IT Governance framework

M A R J O R I E R O D R I G U E Z H E A R D

her name called and moved toward the stage of the Hilton Bangkok ballroom. She had received awards for her advocacy work for the LGBTQ+ commu- nity in the Philippines before, but this was the first time she’d been recognized for Zevoron, the business she’d started three years earlier with the goal of providing jobs for transgender people in Manila and throughout her home country. Zevoron manufactured and distributed polvoron, a soft, crumbly shortbread made of flour, sugar, milk, and nuts, popular in the Philippines. The company

name came from a combination of “ze”—a gender-neutral pro- noun—and “polvoron.” What set the company apart, and the rea- son for the award, was that all its marketing and sales staffers were transgender. This unique posi- tioning had struck a chord with customers and helped Marjorie to create a profitable business in a short period of time.1

Joining her at the ceremony was Oscar Santo Domingo, Zevoron’s CEO, a veteran of the food industry and an operational expert, whom Marjorie had brought on soon after founding the company. Although this was

HBR’s fictionalized case studies pres ent problems faced by leaders in real companies and offer solutions from experts. This one is based on the case study “Kineer: A Social Marketing Dilemma,” by Dominique Turpin, Umashankar Venkatesh, Jones Mathew, and Sandeep Puri.

Case Study Should You Compromise Your Founding Principles for Faster Growth?

by Sandeep Puri

Illustrations by ANUJ SHRESTHA144 Harvard Business ReviewJanuary–February 2022

her passion project, she couldn’t dedicate 100% of her time to it, given her other commitments.

Marjorie’s origin story was familiar to many in the Filipino LGBTQ+ community. She was from a conservative family that shunned her when she came out as transgender. She left home and moved to Manila, where she started her professional life as a photographer’s assistant. After paying her own way through the University of the Philippines, she began acting in films, and the visibility gave her a platform for advocacy. In 2018 she partnered with Vivienne Cru, the first

openly transgender member of the Congress of the Philippines, to publish a report on the state of transgender rights in their country. The findings prompted Marjorie to focus on employment issues: Because of widespread discrimination, many in her community struggled to get hired or to keep their jobs. 2

Oscar shared Marjorie’s deep belief in Zevoron’s mission. “I’m so proud of you,” he said after her short acceptance speech.

“Of us,” she said. “This is about the organization, not me.” Marjorie was used to the spot- light, but she preferred to share it.

“Of course,” he said. “Still, you should enjoy the accolades tonight. After all, it’s back to work tomorrow.”

She knew what was on Oscar’s mind: Zevoron was on the cusp of expansion. It had originally targeted business customers, including major retail and souve- nir stores. Those B2B buyers had been supportive of the business model and the jobs program. But for the past several months Oscar and Ajay Nitin, the company’s national sales manager, had been discussing how and whether to expand their customer base to include grocery stores and bakery distributors. Doing so would require a much larger sales force, and they were worried about a shortage of qualified transgender people in certain locations.

“If we want to continue to win awards like this one,” Marjorie said, gesturing at the glass statue on the table, “we have to keep making an impact.”

Oscar nodded. He was well aware of her hesitation to change the makeup of the sales force in pursuit of growth. She’d never been particularly focused on

profits. At the same time, she wasn’t naive enough to think that they could fulfill their mission without financial success.

“Let’s save discussions about the future for tomorrow,” Oscar said, raising his glass to toast her. “Now we celebrate our accom- plishments.” Marjorie smiled as everyone at the table exclaimed, “Tagay!”

BACK IN MANILA The next afternoon, at Zevoron’s offices, Marjorie and Oscar sat down with Ajay for an extended meeting to discuss three-year growth plan proposals—ranging from ambitious to conservative.3

“Regardless of which targets we land on, we need more people fast,” said Ajay. A few of their most successful salespeople had gotten managerial positions with other companies, which was a win for the cause but also meant hiring headaches for Zevoron. “We won’t have enough employees if we don’t look beyond transgender people.”

Marjorie cringed inwardly. Having an all-trans sales team meant a great deal to her, although Ajay had warned her when he first joined that it would eventually become a limitation.

“But it’s what makes our brand stand out,” Oscar said. “Our sales force allowed us to get attention in this crowded market and attract our first customers. There are tons of polvoron companies. We can’t lose this distinction or

Case Study Classroom Notes

1. Some experts argue that differentiated products or services are not enough; a company should have unique qualities that set it apart from competitors.

2. The Philippines has no laws specifically protecting gay or transgender people. Its Congress has considered a bill to outlaw discrimination against people based on sexual orientation, gender identity, or expression, but the bill has yet to pass.

3. In a 2017 survey of 206 social enterprises in the Philippines, 60% reported plans to seek new customers and develop new products and services in the upcoming year.

Harvard Business Review January–February 2022  145

Experience

we’ll have no chance of compet- ing against the big ones.” He was articulating exactly what Marjorie was thinking: Wouldn’t they be compromising the very thing that set them apart in a cluttered and commoditized product market?4

“We’d still lean into our origins and the jobs program in all our marketing,” Ajay argued. “And Marjorie is still our founder and main spokesperson. Customers won’t forget what we stand for.”

“I’m not so sure,” Oscar said. “That may be true for existing customers, but what about new ones? In B2B, sales is the face of the company. How is a cisgen- der salesperson going to get the attention of a new grocery distributor?”

Marjorie cleared her throat, and both men turned to look at her. “You know what I’m going to say, right?” she said with a smile.

In unison, Oscar and Ajay said, “We can’t lose sight of our

impact!” She didn’t repeat the phrase as often as she had early on, but when they were facing tough decisions, it was a mantra.5

“We can make an even bigger impact through growth,” Ajay said. “We can fund employment programs with our profits. And perhaps pairing transgender employees with cisgender ones on sales calls will help us get even more traction. I really believe it’s time to welcome more people in.”

Ajay’s point was valid. The more successful and profitable the company was, the more visi- bility it would have for its work- force program, the more money it could give away, and the greater the platform Marjorie would have for her LGBTQ+ advocacy work.

“We don’t want to become a funder, though,” Oscar said. “We want to do the work, not support it. That was Marjorie’s vision.”

Marjorie knew that both her colleagues were right. A larger

company could do more good in the world. But the bigger Zevoron got, the harder it would be to stay true to its mission.

She brought out one of her other oft-used phrases: “Let’s see what the team thinks.”

“WE’RE TORN” When Zevoron’s top salespeople were together in a room, it often got loud. Many of them had known one another for years, long before they worked for the company, so a meeting could feel like a rowdy family reunion. But everyone quieted down quickly when Marjorie stood, their respect for her palpable.

Earlier in the week, at the monthly all-hands meeting, Oscar had shared a draft of the three-year goals, and it had generated a lot of chatter.

Marjorie was grateful to know that this group wouldn’t hold

4. Might Marjorie and Oscar pursue other angles of differentiation to help Zevoron stand out as a company?

5. When businesses have to make trade- offs between profits and social impact, how should they decide which to prioritize? What factors should they consider?

6. In the United States trans people are twice as likely as the average person in the general population to be unemployed.

146 Harvard Business ReviewJanuary–February 2022

back. “Obviously, achieving these targets—even the conser­ vative ones—will require that we expand our sales force,” she said. “We want your honest opinion.”

“I have a lot of friends look­ ing for jobs,” said Diwa, one of Zevoron’s first salespeople. “I can’t guarantee they’ll hit the ground running, but they’re trainable. We can fill any open positions with trans brothers and sisters.”6

A few of the others shook their heads. Noting this, Oscar asked, “Carmelita, what do you think?”

“We spend way too much time training newcomers as it is,” Carmelita said. “It would be a relief to bring in people with actual sales experience, even if they’re not part of the commu­ nity. It would up our game, make our existing employees more professional.”

“Or scare them away,” said Angelo. “I took this job—and love it—because I can work with

people from my community— people who get me and don’t judge me. I don’t mean this as a threat, but I don’t know if I’ll stay here if I’m going to be working alongside some cisgender dudes.” Several other employees nodded in agreement. Then Angelo added, “No offense, Oscar.”

Everyone laughed. Oscar and Ajay were often the only “cis­ gender dudes” in these meetings. “None taken,” Oscar said.

“I have a different view,” said Celeste. She was a relatively new hire but clearly talented and had moved up the ladder quickly. “We’ve all had those meetings that turn sour as soon as we enter the room. Having nontrans people will help us get a foot in those doors. We’ll be welcome in more places.”

“Great—we’ll be able to sell to bigots!” Angelo said sarcastically. Everyone laughed, even Celeste, but she wasn’t deterred.7

“It’s clear that we’re torn,” she said. “But I think a more diverse sales team will give us a better chance with more­traditional buyers, and after they’ve worked with us, they might become more open­minded. It could be a win­ win. And isn’t that what we all want? To be more successful?”

Everyone nodded. It was hard to disagree with that sentiment, but there was still no consensus. Marjorie, who’d been mostly quiet, spoke up now: “I guess it depends on what we mean by ‘more successful.’”8

THE REAL REWARD That night Marjorie was at home, reflecting on the meeting. Oscar had told her afterward to think the decision through a little lon­ ger. Ultimately he would support whatever she decided. Now she was mulling over one of the last things he’d said: “This isn’t as

7. In a 2019 Pew Research Center survey, 73% of Filipinos said society should accept gays and lesbians, making the Philippines one of the more “gay-friendly” Asian countries.

8. When you’re running a mission-driven business that relies on sales revenue to succeed, what metrics should you track to measure prog ress?

Harvard Business Review January–February 2022  147

simple as mission versus profit.” He was right. If the choice was whether to prioritize Zevoron’s support of the trans community or its bottom line, she’d pick mis- sion every day of the week. But the two were inextricably linked.

As she sat on her couch, she glanced at the wall where her awards and pictures of her with some famous Filipino celebrities hung. Of course those accolades were meaningful, but she’d rather be in a conference room with the sales team, debating the compa- ny’s future, than on a podium or shaking the hand of a movie star.

Keeping the company small— with an all-trans sales force— might be the best way to continue doing what she and so many of their current employees loved. It might also be the only way to retain Zevoron’s competitive advantage in a crowded market.

But would that be holding the company back from making more of an impact, as Ajay contended? She knew how many nonprofits were struggling to find the money they needed to help the trans community. Would running a bigger, more profitable, and faster-growing business—even if it looked different from what she had originally envisioned—be the best way to give back now? Or would she be compromising her vision, essentially selling out?

SANDEEP PURI is a professor at the Asian Institute of

Management, in the Philippines.

I strongly encourage Marjorie to stick with her current approach of employing an all- transgender sales force. As an entrepreneur, I know that achieving profitability in three years is no small feat, and she has done that

while staying true to her values and directly supporting her community. She has lightning in a bottle and needs to double down on her strategy, not back away from it.

Zevoron is an incredible platform for raising awareness around what so many transgender people face: They’re discriminated against, marginalized, often threatened, and even murdered. At least 50 transgender or nonbinary individuals are reported to have been killed in the Philippines since 2010, and the real toll is probably much higher, since the deaths of transgender people often go unreported. Until that dis- crimination disappears, Marjorie needs to keep hiring people like her,

Should Zevoron change the makeup of its sales force? The experts respond.

FRAN DUNAWAY is a cofounder of the gender-neutral clothing brand TomboyX.

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Experience

telling their stories, and advocating for change.

If I were in her shoes, I’d start by questioning Ajay’s assumption that Zevoron won’t be able to meet its talent needs with only transgender new hires. He seems to be coming from a scarcity mindset. Instead I’d listen to Diwa, who says that plenty of trans brothers and sisters are looking for jobs. Perhaps she and Carmelita could be put in charge of recruiting, onboarding, and training. Given how the staff meeting went, I don’t think it’s wise to introduce cisgender employees into this commu- nity of salespeople. That’s not to say the company shouldn’t have diversity in other parts of the business—it already has that and can have more. But the salespeople are the face of Zevoron and should remain all trans.

When my wife and I were seeking funding to start TomboyX, a manufac- turer of gender-neutral undergarments, we knew what we were up against: Women—and especially lesbians—have a harder time raising capital than het- erosexual men do. But we didn’t look for a token guy to make our team more pal- atable to investors. We are unapologetic about who we are. From the beginning we have represented the brand and what it stands for: pride in the ability to authentically express your identity.

Marjorie can continue doing what she loves best and can tell the Zevoron story better if she maintains a trans sales force. That gives her a megaphone for sharing both her own story and the personal experiences of her employees. We know that consumers, especially those in Gen Z, care about the mission and purpose behind the products they buy. Zevoron’s emphasis on fighting for transgender rights and acceptance and giving people in Marjorie’s com- munity valuable skills and rewarding employment is something consumers are already getting behind. In my view, retaining that focus will help the com- pany sell more and grow.

It’s time for Marjorie and Zevoron to welcome a more diverse sales force. They should bring nontransgender folks into the mix, but only after careful vetting to ensure that they preserve the company’s culture and what differenti- ates the brand.

When contemplating Marjorie’s dilemma, I thought about the LGBTQ+ bookstores I’ve frequented during my life. While I was attending graduate school in Alabama, trying to find writ- ings about the Black lesbian experience, those bookstores were a lifeline for me as a member of the queer community. They were also judgment-free zones, creating safe places for us to come together and feel connected. Then, in the 1990s and the 2000s, as gays and lesbians gained more rights and recognition, mainstream stores started to establish LGBTQ+ sections. Over time those original safe spaces became less essential.

I see parallels with what Marjorie and Oscar have done with Zevoron. They have created a protective womb for their transgender employees. But if we stay in bubbles like these, we can’t achieve the broader impact we want. Zevoron can accomplish more if it invites other people into that space and makes them part of it.

The response from customers that Zevoron has received so far reassures me that this move will work. The company is already and will continue to be differentiated because its sales force will remain mostly transgender. But by ramping up hiring to include nontrans people as well, it will reach even more

people—consumers and employees— with its mission.

We at Curaleaf also want to make a positive impact in the world. We’ve had internal discussions about how we could make a difference for people who have been negatively affected by the criminalization of marijuana, and we’ve decided to commit to ensuring that 10% of all our new hires will be individuals who’ve been touched by cannabis-related offenses. We’re betting that consumers, many of whom fought for legalization in various states, will care about this mission.

All that said, Marjorie, Oscar, and Ajay need to make the change to their workforce thoughtfully. They can’t bring in just any cisgender salespeo- ple; they must be sure that new hires embrace and will prioritize inclusion. They should be laser-focused on sus- taining the Zevoron culture they are try- ing to preserve and build. That means being intentional not just in recruiting but also in training and policy adoption. It will serve them well to do regular check-ins with existing staff members, especially those who are worried about the expansion.

This is not an easy decision. Zevoron could lose people like Angelo, who’d be unhappy with the change. But as long as Marjorie has given them an opportunity to be heard and has explained clearly why she believes an expanded talent pool is best for the company, she should be comfortable with their leaving.

I don’t agree with Oscar that Zevoron will lose what makes it unique if it employs more nontrans people. The differentiation is not just the sales force; it’s also that the company is doing trans-centered work. And sometimes you have to expand (and diversify) your army to advance your cause.

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KHADIJAH TRIBBLE is the vice president of CSR at the cannabis company Curaleaf.

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