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12.8.98  
How Bright Horizons Takes Care of Kids — and Business
A child-care-company executive talks of balancing conscience and profit

Linda Mason learned about social consciousness and business practices in the desert of the Sudan, where, as a director of the relief group Save the Children, she helped feed 400,000 victims of war and famine. Despite their best intentions, Mason says, "Most refugee operations are horribly run. People were really railroaded. There was high turnover. At best, there's a lot of wastage, and at worst, there's a terrible lost opportunity."

She remembered those lessons when she became an entrepreneur. In 1986, she and husband Roger Brown (also a former relief worker) founded Bright Horizons, a child-care company catering mainly to large corporate clients that runs 135 child-development programs in all. Bright Horizons, now a $250 million, publicly traded company, prides itself on its mix of social responsibility and business smarts -- paying top-scale wages, providing $1 million in child care for its own employees, and setting up full-time day care for Boston-area homeless children.

Yet even Mason finds the two philosophies don't always mesh perfectly. When Bright Horizons began to raise money from the public markets, the first third of the company's "road show" concerned educational philosophy, not its financials. "Our bankers said they're not interested in that, it's not important. But it was who we are." How can other companies keep their profit-making missions without sacrificing the values close to their hearts? Business Week's Dennis Berman spoke to Mason to find out. Here's an edited transcript of their conversation:

Q: Did you consciously go about creating a "socially responsible" company, or did it happen more organically?
A:
We never started out defining ourselves as a socially responsible company. That was never our starting goal. Our mission has always been very clearly to provide high-quality early-childhood education. And in order to implement that mission, much of what we do is socially responsible. That's an important difference.

We don't look at things through a socially responsible lens. We had a big debate about cloth or disposable diapers. If I was defining myself as socially responsible, we would use cloth. But it was such a fiasco, having huge bags of stinky cloth diapers. So we went to disposable. That's a good case in point. We don't have multiple screens, we have one: what serves our children. And that simplifies things, if you're a small or large organization.

Q: Is it hard doing the socially responsible things -- which can cost more money, especially when you're a public company?
A:
I don't see it as a zero-sum game, and I question that assumption. For a lot of companies that have this approach, I don't think you can look at them and say they have a lower margin than nonsocially responsible companies. It's more of a mindset, an attitude that leads to more loyal customers, which then adds to the bottom line. For many consumers, it means a lot. I'm on the board of Whole Foods market -- [a health-food supermarket], and their profit margins are twice that of a standard supermarket chain. So I don't think you can say socially responsible businesses are less profitable than companies that wreck the environment.

Q: How do you foster these attitudes of responsibility among your employees? It must be hard with many of them being low-wage, part-timers.
A:
Look at who chooses to work in child care: They do it for love of children, not for the money. We pay between 20% and 30% above industry average, but it's still just under $9 per hour. And with low unemployment nationwide, they could choose practically any field to go into. But they already have a passion there. And with a company like ours, they can help build something.

I don't think it's a matter of the top to the bottom. You can't come in and impose this on a culture. We took the values and philosophy in the service we provide -- individual, nurturing care between teacher and child -- and those values permeate the organization itself.

So it's mutual reinforcement. When we started it, we attracted people who were attracted because of our mission and goals. They come in and they become vehement safeguarders of the approach. If you look again at Whole Foods, I don't think that the person who works there would go to a Stop & Shop.

Q: What's it like being under the scrutiny of the stock market?
A:
Throughout our whole IPO process, the first third of our road show presentation was on our educational philosophy. Our bankers said they're not interested in that, it's not important. But it was who we are. That's another key message: the importance of having consistency of message externally and internally with all audiences. When we meet with investment bankers, we don't just talk about the bottom line. Likewise, when we meet with our teachers, we don't just talk about the pure educational side. We have the same consistent message: For this organization to succeed, it has to stand on two firm legs, its quality mission and financial strength.

Q: So who are you serving? Children or shareholders?
A:
We have defined five groups that have a stake in our success. First and most important is the child. Second is the family. Third are our own employees. Fourth are the corporations who sponsor our centers. Fifth are our shareholders. We lay that out in our mission statement. And the public markets have agreed with that compared to how they value other child-care companies.

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