Innovation

For the Neighbourhood Group, the innovation is not one aspect of the business or a certain technology they use, their business model is the innovation. The Neighbourhood Group’s innovation is to create world-leading restaurants that are “obsessively local” and attempting to be sustainable at every level of their business. This industry-leading innovation can be broken up into three categories; sourcing locally, lessening environmental impact, and positively impacting people. During our interview with Court Desautels, CEO of the Neighbourhood Group, the line “think globally, eat locally” (Desautels, 2018) came up frequently, and it is clear the entire operation is committed to local. While local food is a popular movement these days, few commit their whole operation to local like the Neighbourhood Group. When starting out, the Neighbourhood Group wanted to define what Canadian food was. In the words of their CEO "We wanted people to say that "hey we're not going out for Italian or Vietnamese, I'm going out for Canadian" (Desautels, 2018). To them, this meant sourcing all local food and drink, at one point working with over 50 suppliers for one restaurant. They didn't let the local movement stop at the food, however, they took it all the way to their uniforms, dining ware, and even building supplies:

“And then we opened up and started looking at not just the food and the drinks but the building materials… Where is the rock coming from…? Where is the wood being sourced from? The designer said we can put all this beautiful rock up on the wall. And we said where's this stone coming from? And he said, "we get great stone from Arizona or Italy". And I went "we're shipping rocks from Italy?” … It's crazy that our Ontario rock is ugly because I think its quite beautiful. We have beautiful limestone and beautiful granite” (Desautels, 2018).

While clearly “obsessively local”, the Neighbourhood Groups’ commitment to the environment runs just as deep. The entire operation is B-Corp certified, the largest B-Corp certified restaurant group in the world. One of the restaurants, The Wooly Pub, has all energy supplied by Bullfrog Power, making the energy footprint carbon neutral. For all remaining restaurants, carbon offsets are purchased for their energy footprint. Additionally, they audit all their waste and continually work to lessen their waste and donate food waste to farmers where they can. All restaurants under the group serve only sustainably harvested seafood and are Ocean Wise and Eco Certified. The Neighbourhood Group’s commitment to “doing the right thing” affects their staff and those in their organization as well.

In order to be B-Corp certified organizations must fulfill certain requirements with the way they treat their staff, however, the Neighbourhood Group goes above and beyond that. For example, they have recently just introduced a health and wellness plan for their staff. Part-time employees have access to $175 per year for professional development, full-time employees receive $350 per year, supervisors have access to $500 per year in professional development funding and managers can receive $1000 per year for professional development. This is unheard of in the restaurant industry. This is designed to provide access to skill development workshops that the employees can then apply to their work with the Neighbourhood Group, but also assist them in building their resumes. Additionally, the Neighbourhood Group pays 100% of health benefits to all employees who have been with them for two years, with options for family benefit plans as well.

While sourcing local food, being environmentally conscious, and treating your employees right is trendy these days, what sets the Neighbourhood Group apart is how long they’ve been doing it for.

Court credits his dad, a restaurateur in his own right, for inspiring his company’s commitment to do the right thing. Bob Desautels owned and operated several restaurants across Ontario during the late eighties and nineties. He too was trying to define local, Canadian, cuisine and drink before Canadians even knew they wanted it. “He was a trailblazer” (Desautels, 2018) says Court, “completely before his time” (Desautels, 2018). While his dad’s restaurants may have struggled, the foundation for Court’s business model was founded at this time. “I have an operations manual back from ’94-’96 that my dad put on my desk that lays out the B-Corp values. It was about our people, our community and our planet…he created it” (Desautels, 2018). While not involved in the day-to-day operations of the restaurants anymore, it is clear Bob is still teaching and inspiring those around him. He operates a blog on the Neighbourhood Groups’ website called “Bobby D’s Locavores Digest” and it is evident that Court still turns to his dad for inspiration and purpose. Bob is the primary reason behind why Court’s restaurants have the business model they have.

“It’s the way I was brought up” (Desautels, 2018) is how Court responds when asked why he goes out of his way to have a positive impact on people, communities, and the earth. “I never appreciated the sacrifices my father had to make in order to make the right choice” (Desautels, 2018). The idea of “doing the right thing” and creating value for all parties at every level of the chain is just ingrained in Court’s psyche, and as a result in the business model of the Neighbourhood Group. The way Court explains it, if you look after people in your community and are committed to doing the right thing, they will look after you. Court cited the global economic downturn of 2008 as an example of this. While the restaurant industry was hit pretty hard around Ontario, the Neighbourhood Group’s sales went up. “You might make maybe a little less money, but when times are tough people rally and support you” (Desautels, 2018).

In summary, Court cites the mantra of: “If it doesn’t feel right, why would you do it. I couldn’t look someone in the eye and tell them “yeah it’s the best product I’ve ever had, but I don’t want it cause it’s too expensive.” You have to stand for the relationship behind the product” (Desautels, 2018).

Inspiration

Led by Bob Desautels, the Neighbourhood Group continued to try and implement the visions and the values that Bob had into its company. These values were also shared by Bob’s son and current leader of the group Court, who spoke about his father values, “It’s funny I have an operations manual back from 94-96 that my dad put on my desk that lays out the B-Corp values. It was about our people, our community, and our planet… he created it” (Desautels, 2018). This manual was written ten years before B Lab, the company who manages B-Corporation certification, was founded. This manual, as well as the leadership of Bob, helped instill these values into the company who became a B-Corporation themselves in 2015. The innovation to try and make the biggest impact on the local community and the environment does not end with the company becoming B-Corporation certified. Court made it clear that the Neighbourhood Group was not going to be complacent with what they had already done and that they will continue to strive to do more for the community and to try and do more for the environment. He says, "My vision is to create business that helps build on communities or help build a community" (Desautels, 2018).

The motivation for doing what the Neighbourhood Group does comes from the values that have been with the company from the beginning and the forward thinking that the Desaultes' had. Court refers to his dad as a trailblazer when talking about how much importance he placed on being sustainable when that thought was not even crossing the minds of most other executives in the industry. The motivation behind the Neighbourhood’s efforts to create a local sustainable restaurant scene in Guelph comes from the Desaultes’ passion which is clearly evident when hearing them speak. Court summed up their purpose as, "You can't just take advantage of people. If it doesn't feel right what's the point in doing it? What's the gain?" (Desautels, 2018).

Overall impact

Businesses with a focus on environmental sustainability recognize the long-term game that must be played. Implementing sustainable practices into your business model is often expensive up front. In the case of the Neighbourhood Group, the Bullfrog Power they use to power one of their establishments costs 30% more than typical energy costs. Additional costs of not doing business the typical way can be found throughout the organization, including the use of organic, locally-made uniforms, purchasing carbon offsets, paying a living wage to its employees, and going through the B-Corp certification process. This all adds up to a significant cost of doing business, limiting short-term gains. At the beginning, Court actually had to buy out some business partners as a result of this. “They didn't see the future," (Desautels, 2018) says Court, they were simply too focused on short-term results to see the vision of the business. While implementing sustainable business practices can be expensive in the short-term, Court was able to see the long-term visions and the business are starting to respond accordingly.

Businesses with a sustainable focus are all about long-term. Often, they recognize they could likely make more money in the short-term if they cut corners, however, the organization prioritizes long-term positive impact and financial gains. The same could be said for the Neighbourhood Group, which is beginning to feel the effect of those long-term gains.

Business benefit

The business benefit that this innovation has had for the company was not realized right away and it took time, patience, and dedication to their values but the company has been able to see growth, and directly correlate it with their sustainable business model. Court had this to say about becoming a B-Corp, “We were losing money for a few years. We were just starting to break even and we’re like hey, we’re going to give more money back into the community” (Desautels, 2018). The gamble paid off for them as they saw that becoming a B-Corp may not have directly made them more profitable but has helped them understand more about their business due to the intensive audit process. Court refers to these changes as leaps of faith and says, “Every time we’ve made one of these leaps of faith we’ve driven more money to the bottom-line” (Desautels, 2018). This appears to be backward as they put more money into being sustainable, but seem to be able to create more income for the business by doing so.

Social and environmental benefit

The Neighbourhood Group has a tremendous impact on society and the environment, especially considering they are a for-profit business. Their commitment to sourcing local food and drink returns profit to the community and helps other grow their business. “What we did was open up those products to other restaurants so it brought these other small businesses, or small farms, or small operations. So, it grew their business” (Desautels, 2018). Keeping this cycle of capital in the community returns to benefit the Neighbourhood Group along with the community. Their living wage compensation and new health and wellness plan, further return gains to the community and benefits to society. Additionally, they are proud supporters of an organization called Kidsability that works to empower youth with special needs in the Guelph and Waterloo region (Kidsability, 2018).

There is a collection of quotes on the Neighbourhood Group’s website. One of them is “We do not inherit the earth from our parents we borrow it from our children.” This quote sums up the organization’s commitment to environmental responsibility, and the environmental benefits stem as a result of this mentality. Most recently, the Neighbourhood Group donated $75,000 to the new Guelph Lake Nature Centre Complex in order to educate the next generation of environmental crusaders (News, the Neighbourhood Group, 2018). As a certified B-Corporation, there are a number of specific environmental targets that must be met. Additionally, there are innumerable environmental benefits as a result of sourcing everything, from the food to the stone used in building, as locally as possible.

Interview

Court Desautels, CEO & Group Leader