Cadbury and What We Lose When Profit Becomes the Only Goal

In the village square of Bournville, near Birmingham, stands a small building that tells me more about entrepreneurship than many a management book.

It was given to George Cadbury and his wife Elizabeth in 1914 to mark their silver wedding anniversary. Employees of his chocolate business, from different parts of the world, had paid for it. That building, the Rest House, still stands.

I kept thinking about that gesture. What must you have meant to people as a business owner for them to decide to give you something like that? How much mutual trust has to come before it?

I did not know the story behind Cadbury. I knew the name, but in the Netherlands the brand is far less woven into everyday life than it is in Britain. For many people there, it belongs to their childhood. A bar of chocolate in a purple wrapper. For me, it became a story about what you are actually building when you start a business.

And what can disappear when someone else buys it.

A Business That Took an Interest in Life Beyond Work

I have always been fascinated by businesses that took responsibility for life beyond the workplace. Philips is a familiar Dutch example for me. Housing, education, sport, support during illness. The company concerned itself with much more than the hours people were paid to work.

The Philips Museum describes that social history, including its other side. There was something paternalistic about that care. When your employer also provides your housing and medical care, it gains an enormous influence over your life. Many of those services later became independent, partly because people rightly wanted greater independence themselves.

Yet the thinking behind it still moves me. The recognition that someone who works for you also has a life you can make a difference to.

You can pay an employee fairly on paper while creating a working culture that slowly wears them down. You can follow every rule and still feel that you are doing something you would never want for your own children.

For me, that is where an entrepreneur’s responsibility begins. With the consequences of your choices, even when nobody requires you to consider them.

What the Cadbury Family Built in Bournville

John Cadbury opened a shop in Birmingham in 1824, selling cocoa and drinking chocolate among other products. His sons Richard and George later took over the business. They came from a Quaker family in which faith and social responsibility carried considerable weight.

As the company grew, the brothers built a new factory outside the city. Construction began in 1879, along with the first sixteen homes for employees. A village later grew around the factory, with gardens, schools, sports facilities and room to spend time outdoors. According to Cadbury’s own account of its history, thirty per cent of its capital expenditure in 1902 went towards employee welfare.

Try to imagine what moving there meant to someone coming from an overcrowded industrial city. A home with space. Children who could play outside. Somewhere you could breathe. The success of the business became visible in the daily lives of the people who helped build it.

George went a step further. In 1900, he established the Bournville Village Trust. He placed the village’s management in the hands of an independent institution intended to keep serving the community after his death.

That may have been his most far-sighted decision. He gave his convictions a form that could outlast his own involvement.

An entrepreneur does not live forever. And the next owner does not have to share your conscience.

How Far Does Your Responsibility Reach?

As I read further, I also came across a part of the history that made the beautiful story uncomfortable.

Cadbury bought cocoa from São Tomé and Príncipe, where people worked under conditions of forced labour and slavery. There were indications of those abuses within the company as early as 1901. Investigations and attempts to bring about change followed. The boycott of cocoa from those islands came in 1909. Selly Manor Museum, which is closely connected to Bournville, describes that history.

That, too, belongs to Cadbury’s story.

While people in England were gaining a better life, people elsewhere who helped produce the same product did not have that freedom. That does not make the homes and schools in Bournville worthless. It does reveal how easily our care can stop at the people we can see.

I recognise that danger in the way we talk about business today. We are proud of our own culture, happy employees and worthwhile initiatives. But what is life like for the people further along the supply chain? Who pays the price for what we buy cheaply?

Meaningful Profit asks you to look there too. Especially when what you find could affect your margin.

The Hope That Disappeared After the Takeover

Kraft Foods acquired Cadbury in 2010. Something happened around that takeover that stayed with me.

Cadbury had already decided to close its Somerdale factory and move production to Poland. During the takeover, Kraft raised expectations that it might be able to keep the factory open. One week after the acquisition was completed, Kraft announced that this would not happen after all. The factory closed in January 2011.

The UK Takeover Panel accepted that Kraft had genuinely believed keeping it open was possible. At the same time, it found that the company had lacked a reasonable factual basis for those statements. A British parliamentary committee was also sharply critical of Kraft’s conduct.

At the negotiating table, a statement like that can be an expectation, accompanied by qualifications and room to explain it differently later.

I try to imagine how that same statement arrives at someone’s kitchen table. A person who has spent a long time fearing for their job tells their family that perhaps there is a future after all. There is a little room to breathe again. Plans that had been put on hold begin to feel cautiously possible.

A week later, that person has to explain once more that the work is disappearing.

For me, that is where the pain lies. People make decisions about their lives partly on the strength of what you say. As an entrepreneur or a business leader, you also carry responsibility for the hope you create.

When Profit Is Your Only Goal, You Make Some Very Bad Decisions

That has been my conviction for years. As an entrepreneur, I know how necessary money is. Salaries have to be paid. A business that consistently loses money will eventually have little left to offer its employees either.

I have faced a situation in which we had 120 employees in the Netherlands, forty in Budapest and fifteen in Jakarta, with enough cash left for roughly three months. Two major clients were leaving because their strategy had changed. At a moment like that, financial survival becomes very real. People are waiting for your answer while you do not have all the answers yourself.

That is precisely when what you stand for matters. What can you honestly say? What expectations are you entitled to create? Which decision can you explain to the people who will live with its consequences?

The problem begins when financial profit becomes the only outcome by which you judge yourself. Everything that costs money is then required to justify its existence. Extra time for an employee. Quality a customer might not immediately notice. A provision whose value is felt most strongly by the person who needs it.

You can cut all those things and present better figures at the end of the year.

The full bill simply does not appear in your accounts.

Part of it lands with an overworked colleague. Part with a family whose parent or partner comes home exhausted every evening. Part with customers who have to work harder and harder to get help. Financially, you have improved something. The question is how much has been lost along the way.

Who Should Benefit from Your Business?

Together with Wassili Zafiris, I developed the thinking behind Meaningful Profit. We use profit in a broader sense: the benefits people gain from a business. Money belongs there, alongside development, enjoyment, health, trust and the contribution you make to the world around you.

That requires choices within the business itself. Who should benefit, and in what ways? What do you make room and budget for? How do you judge a decision when its financial return is favourable and its human consequences are not?

That conversation only becomes interesting when there is something real to choose. As long as caring for employees demonstrably produces a greater return, it is easy for everyone to support it. But what if that care costs you some of your profit? How much is it worth to you then?

I worry when every human conviction has to be translated into financial return before it is allowed to count. As though a person only deserves to be treated well once someone has calculated that doing so will pay.

I want to be able to run a business with the conviction that some things are our responsibility. Even when a spreadsheet leaves room for a cheaper choice.

What Remains When You Leave?

The village George Cadbury placed in an independent trust is still managed by that institution. That gives me hope too. He could not personally hold future owners of the chocolate factory to account for their decisions. He could, during his own lifetime, put something in place that allowed part of his intention to survive.

There is a question here that reaches beyond Cadbury. If you build a business around certain values, how do you make sure those values still carry weight after you leave? What do you put in place around decision-making, ownership and employees’ interests? And what do you leave to the good intentions of your successor?

Perhaps one day your business receives the valuation you have dreamed of for years. There are advisers, conversations and signatures. One day the money is transferred and the sale is complete.

Then, the following morning, the employees go back to work.

What have you put in place for that morning?