Conscious Capitalism

I have been watching a movement develop over recent years called ‘conscious capitalism’ or ‘conscious business’.  It provides a different take on what it means to be a ‘social enterprise’.  The idea is being pioneered by amongst others, John Mackey, CEO of Wholefoods Supermarket.  In a recent speech he says:

A Conscious Business is one which has two major attributes that define it:

  1. It has a deeper purpose beyond only making profits. Just like individual people by following their hearts can discover their own sense of deeper purpose, so can the business enterprise. I believe that great businesses have great purposes that inspire them to higher levels of success. Think for a moment about some of the greatest businesses in the world and ask yourself whether they exist to fulfill a greater purpose beyond only maximizing profits. Certainly Apple does, driven by its intense desire to create “insanely great” technology which transforms our lives in positive ways. Clearly Google does too with its passion for discovery and desire to operate an ethical company. One of the best examples in the world is Grameen Bank in Bangladesh founded by 2006 Nobel Peace Prize winner Muhammed Yunus, which exists to end poverty in Bangladesh and throughout the world. Every business has the potential to discover and actualize its higher purpose—it has the potential to become more conscious.
  2. The Conscious Business also understands the interdependency of all of the major stakeholder groups—customers, employees, investors, suppliers, communities, and the environment—and the business is managed to consciously create value for all of these major stakeholders. Instead of viewing the stakeholders in terms of win-lose relationships with conflicts of interest dominating their interactions, the Conscious Business understands that there is a harmony of interests between the stakeholder groups and that by working together greater value can be created for all of them. At Whole Foods we understand that management’s most important job is to make sure the team members are well trained and happy at their work. The team members in turn understand that their job is to satisfy and delight the customers and happy customers result in happy investors through the prosperity of the business. A virtuous circle is created with all of the stakeholders flourishing together.

Who will create the Conscious Businesses of the 21st century—businesses that have deeper purpose and are managed consciously to create value on behalf of all of the stakeholders?

John Mackey, May 2008

This feels to me like a much more coherent, honest and powerful approach to making business work for the planet than cleaving it along  ‘social enterprise = good; for profit = bad’ divide.

Of course words are relatively easy (although John Mackey has found that words have got him into lots of how water in the past.  We have to judge the movement by its achievements.  But I am hopeful.

You can read a much fuller paper by John Mackey called ‘Conscious Capitalism’ here.

The Advantage of Social Enterprise

Rob Greenland over at The Social Business has written a piece about how the ‘table’ that social enterprise has fought so hard to get a place at has collapsed.  I am assuming Rob means the table where policy is thrashed out and funds are allocated.

The high political table.

The table of the bureaucrats and the planners.

Rob’s analysis is that this table has collapsed.  They have no cash to spend since the bankers have grabbed it all.  So “What is a social entrepreneur meant to do now?” Rob asks.

Well I think the collapse of this table could be just the tonic that the social enterprise sector needs.

The sectors’ advantage is not in being a cheaper route to market for bureaucrats  – implementing their policies and plans (although this may be a legitimate benefit it CAN offer).  Its’ advantage lies in the ability of social entrepreneurs to tell stories of social change, social injustice and progress. In being able to attract, retain and develop talented and committed people who share in the vision and have the potential to manifest it.  In harnessing the potential of those affected by injustice and using it to drive progress.

So instead of trying to manoeuvre to catch the crumbs from the top table perhaps the sector should focus on sharpening vision, improving stories, and building a movement that people will want to join and work in because of its autonomy, independence and creativity; its ability to provide fulfillment and a decent wage – not because of the funding streams that it can secure (along with KPIs, evaluation frameworks and other game playing  inducements attendant with the mainstream).

When we are sat at the top table we have our backs to the real social enterprise marketplace.

Of course the sector needs to maintain good relationships with the ‘top table’.  It needs to influence, lobby, advise and occasionally disrupt.  If it can secure investment on its terms than so much the better.  But it needs to ensure that the money and power available does not corrupt – as it so often has.  That the pull of the cash does not lure us away from core purpose and beliefs.  That it does not allow us to kid ourselves that the latest funding stream to ‘do things to people’ might just work – this time – if we can only get our hands on the cash.  The social enteprise sector has to have the guts to be uncompromising on vision, values and beliefs.  It has to maintain integrity.

This requires the sector to develop an entreprenurial management and leadership culture.  A progressive mindset.  Progressive management.  Not Political.

The social entrepreneur needs to be comfortable and competent at managing and leading through vision, values, social goals and objectives and then relying on creativity and innovation to secure sustainable investments.  They must be obsessed with the social change they are trying to deliver and the recruitment and retention of a tribe of professionals and volunteers who can help.  Not with reading the political runes.  They need to promote change, not maintenance, autonomy not dependence (on the top or any other table), courage not conventionality.

The advantage of social enterprise is that it can be transformational.  People will join a transformational movement and bring to it their passion, creativity and hard work.  Turn it into another transactional part of the prevailing bureaucracy and this advantage will be lost.

And finally of course any organisation can be a social enterprise regardless of structure.  Many ‘for profits’ have learned how to create social change and a sustainable profit!

Conscripts, mercenaries, and volunteers

Willing volunteers outperform conscripts and mercenaries every time. They are more innovative and creative as well more diligent and disciplined.

Volunteers have bought into a mission and a purpose rather then been bought into it.

Much of the private sector is struggling with how to turn salaried staff from conscripts and mercenaries into volunteers. Finding ways to engage them in the work of the organisation. To provide them with fulfilling and rewarding work.

Much of the public and third sector seems to be taking almost exactly the opposite path. It finds ways to turn passionate and caring volunteers (people who have bought into the mission) into conscripts and mercenaries. This is achieved by:

  • making them servants of the system rather than servants of their customers
  • imposing performance management systems that often fail to recognise quality service delivery
  • entering into inflexible and output related contracts for service delivery that shrink opportunities for innovation and improvement
  • managing them as if they are units of production rather than as caring and compassionate people full of insights into how to improve performance.

It is a strange paradox that many private sector clients are making genuine efforts at developing employee engagement in pursuit of profits while so many third sector and public sector organisations are developing processes and systems that alienate employees and volunteers in pursuit of efficiency.

Goals, Priorities and Resources; where does it all go wrong?

Spending time developing and clarifying goals is rarely time wasted. Although some of us spend time clarifying our work goals few of us spend time developing goals for other important aspects of our lives – family, community and self. This is one of the reasons why we find work-life balance so hard to achieve. Goals that have been set in our professional lives are not balanced by goals in other areas. The goals that we have set start to demand creativity and resources and before we know it…

Sometimes we set goals that do not provide clear priorities. Or they provide us with so many priorities that we may as well have no priorities at all. Priorities are immediate next steps that will move us closer to our goals. Good priorities are ones that we cannot fail to address. They are so simple and appealing that they cry out for us to get on with them.

But often we forget to allocate time and other resources to our priorities. Without resources to go with them our priorities are worthless. Without doubt time is the most precious resource that we can commit to a priority. I often find myself working with senior managers to clarify goals and priorities (no more than three or four at a time) and then schedule time in busy diaries to spend on them.

By scheduling two 90 minute blocks of time every week to work on priorities many managers ‘magically’ start to make tangible progress towards goals that had previously frustrated them.

Building the Social System for High Performance

Whenever you see an organisation doing something consistently well, you can be sure that there is an effective social system behind it. The social system is made up of both a hard and a soft landscape. The hard landscape is that of meetings, information flows and decision making processes. The soft landscape is to do with behaviours, attitudes, values, respect and commitment.

Effective managers recognise their role in developing both the hard and soft landscapes of the social system – but recognise that it is the soft landscape – the way people and teams work together that really drives culture and performance.

When trying to initiate change, less effective managers work on the hard landscape. They change the organisational structure, replace key people or alter what is measured and rewarded. While such changes maybe necessary, they are NEVER sufficient.

It is the interactions between people that need to be changed, the information flows and the decision making processes. If people are not having the right discussions or behaving in ways that drive values and performance then the managers’ job is to influence them to adopt different ‘value creating’ behaviours.

In most cases this can be done using feedback. In other cases it may require more concerted efforts at coaching for the desired behaviours.

Recognising and shaping the behaviours that drive values and performance is the hallmark of an outstanding manager.

The social system changes and enables the organisation to perform consistently well because managers use mechanisms that ensure that the right conversations happen consistently and frequently. These conversations improve the quality of decision making and encourage behaviours in people’s every day work to accomplish the elusive goal of culture change.

Personal e-mail and reflections on transformation, humanity and compassion!

I got  a wonderful e-mail this morning from an old friend, Jim McLaughlin.

In it he said:

I love this marriage of science and heart.

It’s where the human potential movement meets good organisational practices.  In fact, if people in organisations were enabled to be their best human selves – loving, forgiving, caring, open, courageous – there would be wonderful organisations.  But somehow we change the rules of what is expected when someone brings their work self into the office/hospital/factory.”

Now why didn’t I put it like that!

One of the real sources of advantage is the ability to retain humanity and compassion while developing excellent organisational practices.  However this is a trick that many organisations with ‘transactional’ rather than ‘transformational’ cultures have managed to miss.

On a good day I would like to think that the compassion and humanity that attracts so many of us to third sector would make this transformation trick a straightforward one to play.   However the evidence suggests that many organisations in third sector quickly become as transactional as so many of their private and public sector cousins

Thanks Jim!

What Gets Measured Gets Done

This is the title of blog post by Jim Estill over at CEO Blog – Time Leadership.  And as Wally Bock says this is ‘one of those hoary old management sayings that hangs around because it’s both true and useful’.

Interestingly in the main body of the post Jim changes the saying slightly to:

What gets tracked and measured gets done.

The addition of this one word makes a massive difference.  The truism leads to poor management because it often gets put into practice as:

  1. What can be measured (objectively) that appears to be a reasonable proxy for what we want to get done?
  2. Let’s measure it and then hope we will get the important things done.

However many of the ‘important things’ are difficult to objectify and measure.  But they can usually be tracked.

Take for example this core value:

‘We challenge complacency and the second rate and embrace change’

My guess is that it would not ‘get measured’.  My second guess is that it would rarely be tracked.  And my third guess is that it would therefore rarely get done!

So how might it be tracked to see if it does get done?

By asking regularly (in 121s perhaps…) questions like:

‘Have you found yourself putting any of our core values in to practice this week?’

‘Which ones?’

‘How did they help or hinder your progress?’

we can regularly track core values and are far more likely to get all team members thinking about how they live the values (or not) in their day to day work.  We can track which are being used to shape practice and decision making and which ones aren’t.  Can you imagine the impact on equality and diversity in your organisation if every employee was asked regularly:

How has your work, this week, lived our value of ‘welcoming people’s differences’.

Or have you found any situations this week where living this value was difficult?

So revisit the mission, vision, values, principles and objectives of your organisation and ask yourself:

  • Are these important enough for me to want to measure or track regularly?
  • How can I track these in such a way that they are more likely to get done? (If you are doing 121s this should be a no-brainer!)
  • Do we have the balance right between tracking and measuring the ‘whats’ the ‘whys’ and the ‘hows’?
  • What are the risks of writing these sorts of statements and then not tracking them regularly and building them into expectations around employee performance and development?

Your answer to this last question might feature some or all of the following – hypocrisy, mediocrity, blandness, disillusionment….

Alien versus Predator 2; Profit taking versus social enterprise

“For a profit maximising company, the bottom line is how much money you make. But when you run a social business, it’s about impact.”

Mohammed Younis

For a publicly listed company there is a legal obligation on the Board of Directors to act in a way that will maximise the return on investment to shareholders i.e. profit.

For any shareholders who seek a long term return on their investment – rather than quarterly profit taking – then ‘impact’ (net ‘good done’ in the community as the result of the company’s actions) will be more or less synonymous with profit.  In a perfect world, companies that do bad things in the name of profit will only derive those profits in the short term.

Every company I have ever worked in (I have not worked in any PLCs but have worked in profit and non-profit distributing businesses) there has been a real concern both for social impact and for making a sound return on investment.

The sense of dynamic balance has been vital.  It is not profit making OR social impact but profit taking AND social impact that leads to sustained progress.

We can shun the tyranny of “OR” and embrace the genius of “AND” – there is a yin/yang dynamic; a Zen type ambiguity that can be used creatively.

In my experience it was the companies that traded profitably and used those profits transparently and accountably to ensure the sustainable development of the company and is employees that were able to do their best work in the long term.  In the ‘non profits’ too often the development of the business was entirely hi-jacked by the whims of funders and policy makers.

It is possible to find profitable ways to make the world a better place.

Action Yearning

‘Santiago taught me about turning dreams into reality – he taught me how yearning has a dynamic to it that is incredibly powerful.  It is important, simply to be open and alive to possibility, to encourage people rather than to be suspicous of them, and to see the potential for success rather than the potential for failure.  This is where true knowledge and learning can be found…’

The Social Entepreneur – Andrew Mawson 

Much wisdom in this piece – whether you are a manager trying to get the best from a team or whether you are supporting entrepreneurs.

The book is a great read too!

Something for Nothing in Halifax

Would you like to learn a management tool that is guaranteed to:

  • Save you time
  • Increase levels of trust in your team
  • Improve communication
  • Make you a noticeably better manager
  • Get more done – more quickly
  • Accelerate the professional development of your team, and
  • Reduce the pain of performance reviews?

Then come along to a free introductory session of the Progressive Managers’ Network at the Elsie Whiteley Innovation Centre on March 26th from 13.30 to 16.30.

At the event you will get a free gift to help improve your management worth more than £25.

Places are strictly limited so please book your place online here. Or call me for more information on 0113 2167782.
If you know of a manager who might be interested please forward them a link to this page.