Conscious Company Magazine | Issue 15 | September/October 2017 by Conscious Company

THE BUSINESS CASE FOR PURPOSE

WHOâ&#x20AC;&#x2122;S WHO IN THE MOVEMENT

THE COMPLETE A TO Z GLOSSARY

CONSCIOUS COM PA N Y SPECIAL ISSUE

2017 INDUSTRY

GUIDE THE WHO, WHAT, WHY, AND HOW OF DOING GOOD THROUGH BUSINESS

LEADERSHIP | WORKPLACE | SUSTAINABILITY | ENTREPRENEURSHIP

TABLE OF CONTENTS

DEFINING “CONSCIOUS BUSINESS”

THE CONSCIOUS COMPANY GLOSSARY*

THE BUSINESS CASE FOR GOING CONSCIOUS*

DR. VICTOR STRECHER ON THE INCREDIBLE POWER OF PURPOSE

*Cover Story

KEY PLAYERS: INDUSTRY GROUPS AND LEADING COMPANIES*

INTERFACE GLOBAL’S JAY GOULD ON TRANSFORMING COMPANIES BY FINDING THEIR CORE VALUES

DIANA CHAPMAN ON THE POWER OF CONSCIOUS LEADERSHIP

11 WAYS TO EVOLVE YOUR BUSINESS BY RAJ SISODIA

September / October 2017 | Issue 15 EDITORIAL DIRECTOR Rachel Zurer

ART DIRECTOR Cia Lindgren

GENERAL INQUIRIES

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WHAT // WHY // WHO // HOW

WHAT IS A

CONSCIOUS COMPANY? Meet the “Millennial mindset” that will fundamentally shift capitalism. BY RACHEL ZURER There’s a change happening in business. Can you feel it? It’s there, in the organic soymilk you can now buy at Walmart. It’s buzzing through the handmade artisanal jewelry your niece found on Etsy. It’s ringing through the halls of Next Jump, a $2 billion e-commerce company that works as hard at helping its employees become better versions of themselves as it does on its products and revenue. We even caught an echo of it in the 2017 Super Bowl ads by major corporations that focused not primarily on their products but rather on social issues such as immigration and equal pay for women. The change has been building for a long time. And now the hum has become a roar, spurred on by the thousands — maybe millions — of people who have seen the true price of “profits at all costs” and said, “Enough! We want something more in life,

in business, in companies, in work, in the world. We want meaning. Purpose. Joy. Of course money matters. But money isn’t everything. We know there can be more.” Since 2014, we’ve been building this magazine and media company to help document and accelerate this change in business culture: from viewing profit as an end to a new normal where profit is seen merely as a means. And after several years at the helm of Conscious Company Media, after interviewing dozens of CEOs, meeting hundreds of entrepreneurs, and participating in this new way of doing business, we’re confident this isn’t just a fringe movement or an idealistic trend. This shift is real, permanent, and growing. It’s driven partly by the demands, needs, and values of the Millennial generation raised on the hangover of the over-consumptive 1980s, partly by Baby Boomers starting to wonder seriously about their legacy, and

Bhakti, TOMS, Patagonia, Seventh Generation, and Clif are all examples of conscious companies.

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partly by Generation X, which found that the singular pursuit of profit didn’t lead to a promised land. Thank goodness. Because this shift is our planet’s best hope.

WHAT IS A MISSIONDRIVEN BUSINESS? People often ask us how we define a “conscious company.” While there’s no single answer that fits for-profit businesses across all sectors, we’ve settled on some overarching guidelines: a conscious company takes all stakeholders into account in its operations, decisions, and strategies, and has a higher purpose beyond profit. These mission- and purpose-driven companies consider, measure, and value the people, communities, and environment that their operations impact. And their goals go beyond “doing less bad,” such as reducing pollution or energy use — though of course that’s important. These

companies seek to actively create a positive impact on the world around them in as many ways as possible. One key difference between business and other pathways to achieving a mission — say, politics or philanthropy — is that business generates wealth along the way. The challenge is designing and building businesses that can generate that wealth without the negative externalities and harmful side effects that inevitably come from focusing on profit alone, or above all else. Of course, simply having a mission doesn’t guarantee having a strong business model. Businesses must be profitable in order to sustain themselves. But conscious companies don’t see the drive for profit as being in conflict with their mission; in fact, the more successful a business is, the easier it becomes to achieve the mission or to “give back.” Money and profits become the fuel that powers the mission engine. We’ve heard the naysayers: “Too good to be true.” “Nice idea if you don’t actually care about success.” “Idealistic pish posh.” But this isn’t just theory, and this isn’t just for independently wealthy do-gooders who can afford to throw cash away. There are billion-dollar companies operating by these principles right now, today. Companies like Organic Valley, which has thrived

for 30 years without compromising its mission to take care of family farmers. Companies like Patagonia, one of the most successful and well-respected brands in the outdoor industry, which sees protecting the natural places where its customers play as being fundamental to ensuring its continued success. Companies like Natura, the Brazilian cosmetics manufacturer that creates jobs and protects the Amazon rainforest while reaching millions of consumers in seven countries. These old-guard conscious companies spent decades forging their own paths amid a business landscape that didn’t always understand what they were up to. But a new generation of workers and consumers is coming into power, spreading a mindset that no business of any kind can afford to ignore much longer. The examples above prove that mission is compatible with success. But everything we know about the Millennial mindset and shifting consumer and worker values has us convinced that in the nottoo-distant-future, mission will actually become a requirement for thriving in the business world. Modern workers are no longer satisfied with punching a clock at the same company for life, making as much money as possible with the hope of giving back to charity and finding meaning upon retirement. They want purpose,

now. Evidence is starting to mount that they have the numbers, means, and drive to shift the fundamental nature of how business is done (see page 24). So what does that mean for you? Read on for more information about what the conscious business movement is about, why it makes sense, who’s leading the way, and how to start implementing or deepening these practices for yourself. We’ve packed a lot of information into this special industry guide — designed to be useful to both experienced practitioners and newcomers — and yet it’s also just a sliver of what’s out there. The good news is that you’re already on the path. By getting curious about the possibility of a different relationship between business and work on the one hand, and the rest of our lives on the other, you’re already helping ensure that we’re not just on autopilot toward repeating the same old practices of the past. As more and more companies, CEOs, leaders, and workers get on board with conscious business ideas, we can look forward to a better world, where business helps rather than hurts the environment, where work leaves people fulfilled, and where justice, freedom, and equality thrive not in spite of the companies in our midst, but because of them. That’s a world we’re willing to work for. Will you join us?

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THE CONSCIOUS COMPANY

To understand the movement, you’ve gotta know the lingo. Whether you’re a seasoned pro or new to the field, this A to Z guide to the most important terms in conscious business will help you keep it all straight.

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WHAT // WHY // WHO // HOW

Many conscious leaders see advocating for causes as an important role businesses can and should play in society.

ACCELERATOR An organization that helps startups improve their chances for success by providing mentoring, connections, and access to funding, often in a bootcamp-like, short-term format. Accelerators usually provide access to capital or funding in exchange for equity in the venture. While the most famous accelerators have typically been in the tech industry, many are focused on mission-driven organizations. See also: Incubator

ADVOCACY Public support for or recommendation of a particular cause or policy.

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ing a high-functioning workplace culture, especially in the context of diversity and inclusion. Research shows that employees who feel a sense of belonging in an organization are more likely to perform at their best and feel ownership in the success of the company.

AUTHENTIC LEADERSHIP A leadership approach that emphasizes honesty and vulnerability, popularized by the 2003 book “Authentic Leadership” by Bill George. Most practitioners agree that authentic leaders are self-aware, genuine, heart-centered, and focused on results related to an ethical mission — not their own personal gain. See also: Servant Leadership

ACCREDITED INVESTOR A legal designation, the parameters of which vary by country, of a person or entity authorized to invest in higher-risk vehicles, such as providing capital to startups. In the US, to be an accredited investor a person must have a net worth of at least $1 million excluding the value of their primary residence, or demonstrate an annual income of $200,000 ($300,000 for joint income). See also: Equity Crowdfunding

socially responsible business.”

BIOMIMICRY

BELONGING Acceptance as a member or part. Belonging is considered to be a basic human need in many psychological theories. Increasingly, fostering a sense of belonging among employees is seen as an important part of creat-

An approach to innovation, adopted by many conscious companies, that seeks sustainable solutions to human challenges by emulating nature’s patterns and strategies. The goal is to create products, materials, structures, and systems that are well adapted to life on earth over the long term. (Source: biomimicry.org)

BENEFIT CORPORATION B CORP(ORATION) A designation issued to for-profit entities by the nonprofit B Lab, which certifies that the business meets rigorous standards of social and environmental performance, accountability, and transparency. Unlike benefit corporations (see right), B Corp status has no legal standing; rather, it’s a marker of having met third-party verified criteria. Inc. magazine has called B Corp certification “the highest standard for

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A type of legal structure for businesses available in Italy and 33 US states which have passed legislation to enact it. Benefit corporation status expands the legal mandate of boards, requiring them to consider in their decisions environmental and social factors as well as the financial interests of shareholders. See also: Community Interest Company, L3C, Social Purpose Corporation

State by State Status of Legislation

Laws passed

Working on it

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It’s important now more than ever for businesses to stand up for the change they want to see in the world. No longer can a business stand on the sidelines and hope elected officials create change. - Bryan Papé, CEO and founder, MiiR

BLENDED VALUE

BUSINESS

A conceptual framework, first introduced by impact investor Jed Emerson, which posits that it makes no sense to think of the economic or financial value created by an organization or an investment as separate from its social and environmental value — whether the investment or organization is a nonprofit or for-profit entity. See also: Shared value, Triple Bottom Line

An economic system in which organizations produce goods, offer services, or sell existing goods in exchange for money — ideally creating value in the process. That value is typically measured in financial profit, though other metrics of value are increasingly being considered, including ones related to human and environmental wellbeing. The term also refers to individual organizations participating in the economic system.

BOTTOM OF THE PYRAMID The largest but poorest socio-economic group; the 2.7 billion people worldwide who live on less than $2.50 a day. Many social entrepreneurs have targeted the vast untapped opportunity to harness market forces for good in creating products and services to reach this underserved market. The term was first popularized by management scholar C.K. Prahalad in his 2004 book “The Fortune at the Bottom of the Pyramid.”

COALITION

CAUSE MARKETING An increasingly popular marketing technique in which a brand aligns with a nonprofit or social cause to raise both money and awareness around an issue and to profit from the “halo effect” of being associated with said cause or issue. See also: Cause Washing

CAUSE WASHING Inauthentic cause marketing, which occurs when a company’s demonstrated practices don’t match the values it’s purporting to uphold or support by aligning itself with a nonprofit or social cause. Conscious companies, by contrast, integrate solving social problems not just into their marketing plans but also into their full business strategies and operations.

An alliance formed between entities or groups, especially for some temporary and specific reason. Forming coalitions with other groups that hold similar values, interests, and goals allows members to combine their resources and become more powerful. Because conscious companies often exist to solve social problems larger than themselves, they sometimes band together with other like-minded organizations to accomplish goals such as advocating for policy changes. See also: Collective Impact

COLLECTIVE IMPACT “Collective impact occurs when organizations from different sectors agree to solve a specific social problem using a common agenda, aligning their efforts, and using common measures of success,” according to fsg.org. Also the name of a specific, structured approach to such a collaboration.

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COMMUNITY INTEREST COMPANY

CONSCIOUS COMPANY

This legal designation established by the United Kingdom in 2005 creates a type of business entity somewhere between a nonprofit and for-profit. It allows for returns to investors, but these must be “balanced and reasonable” and the business must exist to provide a community benefit. See also: Benefit Corporation

CONSCIOUS Fully aware of, responding to, and sensitive to one’s surroundings and oneself; acting deliberately and intentionally thanks to that awareness.

Any business that subscribes to a holistic view of sustainability extending to the self, the workplace, and the company’s effect on the world.

CONSCIOUS CONSUMERISM The increasingly common and influential practice of consumers using their buying power to influence the world by purchasing responsibly produced products and services.

CONSCIOUS LEADERSHIP The practice of guiding a group from a heightened state of internal and external awareness.

CONSCIOUS CAPITALISM™ The trademarked name of a particular philosophy of purpose-led business popularized by Whole Foods Market co-founder and co-CEO John Mackey and professor Raj Sisodia through their 2013 book “Conscious Capitalism: Liberating the Heroic Spirit of Business.” Mackey and Sisodia are also the co-founders of the nonprofit organization Conscious Capitalism Inc., which has local chapters in 26 US cities and 12 other countries. The Conscious Capitalism framework focuses on four interrelated disciplines — purpose, culture, stakeholders, and leadership — and posits that creating a truly conscious company requires a strong commitment to each discipline. Conscious Capitalism’s principles are exemplified by a growing number of companies including Starbucks, Unilever, the Container Store, and Zappos.

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Conscious leaders observe and master their own thoughts, feelings, beliefs, assumptions, and tendencies while simultaneously noticing the effects and results of their choices and actions.

COOPERATIVE A form of ownership in which a business (or other organization) is owned by and run for the benefit of all of its members. It’s generally characterized by a democratic governing structure in which each user-owner receives one equal vote. See also: Employee Stock Ownership Plan

CORE VALUES A person or organization’s fundamental and most important moral beliefs,

which serve to guide all decisions, actions, and goals. Articulating and operationalizing a company’s core values is an important component of practicing conscious business.

CORPORATE SOCIAL RESPONSIBILITY (CSR) A business’s efforts to measure and control its effects on the greater environment and society in which it operates. The term generally refers to work that goes beyond what is legally required, and traces its origins as a modern concept to roughly the 1950s. The main categories of CSR practices include environmental sustainability efforts, philanthropy, ethical labor practices, and volunteering. CSR practices risk being seen as inauthentic, tacked on, or an afterthought if the core operations of the business contradict or undermine their ostensible message or mission.

CO-WORKING The use of a shared office or other working environment by people who are self-employed or working for different employers, typically to share equipment, ideas, and knowledge. See also: Accelerator, Incubator

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and ethical impact. Growing evidence suggests that companies with strong ESG indicators may perform better in the long term and have superior business models. See also: Socially Responsible Investing

CRADLE TO CRADLE “A phrase invented by Walter R. Stahel in the 1970s and popularized by William McDonough and Michael Braungart in their 2002 book of the same name. This framework seeks to create production techniques that are not just efficient but are essentially waste-free. In cradle-to-cradle production, all material inputs and outputs are seen either as technical or biological nutrients. Technical nutrients can be recycled or reused with no loss of quality and biological nutrients composted or consumed,” according to sustainabilitydictionary.com. See also: Biomicmicry, Regenerative Economy

EMPLOYEE ENGAGEMENT

The packaging on this chocolate is Cradle to Cradle Certified™.

CRADLE TO GRAVE The practice of taking responsibility for disposing of the goods one produces once consumers are done with them.

DELIBERATELY DEVELOPMENTAL ORGANIZATION (DDO) A term coined by Harvard University researchers Robert Kegan and Lisa Laskow Lahey to describe companies that do every-

thing within their power to create conditions that enable workers to overcome their own internal barriers to change, take stock of and transcend their own blind spots, and see errors and weaknesses as prime opportunities for growth. According to the pair’s research, deliberately developmental organizations reap more profits, have more satisfied and functional teams, and are more innovative than companies that don’t take this approach.

documented that increased diversity drives innovation, creativity, and adaptability within a company. See also: Belonging, Inclusion

An employee’s involvement and satisfaction with and commitment to work — or, put another way, the emotional connection a worker has with their job. Highly engaged employees tend to outperform their peers, and companies that succeed in nurturing high levels of engagement throughout their workforce enjoy numerous benefits, including higher profitability, better productivity, and improved customer metrics. Conscious companies tend to benefit from high employee engagement.

EMPLOYEE STOCK OWNERSHIP PLAN (ESOP)

DIVERSITY

ESG (ENVIRONMENTAL, SOCIAL, AND GOVERNANCE)

In business, this term usually refers to a heterogenous mix of attributes within a workforce, including but not limited to gender, race, age, background, and education. Extensive research has

Environmental sustainability practices, social responsibility commitments, and governance policies are three factors socially conscious investors use to evaluate and screen investments for sustainability

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A program that provides employees with shares of the company they work for, usually through a third-party trust, and often at no upfront cost to the employee. Unlike in a cooperative, the employees don’t directly own shares and typically don’t gain voting rights in the company. Employees typically receive the cash value of the shares in their account when they leave the company. See also: Cooperative

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EQUITY CROWDFUNDING A process of raising money to fund a venture through multiple small contributions from a large number of people, with the backers each receiving a share of ownership in the company. This type of crowdfunding became legal in the US for non-accredited investors in 2016.

EVERGREEN BUSINESS This term, coined by the Tugboat Institute, describes a purpose-driven company that plans to remain privately owned, focuses on long-term outcomes, and avoids raising capital that puts money before mission. See also: Small Giant

EXTERNALITY A side effect or consequence of business activity that isn’t reflected in the monetary cost of providing related goods or services. For example, nitrogen runoff into local waterways is a negative externality of some livestock farming.

EXTRACTIVE Tending to withdraw resources with no provision for replenishing them. Examples include removing groundwater for agricultural or manufacturing use at a faster rate than that at which the aquifer recharges, or not allowing for adequate rest when scheduling employee work hours. The term can

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apply to business models or even whole economies, and is a major element of what conscious companies seek to avoid.

sectors that uses earned income to maximize social benefit. See also: ForBenefit, Hybrid Organization

FAIR TRADE

GLOBAL REPORTING INITIATIVE (GRI)

Any one of a number of certifications that verify that suppliers, especially in developing countries, receive above-market rates for their goods (usually commodities) and that those goods were produced according to particular environmental and social standards. Two examples of certifying bodies are Fair Trade USA and Fair Trade International.

An independent international organization that provides standards for sustainability reporting, encompassing both environmental and social impacts. As of 2017, almost 11,000 organizations used these standards for their reports.

GREEN BUSINESS An informal term describing a company that prioritizes environmental sustainability in its practices and policies. See also: Sustainable Business

decision-making through a network of self-organizing “circles.” Features of the system, which is trademarked by HolacracyOne LLC, include focusing on roles as opposed to job descriptions, distributed authority, and transparent rules. The approach gained traction in 2013 when it was adopted by Zappos under CEO Tony Hseih.

HYBRID ORGANIZATION A business that operates under a combination of nonprofit and for-profit principles, and often legal structures, in order to maximize the advantages of both models — for example, a nonprofit’s ability to accept tax-exempt donations and a for-profit’s ability to accept investment in exchange for equity. The nonprofit and for-profit arms can relate to each other in a variety of ways; for example, a nonprofit can own equity in a related for-profit subsidiary.

FOR-BENEFIT A term used to describe organizations that generate earned income and/or profits but primarily exist to fulfill an explicit social mission. See also: Fourth Sector, Hybrid Organization

FOURTH SECTOR A category of enterprise at the intersection of the public, private, and social

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HOLACRACY™ A peer-to-peer system of organizational governance created by former programmer Brian Robertson that distributes authority and

IMPACT INVESTING Placing capital into companies, organizations, or funds with the intention to harness the power of

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enterprise to generate positive social and environmental results alongside a financial return. The Global Impact Investing Network estimated that the 2016 impact investing market included $114 billion of assets under management.

INCLUSION In the context of workplace culture, inclusion means harnessing the power of diversity by creating a welcoming environment of connection, support, and respect where people of different backgrounds are able to contribute at their fullest. See also: Belonging, Diversity

INCUBATOR A program, often run by a nonprofit, designed to help foster success in startup businesses by providing entrepreneurs with resources, connections, and services. Many focus on mission-driven business. In contrast to an accelerator, incubators often do not have strict timeframes and usually don’t take an equity stake in a company. See also: Accelerator

INTEGRATED REPORTING A method of communicating the value a business creates that includes both traditional financial measures and information about non-financial resources such as human and social capital and environmental benefits.

INTRAPRENEUR

NEW ECONOMY

An individual who behaves like an entrepreneur by taking initiative to innovate, but from within an existing organization. While the subject of the innovation can vary, the term is often used to describe changemakers who seek to drive a business toward more conscious practices.

A term used within the conscious and sustainable business movements to describe a future economic system that works for all people, including those who have historically been left out of economic prosperity, and which supports regeneration of human and natural systems.

L3C (LOWPROFIT LIMITED LIABILITY COMPANY) A legal designation available in eight US states and 2 Native American tribes. Unlike a standard LLC, an L3C has an explicit charitable mission, yet, unlike a nonprofit, it can distribute profits to its members or owners. See also: Benefit Corporation, Community Interest Company, Social Purpose Company

LIVING WAGE A wage high enough to maintain a normal standard of living in the residential area in which it is earned. Paying a living wage to all employees is a common commitment of conscious companies.

MISSION STATEMENT A statement that sets out a business’s purpose and what it means to achieve it both now and in the future. The term is sometimes used interchangeably with “purpose,” especially in the context of describing a business that prioritizes achieving self-transcendent goals. See also: Mission-Driven Business, Purpose Statement

MISSION-DRIVEN BUSINESS A for-profit enterprise that incorporates a social purpose into its strategy and operations.

NONPROFIT Also known as “not-forprofit,” these organizations conduct business for the benefit of the general public, and legally must reinvest any profits beyond normal operating expenses into the cause or mission they serve. The legal structure does not allow for private owners or shareholders. Nonprofits are usually exempt from income taxes and able to accept tax-exempt donations.

NATURAL CAPITAL The world’s stocks of planetary assets — such as water, sun, soil, and air — from which humans derive the conditions and processes necessary to make life and business possible.

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PRINCIPLES FOR RESPONSIBLE INVESTMENT (PRI)

OPEN-BOOK MANAGEMENT

OPEN HIRING™ A human resources and community development technique pioneered by New York-based Greyston Bakery in which certain job openings in the business are offered to the next person on a waiting list with no background checks or interview process. The practice demonstrates that with proper support, many people who would not be hired via a traditional process can be excellent employees.

A management philosophy in which a company shares all its financial information with all employees in order to empower and enable them to make better business decisions. This level of trust and transparency can also enhance belonging and engagement.

ORGANIC An agricultural certification that attests that foods are grown and processed according to strict guidelines that prohibit the use of synthetic fertilizers and pesticides, antibiotics, hormones, genetically modified organisms, and more.

PATIENT CAPITAL A financial investment with no expectation of a short-term profit. Investments that are aligned with an organization’s social or environmental mission are often patient with regards to financial returns.

A set of six voluntary, aspirational investment principles drafted in 2005 by investors in partnership with the United Nations, including, for example, “we will seek appropriate disclosure on ESG [environmental, social, and governance] issues by the entities in which we invest.” The principles now have about 1,750 signatories representing $70 trillion committed to incorporating ESG issues into investment practice.

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Resilient people and companies face reality with staunchness, make meaning of hardship instead of crying out in despair, and improvise solutions from thin air. Others do not.

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— Diane Coutu, “How Resilience Works”

New York’s Greyston Bakery practices Open Hiring™.

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PURPOSE STATEMENT

SHAREHOLDER ADVOCACY

A statement made by a person or organization about why they exist, and about the difference they seek to make in the world. Research suggests that both individuals and businesses with a strong, self-transcending purpose are more likely to thrive. See also: Mission Statement, Vision Statement

According to US law, anyone who owns shares of a company has the right to influence its policies. At the annual general meeting of a company, every shareholder is asked to vote on a range of issues including electing the board, approving CEO pay, governance and policy questions, and an array of environmental and social issues that shareholders have raised. Shareholder advocacy is the practice of using that right to influence a corporation’s behavior by filing resolutions or otherwise requesting dialogue. In recent years, shareholder advocacy has proved to be an effective technique for improving the environmental, social, and governance policies of major corporations.

RESILIENCE The capacity to recover quickly from difficulties. Conscious companies tend to favor mindsets and practices that enhance resilience at the individual, organizational, and societal levels.

RIGHT LIVELIHOOD An ancient idea, particularly explicit in Buddhism as part of the Eightfold Path to enlightenment, that each person should choose an occupation that leaves the world better than they found it. While the term itself is just starting to find its way out of religious contexts, there is strong evidence that the Millennial generation in particular tends to value the ideals of right livelihood and seeks meaning and purpose through work.

SERVANT LEADERSHIP A philosophy for guiding a group that involves flipping the typical hierarchy of “power at the top” and instead focuses primarily on the growth and wellbeing of those being led. Servant leaders put the needs of others first and help people develop as much and perform as highly as possible. The term was first coined by Robert K. Greenleaf in a 1970 essay called “The Servant Leader.” See also: Authentic Leadership

SHARED LEADERSHIP Any of a number of management philosophies and practices that broadly distribute responsibility across an empowered team. See also: Holacracy

because of the belief that this orientation can discourage long-term value creation and investment.

SMALL GIANTS A term coined by author Bo Burlingham in his 2006 book by the same name. He defines small giants as “companies that choose to be great instead of big” by prioritizing mission and the act of taking care of multiple stakeholders over growth for growth’s sake. See also: Evergreen Business

SOCIAL CAPITAL An economically valuable network of relationships between individuals and entities. Social capital has often been ignored, harmed, or undervalued by traditional business practices, and the lack of it can be as much of a barrier to economic prosperity in disadvantaged populations as the lack of financial capital.

SHORT-TERMISM Short-termism refers to an excessive focus on shortterm results at the expense of long-term interests. Many conscious leaders are critical of excessive short-term focus by corporate leaders, investors, and analysts

SOCIAL ENTREPRENEUR A person tackling a broad social or environmental goal — often in an area such as poverty alleviation, health care, sustainable farming, or protecting public lands — by creating or operating a startup or new organization. While the organization could be a nonprofit, it’s becoming more common for social entrepreneurs to aim for impact by filling a market demand that simultaneously generates a positive return to society. In many cases, the altruistic mission of the

SHARED VALUE A term coined by Mark Kramer and Harvard economist Michael Porter to describe the idea of maximizing the business opportunity of solving social problems. See also: Blended Value

BUSINESS OPPORTUNITIES SHARED VALUES SOCIAL NEEDS

CORPORATE ASSETS

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enterprise takes priority over strong financial gain or valuation, with revenue as a fuel to sustain the service being offered. Some argue that the greater agility to pivot and reallocate resources under the structure of a for-profit business allows for more freedom and responsiveness compared to nonprofit, grant-based models.

SOCIAL INNOVATION “A novel solution to a social problem that is more effective, efficient, sustainable, or just than existing solutions and for which the value created accrues primarily to society as a whole rather than private individuals,” according to Stanford professors James A. Phills Jr., Kriss Deiglmeier, and Dale T. Miller.

SOCIAL PURPOSE CORPORATION A legal category of for-profit entity in California, Florida, Texas, and Washington that enables — but does not require — corporations to consider social or environmental issues in decision-making instead of relying only on profit-maximizing goals. See also: Benefit Corporation, Community Interest Company, L3C

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SOCIALLY RESPONSIBLE INVESTMENT (SRI) Similar to impact investing, SRI involves placing capital either in individual companies or through funds with an eye toward the nature of the business that the recipients conduct. SRI tends to imply having a practice of screening out investments that have negative effects, whereas impact investing implies intentionally fostering particular positive effects.

SUSTAINABLE BUSINESS A company that seeks to meet the needs and aspirations of the present without compromising the ability to meet those of the future. While popular perceptions of “sustainability” tend to focus on environmental concerns, a broader definition of “sustainable business” also includes customer, employee, and community wellbeing along with economic solvency for the company in question. See also: Conscious Company, Green Business, Triple Bottom Line

STAKEHOLDER A person, group, or organization that has a direct or indirect stake in an organization because it can affect or be affected by the organization’s actions, objectives, and policies. A key practice of conscious companies is considering and weighing the interests of all stakeholders — including customers, investors/shareholders, employees, suppliers, society, and the environment — and seeking win-for-all solutions when making decisions. The stakeholder theory of organizational management was first popularized by R. Edward Freeman with his 1984 book “Strategic Management: A Stakeholder Approach.”

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TRIPLE BOTTOM LINE (3BL) A business approach in which companies track, report, and value not just the traditional financial “bottom line,” but social and environmental impact as well. This point of view acknowledges that a company’s long-term success depends not merely on its profit, but also on its interaction with employees and surrounding communities and the natural world. The concept is also sometimes called “3P”: people, planet, and profit.

SYSTEMS THINKING A management discipline and way of thinking that focuses on seeing the web of interconnections that create emerging patterns among parts of a network, organization, or other structure. It’s a perspective concerned with how parts of a whole interact with each other in complex, often surprising ways. The tools of systems thinking include causal loop diagrams, stock and flow diagrams, and simulation models that can help map and explore dynamic complexity. Thinking in systems is one of the skills of conscious leadership and thinking about organizations within systems is an important perspective for conscious business.

a | b | c | d | e | f | g | h | i | j | k | l | m | n | o | p | q | r | s | t | u | v | w | x | y | z

U.N. SUSTAINABLE DEVELOPMENT GOALS (SDGs) These 17 global goals, established by all 193 members of the United Nations in 2015, lay out a path to creating the world we want for the wellbeing of all by 2030, including ending extreme poverty, fighting inequality and injustice, and protecting the planet. The SDGs’ non-binding targets provide a framework for all kinds of organizations, including businesses, to think about and begin addressing the most important challenges the world faces.

UPCYCLING Reusing discarded materials or waste objects to create a valuable product.

VISION STATEMENT A written declaration explaining an organization’s desired future. See also: Mission statement

WORKPLACE CULTURE The norms, behaviors, and routines that add up to “how we do things around here” within a workplace. Management expert Peter Drucker famously once said, “Culture eats strategy for breakfast.” Research from Great Place to Work indicates that trust is the most important element in creating a high-performing workplace culture. Culture is also one of the disciplines of Conscious Capitalism, and generally an important element of creating a conscious and sustainable business.

Thanks to Rand Stagen of the Stagen Leadership Academy and Flip Brown of Business Culture Consultants for their help with this article.

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WHAT // WHY // WHO // HOW

WHY BECOME A CONSCIOUS COMPANY? It’s healthier for workers Longer life

A 2014 study found people with a purpose live longer, even when researchers controlled for other markers of wellbeing.

Customers want it 90%

Less burnout

A 2016 meta-analysis of 58 studies found that how strongly we identify with the people or organization where we work is associated with better health and lower burnout.

More fulfillment 88%

87% of global consumers believe that business needs to place at least equal weight on society’s interests as on business’s interests.

of Millennials feel their job is more fulfilling when they have the opportunity to make a positive impact.

53% of workers say that “a job where I can make an impact” is important to their happiness.

Life Satisfaction

Employees’ life satisfaction steadily increases as more core needs are met.

+42% +56% 0

+66%

3 2 Needs Met

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+77%

CONSCIOUS COMPANY MAGAZINE

of citizens believe it’s important that business signs up to meet the UN’s Global Goals for Sustainable Development.

73% of consumers would switch brands if a different brand of similar quality supported a good cause.

Implementing conscious business practices isn’t just about doing the right thing or being nice. In fact, the research on the advantages of consciousness just keeps pouring in: self-aware leadership, sustainability, and other companion practices elevate human wellbeing even as they benefit the bottom line. But don’t just take our word for it — here’s the latest evidence of the benefits of becoming a conscious company.

consumers also want companies to address issues that are active in the news

of global consumers agree that business must play a role in addressing societal issues.

94% Percent of respondents who said it’s important for companies to address this issue

80%

Domestic Job Growth Racial Equality 87% Women’s Rights 84% Cost of Higher Education 81% Immigration 78% Climate Change 76% Gun Control 65% LGBTQ Rights 64%

Buyers will reward you for it 80% of the general population would rather pay more for products and services that are produced responsibly.

78%

55%

50%

of citizens say of global consumers of customers buy that they are more are willing to pay based on their likely to buy the extra for products beliefs, and 30% goods and services and services from of consumers of companies that companies worldwide say that signed up for the committed to they now make such UN Global Goals positive social and decisions more often for Sustainable environmental than they did 3 Development. impact, a rise of 10% years ago. from 2011 to 2014.

33% of consumers already purchase products with sustainability in mind.

Among belief-driven buyers, 23% say they would pay a 25% premium for brands that support their position, 51% would be loyal buyers for a brand that spoke up on a social issue rather than than staying silent, 48% would advocate for and defend such a brand, and 67% would buy a brand for the first time based solely on its position on a controversial topic. For a complete list of sources and links, visit consciouscompanymedia.com/issue15sources

WHAT // WHY // WHO // HOW

Percent of executives who say their company is successful

Purpose spurs innovation

53% Purposeful company

Company developing a purpose

Improved stock market performance The cumulative stock market returns of “Firms of Endearment” — companies that have a higher purpose beyond profit and take all stakeholders into account — outperformed those of the companies in the S&P 500 by 14 times and outperformed those of companies analyzed in Jim Collins’ classic book “Good to Great” by 6 times between 1998 and 2013.

[

Companies with highly engaged workforces outperform their peers by

147%

19%

31%

in earnings per share.

Company lacking a purpose

6:1 14:1

[

S&P 500

FoE

118%

1681%

G2G 263%

Cumulative Returns 1998–2013

% of studies that agree

“High-sustainability” companies that voluntarily adopt sustainability policies “significantly outperform their counterparts over the long term, in terms of both stock market and accounting performance.” Growth of $1 invested in an equally weighted portfolio of high-sustainability fims vs. low-sustainability firms high-sustainability firms

In a review of 200 studies on sustainability and corporate performance:

low-sustainability firms

$25 $20

90% concluded that good environmental, social, and governance standards lower the cost of capital. 88% showed that good environmental, social, and governance practices result in better operational performance. 80% showed that stock price performance is positively correlated with good sustainability practices. 26

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$15 $10 $5 $0

1992

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1993

1994 1995

1996 1997

1998

1999 2000

2001 2002 2003

2004

2005 2006

2007

2008

2009 2010

In the past 3 years, 42% of non-purpose-led companies showed a drop in revenue, while 85% of purpose-led companies showed positive growth.

Increased revenue

85% % of purposeled companies that showed positive growth

% of nonpurpose-led companies that showed drop in revenue

42%

Sound corporate responsibility management has the potential to increase revenues by up to 20%.

225%

More productive employees

“Inspired” employees generate 225% of the productivity that employees who are merely “satisfied” do.

144% 100% 71% 100% Productivity

Dissatisfied

satisfied

engaged CONSCIOUS COMPANY MAGAZINE

inspired |

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WHAT // WHY // WHO // HOW

Improved retention and employee loyalty

Sound corporate responsibility:

Has the same effect on retention as an increase in annual salary of $3,700/year.

Reduces the average turnover rate by between 25 and 50%.

Employees who find meaning in their work report being

2.8 times

Reduces the annual quit rate by between 3 and 3.5%, which can save replacement costs — up to between 90 and 200% of an employee’s annual salary for each person who stays.

more likely to stay with their organizations and are

2.2 times more satisfied with their jobs.

Recruiting is easier

93% 28

of employees want to work for a company that cares about them as an individual.

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74%

of people want to work for a company whose CEO is actively involved in corporate responsibility and/or environmental issues.

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86%

believe it’s important that their own employer is responsible to society and the environment, with over half (55%) feeling that it’s “very important.”

where are the resources?

the world needs more conscious companies 1% of the world’s population now CONTROLS MORE THAN 50% OF THE PLANET’S WEALTH.

Total U.S. revenue by sector

NON-PROFITS $1.2 TRILLION

GOVERNMENT $3.1 TRILLION CORPORATIONS $20.1 TRILLION

1.3 BILLION TONS OF FOOD ARE WASTED EVERY YEAR while almost 1 billion people are undernourished and another 1 billion go hungry.

Nearly 2.2 billion people live on LESS THAN $2 A DAY.

One in five people still LACK CONSISTENT ACCESS TO ELECTRICITY.

2.5 billion people worldwide LACK ACCESS TO BASIC SANITATION and almost 800 million people lack access to water.

51% of people believe brands can do more to solve social ills than the government can On average — and taking into account population size — INCOME INEQUALITY INCREASED BY 11% in developing countries between 1990 and 2010.

51%

won’t work for a company that doesn’t have strong social and environmental commitments.

470 MILLION NEW JOBS WILL BE NEEDED GLOBALLY to employ new entrants to the labor market between 2016 and 2030.

75%

of employees who feel that their company is environmentally responsible will recommend it, vs. 43% of those who feel that theirs is not.

Given current concentrations and ongoing emissions of greenhouse gases, it’s likely that by the end of this century the increase in global temperature will exceed 2.7°F. THE WORLD’S OCEANS WILL WARM AND ICE MELT WILL CONTINUE.

82%

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of employees at companies involved in a broader societal cause would recommend their company as an employer, compared to 57% of employees at companies not so involved.

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WHAT // WHY // WHO // HOW

“Imagine a drug that was proven to add years to your life, reduce risk of heart attack and stroke, cut your risk of Alzheimer’s disease by more than half, help you relax during the day and sleep better at night, double your chances of staying drug- and alcohol-free after treatment, activate your natural killer cells, diminish your inflammatory cells, increase your good cholesterol, and repair your chromosomes. What if this imaginary drug reduced hospital stays so much that it put a dent in the national health care crisis? The pharmaceutical company who made the drug would be worth billions. The inventors of the drug would receive Nobel Prizes and have institutes named for them. But it’s not a drug. It’s purpose. And it’s free.” — Vic Strecher, “Life on Purpose”

hy am I here?” “What really matters?” “What makes a good life?” These are the types of questions philosophers and mystics have been asking for eons — and not inquiries we usually associate with either business or public health. But the research is increasingly clear: having a strong purpose is a powerful key that unlocks both business success and human wellbeing. That’s why researcher, professor, and entrepreneur Vic Strecher has dedicated himself to elucidating the connections between purpose and wellbeing and spreading the gospel of purpose to all. Strecher, who is director of innovation and social entrepreneurship at the University of Michigan’s School of Public Health, actually has four purposes: to teach every student as if they were his own daughter, to be an engaged husband and father, to enjoy love and beauty, and to help others create a purpose in their lives. But he wasn’t always so articulate about his reasons for being. It’s not that he was aimless as he built a career as a professor and started a health media company that he sold to Johnson & Johnson in 2008, but neither was his aim in life very clear. Then, in 2010, his daughter Julia died at age 19 of a heart condition. Strecher found himself adrift on an ocean of grief, until he eventually made his way to the scientific study of purpose and 32

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its power to change human lives. Since then, his commitment to purpose has spurred him to write two books on the subject and to found a digital solutions company, JOOL Health, that helps workers improve wellbeing by developing — and aligning daily with — their purpose. We spoke with Strecher about how powerful purpose is and what business leaders should make of the latest research. What’s the most surprising thing you’ve learned through your work on purpose? Vic Strecher: How the most modern research is validating the most ancient philosophy. The Buddha, Aristotle, Seneca, Michel de Montaigne, Nietzsche, the famous existentialist philosopher Albert Camus, Viktor Frankl, who wrote “Man’s Search For Meaning” — when you go back through that lineage, you see people talking about the importance of purpose, about examining your life. Socrates once said, “The unexamined life is not worth living.” Aristotle essentially then said, “Yeah, but the purposeless life isn’t worth examining in the first place.” Those edicts that we all thought were nice, but … philosophy? How important is philosophy now? Well, they’re being borne out in science. We find that people with a strong purpose literally have their DNA repaired more effectively, they have

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more antibodies and fewer pro-inflammatory cells. We find that people with a stronger purpose live longer. A fairly new study showed that, controlling for a baseline of income, after six years people who had a strong purpose had made more money and had higher net worth. We’re finding that purpose, something the ancients talked about a lot, turns out to be a really important factor in your health and in your life. How do you define purpose? VS: A set of goals linked with your core values. That’s it. You have different domains of purposes. You have a work purpose, a family purpose, a personal purpose, a community purpose. We’ve known for 30 years in organizational management that setting a goal works so much better than just saying, “I’m going to do my best.” Purpose is just a meta-goal based on your deepest core values. So, you don’t think of it as people having just one singular purpose — “this is why I’m here”? VS: Right. When you look at your purpose in these different domains, you realize one overall, overarching, vague purpose doesn’t cut it. That is not how I think about it, and I don’t think about Hallmark-card-type purposes, like “I want to do good in the

world.” It’s not authentic. What I’m after are purposes and mission statements from individuals and authentic mission statements from businesses. What’s the relationship between purpose and work, or business? VS: Thinking more about your purpose is really designing your life. It’s rejecting, “I’m going to live my life in accordance with a cookbook,” whether that’s a cookbook religion or what TV tells you. It’s saying, “I’m going to live a life that I’ve designed.” And a “transcending” life is simply saying, “I’m going to do things bigger than myself.” When you think about an organization then, and the transcendence of an organization, you start having to ask, “What is my business here to do in the big picture? What kind of legacy should this business leave on this planet? Should it just be about making money? Do we just want to create the richest people in the graveyard, or do we want to do something bigger and leave a positive legacy?” When you start thinking in that different way, oddly enough, you start making more revenue. Meanwhile, if you’re thinking about becoming an employee in a company, it’s important that you look at its mission and purpose and decide whether that’s something you want to be aligned with, because this is a big part of your life. How about people who have jobs that seemingly don’t have a lot of purpose? VS: Purpose isn’t just for uppermiddle-class yuppies who are doing something socially responsible. People are finding purpose in just about any kind of job. Jane Dutton, a psychologist in the Ross Business School at the University of Michigan, has studied this. She interviewed custodians at the University of Michigan’s hospital and asked, “Do you have a purpose at work?” A bunch of them said, “Yeah, it’s to make money, and I don’t make that much.” In other words, their purpose was not very strong. But others said, “I’m part of the medical team. If

The benefits of a strong personal purpose

12%

27%

In 7,000 middle-aged Americans followed over 14 years, a 1-point increase on a 7-point scale of purpose = a 12% reduced risk of dying

In 1,500 adults with heart disease, a 1-point increase on a 6-point purpose-in-life scale = a 27% lower risk of suﬀering a heart attack

22%

17%

In 6,000 adults followed over 4 years, a 1-point increase on a 6-point purpose-in-life scale = a 22% reduced risk of stroke

In 7,000 adults followed over 6 years, a 1-point increase on a 6-point purpose-in-life scale = a 17% reduction in the number of nights spent in the hospital

2.4x

In 900 seniors followed for 7 years, low purpose = a 2.4 times increased likelihood of developing Alzheimer’s and a faster progression of the disease

half

People who enter drug and alcohol rehab programs with purpose are half as likely to relapse within 6 months of completing treatment.

High purpose is also associated with:

• Better sex • Better sleep • Being more relaxed • Being less likely to suﬀer depression • Better levels of “good” cholesterol • An increase in cells that attack viruses and cancer

Source: “Life on Purpose” by Victor J. Strecher

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WHAT // WHY // WHO // HOW

there’s a person in a coma for a couple of months, I’ll put a fresh flower in front of her face every morning. Just in case she wakes up, the first thing she’ll see is something beautiful.” Or, “There’s a child dying of cancer whose parents are never able to be there. I sit and read her stories. I’m part of the medical team.” Those people tend to never be absent. They are happy at their work, they feel they’re part of the team, and the team feels that they are indeed connected. That’s what I mean by purpose. Dutton calls it “job crafting.”

VS: I might refer you to a New York Times bestseller list book called “Give and Take,” by Adam Grant, an author from the University of Pennsylvania and the Wharton School of Business. He’s found very clearly that altruistic behavior results in much happier people and much more productive, successful people. On the other hand, right away, he says, “Look, there are people who give, give, give all the time and they get taken, essentially.” You can be a sucker, and a lot of people can just spend their whole lives doing nothing but giving. He talks about

by forming a business.” That’s what I did with Health Media and that’s what I’m trying to do with JOOL Health right now. What do you wish all CEOs and business leaders knew about purpose? VS: Revenue-transcending purposeful business is good business. Having a revenue-transcending mission will end up resulting in better outcomes for your shareholders. If your company is only about shareholder value, your shareholders will

“Do we just want to create the richest people in the graveyard, or do we want to do something bigger and leave a positive legacy?” Does the organization itself have a role to play in helping people find purpose by “job crafting”? VS: Yes. Absolutely. That hospital could choose to save a little money by rotating the custodians around different parts of the hospital. Suddenly that destroys the “I am part of the team” approach. They’re now just a robot, hired to go clean any floor that happens to be available. If you ask the medical team, “Are your custodians a part of your team?” and they say no, that’s a problem. What about the fact that many self-transcending jobs, like nonprofit work or social work or teaching, tend to pay poorly?

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this intermediate goal, something in between giving and taking: enlightened giving. You’re giving, but you also understand that you’ll receive something because of that giving. In terms of specific professions, you could get into a giving profession where all you’re doing is giving. But if you’re trying to help a lot of people, you may turn that into a business. That business can reach lots of people. In fact, many times it reaches more people than the social service agency you’re involved in. You may see ways to innovate and say, “I don’t like the social work agency that I’m in right now. It’s not doing anything.” And if you’re real honest with yourself, you say, “I’m actually not giving that much. How can I give more? I could do it

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get less revenue [than if you have a transcending purpose]. And if you try to pretend that you’re interested in something beyond shareholder value but you’re really only interested in shareholder value, you’ll fail. The real leaders are those who can get people to go through difficult circumstances, uncertainty, and still follow them over that hill. You can only do that with a transcending mission. Something bigger than yourself.

For Strecher’s six steps to finding your purpose, go to consciouscompanymedia.com/ findpurpose.

WHAT // WHY // WHO // HOW

THE LANDSCAPE:

WHO ARE THE KEY PLAYERS? The conscious business movement includes numerous industry groups that serve the various interests of the community, from impact investing and policy to social entrepreneurship and local business. These organizations play a critical role in educating, connecting, and convening individuals who believe in the power of business as a force for good. Here’s the scoop on some of the leading players you might consider joining — and some of their most well-known members or partners.

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CONSCIOUS COMPANY MAGAZINE

This Washington, DC-based membership organization advocates for policy change to build a more sustainable economy. The ASBC helps leaders of sustainable, socially responsible businesses engage with policymakers, gain media exposure, inform the public, and more. Founded in 2009, it has more than 250 business and association members representing more than 250,000 businesses. asbcouncil.org

Well-known members:

Membership Cost: $250–$15,000 annually, depending on company revenue Primary Focus Areas (at both the federal and state level): 1) Climate and environment 2) The high-road workplace 3) Sustainable economic development Best Suited For: Business owners and executives who take a triple-bottom-line approach and want to pursue changes in government policy to hasten the transition to a prosperous, sustainable economy that works for all Download “Step Up, Speak Out, Impact Policy: An Advocacy Guide for Responsible Business Leaders” at consciouscompanymedia.com/advocacy.

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WHAT // WHY // WHO // HOW Based in Oakland, CA, since 2001, BALLE has been bringing people together throughout the US and Canada who are using the strategies from its Local Economy Framework to create healthy, equitable communities. Primary Focus Area: Community and economic development, leadership development, convening leaders bealocalist.org

Industry partners:

Best Suited For: BALLE no longer operates with a membership model, i.e., it does not directly serve entrepreneurs, but rather the organizations, support systems, and funders who serve entrepreneurs. It convenes three communities of practice: the Local Economy Fellowship (for local economy leaders and practitioners who convene and support small businesses across the US and Canada), the Local Economy Investors Circle (individuals working to influence the field of place-based impact investing), and the Local Economy Foundation Circle (community, private, and health foundations shifting their investment assets toward place-based impact investing to go all-in for their missions).

B Lab is a nonprofit organization founded in 2006 that serves a global movement using Business as a Force For GoodTM. From its Berwyn, PA, headquarters, B Lab is building a global community of Certified B CorporationsTM (numbering more than 2,000 across 55 countries and 130 industries), promoting innovative corporate structures like the benefit corporation, and helping 50,000+ businesses, investors, and institutions measure what matters through its B Impact Assessment and B Analytics. bcorporation.net bimpactassessment.net

Well-known members:

Primary Focus: B Lab is the nonprofit that certifies B Corporations, companies that use the power of business to solve social and environmental problems. Cost: Cost of certification varies depending on the size of company. Best Suited For: For-profit companies that are using their business as a force for good

Founded in 1992, BSR (Business for Social Responsibility) is a San Franciscobased global nonprofit that works with a network of more than 250 member companies and other partners to build a just and sustainable world. From offices in Asia, Europe, and North America, BSR develops sustainable business strategies through consulting, research, and cross-sector collaboration.

bsr.org

Well-known members:

Primary Focus Area: Sustainable business, which encompasses climate change, human rights, womenâ&#x20AC;&#x2122;s empowerment, inclusive economy, supply chain, and sustainability management Members: 250+ Cost: Dues vary depending on size of company. Best Suited For: Large multinational companies and other entities with an interest in integrating or promoting sustainable practices

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Since 2010, this San Francisco-based nonprofit has been producing events, workshops, publications, and academic research serving a movement of more than 15,000 people. Conscious Capitalism Inc. also supports a growing network of Conscious Capitalism Chapters around the world. Primary Focus Area: Elevating humanity through business Cost: Multi-tiered fees to enable individual, chapter, and corporate membership opportunities

consciouscapitalism.org

Well-known members:

Best Suited For: CEOs and their executive leadership teams, entrepreneurs, the consultants and coaches who support them, and anyone interested in learning more about the practice of Conscious Capitalism

Founded in 2009, the Global Impact Investing Network is a New Yorkbased nonprofit organization dedicated to increasing the scale and effectiveness of impact investing around the world through work with its 230 members. Primary Focus Area: Building critical infrastructure and supporting activities, education, and research to help accelerate the development of a coherent impact investing industry Cost: $2,500–$3,500 Best Suited For: Membership is primarily designed to support investors and the growth of their impact investment practices. Organizations of all types that make — or plan to make — impact investments are invited to apply. Organizations providing or seeking to provide services to impact investors, such as law firms, investment advisors, ratings agencies, and placement agents, are also invited to apply to join the community.

Gratitude Railroad represents a community of investors with accomplished careers, some as entrepreneurs and business leaders, dedicated to cultivating the next generation of investment managers, and leading businesses using capitalism to solve environmental and social challenges. It was founded in 2015 in Park City, UT, and currently has no formal membership program. Primary Focus Area: To invest in for-profit businesses that are helping solve social and environmental challenges

thegiin.org

Well-known members:

gratituderailroad.com

Well-known members:

Best Suited For: Investors from the “traditional” capital markets with experience as entrepreneurs, operators, and investors

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WHAT // WHY // WHO // HOW

Based in Hartford, CT, the ISSP is the world’s leading professional association for sustainability professionals. Formed in 2007, ISSP has more than 1,000 members from every region of the world. sustainabilityprofessionals.org

Well-known supporters:

Primary Focus Area: Professional certifications, webinars, online courses, special reports, resource directories, and more Cost: $150 annually Best Suited For: Sustainability professionals, academics, and students

Since 1987, San Francisco-based SVN has been the leading peer-to-peer network of mission-driven business leaders, social entrepreneurs, and impact investors who are leveraging the power of business to solve social, economic, and environmental problems. SVN’s 500 members create a community where leaders can make connections, share ideas, and find the inspiration they need to build a more just, humane, and sustainable world. svn.org

Well-known members:

Primary Focus Area: Peer-to-peer networking in a community of mission-aligned, high-impact business leaders Cost: $1,300–$6,000/year Best Suited For: High-impact mission-aligned business leaders — typically C-level executives, owners, founders, and presidents; investors and funders — typically senior executives, founders, partners, and private individuals

tugboatinstitute.com

Well-known members:

Founded in 2013, the Palo Alto, CA-based Tugboat Institute is a membership organization (100+ as of 2017) that brings together CEOs across industry sectors to share best practices and unique insights around Evergreen business. Evergreen businesses are led by purpose-driven leaders with the grit and resourcefulness to build and scale private, profitable, enduring, and market-leading businesses. They put their people first and avoid raising capital that puts money before mission and imposes a growth-at-all-costs or exit-oriented mindset. The Tugboat Institute also certifies Evergreen companies. Primary Focus Area: CEO membership, Evergreen company certification, Evergreen movement Cost: Depends on organization size Best suited for: CEOs and owner-operators of privately held, profitable, and purposeful organizations

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CONSCIOUS COMPANY MAGAZINE

LESSONS FROM A

MASTER TRANSFORMER

Interface CEO and president Jay Gould has made a long career of helping major brands find both purpose and profitability. In this exclusive interview, he shares his best lessons and tips about leading organizations toward more meaningful work.

INTERFACE AT A GLANCE Location: Atlanta, GA Founded: 1973 Employees: 3,278 Key Recognition: Named a top-rated leader for the 20th consecutive year in the Sustainability Leaders Survey by GlobalScan/SustainAbility Structure: Publicly traded for-profit 2016 Revenue: $958.6 million Vision statement: “To be the first company that, by its deeds, shows the entire industrial world what sustainability is in all its dimensions: People, process, product, place and profits — by 2020 — and in doing so we will become restorative through the power of influence.”

f you took just a quick look at his resume, you might not expect to find Jay Gould at the helm of one of America’s pioneering conscious companies. The list of businesses where he’s excelled is a who’s who of major “traditional” names like Wheaties, Colombo yogurt, Minute Maid, Pepperidge Farm, Graco, and American Standard. But Gould became CEO of Interface Inc., which designs and makes carpet tiles, in March 2017 — and is well qualified to lead the sustainability champion. His conventional corporate origins might even be an advantage. “About 15 years ago,” he says, “I got serious about what I call the purpose-driven transformation of companies.” From within some of America’s most mainstream organizations, Gould, who started as a marketer, perfected a formula for brand success that involves investing in a mission that transcends just making money — and watched traditional success follow. His most notable win to date came at American Standard, which he rescued from the edge of bankruptcy. Now he’s poised to help Interface make good on its commitment to inspire other businesses to make a difference in the world — with his hard-boiled credibility that’s hard to ignore. We spoke with Gould about his journey and the lessons he’s learned along the way.

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WHAT // WHY // WHO // HOW

How did you end up in the role you’re in today and why is that what you’ve chosen to spend your time on? Jay Gould: [In the ’90s,] I worked for this CEO, Roberto Goizueta [at The Coca-Cola Company], who’s legendary in terms of value creation in business. He used to say, “We exist to create shareowner value.” My response to that was always, “But that’s not a stirring reason to get out of bed every day.” We want to come to work to make a difference in the world. An important outcome of the work we do has to be value creation for our shareowners, but also for other stakeholders. I became focused on saying, “We in

the spark that makes companies successful?” If you go back to any company’s roots, they had to have a spark to get them started, and they usually had a founder who was driven to make a difference in the world. Almost no company starts with the idea of “Let me make a lot of money.” What Joey and I talked about was, how do you find the truth of the company, the authentic spark, the authentic culture? I was intrigued with that idea. Joey and I started working together. We eventually started calling the work “purpose,” but 15 years ago, to use the word “purpose” in business seemed very foreign, so we called it “the why behind the what.” I got the chance to first work on

ed to fully enact the methodology of running a purpose-driven business in a standalone company, which is precisely what we did. When I joined Interface [as COO in 2015], it was the first time I was ever hired because of my experience with purpose-driven organizations, rather than despite it. What are some of the lessons you’ve learned as you’ve helped transform so many companies? JG: One of the things I’ve practiced over the last 15 years as I’ve joined different organizations is not to come in and say, “Here are the values I think are important as the new leader,” but rather, “What are the values

“Business is the most powerful entity in the world, and businesses need to take a long-term view about the health of the world.” business have to exist for a greater purpose. Can we find the way to be successful in business but also to make a difference in the world?” The second half of my career is helping companies discover that path. How did you discover that path? What were your earliest steps? JG: Doug Daft became the CEO of Coca-Cola [in 2000] at a time when Coke had lost its way. He asked a group of us to try to rediscover what made it a great company. As part of the process, not only did we explore what makes Coca-Cola tick, but what makes us as individuals tick. For me, I found it was about culture and coming to work to make a bigger difference. Then in November of 2002 I had a lunch which changed my life, with a gentleman by the name of Joey Reiman. Joey [a marketing expert] was working on [helping brands articulate] something he called the “master idea”: what is the why behind the what of a company? I listened to Joey talk about “What’s

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this when I was running [marketing for] Pepperidge Farm [starting in 2002]. There, it was about rediscovering the truth of Margaret Rudkin, the woman who founded the company in 1937. We started out with research about her, discovering the values she thought were important and resurrecting those for today’s world. I remember distinctly when I made the presentation to the president of Pepperidge Farm; I was so nervous because I wasn’t sure if I was going to be fired or move forward with the idea of how to change the culture back to its original, powerful force. With those first steps, I learned it wasn’t just the purpose itself that became so important, but also the values in the culture. Then I joined Newell Rubbermaid, which had a whole portfolio of companies, so we really got to perfect the approach to running companies that could create value for all their stakeholders. That work ultimately led to my joining American Standard in the beginning of 2012, because I want-

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that are authentically true to this organization?” Real servant leadership requires a leader to be authentically true to that company. We’ve used almost an anthropological approach to not inventing but uncovering the truth of a company, and recreating that for today’s strategic environment. With that authenticity comes power. Tell me more about what doing this uncovering work really looks like. JG: I have a methodology behind it. Let’s say I’m coming to Interface. We started our sustainability movement back in 1994, and in 2000, we articulated a vision — we called it Mission Zero — that by the year 2020 we would have no negative impact on the Earth. As we began to talk about the next sustainability challenge to take on, what I said was, “I’m only willing to do this if we understand what was in our founder Ray Anderson’s head and heart when he articulated our first mission. What was the why behind the what?”

We brought in Joey’s consulting company, BrightHouse, and an internal team to get input from thousands of people. We interviewed employees, we interviewed customers, we interviewed suppliers, former employees. We read every word Ray ever wrote, and consolidated that into a point of view about what was in Ray’s heart. The language we came up with was “lead industry to love the world.” Our role is to help others discover how we can help people and the planet. We put that to film. We shared it with every employee around the world. I did dozens of town hall meetings to articulate the purpose and the new mission [Climate Take Back, which aims to reverse climate change by “bringing carbon home” out of the atmosphere]. It was met with tears of joy, with standing ovations, and with excitement from our colleagues around the world. Why are the roots such a powerful place to start this work? JG: By definition, since we’re still working at the company, it worked, it succeeded. Now obviously you have to sort through all the different truths to find the ones to shine the light forward. Part of the hard work, the management part, is understanding from all the things we could choose from, from all the truths, what are the most powerful ones going forward? Do you think it’s possible to do this kind of work where there isn’t an iconic founder to look back to? JG: Absolutely. I did this with the brand Graco, which makes car seats and strollers. The founders were very religious, and we couldn’t use that in today’s world, being a global company. So we didn’t focus so much on the founders, but we did focus on the values that came out of that.

How do you get buy-in from employees to start shifting things? JG: Honestly, that’s the most fulfilling part for me, because people want to work at companies that will make a difference in the world. If you do it right, it’s the easiest thing because it’s in human nature to want to help others. Take American Standard. American Standard was a great, great company, and it had lost its way. The employees had lost some of the passion for the business because we couldn’t articulate the why behind the what. When I got there, I was shocked to learn that 2,000 kids died [from unsanitary conditions] the day I started with the company, and the next day, and the next day, and the next. I wasn’t aware of the global sanitation crisis, but when that was unveiled to me, I thought, “There’s a place we can make a difference. We make toilets for a living.” I sent a small group of engineers to Bangladesh for five weeks to figure out whether we could help, unleashing the creativity of our engineers onto this problem. What we figured out was how to make the open-pit latrines people were using much safer. That was the journey to say, “Okay, there’s a big problem in the world and we can make a difference.” That notion of helping raise the standards for others became our sense of purpose, and we articulated that. When you say, “We’re going to make a difference, we’re going to help save lives around the world” — that brings people to the office with a sense of motivation so much more powerful than previously. Were there moments along your journey when you doubted this purpose-driven commitment was the right idea? JG: When I joined American Standard, it was a company in crisis. It was teetering on the edge of bankruptcy, and it was owned by

JAY GOULD’S THREE STEPS TO TRANSFORMING A BUSINESS 1. ARTICULATE A COMPELLING PURPOSE THAT CAN MAKE A DIFFERENCE IN THE WORLD. Find the unique intersection between the needs of the world and what the company can be the very best at.

2. FIND THE AUTHENTIC VALUES OF THE COMPANY. You need to be able to guide the behavior of the organization, but we didn’t sit in a room and invent values for our employees to live by. We went back to the original roots of the company and rearticulated the values that guided the company’s development from the beginning.

3. MAKE A PLAN TO CREATE VALUE FOR ALL STAKEHOLDERS. One of the things I constantly remind organizations is, “You have to earn the right to pursue your sense of purpose.” You earn the right by delivering good financial results. Because if we ignore those things, we actually won’t have access to capital to allow us to invest in the business. We don’t come to work fired up every day about our financial results, but they’re a super important outcome of the work we do so we can continue to pursue our purpose.

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INTERFACE’S 2016 SUSTAINABILITY HIGHLIGHTS BY THE NUMBERS

35%

43%

reduction of the average carbon footprint of its carpet since 2008

86%

improvement in energy efficiency at manufacturing sites since 1996

95%

reduction in total water intake intensity at manufacturing sites since 1996

reduction in GHG emissions intensity at manufacturing sites since 1996

77%

87%

reduction in total accident frequency rate from 1999

of energy used at manufacturing sites is from renewable sources

58% 10 MILLION 84,000

of raw materials used to make carpet are either recycled or bio-based

pounds of post-consumer carpet diverted from landfills

pounds of fishing net collected and shipped to Net-Works recycling partners

a private equity firm with fairly short time horizons. I had to take a gamble on whether a purpose-driven approach could create enough value for the private equity holders in that short of a timeframe. There was a moment of judgment on whether I was going to put my belief in being purpose-driven to the test at a company on the edge of bankruptcy. Obviously, I did. I believed that being purpose-driven would create the value we needed. So even in the harsh light of that financial crisis, we put money to work on being purpose-driven. And it played out with dramatic results. We quadrupled the value of the company in about a year and a half. What have you learned about getting CEOs — when you weren’t the leader — and boards to support this kind of shift? JG: It was hard, honestly, in the beginning. I struggled with how to get data to help support the notion of becoming purpose-driven. This is when I was working in divisions of companies, trying to convince leaders to believe in this as a methodology of running a business. What’s emerged over the last 10 years or so is an increasing belief that purpose-driven companies do, in fact, outperform their peer set. But I would remind all CEOs trying to go through this transformation not to ask for a hall pass. I don’t say to the board, “Let me deliver less than my peers because I’m purpose-driven.” I always go back to the adage of earning the right to pursue your purpose. Because we have a microscope placed on us, purposedriven companies have to perform as well as our non-purpose-driven peer set. I do try to explain some of the tradeoffs we might make. As an example, more than 50 percent of the materials we use at Interface are either recycled or biobased [and thus more expensive]. That’s a [short-term] financial trade-off in support of sustainability. We’re making investments to help build recycling; we believe that will become a more profitable business model. It sounds like it’s a question of the timeframe; that if you take a longer outlook, you can make the case. JG: That’s exactly right. At Interface, we’ve been fortunate enough to work with a board on longer timeframes. Mission Zero was a 20-year strategy, and as we embark on Climate Take Back, we’re talking about a 30- to 40-year sustainability strategy. The board has endorsed that. We have been able to elongate the strategic conversation. How do you start to make that shift with the board to thinking in longer timeframes? JG: First of all, you have to recruit board members who take a perspective that purpose-driven compa-

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Interface’s Net-Works program pays people in developing communities for old fishing nets and recycles them into carpet tiles.

nies ultimately do outperform their peer sets. With Interface, we were fortunate in that when Ray Anderson was still alive, he had voting control of the company. He was able to attract board members who took a longer-term perspective, and we still have some of those people today. We’ve been fortunate to weave that into the DNA of our board. Number two, I believe it’s going to take some board governance transformation. Ultimately, business is becoming a multistakeholder-driven model. Unfortunately, capitalism took a weird turn 20 or 30 years ago around becoming overly focused on just the shareowners. In most bylaws written today, the board is solely responsible to the shareowner, and that potentially puts the board and the CEO in conflict. Interface has a very enlightened board, and we talk about creating value for multiple stakeholders, including employees, our customers, and the environment. But boards of

directors aren’t responsible for all those stakeholders. I would love to see a significant revolution around board governance. I know there is a small movement around benefit corporations, but it’s too controversial right now. Those companies trade at a discount and there aren’t very many publicly traded companies that have announced benefit corporation status. But I do believe there’s a movement afoot for board governance to evolve to more of a multi-stakeholder model, and there’s some research going on at Harvard right now about that. I’m encouraged that this movement will gain more and more traction over the coming decade. Those of us who are already purpose-driven can help carve the path for others to follow. What trends are you seeing in the world of purpose-driven business? JG: This movement, this methodology has gained so much steam over

the last five years. I see it across industries. There is data to suggest that purpose-driven companies outperform their peer sets, but ultimately the leaders in an organization have to believe in this and have to be willing to make tradeoffs to take a longer-term perspective. As an example, I’m spending $50 million to upgrade our manufacturing here in the United States, and we’ll spend at least 10 to 15 percent more because of our commitment to transform our factory into a positive member of the biosphere down in southern Georgia. I’m investing in ways to think about how we sequester carbon from the atmosphere and bring it down into our products and into our physical plants. I also fear there is a lot of purposewashing going on. The last time I was in Davos at the World Economic Forum, all the CEOs were talking about being purpose-driven, but sometimes you hear things like, “Oh yeah, we have to be purpose-driven

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Manufacturing this “Proof Positive” prototype carpet tile actually removed carbon from the atmosphere.

so we can hire Millennials.” That just made my hair stand on end, because you have to be more authentic, you have to be more truthful, and frankly, more committed than just that. If leadership gets it, they’re going to drive it. But if leadership doesn’t, we need the demand to come from all areas of the company. Millennials do want this, and I would encourage them to demand it, to make choices amongst employers who are purposedriven. You mentioned servant leadership earlier. What makes a good leader and what do you try to practice every day? JG: The starting definition for “servant leader” is that it’s about helping others on the path to success. There’s a lot of responsibility that comes with that. As a leader, you have to be super clear about how you’re going to create value for all your stakeholders. Having a multi-year value-creation roadmap is important. With that, you can enable freedom within an organization. Give people freedom to explore, to accomplish, to grow. Freedom and responsibility are very powerful organizational enablers. But you have to have both. You can’t 50

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have freedom without responsibility, because ultimately we have to deliver on our value-creation agenda. That’s what I’ve tried to do with Interface: make sure both pieces are working well. The company is so committed to being purpose-driven. We perhaps weren’t performanceoriented enough, and a business needs both. Purpose and performance lead to sustainable success. What is the role of business in solving social problems? JG: Business is the most powerful entity in the world, and businesses need to take a long-term view about the health of the world. Despite some of the turmoil that may be happening in Washington, it’s a great opportunity for businesses to lead the dialogue. Our point of view [at Interface] is that we can make a difference on sustainability, and particularly around the carbon footprint of the world. Businesses don’t all have one singular purpose, so it’s great that more and more businesses are becoming purpose-driven and collectively taking on different challenges. American Standard continues to focus on sanitation. That’s a major crisis. We are taking on global warming. We hope to

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help demonstrate a path forward for all business. What’s keeping you up at night lately? JG: This notion about reversing the impact of global warming is a huge challenge. We’re trying to find the right investments to demonstrate that reversing global warming is possible. At a recent tradeshow, we unveiled our “concept car,” if you will: a carbon-negative carpet tile. We demonstrated that it’s scientifically possible to make a carpet tile that consumes more carbon than it lets off. Now I have to make it economically viable. How’s that for a nightmare? What’s giving you hope? JG: My organization. The people who work for us bring me hope. As an example, we just started about a year ago on this new mission, and in that first year, the R&D team brought forward that carbon-negative carpet tile. Wow, did that give me hope. It was so exciting. The level of ingenuity that exists inside of our business just excites me every day. Photos courtesy of Interface

WHAT // WHY // WHO // HOW

HOW CONSCIOUS LEADERSHIP CAN

UNLOCK A BETTER WORKPLACE In this exclusive interview with Diana Chapman, co-founder of the Conscious Leadership Group, she shares her story and best wisdom for leading a drama-free workplace. Photo by Art Durand >>

In 1997 year, Diana Chapman was a stay-at-home mom teaching scrapbooking in Ann Arbor, MI — “as mainstream a life as they come,” she says. Then her brother-in-law, the CEO of Monsanto at the time, gave her a gift that would transform her life: $5,000 to use as she pleased. She had always been interested in personal development and human consciousness, so when he made the suggestion that she use the money to learn from the best coaches he knew, psychologists Gay and Katie Hendricks, she jumped on the opportunity. After studying with the Hendrickses for a decade and taking their work into a business context, Chapman is now one of the world’s foremost experts on conscious leadership. In 2014, she co-authored the influential book “The 15 Commitments of Conscious Leadership,” and later co-founded the Conscious Leadership Group, a coaching and consulting business. Her mission is to help individuals, teams, and organizations learn how to eliminate drama and suffering from their individual and collective lives. We spoke with Chapman about 54

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what conscious leadership is, how to start practicing it, and the transformation it can bring to workplace cultures of all types. For those who haven’t read it, what is “The 15 Commitments of Conscious Leadership” about? Diana Chapman: We say that in any given moment you’re either in a state of trust or you’re in a state of threat. We’re wired to be in a state of threat. That’s a natural state for us. But once we’re handling our survival needs, we can learn to handle longer and longer periods in a state of trust. If you’re in a state of trust, the positive side of that is that you eliminate suffering and drama. The book is all about helping you learn to practice living more from a state of trust — what we call “above the line.” How do you define conscious leadership? DC: I say “conscious” is “to be here now,” which most people aren’t. To be here now in a non-triggered, non-reactive state. The moment I’m

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triggered or reactive I can’t fully be here now — I can’t be “above the line,” and I drop “below the line.” My definition for “leadership” is anyone who wants to take responsibility for their influence in the world. Anybody and everybody can be a leader if they’re interested in taking responsibility for their influence in the world. How do you normally get started with the leaders you coach? DC: One of my favorite things I do with people is say, “If I, too, wanted to have your same problem, what would you tell me to do to create that problem the way you have created yours?” Any person can answer that question no matter how self-aware they are. I’ve never had anybody not be able to tell me. I was just at a company up in New Hampshire and they said, “We have a bad gossip problem.” So I said to them, “Great. I have another company — they want gossip to be one of their primary challenges in a year. What should they do if they want that to happen?” And everybody laughed and then immediately could

start putting together the recipe. Then they all understood, “Oh yeah, we’re actually all committed to gossip and here’s how we do it.” And then I said, “Great. Now if you want to, you can stop that. All you have to do is the opposite of what you’ve just written down.” I basically help people see how they’re creating the results they say they don’t want. Because another big thing we talk about is this difference between “life is happening to me” versus “life is happening by me.” If there were one practice that you could get every CEO in the world to adopt, what would that be? DC: To recognize and shift wanting to be right. Letting go, really being able to acknowledge that you’re wanting to be right and then questioning that and seeing how the opposite [of the position you’re attached to] is true. How you teach letting go of wanting to be right? DC: One of the ways is directly using Byron Katie’s work. She’s a teacher who basically says all your suffering is happening because you want to be right about the way you see reality. If you simply let go of being right, you would end your suffering. She has four questions helping people see how the opposite of whatever they believe at the moment is at least as true. For example, “We should grow our numbers by this much this year.” “Great. Let’s say that’s true. Can you see that the opposite is at least as true? That we shouldn’t grow our numbers? Let’s look for real evidence about how that’s true.” We have leaders genuinely go find real evidence. Or a lot of CEOs think, “I shouldn’t be lazy.” I say “Turn it around. Look for real evidence of how you actually should be lazy. How you could be more effective as a leader if you were lazier?” And many times, at first, they go, “What? That’s crazy.” But if they look, they’ll find, “I don’t rest enough. I’m pretty tired. I think that probably affects my thinking. So yeah, I could see how maybe if I took more naps — what I judge as lazy — I could be more effective.” We’re always asking people to see the

opposite of their thinking so that they can come back to “I am not right,” and from that place they can get curious. It’s just so difficult to really learn and grow as long as you want to be right about the way you see the world. Once you’re sold that the opposite could be true, what do you do then? DC: Let’s go back to this lazy example; “I need to drive my team harder. We can’t be lazy.” I’d say, “Look and see how the opposite is true, that you shouldn’t drive your team harder and you should all be more lazy.” I’d get them to a place where they can’t believe their argument on either side, because both sides are true and both sides are not true. Then from that place, I say, “Knowing that you’re not right, listen to your deeper knowing that’s not righteous — what pace do you think would allow your team to be most effective?” So now he’s doing more listening to presence, and from presence, he’s likely going to come up with the pace that will be of most service to maximize productivity and wellbeing. When you say “listening to presence,” what does that mean? DC: Presence is this place of listening from the three centers of intelligence:

my IQ, my EQ (emotional intelligence), and my BQ (body intelligence). Or, to go back to the definition of “conscious,” to be here and now and in a non-triggered, nonreactive state. And by the way, I can’t be non-triggered and non-reactive if I want to be right about the way the world ought to be. So the idea is: I’m present, I’m non-triggered, I’m having full access to my IQ, EQ, and BQ, and from there I listen to my own deep knowing of what would most serve and support me and my team. How does my “deep knowing” know what my team needs? Shouldn’t I go ask them? DC: Yeah sure, you could go ask them, and that might be valuable. But even when you ask them, they may all be a bunch of workaholic adrenaline junkies and they may all say, “What works for us is let’s drive this baby so we can go make a bunch of money.” You may listen and say, “I don’t know that that’s actually in their best interest.” For me at least, my heart, my mind, and my body give me feedback that helps me know what might most support everybody. I can’t know whether I’m right or not, because there is no right. All I can do is take

The Conscious Leadership Group’s map of what our minds look like “above the line” or “below the line.” Image by Graeme Franks. CONSCIOUS COMPANY MAGAZINE

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WHAT // WHY // WHO // HOW

a stand in one direction or another and learn from my results. But my experience is that when I’m really present and I have access to those three centers of intelligence, almost all of my decisions seem to serve and support me and others. How can teams instill the commitments you talk about in your book across their cultures? DC: I would recommend doing a book club [with “The 15 Commitments of Conscious Leadership”] where you and your team read one chapter every month, and you have a lunch where everybody sits together and you spend at least a good hour talking about, “What did we learn from a chapter? What are some of the examples of how this is applying to us and our lives?” And then create some practices. We recommend that everybody has an

“I’m above the line” or “I’m below the line.” Again, we don’t have to do anything more with that except just be aware of what’s going on. That said, let’s imagine we’ve just run into an emergency and we all recognize that we’re below the line. We might want to spend a little time seeing if we can create a shift for ourselves so that we don’t try to solve the emergency from a state of threat, because we’re going to be far less effective. Is there such a thing as a toxic person within a culture, or does everyone have the capacity to develop and transform and be a working member of a team? DC: My experience is that almost every team has some level of toxicity in it, whether one member or two or three or more, who are deeply committed to being victims. They’re living in a victimhood state. They are

learn,” then great. We can help you learn, help you question your thinking, feel your feelings, learn how to lead direct conversations, and start to be in a state of appreciation. We can help you learn to play with whatever challenge might have been so serious. I have seen so many toxic people turn around. I have great hope for people. It just requires their willingness. I always say “wanting to change” and “willing to change” are two very different things. Some people will say, “Yeah, I want to change,” but they’re actually not willing. And therefore the drama doesn’t end. What’s giving you hope? DC: So many things. One is that when I first started doing this work with businesses about 10 years ago, there were differences between the West Coast and the rest of the country,

“ANYBODY AND EVERYBODY CAN BE A LEADER IF THEY’RE INTERESTED IN TAKING RESPONSIBILITY FOR THEIR INFLUENCE IN THE WORLD.” individual practice that helps them practice each commitment for the month. One of the things we use is an app called Mind Jogger [Android option: Randomly RemindMe]. It will pop up on your phone with a question related to the commitment we’re working on; I usually have mine trained to seven times randomly per day. So it would say, “Diana, in this now moment, are you above the line or below the line?” Whenever that pops up, I check, “Where am I?” I don’t have to do anything other than just be aware of where I am. If everybody has that on their phone and everybody’s practicing individually, you’ll start to notice the culture shift. Then anytime there’s a meeting, start with “Where are we?” Everybody does what we call a line check;

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“at the effect of” whatever it is: leadership, the crappy work, the work hours, compensation, whatever. And they are angry and they are disengaged, and in many cases are trying to disengage others. Any of those people can change into a productive member. Everybody has the capacity, but not everybody has the willingness. What leadership can do is offer up ideas. You say, “This is our operating system. Is this a system you’d be willing to practice and grow into, yes or no?” If the answer is no — which is perfectly acceptable, it’s not a moral judgment — then we know those people are committed to being victims and they’re not going to shift. Then I recommend cutting them out. But if the answer is “We’re willing to

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palpable differences. I’ve traveled and worked with people from everywhere for years now, and I truly believe that there is a collective interest and willingness to shift and that the distinctions are not so drastic anymore between the West Coast and the rest of the world. What else gives me hope is that those who are practicing acknowledge that life is becoming a much more satisfying experience and that their suffering is reducing, they are more engaged with the people they live and work with, they have more energy, and they’re more creative. That gives me so much hope that it’s possible, because when we first started out we didn’t know if this was really going to be something we could easily pass on to others. We’re learning that we can.

11 WAYS TO START YOUR

CONSCIOUS BUSINESS JOURNEY 1 BY RAJ SISODIA

Convinced that investing in all stakeholders, having a purpose beyond profit, focusing on culture, and practicing conscious leadership are good ideas? Try one or more of these 11 action steps to start implementing them within your company.

ADOPT AND LIVE BY HERB KELLEHER’S MANTRA:

“The business of business is people — yesterday, today, and forever.” The co-founder and former CEO of Southwest Airlines explained in a 2008 speech: “Among employees, shareholders, and customers, we decided that our internal customers — our employees — came first. The synergy, in our opinion, is simple. Honor, respect, care for, protect, and reward your employees regardless of title or position, and in return they will treat each other and their external customers in a warm, in a caring, and in a hospitable way. This causes external customers to return, thus bringing joy to shareholders.”

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CONDUCT A CONSCIOUS BUSINESS SUMMARY AUDIT SELF-ASSESSMENT.

Total your score for each of the pillars of Conscious Capitalism to see which are your areas of strength and which are your learning edges.

PILLAR

QUESTION

PURPOSE

Our organization fulfills deep-seated needs of our customers, not just their wants or desires. Our customers would be genuinely distraught if we ceased to exist. Our investments and R&D priorities reflect a higher purpose beyond profits. We have a clear vision of how the world would look if we fulfilled our purpose. Our employees find intrinsic satisfaction in their work that goes beyond the salary that they earn. The best ones would leave if we ceased being true to our purpose.

STAKEHOLDER INTEGRATION

For all major strategic decisions, we explicitly consider short-term and long-term impacts on each of our key stakeholders: customers, employees, suppliers, investors, and communities. We use metrics to track the wellbeing of each of our stakeholders, and these are monitored at the highest levels within the company. We routinely engage stakeholders in dialogue and give them a voice in the company’s direction. We recognize the interdependencies that exist between our stakeholders, and we explicitly seek solutions to issues that satisfy multiple stakeholders simultaneously. At the very least, we ensure that no stakeholder is harmed so that another may gain. Our relationships with all our stakeholders are characterized by frequent communication and high degrees of mutual trust and goodwill.

CONSCIOUS LEADERSHIP

Our leaders are deeply self-aware individuals who are in their roles because they passionately believe in the purpose of our organization and in service to our people. Our leaders are intuitive systems-thinkers and systems-feelers. They not only think in systems terms, they also feel the connectedness and interdependence that exists among stakeholder groups. In our company, power and virtue go together. In other words, we consciously seek to promote individuals who have the greatest integrity and capacity for caring and compassion. Most senior positions in our company are filled by promotions from within. In our company, accountability between employees and managers runs both ways; employees are accountable for their performance, and managers are accountable to ensuring that employees have what they need to perform at a high level.

CONSCIOUS CULTURE

Our company’s culture has a high degree of trust and transparency internally and externally: there is high trust among employees, between employees and management, and between the company and its external stakeholders. In our culture, we say what we mean and we mean what we say. There is no sugarcoating of tough reality, and there is a high level of commitment to truth and integrity in all matters. We operate within a culture of genuine caring and compassion for all stakeholders. When times get tough, our company exhibits an even higher level of caring and compassion than in prosperous times. There is a real sense of altruism in our culture — people do things for others with no expectation of a return, reward, or recognition. Our people and our organization are continually evolving to higher states of capability and consciousness. Employees in our company are empowered to do the right thing at all times. We use self-managing, self-motivated, and self-directed teams to accomplish our work.

HERE’S WHAT YOUR SCORE IN EACH DOMAIN COULD MEAN: 5: We are exceptionally good at this, to the point that others should learn from us. 3: This is a strength for us sometimes, but overall our record is mixed. 0: We seem to embody the opposite of this. 60

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TRUE?

This employee survey tool was developed by the Barrett Values Centre, a consulting agency that helps leaders measure and manage the culture of their organizations. Learn more at valuescentre.com.

INTRODUCE JOB-CRAFTING TO ALIGN PEOPLE AND POSITIONS.

This methodology, developed by researchers Amy Wrzesniewski (Yale School of Management), Jane Dutton (University of Michigan’s Ross School of Business), and Justin Berg (Stanford Graduate School of Business), helps workers identify how they can shape the realities of their duties — no matter the job — in subtle ways to make it more meaningful to them (see page 31). The trio created a workbook and online workshops to help bring their research insights to organizations. Learn more at jobcrafting.com.

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ESTABLISH A CULTURE COMMITTEE AND EMPOWER IT TO SUSTAIN AND STRENGTHEN YOUR CULTURE.

START A RECOGNITION AND CELEBRATION PROGRAM FOCUSED ON SHINING A LIGHT ON GOODNESS WITHIN YOUR COMPANY.

Lisa Bodell, CEO and founder of futurethink and author of “Kill the Company,” writes: “Sometimes, to be more innovative, we have to stop doing things. In fact, we have to streamline or eliminate the barriers that are holding us back from being more innovative in the first place. One technique that we use with organizations is called Kill a Stupid Rule. Here’s how it works: “Get your team into a room and ask them to brainstorm the following question: ‘If you could get rid of any rule, either kill it or change it, what rule would you choose and why?’ Put some guardrails around the brainstorm. Designate ‘red rules,’ those rules that cannot be touched because they are regulated by the government or would be illegal if you changed them. Everything else is a ‘green rule,’ and it’s fair game to be changed. “After about 10 minutes of brainstorming, see what people come up with. You’ll be amazed! Many of the things you [will not have realized] were holding people back in the first place. In fact, many of them will not be rules at all — they’re assumptions, processes, and annoying things around meetings and emails that perhaps you can change right now. “But don’t let it stop there, because ideas mean nothing in a vacuum and you want your efforts to result in decisions. Ask everybody in the room to now put a stake in the ground and write, on a sticky note, the one rule they would really like to kill or change that would make a big difference. Then have them place the stickies on a decision matrix like the one below and see what emerges. HIGH

DO A CULTURAL VALUES ASSESSMENT.

KILL ALL STUPID RULES.

IMPACT

that states your core mission and values, as Whole Foods Market and B Lab have done, and hold yourself accountable to it.

LOW

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CRAFT YOUR OWN “DECLARATION OF INTERDEPENDENCE” MANIFESTO

DIFFICULT

IMPLEMENTATION

EASY

“On this 2 x 2 we have Implementation (is it difficult or easy to implement this rule?) and Impact on the business (does it have a low or high impact?). You can define what the key success factors are for your business. Then, see what clusters emerge. For example, if all the rules that people put up are easy to implement and have a high impact on the business, why aren’t we changing them? You’ll have a lot of great discussion and will be able to break down barriers more quickly in a very easy way.” Learn more at FutureThink.com.

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WHAT // WHY // WHO // HOW

DEVELOP A LEADERSHIP CHECKLIST AND ALIGN ALL YOUR LEADERSHIP DEVELOPMENT PROGRAMS WITH IT.

Here’s an example from Barry-Wehmiller Companies, a St. Louis-based manufacturing tech firm known for its transformative workplace culture. Learn more at bwleadershipinstitute.com.

LEADERSHIP CHECKLIST I accept the awesome responsibility of leadership. The following describe my essential actions as a leader. I practice stewardship of our Guiding Principles of Leadership through my time, conversations, and personal development. I advocate safety and wellness through my actions and words. I reflect to lead my team in Achieving Principled Results on Purpose. I inspire passion, optimism, and purpose. My personal communication cultivates fulfilling relationships. I foster a team community in which we are committed to each other and to the pursuit of a common goal. I exercise responsible freedom, empowering each of us to achieve our potential. I proactively engage in the personal growth of individuals on my team.

ASSESS AND IMPROVE YOUR CUSTOMER EXPERIENCE USING YOUR NET PROMOTER SCORE (NPS).

Net Promoter is an index from −100 to 100 based on a simple question for customers: On a scale of zero to 10, with 10 being highest, what’s the likelihood that you would recommend our company to a friend or colleague? A response of 9 or 10 means a customer is a promoter; 7 or 8 means they’re passive; 6 or lower means a detractor. To calculate your NPS, take the percentage of promoters (9s and 10s) and subtract the percentage of detractors (6 and below). A score above 50 is considered a sign of strong customer loyalty and satisfaction, but no matter your score, consider also asking customers why they answered what they did and what you can do to improve — and then listen. Learn more at netpromoter.com.

ORGANIZE A FUTURE SEARCH OR APPRECIATIVE INQUIRY SUMMIT TO CO-CREATE YOUR FUTURE WITH KEY STAKEHOLDERS.

These are both methodologies designed to “get the whole system in the room.” The details of the interventions differ, but both gather a large group of diverse stakeholders for a period of several days to tell stories and discover, dream, and design a better future. Learn more at futuresearch.net or davidcooperrider.com/ ai-summits.

I facilitate meaningful group interactions. I set, coach to, and measure goals that define winning. I recognize and celebrate the greatness in others. I commit to daily continuous improvement. When we engage our heads, hearts, and hands around these habits, extraordinary levels of trust and fulfillment will result.

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Raj Sisodia is FW Olin Distinguished Professor of Global Business and Whole Foods Market Research Scholar in Conscious Capitalism at Babson College. He is also the co-founder and co-chairman of Conscious Capitalism Inc. and the author of nine books, including “Firms of Endearment: How World-Class Companies Proﬁt from Passion and Purpose.”

parting thought...

“At the end of the day, you want to be profitable, but that’s not the meaning of life.” — Daniel Lamarre, CEO of Cirque du Soleil