Five hundred and sixty (560). That is how many commercial Chapter 11 filings occurred in April 2020, a 26% increase from the same time the year prior.
That is 560 data points proving that creating a value proposition is not a one-time deal, unless you want to be left behind as the market shifts and your business changes to meet those new market needs. Just consider the year 2020 as a microcosm for these shifts. The economy, technology, consumers, and nearly every market in every industry have changed significantly in a few short weeks because of the Covid pandemic.
Some of the companies are large brick-and-mortar retailers like J. Crew, Neiman Marcus, and JCPenney. The market had been trending to online sales for quite some time, yet they got complacent and continued with their legacy brick-and-mortar retail strategy. Coronavirus simply accelerated the consumer transition to e-commerce apparel shopping, leaving these iconic stores behind.
Earlier this year…January to be exact…which feels like a different time and a bygone era, I wrote an article on the essentials of the value proposition to tell an epic fundraising story (“Is Your Fundraising Story Epic? Blueprint: How to Open Doors to Funding Starts with the Value Proposition”). The fundamentals to create or reshape the value proposition still apply. After all, your company culture, your product, and, most of all, your why constitute the raw material for the destiny of your company. But how many of the 560 companies who filed for Chapter 11 in April could have avoided bankruptcy proceedings if they revisited their value proposition and evaluated some of the following questions:
What is your “why”?
Why is it your “why”?
Is there still a need for your product or service? What problem does it solve for customers?
Is there a better way to deliver your product or service for today’s market?
Is your product still unique?
Do customers inherently understand what your product is and how it helps them?
Does your value proposition compel your target audience practically AND emotionally?
Can your product or service transcend a crisis?
The numbers tell the story…have you paid attention to your bottom line?
To learn more on how to create a winning value proposition at any company stage or as part of an effective 1-page executive summary and pitch deck, contact me for a complimentary consultation by phone at 314-578-0958 or by email at email@example.com.
Ines LeBow is the CEO, Transformation Executive for ETS. She is a known catalyst for business operations, bringing 30+ years of hands-on experience. Ines has a long history of being recruited into senior executive roles to improve the execution of business operations and to drive revenue growth. You can see her LinkedIn Profile at www.linkedin.com/in/ineslebow, view the ETS website at www.transformationsolutions.pro, or email her directly at firstname.lastname@example.org.
This is a Guest blog post by Bei Ma, Founder and CEO of The Pinea Group
Leadership Transformation in 2020
Change is inevitable. Transformation is by conscious choice.
Photo by Evgeni Tcherkasski on Unsplash
As Bill Gates recommended 5 summer books in his recent Gates Notes on May 18, 2020, he wrote: “The Ride of a Lifetime, by Bob Iger. This is one of the best business books I’ve read in several years. Iger does a terrific job explaining what it’s really like to be the CEO of a large company. Whether you’re looking for business insights or just an entertaining read, I think anyone would enjoy his stories about overseeing Disney during one of the most transformative times in its history.”1
Yes, indeed. Robert Iger, in his 2019 book “The Ride of a Lifetime”, shares in great detail on how the ten principles that strike him as necessary to true leadership have transformed Disney. And the ten principles are: Optimism, Courage, Focus, Decisiveness, Curiosity, Fairness, Thoughtfulness, Authenticity, Relentless Pursuit of Perfection, and Integrity.
While each of these ten principles speaks the truth of leadership, we need more, we need more for an unprecedented year we are in at this very moment. The year of 2020 perhaps manifests every aspect you can imagine that life does not always go the way you expect it will.
We are still in the middle of the global pandemic. Period. The director of National Institute of Allergy and Infectious Diseases and the nation’s top infectious disease expert, Dr. Fauci spoke at BIO Digital virtual healthcare conference on June 10 that the coronavirus pandemic has turned out to be his “worst nightmare” and warned that it’s not over yet.2
Millions of people still have no jobs or steady income despite an optimistic labor report of May by the Department of Labor. According to Business Insider, US jobless claims totaled 44 million, meaning more than one in four American workers have lost a job during the pandemic.3
Social reform is well likely underway with the “Black Lives Matter” movement amid nationwide protests. New York Governor, Andrew Cuomo says he intends to sign the package of bills passed by New York legislators for comprehensive police reform.4
In the business context, CEOs have been facing an ultimate leadership test. While business executives shall absolutely continue to incorporate and implement in their daily business life the ten principles of true leadership by Robert Iger: Optimism, Courage, Focus, Decisiveness, Curiosity, Fairness, Thoughtfulness, Authenticity, Relentless Pursuit of Perfection, and Integrity, leadership transformation is imperative. CEOs must make conscious choices for leadership transformation facing one crisis after another in the year of 2020 and onward.
In this article, we explore two actions, accompanying mindset and qualities that can help executives navigate such perfect storms and future crises and consciously make leadership transformation.
Leading with Compassion
Numerous studies show that in a business-as-usual environment, compassionate leaders perform better and foster more loyalty and engagement by their teams.5 However, compassion becomes especially critical during a crisis.6
Four months into the pandemic, the nation is seeing a historic wave of widespread psychological trauma driven by fear, isolation, uncertainty, anger, and distress. Nearly half of Americans report the coronavirus crisis is harming their mental health, according to a Kaiser Family Foundation poll.7
To an organization, collective fears and existential threats triggered by the crises call for a compassionate, empathetic, caring and highly visible leadership. If executives demonstrate that everything is under control with business-as-usual meetings and overconfident emails with an upbeat tone, afraid of showing the genuine vulnerability, empathy to connect and compassion to support their people, reduce their stress and burden, absurdly, this might backfire and will certainly not create the confidence, innovation and creativity from people to enable them navigate through the crises and recover the business.
“I’ve learned that people will forget what you said, people will forget what you did, but people
will never forget how you made them feel.”
– Maya Angelou –
People feel it and will never forget when leaders act with genuine compassion, especially during the crises.
Leading with Rooted Power
In routine emergencies, experience is perhaps the most valuable quality that leaders bring. But in novel, landscape-scale crises, character is of the utmost importance.8 Deliberate calm is the ability to detach from a fraught situation and think clearly about how one will navigate it.9
Crisis-resistant leaders, as the captains of their ships during a perfect storm, will be able to unify the teams with deliberate calm, clarity, and stableness, making a positive difference in people’s lives. The calmness comes from well-grounded individuals who possess rooted power of humility, hope, and tenacity.
Crisis-resistant leaders return to their roots, core values, beliefs, and principles during a perfect storm. They pose questions to themselves and teams about what the organization stands for, what the purpose is, and what should continue to do or stop doing, what need to be created as new practices or ways of working, new norms that are emerging.10
The rooted power of crisis-resistant leaders is originated from physical health providing energy and stamina; mental health providing optimistic and positive view; intellectual health providing acute decisiveness and clarity; and social health providing the trust and transparency.
Only grounded leaders with such rooted power can beat landscape-scale crises.
The crises and overwhelming consequences ask for leadership transformation. Besides the ten principles to true leadership1, business leaders who make conscious transformation: leading with compassion and leading with rooted power, can support their organizations and communities, navigating through the perfect storms.
Jane E. Dutton, Ashley E. Hardin, and Kristina M. Workman, “Compassion at work,” Annual Review Organizational Psychology and Organizational Behavior, Volume 1, Number 1, 2014, pp. 277–304; Jacoba M. Lilius, et al, “Understanding compassion capability,” Human Relations, Volume 64, Number 7, 2011, pp. 873–99; Paquita C. De Zulueta, “Developing Compassionate Leadership in Health Care: An Integrative Review,” Journal of Healthcare Leadership, Volume 8, 2016, pp. 1–10.
Jane E. Dutton, et al, “Leading in times of trauma,” Harvard Business Review, Volume 80, Number 1, 2002, pp. 54–61; Edward H. Powley and Sandy Kristin Piderit, “Tending wounds: Elements of the organizational healing process,” Journal of Applied Behavioral Science, Volume 44, Number 1, 2008, pp. 134–49.
Gemma D’Auria and Aaron De Smet, McKinsey & Company, Organizational Practice, “Leadership in a crisis: Responding to the coronavirus outbreak and future challenges”, 2020.
Helio Fred Garcia, “Effective leadership response to crisis,” Strategy & Leadership, 2006, Volume 34, Number 1, pp. 4–10.
Adapted from Ronald Heifetz, Alexander Grashow, and Marty Linsky, “Leadership in a (permanent) crisis,” Harvard Business Review, July–August 2009, hbr.com
About the Author
Bei Ma is the founder and CEO of the Pinea Group (Pinea). Pinea serves as a trusted partner specialized in cross-border fund raising, market access, clinical studies, regulatory pathway, licensing, and distribution to help medical devices, diagnostics, pharmaceutical and biopharmaceutical organizations to achieve the best patient outcomes and commercial success. Previously, Bei Ma served as Vice President of Global Healthcare Business Development at British Standards Institution (BSI) Group. Bei can be reached at 410.271.7267 and email@example.com; her LinkedIn profile is https://www.linkedin.com/in/beima/
Herodotus, the ancient Greek intellectual who became known as “The Father of History” coined the phrase “Culture is King”. Companies rise and fall based on their culture, and challenging situations like we’ve faced here in 2020 test company culture to determine if it’s real or just a façade. In a recent article, I gave advice on how to “Pandemic-Proof Your Funding Pitch Deck”, but as an entrepreneur, are you really able to pandemic-proof your company culture? The answer is a resounding “yes”! In fact, you can create a culture that thrives in any market situation, including Covid and beyond.
How you, the entrepreneur, and the executive team lead at the outset of your business and through “normal” times sets the tone for your culture that will carry you through times that are trying. As Frances Hesselbein so succinctly put it, “Culture does not change because we desire to change it. Culture changes when the organization is transformed; the culture reflects the realities of people working together every day.”
For the leadership team that truly prioritizes the culture of their organization, there are a few core values that will be emphasized down the management ranks to the front-line employees and a call to have the actions of all personnel align with these values. The top core values include:
Two-Way Communication – Consistent and ongoing opportunities for the executive team to interact with staff (both speaking and listening) and for all team members to interact with customers (again, both speaking and listening)
Engagement – Fostering a sense of ownership and a common purpose throughout the organization to energize all employees and get them working toward a uniting vision
Wellness and Balance – Setting policies that value employees’ work-life balance, mental and physical health, and general wellness
Programs and Tools – Enacting programs and implementing tools that allow employees to thrive in personal and professional development, workplace collaboration, idea innovation, mobile and remote work setups, knowledge sharing, and more
The combination of forced and voluntary business shutdowns that occurred nearly overnight as a result of the Coronavirus response quickly led to 88% of companies that either required or encouraged their employees to work from home, according to a Gartner survey. Some companies were ill-prepared for this rapid shift. Many of the companies with the technical capabilities for hosting a truly remote workforce, however, lacked the type of culture that would keep employees engaged, communicating, and thriving when not in an in-person environment.
Having a great framework in place is essential and must include employees who come to a physical office location as well as employees who work from home, in the field, or from a remote office. As companies return to work, executives and board members are going to re-imaging how the company operates. The old approach of leasing large office spaces may alter significantly, causing companies to adopt a more aggressive mobile and remote work model. Re-thinking how these core values that contribute to the corporate culture can be dealt with is just as important to strategize over.
To learn more about creating an engaging culture or how to create an epic fundraising story for digital presentations to investors, contact me for a complimentary consultation by phone at 314-578-0958 or by email at firstname.lastname@example.org.
Ines LeBow is the CEO, Transformation Executive for ETS. She is a known catalyst for business operations, bringing 30+ years of hands-on experience. Ines has a long history of being recruited into senior executive roles to improve the execution of business operations and to drive revenue growth. You can see her LinkedIn Profile at http://www.linkedin.com/in/ineslebow, view the ETS website at http://www.transformationsolutions.pro, or email her directly at email@example.com.
This is a Guest blog post by sales and sales management expert Chris Tully.
How to Hire a Stellar Sales Team to Accelerate Your Recovery
If there is a silver lining to the pandemic-related economic shut down, it is that a lot of excellent salespeople are now available and hungry to contribute to your business. The opportunity here is to rehire your best performers and then build a stronger team than before.
To hire a stellar sales team to accelerate your recovery, you need a plan. Here are some things to consider that will help you create an excellent hiring plan.
1. Are your business goals different than before the shut down?
In the past few months, you’ve had time to really think about your company. You may have revised your strategic business plan and reprioritized your goals. If so, take a look at your new focus and figure out, “what sort of sales power will get me there?”
As an exercise, picture your previous sales team. Imagine how they would – or would not – achieve your new goals, and what sort of salespeople you need going forward.
2. Are you clear about the sales role?
What is it that you really want your ideal salesperson to do day to day, and accomplish overall? What specific skills would that person need? Most importantly, be clear about the personal attributes of the ideal person to represent your business.
3. Are you willing to invest in a professional recruiter?
Sure, LinkedIn Jobs, Indeed, and other free job posts or low-cost ads will get responses. But you and your HR people will spend an inordinate amount of time sifting through a lot of junk to get to the few gems. Unless you’re adding entry-level people, don’t cheap out – invest in a professional recruiter, particularly if you’re looking for experienced sales professionals with a proven track record.
Talent recruiters screen against your hiring profile, verifycandidates’ work history, and validate their self-stated strengths and accomplishments. Recruiters also help you find employed candidates who are not looking for a job but who may be perfect for your business.
4. Do you have your sales incentive structure worked out?
Although it isn’t a jobseeker’s market right now, people are still going to ask how they get paid. That’s completely reasonable. As the job market strengthens, candidates who know their worth are going to hold out for appropriate compensation. In addition to your hiring plan, you’re going to need an incentive plan to attract and retain the caliber of salespeople you expect.
5. What third-party tool are you using to assess candidates?
Third-party assessment tools are a must with hiring decisions. Let’s face it – salespeople are often chameleons. They are trained to probe for needs, listen actively, and position their products (themselves, in this case) in the best possible light to solve your problem.
You need some objectivity to balance those impressions, especially if you don’t hire that many people each year. There has been a lot written about the cost of a bad hire, which I won’t repeat here. Get some help!
These are three salesperson assessment tools that I recommend:
It’s important to have a well thought-out plan to get new sales hires acclimated to their role in your company. For that, you need to a road map that new hires can follow (as well as trainers) so nobody gets lost.
7. Can you “hire slow”?
This last question is a trick one: the answer has to be “Yes.” You’ll want to take your time and think about the answers to all of the questions I’ve laid out, in order to hire superb salespeople. It’ll be so worth the time and effort when the right team propels you to reach – and exceed – your goals.
“For more than 25 years, I’ve led sales organizations in public and private technology companies, with teams as large as 400 people, and significant revenue responsibility.
I founded Sales Growth Advisors to help mid-market CEOs execute proven strategies to accelerate their top line revenue. I have a great appreciation for how hard it is to start and grow a business, and it is gratifying to me to do what I am ‘best at’ to help companies grow faster and more effectively.
Let’s get acquainted. I am certain I can offer you an experienced perspective to help you with your growth strategy.”
Recently, I was interviewed by the Montgomery County Economic Development Corporation about The Big Idea CONNECTpreneur Forum, of which they are a sponsor. Following is the transcript of the interview. I have been a Board Member of this tremendous organization for the past 4 years.
CONNECTpreneur recently entered our 9th year. To date, we have hosted 47 events, the last 4 being “virtual” events. Over 20,000 business leaders, investors, and entrepreneurs from around the world have attended our events. Our website is connectpreneur.org. Please check us out!
THE BIG IDEA
IN CONVERSATION WITH TIEN WONG, CEO, OPUS8, AND
FOUNDER & HOST, CONNECTPRENEUR
Get to know CONNECTpreneur, a unique forum which attracts the region’s top entrepreneurs, investors, innovators and game changers. Organizers of the top tech and investor networking events in the region.
WHY IS IT IMPORTANT TO MAKE CONNECTIONS BETWEEN BUSINESS LEADERS OF ALL STRIPES – CEOS, VCS AND ANGELS – TO EARLY STAGE COMPANIES?
Not just for early stage companies, but all businesses of all sizes, the old adage, “It’s not what you know, it’s who you know,” still applies very relevantly. People want to do business with people. Early stage companies, in particular, have many needs: capital, talent, customers, vendors, partners, product development, marketing, etc. and having a large and deep network gives an entrepreneur a huge advantage in the marketplace, for obvious reasons. There is a proven correlation between the size and quality of one’s network, and one’s overall success — in entrepreneurship and most endeavors.
WHAT IS THE SECRET SAUCE THAT MAKES CONNECTPRENEUR A TOP TECH NETWORKING EVENT IN THE REGION?
It’s our ability to attract the region’s top entrepreneurs, investors, innovators and game changers. We pride ourselves on organizing the top tech and investor networking events in Montgomery County and the Washington region as a whole. We think that the reason that over 70% of our surveyed attendees rate CONNECTpreneur as the “number one” tech and networking event in the Mid-Atlantic region is because of the high quality and seniority of our attendees, which is unprecedented. Over 20% of our attendees are accredited angel investors or VCs, over half are CEOs and founders, and we intentionally keep the ratio of service providers as low as possible. This makes for more meaningful connectivity among the participants.
HOW DOES CONNECTPRENEUR SUPPORT FEMALE ENTREPRENEURS AND ENTREPRENEURS OF COLOR?
CONNECTpreneur is very intentional about providing a diverse set of presenters and speakers in our programming. Our community of entrepreneurs and investors is highly diverse, and our selection committee is very tuned in to the benefits of gender and cultural diversity. We actively work with and partner with local, regional, and national players who share our values of “double bottom line” ethics which value social impact as well as financial gain. Some of our partners include Maryland Tech Council, TEDCO, Startup Grind, Founder Institute, Halcyon and Conscious Venture Labs to name a few.
WHY IS MONTGOMERY COUNTY A GOOD LOCATION FOR AN INNOVATIVE STARTUP COMPANY? AND, WHAT’S YOUR BEST ADVICE FOR SUCCESS?
Montgomery County is a top tier County nationally for startups, and that’s evidenced by numerous awesome success stories. MoCo has a tremendously educated talent base, world class government institutions, top schools, and a large base of angel and high net worth private investors who can provide seed funding. The best advice for success is to understand thoroughly your customer and their needs and pain points very deeply. That way you can get to “product market fit” more quickly, de-risk your opportunity, and be more capital efficient. Too many companies get enamored with their product and design, or culture, or getting media coverage whereas the true essence of any successful business is to provide excellent products and solutions to its customers and sell into their markets like crazy.
WHAT ARE SOME UNIQUE CHARACTERISTICS OF AN EARLY STAGE COMPANY THAT SPARK YOUR INTEREST TO EXTEND AN INVITE TO PARTICIPATE IN THE FORUM?
We are looking for presenting companies which have truly disruptive ideas, products and/or solutions which could be sold into huge markets. And of course, the most important criteria are the quality, expertise, and coachability of the founding team. We have had presenters from all kinds of sectors including life sciences, cyber, telecom, blockchain, wireless, mobility, e-commerce, marketplaces, fintech, medical devices, IoT, etc.
Learn more about CONNECTpreneur at our website: connectpreneur.org
It made sense to sell to Coca-Cola in 2011 for greater distribution, scale and purchasing power. The Honest brand is selling billions of servings through McDonald’s, Subway, Chick Fil-A, and Wendy’s while supporting communities through fair trade and a healthful alternative. He says that his work with McDonald’s alone has removed 1 billion calories from the American diet.
CONNECTpreneur founder, Tien Wong (L), interviews Seth Goldman at George Washington University.
Seth said his company has been connected to Coca Cola for longer than it was an independent company: “The brand has its own life, its own momentum. The teams in Atlanta and Europe we’ve seen they’re doing the right thing with the brand. They are innovating the right way and it’s large enough that I can’t see anyone saying ‘Let’s make it sweeter or discontinue certifying it as organic or Fair Trade.’ I’m not putting a toddler out into the world. This is a 22 year old entity with its own personality and it’s strong enough to survive on its own.”
Seth remains Executive Chair of the Board of Beyond Meat and says he will continue to support the alternative protein brand as it pursues its mission to transform the supermarket’s meat case into the protein case.
He summarized Beyond Meat’s approach: “Rather than define meat by its origin, which says meat always comes from animals, we’re going to define it by its composition. So when you look at it that way, meat is just an assembly of amino acids, which form the proteins; lipids that form the fats, 70% water and some trace minerals and carbohydrates.”
Although some are concerned that products such as Beyond Meat are “processed,” Seth says it is produced with the same equipment used to extrude pasta. And, the sustainability benefits are well worth pursuing.
“It will take 2 1/2 worlds to feed the growing population the same kind of protein diet we have in the United States, but we have only one,” Seth observes. The brand counts the Bill and Melinda Gates Foundation among its early socially responsible investors out to feed the world responsibly.
Seth also remembers fondly another major “investor” without whom Honest Tea would not have been able to fill its first order for 15,000 bottles for Fresh Fields, which became Whole Foods. He’s referring to the bottle supplier in Pennsylvania who helped him respond to the cyclical nature of the beverage industry by agreeing to extend payment through each difficult winter. Seth is proud of bringing the payments each spring, well before the seasonal 90 day payment terms were up. The weekend before his fireside chat at GW, Seth learned the bottle supplier who had believed in him since the beginning had passed away.
“I would not have been able to succeed without him,” he says.
Read more about Seth Goldman’s detailed account of his co-founding Honest Tea here.
About Janice K. Mandel
I’m a multimedia storyteller following evolving voice-first opportunities. Early adopter experience in New York City included: Sr. Editor, EIC/Intelligence, the first online, commercial database (1980s);Communications/Voice of Equinta.com, like Zillow but in 1999; and Reach networks — like Mosaic, only four years sooner. I’ve recruited speakers for VOICE Summit (https://voicesummit.ai) and conducted its microcast leading up to the event. Would love to do more microcasting in the future.
This is a Guest blog post from Mark Haas, CEO of the Association for Enterprise Growth. He helps boards and executives create powerful strategies to help them make decisions with greater confidence, impact and pride.
Corporate restructuring, M&A, competitive intelligence, strategy, new product development, and process reengineering. One thing required for success that they all share is the need for the best and brightest. The smartest person in the room. World class minds to solve world class problems. Top grads from the best schools.
I disagree. While intellect has its place in business, being smart is no replacement for creativity, agility, innovation or insight. Yes, sometimes these capabilities are rolled into one person, but rarely. Several decades helping clients create strategy has led to some insight into where smart is a help and where it can be deadly.
You wouldn’t want only the “smartest” surgeons, engineers, artists or teachers wholly responsible for your welfare. You’d want the right team of individuals, each bringing appropriate skills for the task. Creativity is about being able to see alternatives. Agility requires anticipation. Innovation is more about flawless execution than the up-front ideas. Insight needs, well, a lot more than intellectual horsepower.
The Risks From Being Smart
Being smart has a huge downside for humans. It derives from how we were raised, trained, rewarded and placed in corporations. As children, most of us were rewarded for being on time, orderly and respectful of adult norms. In school, being smart was equated with getting the “right” answer, quickly. Most professions promote a body of knowledge that implies adherence to widely accepted professional standards. Our advancement in most business settings is a result of knowing the right people, performing well on tasks and knowing the rules of promotion. All this seems appropriate because it is so familiar.
In strategy formation, high intellect can be a hindrance; in a team of only “the smartest of the smart,” it can be a disaster. Especially in an increasingly VUCA world, there is no single answer and the first answer is often not the best answer. For the highly intelligent person, the learned (both personally and socially) rigidity and linearity of problem solving to reach an elegant, perfect solution gets in the way of seeing the possibilities of which powerful strategies are made.
Use Smart, But Leverage It
The solution is not to ban smart people from the strategy team. Rather, recognize that the skills you need for a powerful strategy team go far beyond intellect. A high-horsepower car engine is great in theory but is useless without fuel injectors, cooling system and brakes. Fill your team with staff (this also applies to external advisors) who can turn off their brains for a bit and participate more fully in the other essential parts of the strategy process.
Mark Haas is CEO of the Association for Enterprise Growth. He helps boards and executives create powerful strategies to help them make decisions with greater confidence, impact and pride. He works with companies and nonprofits to develop strategies, create and validate business models, and execute with discipline. Mark is also an international trainer, facilitator and speaker in ethics, strategy and performance management. He can be reached at firstname.lastname@example.org and (301) 442-5889.
This is a Guest blog post from Jeff Cherry, Founder and Managing Partner of The Conscious Venture Fund and Founding Partner of The Laudato Si Startup Challenge. He is a tech CEO and mentor, investor, philanthropist, and community builder.
I recently listened to a thought-provoking episode of the TED Radio Hour on NPR entitled What We Value. Its premise was that this economic and societal crisis in which we find ourselves is accelerating the move towards a new set of values when it comes to the practice of capitalism. Those of us in the social impact and Conscious Capitalism space are heartened to see this discussion gaining momentum, but the question remains: How will capitalism change now that the unhealthy state of business and our major societal institutions have been laid bare?
There are many indications that this shift was in the offing far before the onset of the coronavirus pandemic. Although late to the game, the statement released by the Business Roundtable in August 2019 signaled a transformative move away from the outdated notion of shareholder primacy and towards a more human and effective form of business. It certainly garnered the attention of the press. And others in the business mainstream who had been either unaware or hostile to the market forces driving this change, are now finding it hard to ignore discussions of stakeholder management and whether business should have a broader role in society.
These ever-expanding discussions about the purpose of business in society are now taking place in the context of what does a return to “normal” look like in the economy. And a growing sentiment that the normal we were experiencing — where greed, inequity, declining living standards, crony capitalism, rent-seeking, regulatory capture, share buy-backs, corporate welfare and environmental depletion were the norm — isn’t in fact normal. Nor a state of being for which we should collectively yearn. As you might imagine, I agree.
The challenge we face now then, is how do we actually execute on this new idea? Many people talk about business for good and changing the purpose of the firm. But in the real world of competitive advantage, pricing models, customer needs, shareholder demands, supplier, employee and community relationships, knowing what to do is hard. We speak to entrepreneurs all the time who are philosophically aligned with a new narrative about business. They can cite anecdotes about others who have been successful, and they lack a cognitive frame that they can use to build an organization that embodies this day-in and day-out.
I’ve written at length about why I believe a focus on stakeholders in business and capitalism needs to replace the old story. In this article, the first of a two-part series, I’ll describe a framework to begin the journey to business as an institute of societal well-being: Or Human Capitalism.
The New Narrative of Business in Society: Human Capitalism What does a new story about the practice of business and capitalism look like in practical terms?
In order to fully bring this new narrative to life, I believe we need to re-define the purpose of business as a societal institution. Then, we need to translate that definition into tools that real entrepreneurs and executives can use every day to guide how they formulate strategy, individual decision making and implementation.
When a new cohort of the Conscious Venture Lab convenes, I ask a question to frame the work we’ll be doing over the ensuing 16-weeks: “What kind of world could we create if investors, executives and entrepreneurs cared as much about people as they care about profit?” It isn’t a question I expect any of the teams to answer outright. It’s a rhetorical challenge to think about how these ideas impact their businesses and the broader society.
Over the last few months, I’ve reframed that question: What kind of world could we create if we decided our first duty in business was to simply care for each other? This is the essence of Human Capitalism.
This version of the question doesn’t pit people against profit, which I believe is a false construct. Instead, it captures the meaning we’re all experiencing in this moment: can we be a complete society if the overarching purpose of business is only to increase profits and not primarily to improve the human condition? Both of these questions are variations of the age-old investigation of “What is a business for?” Academics, economists, politicians, social scientists and businesspeople have been asking this question for decades, if not longer.
Liesel Pritzker Simmons, co-founder of the impact investing firm Bluehaven Initiative, has said, “A crisis gives us an excuse to have conviction earlier.” What we are experiencing in this moment has emphasized how interconnected we are as a society and as a world. It has emphasized the importance of health as a public imperative. The importance of economic, community and personal resiliency as interdependent societal imperatives to which individuals and all societal institutions, even businesses, need to contribute. This crisis is bringing along those who may not have reached a level of conviction to move to a more human form of capitalism had things stayed … normal.
In this new reality it’s clear that the question about what type of world we want to create can no longer remain abstract or rhetorical. The coronavirus pandemic has exposed the truth, that a focus on our interdependent well-being is necessary for society’s survival. Succeed together or fail together the choice is ours, but we can no longer hide behind a narrative that separates individual financial self-interest from our mutual survival.
In the post-COVID world, the new narrative of business in society is a narrative about authentic caring, societal resilience and collective well-being.
Practical Ways to Integrate Human Capitalism Herb Kelleher, the legendary founder of Southwest Airlines, once said, “The business of business is people — yesterday, today and forever….” But what does it actually mean to structure your business around people? What can you do tomorrow to transform the structure of your business, respond to this new reality and become the type of leader that society needs?
Caring is Job 1: Above all there is one thing leaders must do first in order to be successful in this new world: They must actually care! To be clear, leaders who embrace the idea of caring for stakeholders as a core value and primary motivation for running a business will be well-positioned to succeed in this new world. They’ll be more able to execute on the ideas described later in this article and more likely to attract talent, customers and investors in a post-COVID world of business as a vital instrument of society.
At first this seems obvious and perhaps, some would say, no different than the status quo. But the nuance of authentically treating employees, suppliers, customers and communities as individuals deserving of your care for their own sake, as opposed to primarily as fodder for creating returns is critically important. Not only to how your company will be perceived, but authentic caring — or the lack thereof — will have a tremendous impact on your competitive performance. People understand instinctively if you are treating them fairly simply as a form of manipulation for other ends. And, unless you’ve created a true culture of caring in your organization, you’ll be tempted to abandon that care when it comes into conflict with your “real goals.” The best leaders however will understand this simple truth: how we think about creating financial value is now, more than ever, clearly tied to the way we create societal value. Authentically caring is a key component of this new narrative.
With that as our foundation, there are two things that every leader can do to build caring into the operational DNA of their business:
First, adopt a specific set of guiding principals about what it means to care for each other in service of societal well-being. And second,
Institute a practical business operating system that provides a framework for living into those guiding principals.
Here in Part-1, I’ll discuss a set of guiding principles we’ve created at the Conscious Venture Lab to help entrepreneurs execute upon these cultures of caring.
Guiding Principles: The Five Promises of Collective Well-Being In order to seed this new culture of caring into the DNA of your operations, it is crucially important that you articulate and codify a set of guiding principles that the entire company can use to organize your thought processes and create operating norms, policies, procedures and metrics that will keep your culture on track in good times and in challenging times…like during a pandemic.
Companies that will lead us into a more effective model of capitalism and a future of broadly-shared prosperity have structured their business to deliver on what I call The Five Promises of Collective Well-Being, through which we vow to use business to make the world:
More sustainable and
More prosperous for all.
Let’s examine each principle:
Business as a path to a More Just society: Leaders who are best at this will work to create social justice by structuring their organizations to level the playing field and authentically create access to opportunity for all those in their ecosystem who want to contribute.
Conscious Venture Lab and SHIFT Ventures portfolio companies Hungry Harvest and R3 Score have built this promise into their business models, which drives impact and returns.
Hungry Harvest creates a more just world by providing fresh food to communities that wouldn’t otherwise have access to it and dignified work opportunities to people in need. As a result, they create scores of “Harvest Heroes” who loyally buy wholesome food from the company that otherwise would have gone to waste. In the process they have increase sales by more than 34,000% over the last 4 years.
R3Score creates a more just world by providing a dignified return to civil society for millions of formerly incarcerated Americans and allowing banks a way to engage with people they would otherwise ignore. Thereby expanding the banks’ customer base, putting financial assets to work that would otherwise lay fallow and giving the 1-in-3 Americans with a criminal record the opportunity to build a new life.
Business as a path to a More Joyous life: Leaders who bring more joy into the world will do so by focusing on a combination of the quality of the human interactions in their operations, eliminating misery as a core aspect of their business and/or creating products that bring authentic joy to more lives.
One of my personal favorite companies, Union Square Hospitality Group, uses a culture of caring and enlightened hospitality to bring joy to employees, customers and suppliers alike.
Startup Aqus Water, that was a part of the Vatican Laudato Si Challenge in 2017, has created a product that puts “three years of clean water in the palm of (the) hand(s)” of people in places where lack of clean water has been causing extreme hardship for centuries. With more than 780 MM people in the world lacking access to clean water, bringing joy will undoubtedly bring prosperity to many.
Business as a path to More Equitable communities: When leaders focus on creating a mutual exchange of value between all stakeholders, they move their organizations away from the negative consequences of shareholder primacy and create more equitable communities for everyone. Paradoxically, an equitable approach to business, or removing the shareholder blinders, often creates new paths to greater value for shareholders.
Greyston Bakery in Yonkers New York is a pioneer of open hiring. They create a more equitable world by focusing not on the tyranny of weeding people out in the hiring process but by providing the dignity of work to anyone who wants it.
Here in Baltimore, Jacob Hsu and his company Catalyte have created an entirely new way of identifying undervalued individuals who have the aptitude to become exceptional engineers. Creating new paths to equity and unleashing massive financial potential for communities, his clients and the company.
Business as a path to a More Sustainable world: The winning leaders of the new narrative think and plan for the long-term. They understand that sustainability in every sense is the key to enduring organizational health. They establish a circle of growth for the planet, the people who serve or are served by the organization and the organization itself.
Billion-dollar clothing company Patagonia has rejected the world of “fast fashion” by creating high quality, long-lasting products and offering a repair and reuse program to discourage customers from buying things they don’t need.
Business as a path to a More Prosperous existence for us all: The best leaders view value creation with a polarity, or both/and mindset. They actively look to create real wealth for employees, customers, communities, suppliers and shareholders. They work to manage the polarity of creating value for all stakeholders by asking themselves questions like: “How do we simultaneously achieve the upside of paying our employees as much as possible, and, the upside of creating great returns for shareholders?” This is in contrast to shareholder value leaders who see all stakeholder relationships as tradeoffs that need to be solved for the benefit of shareholders.
Starbucks has fed more than 10 million people through its FoodShare program, redoubled its commitment to eliminate gender pay equity gaps, and committed to becoming “… resource positive — storing more carbon than we emit, eliminating waste and providing more clean fresh water than we use …” — all while rewarding shareholders handsomely — even during the coronavirus pandemic.
Why Human CAPITALISM? In Part-2 of this series I will discuss how the tenets of Conscious Capitalism and stakeholder management will allow organizations to clear the clutter and build these principles into everyday operations.
For now, a note before we end to my main audience: The Skeptics:
I spend the majority of every waking hour thinking about how to support entrepreneurs who have previously been neglected and who are creating world changing companies despite the immense hurdles they face. I also spend a majority of that time thinking about how to invest on behalf of my limited partners in a way that will create exceptional returns. I am a capitalist who believes capitalism can and should be practiced in a way that unleashes its power to elevate all humanity. That we can create a more humane form of commerce and human cooperation. What I am suggesting is that capitalism, like any man-made system, must evolve as society evolves. To paraphrase my friend and mentor Ed Freeman, professor at the Darden School at The University of Virginia, the alternative to capitalism as we know it today is not socialism, but a better, more human form of capitalism.
For those who would push back on these ideas as leaving shareholders behind and giving away profits I would simply ask you to suspend disbelief for a bit. Take a few minutes to think not about what you might lose, but about what you might gain. What kind of world could we create if we decided our first duty in business was to care for each other? Look around…I think that time has come.
Jeff Cherry, is CEO and Managing Partner of SHIFT Ventures, and Founder & Executive Director of Conscious Venture Lab, an award-winning and internationally recognized early stage accelerator. He is also Founder and Managing Partner of The Conscious Venture Fund and Founding Partner of The Laudato Si Startup Challenge. Jeff is a pioneer in conscious capitalism and double bottom-line investing. He can be reached at email@example.com.
This is a guest blog post from Shellye Archambeau, humanitarian, author, speaker, tech CEO and Fortune 500 corporate board executive.
“Noel, caring is sharing!” my five-year old granddaughter reprimands her three-year old sister, who doesn’t want to share her toy. It’s a mantra my daughter uses to teach her children. As I witness this exchange while I “shelter in place” with them in Tampa, Florida, it strikes me that the whole world needs to be reminded of this simple concept.
What do we need to share? Compassion. Simply said, demonstrating compassion means to show kindness, caring and a willingness to help others.
Each of us is being affected in very different ways. For some, it is a real inconvenience, but work and life for the most part continue. Our meetings have turned into video conference calls. Our normal support infrastructure has vanished, childcare, school, household help, etc… We aren’t able to gather for celebrations such as weddings, birthdays or a friend’s successful battle against cancer. Worship, gym exercise and self-care routines are being disrupted. Our travel is curtailed. These impacts are a nuisance, but frankly not that hard.
At the other end of the spectrum in addition to the tens of thousands of people battling the virus itself, there are many people out of work or whose businesses are fighting for survival. They are facing real hardship and there are a lot of them: hairdressers, retail and restaurant workers, performers, event planners, housekeepers, etc. The federal reserve reported last year that 40% of Americans don’t have $400 in the bank for emergency expenses. I know the government is also working on stimulus packages for Americans and business owners however the ramifications of now several months without pay will be felt significantly. If we all can take some measure to support, help, comfort and lend the proverbial hand – it will make a difference.
I had the honor of meeting and speaking with the Dalai Lama several years ago. Compassion is one of the key tenets of his teachings.
“Compassion brings inner peace and whatever else is going on, that peace of mind allows us to see the whole picture more clearly.” Dalai Lama
Research backs up the Dalai Lama statement. The Greater Good Science Center at UC Berkeley has conducted research that supports the premise that leading a compassionate lifestyle improves both mental and physical health. “The reason that a compassionate lifestyle leads to greater psychological well-being may be that the act of giving appears to be as pleasurable as the act of receiving, if not more so. A brain-imaging study led by neuroscientists at the National Institutes of Health showed that the “pleasure centers” in the brain—i.e., the parts of the brain that are active when we experience pleasure (like dessert, money, and sex)—are equally active when we observe someone giving money to charity as when we receive money ourselves!”
Now is the time to help where you can. A couple in my Mountain View neighborhood literally started knocking on doors of neighbors who they didn’t know to see if people needed anything. They met several elderly people who indeed needed help with grocery shopping. Another person in my Nextdoor Whisman Station community reached out to offer to talk on the phone with anyone who needs to talk to someone, to rant, combat loneliness or for any reason at all. I’m continuing to pay my housekeeper and my hairdresser for my regularly scheduled appointments even though the services aren’t being provided. Their income is being severely impacted by the necessary Shelter in Place policies.
So, find ways to show your compassion for others during this very challenging time.
This can be done through donations to charities that support the most vulnerable in our society. Such as the American Red Cross who is facing massive blood shortages due to blood drive cancellations, your local food bank, Meals on Wheels who feeds the elderly, No Kid Hungry which deploys funds to ensure that kids don’t go hungry especially with schools being closed, etc.
You can also financially support the Arts or your local businesses. For those not in a position to help financially, you can give the gift of time or effort. For example, there are thousands of people in nursing homes whose families can’t visit. Call one and offer to speak to residents on the phone. Many high-risk people are afraid to go to grocery or drug stores. Offer to do their shopping when you go.
Use your influence as a leader in business, offer free coaching, support, or tools that can be readily provided to help struggling small businesses and entrepreneurs. Not sure how to get started. Check out organizations such as Score.org and businessadvising.org, both of whom provide confidential business advice through a network of volunteer business people.
Now is a time more than ever to be a mentor within your company and community. For example I launched online “Ask Me Anything” live sessions to provide perspectives and support to people working through professional or entrepreneurial issues.
Give your teams the ok to share their concerns, etc.. Sometimes people just need to be heard and know someone cares about them. There’s also a lot to be learned by just listening to the challenges and issues faced by team members.
We are in this together and together we will get through this just as we have overcome past crises. I believe that most of us are compassionate people. Let’s all take at least one action to demonstrate it. As my granddaughter said, “Sharing is caring”.
Shellye Archambeau is a humanitarian, speaker, author, technology company CEO, and Fortune 500 Board member. She is the author of Unapologetically Ambitious and a leading figure in Silicon Valley. She sits on the boards of Verizon, Nordstrom, Roper Technologies, and Okta. She is the former CEO of MetricStream and former President of Blockbuster. Please follow her at http://www.shellyearchambeau.com
Almost 9 years ago, I published this, my first Blog post on WINNING IDEAS. As I work with students, mentees, and other business colleagues of late, I find myself reverting to various “Fundamentals” in our conversations, this one perhaps being the most important of all. Please enjoy and let me know what you think!
What does it take to be Successful? Everyone has an opinion on this for sure.
Success is Winning, and everyone loves Winning.
Having been a student and analyst of the subject of Success for over 40 years, I think I have boiled down the formula of what creates Success:
Each of the great thinkers and each successful person has their own personal take on what it takes to achieve success, but these are the 5 essential elements.
Of course, I left out a couple of other important elements like Serendipity, Luck, Sacrifice, Hard Work, and others, but I believe that these “sub elements” are a part of one of these 5 essential ingredients. For example, if you have a Burning Desire (passion), then you will make the sacrifices and work hard. Goal Setting includes goal review, and is the roadmap to the destination.
Courage is an interesting one and we don’t hear it mentioned often, but to me, Courage is all about taking action, and stepping up and going outside your comfort zone to make things happen. Without Courage, thought cannot easily be transformed into Action.
And what about luck? Well, the more persistent you are, the luckier you get. By never giving up and hanging in there, opportunities will inevitably come your way.
Persistence is my favorite, and I conclude this, my first ever Blog Post with my favorite quote:
“Never give in. Never give in. Never, never, never, never–in nothing, great or small, large or petty–never give in, except to convictions of honor and good sense. Never yield to force. Never yield to the apparently overwhelming might of the enemy.” – Winston Churchill