the   foundation  has   a   state  guardianship,  there  is  not  private  appropriation.  And  this  is  how  the  Sentit  foundation  was  created,  to  be  in  charge  of  patrimonial  issues  and  to  manage  the  central  services.  The  employees  who  are  not  working  in  the  factory  but  in  the  central  services  are  hired  by  this  foundation.  

Its  name,  Sentit,  “sense”  in  English,   is  due  to  the  fact  that  Cristóbal,  La  Fageda’s  founder,   is  always  talking  about  the  sense  of  the  work;  he  always  says  that  “the  sense  of  the  work  is  a  work  with  sense”.  

What  is  the  maximum  age  to  work  in  La  Fageda?  

There  is  no  age  limit,  because  we  also  have  services  for  retired  people,  which  is  like  a  social  club.  If  they  are  still  autonomous  and  they  do  not  have  a  family,   it  would  cruel  to  stop  provide  them  with  services,  so  they  come,  help  us  and  there  are  some  activities  for  them.  

Is  La  Fageda  a  signatory  of  any  principles  or  initiatives  such  as  Global  Compact,  UNPRI,  etc?    

No,   we   are   not   signatory   of   any   of   these   initiatives.   We   comply   with   the   ISO   9001-­‐2008quality  standard  and  the  ISO  14001,  environment  quality  standard,  and  we  are  subscribed  to  the  European  Charter  for  Sustainable  Tourism  (ECST).  

Which  are  the  environmental  measures  La  Fageda  undertakes?  

We   have   implemented   several   measures:   from   the   energy   conservation,   waste   reduction   to  recycling  activities.  Further,   the  company  reaches  out  to  the  community  by  providing  cleaning  and  maintenance   services   of   public   green   areas   with   its   landscape   services   and   reforestation   plants  grown  in  its  nursery.  We  are  located  in  a  natural  reserve,  so  the  environment  preservation  is  a  must  for  us.  

Which  would  be  La  Fageda’s  performance  indicators?  

Social  responsibility  isn’t  supervening;  it  is  original,  in  the  environment  and  in  the  social.  

How  where  you  granted  with  the  space  La  Fageda  is  located  now?  

The  company  was  born  at  the  same  time  when  the  “protected  space”  was  being  created;  during  the  Franquism   the  area  was  not  protected.   Just  when  La  Fageda  was  created   the  natural  parks  where  being   created  as  well   and   then   it   is  when   it  was   regulated,  urbanity  plans  where  made  where   the  rural  areas  and  urbanity  areas  where  defined.    

We  make  a  special  plan,  an  urbanity  plan  where  we  talk  with  the  government  agencies  and  we  tell  them  that  we  have  a  project  where  we  explain  the  uses  the  farm  will  have  in  the  next  10  years,  where  we   will   invest,   where   we   will   have   the   production   operations,   services,   etc.   and   the   government  approves  the  project,  because  the  project  puts  in  order  the  spaces.  

Which  are  the  growth  indicators?  

Business  in  Society:  Business  Mindset                                                                                                                                La  Fageda      

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Turnover,  investment,  job  positions  created,  unemployment  rate.  As  for  the  environment,  we  report  on  specific  actions  that  have  been  done  and  the  yearly  investment  we  make  for  this  area.  

We  also  have  a  different  kind  of  reporting  that  are  social  networks,  where  we  have  a  community  of  4000  fans  in  Facebook,  2000  followers  in  twitter  and  5000  bulletin  subscribers.  

Depending  on  each  person  level  of  disease,  do  they  perform  different  tasks?  

Yes,  depending  on  the  diagnosis  we  determine  the  activity  and  the  time  that  the  patient  will  be  able  to  work.  It  is  possible  that  at  the  beginning  they  only  work  for  2  hours,  or  that  one  week  they  work  in  the  garden  and  the  other  one  in  the  production  line,  they  shift  job  tasks.  

We  have  workers  with  mental   diseases  and  mentally   disabled.  Mentally   disabled  people  are   those  who  were  born  like  that  and  people  with  mental  disease  means  people  who  contracted  the  disease  like  esquizofrenia,  psychosis  or  other  disorders.  

If  things  go  fine,  have  you  thought  of  expanding?  Hire  more  people?  

No  because  our  objective  was  to  cover  la  Garrotxa  region  and  it  is  already  covered.  We  provide  with  work   to   the  people   in   the   region.  We  are  not   trying   to   compete  with  Danone;  we  offer  a  different  kind  of  product  for  a  different  market  segment.  

Every  year  do  you  invest  a  certain  amount  to  the  environment?  

Every  year  we  invest  different  quantities,  we  do  not  have  a  standardized  amount.    

How  does  La  Fageda  Innovate?  

We  make  social  innovation,  we  do  not  advertise,  we  do  word  of  mouth,  we  receive  45,000  visits  per  year.  We  are  researching  a  new  packaging  based  on  lactic  acid.  

Which  are  the  key  stakeholders?  

The  families  of  the  patients  are  very  important  to  us;  the  employees  come  in  the  first  place,  the  users  of   the   installations   that  are  not  employed   in   La  Fageda,   the   clients   (supermarkets),   the   consumers  and  the  public  and  private  associations.    

Thank  you  very  much  for  the  interview.