Conscious Company Magazine | Issue 10 Nov/Dec 2016 by Conscious Company

THE NEW RULES OF LEADERSHIP | FAIL MORE, EARN MORE

CONSCIOUS CO MPA NY

THE FUTURE OF BUSINESS AS USUAL

THE

GAME S CHANGER ISSUE

WORLD’S

TOP

FOR-BENEFIT COMPANIES

HOW TO BUILD A

$2 BILLION CULTURE NEXT JUMP’S CO-CEOs MEGHAN MESSENGER & CHARLIE KIM

FOOD | ENERGY | FINANCE | INNOVAT ION & DESIGN | LEADERS HIP

TABLE OF CONTENTS

STARTING BLOCK

ADVICE FROM THE SUM AND SUBSTANCE TOUR

HOW DOES YOUR BUSINESS ACTUALLY CREATE VALUE? BY GERRY VALENTINE

INNOVATION & DESIGN

TOM CHI’S RAPID PROTOTYPING REIMAGINES RIGHT AND WRONG*

30 SPOTLIGHT

TO CHANGE THE GAME, WE NEED TO CHANGE POLICY BY DAVID BRODWIN

ENERGY

MEET NEXT ENERGY TECHNOLOGIES’ SOLAR WINDOWS

THE WORLD’S TOP 25 FOR-BENEFIT COMPANIES* SPECIAL PARTNERSHIP WITH GAMECHANGERS 500

THREE COMPANIES REINVENTING THE ENERGY EFFICIENCY BUSINESS

*Cover Story

BUILDING THE BUSINESS

THE NEW JOB SKILLS BY MOE CARRICK

LEADERSHIP

NEXT JUMPâ&#x20AC;&#x2122;S $2 BILLION WORKPLACE CULTURE REVOLUTION*

WHAT LEADERSHIP LOOKS LIKE WHEN YOU PUT PEOPLE FIRST WITH ERIN WADE

HOW TO SHIFT YOUR WORKPLACE CULTURE, STARTING WITH YOU BY LORI HANAU WITH CLAIRE WHEELER*

FINANCE

AN AFTERNOON WITH JED EMERSON, GODFATHER OF IMPACT INVESTING BY AMBER NYSTROM

EVERGREEN BUSINESSES ARE BUILT TO LAST

HOW TO HARNESS THE POWER OF SYSTEMS CHANGE

INSIDE A 50-YEAR PLAN TO MOBILIZE CAPITAL

FOOD

BEYOND MEAT IS CHANGING HOW AMERICA EATS

MEET OUR CORE TEAM Q: What’s been game-changing for you lately? Being present. I don’t check my phone when I am with other people, period.

Taking walks during work calls. It helps me stay present and feel better.

An old school planner, good markers, and highlighters.

Daily midday yoga to reset my energy.

COPY EDITORS Robin Dickerhoof Shane Gassaway

If, as the question suggests, the game is ever-changing, then we are like children at play; and to play.

CO-FOUNDER AND COO Maren Keeley

CHIEF CULTURE OFFICER Amber Lee Eckert Daily meditation EDITORIAL DIRECTOR Rachel Zurer

ART DIRECTOR Cia Lindgren

CHIEF PRODUCT OFFICER Aaron P. Kahlow

Making time for selfcare even when I’m on the road.

Issue 10 November / December 2016

CHIEF COMMUNITY OFFICER Kate Herrmann Turning off my screens after 10 p.m.

CO-FOUNDER AND EDITOR-IN-CHIEFTESS Meghan French Dunbar

WEBSITE GURU Chad Kelsey Bunsun Designs TRANSCRIPTIONIST Carla Faraldo ADVISORY BOARD Ashley Coale Devon Bertram Emily Olson Katie Dunn Nathan Havey Scott Dunbar Wendi Burkhardt

Reading “An Everyone Culture: Becoming a Deliberately Developmental Organization” (see page 46).

NEWSSTAND CONSULTANT Bill Golliher & Full Circle Strategies, LLC PRINTING Publication Printers COVER PHOTO Brett Deutsch deutschphoto.com GENERAL INQUIRIES, SUBSCRIPTIONS, AND REPRINTS:

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info@consciouscomag.com ADVERTISING:

advertise@consciouscomag.com PHONE: 844.522.4768 ISBN 725-2-7429-317-9

Bullet journaling keeps me organized. I use the PocketDoJo.

TEAM MEMBER SPOTLIGHT

EDITORS’ NOTE

HR Momma Bear

AMBER LEE ECKERT What do you actually do here? “I handle all things involving team member happiness and beyond. I’m basically the HR Momma Bear, and I couldn’t love my role and fit within the company more! One of the most fun perks of my job is to birthday-gift shop for all our team members and pick out presents specially tailored to each person. I love that part of my job entails taking care of everyone and helping instill the culture of our company.” What’s inspiring you these days? “I just gave birth to my second child, and right now my children are what inspire me the most, especially seeing the world through their eyes and trying to make the world they see a little better. They’ve taught me how to love deeply and unconditionally. They’ve also made me strive to be the best version of myself I can be.” Favorite quote? “People will forget what you said, people will forget what you did, but people will never forget how you made them feel.” — Maya Angelou

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By the time you’re reading this, the 2016 election may well be old news. But as we go to press with this issue, we’re fresh off the season’s first debate, in which candidate Donald Trump made many references to “business” — explaining why he “rooted for the housing crisis,” for example, by saying, “That’s called business.” Whatever your opinion of Trump as a candidate, while we were watching the debates we couldn’t help noticing that the narrative he was spinning around the idea of “business” — what success looks like, what tactics are fair — was decidedly old-fashioned. It was the exact opposite, in fact, of the vision of business put forth by the companies and people we’ve been gathering for this issue about game changers. The stories in this issue are all examples of people and companies changing the game of business: building new models in order to create a better world, or solving problems by changing their level of thinking. We talked to thought leaders like Tom Chi (page 32) and Peter Senge (page 86), who want you to reimagine what problemsolving looks like. We went inside Next Jump (page 46), an e-commerce business that attributes its massive success to a corporate culture unlike any you’ve probably seen. We have interviews with CEOs of companies on track to disrupt entire industries, like Beyond Meat with its plantbased proteins (page 90) and NEXT Energy Technologies with its ink-based, transparent solar panels (page 40). And the list of the top 25 for-benefit companies we created with our friends at GameChangers 500 provides 25 examples of successful businesses that have little in common with the word Trump was using. As Gerry Valentine so eloquently puts it in his essay on page 26, it’s time for a world where the goals of business go well beyond “profit at all costs.” It’s happening, right here, right now. Let’s hope the rest of the world catches up soon.

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IT TAKES A VILLAGE As we close out our second year in print, we’d be remiss if we didn’t take some space to acknowledge how very many people’s hard work, energy, and support it has taken for us to get this far. Like Charlie Kim of Next Jump told us (see page 46), “If you want to do anything big in life, you can’t do it alone.” And we’re definitely trying to do something big here! iness Changing the practice of “bus and a rt effo ity mun com a as usual” is r first time team sport. Even if this is you mean it most picking up the magazine, we ldn’t do it cou we say sincerely when we without you. m — The Conscious Company Tea

COMMUNITY CHAMPION OUR CONTRIBUTORS So many people have played pivotal roles in helping us further our mission this year, and we’re especially grateful to our writers for their time and effort. In alphabetical order, here are all the contributors to 2016’s print editions.

FLIP BROWN

Not only has Flip been a loyal and valued contributor to several past issues, he’s been an unwavering supporter of and evangelist for the magazine. He hands out more issues every month than some of our staff! Meanwhile, his pointed and constructive feedback about our editorial process has helped us continue to improve and grow. What do you do? As principal of Business Culture Consultants (businesscultureconsultants.com) in Burlington, VT, I serve as a catalyst to help good people in great organizations experience better results and deeper satisfaction. What’s the most game-changing advice you’ve ever received? “Don’t work significantly harder than your client, for ultimately the ownership of their changes lies with them.” What advice do you like to give? “Trust that this stuck point that is really bumming you out right now is your invitation to the growth that you can’t see yet.”

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American Sustainable Business Council, Tripp Baird, BALLE (Business Alliance for Local Living Economies), Aarthi Belani, Catherine Bell, Zach Bernstein, Heather Braithwaite, David Brodwin, Flip Brown, Moe Carrick, Jeff Cherry, Mac Clemmens, Amy Cortese, Melanie Pease Davidson, Nicole Haase, Lori Hanau, Jay Harris, Christine Haskell, Nathan Havey, Pat Heffernan, Kristi Hemmer, Kathryn Hoffman, Kristin Hull, MaryAnne Howland, Hunter Lovins, Tom Matzzie, Tom McDougall, Jessica Meyer, Brian Mohr, John Montesi, Steven Morris, Donna Morton, Amber Nystrom, Gracy Obuchowicz, Nancy Rosenzweig, Ryan Shaening Pokrasso, Corie Radka, Andrew Rodriguez, Fran Seegull, Melis Tusiray, Greta Twombly, Julie Urlaub, Gerry Valentine, Chet Van Wert , Dale Wannen, Claire Wheeler, and Michael Whelchel.

the workshop ad

5 2 THE WORLD'S TOP

FOR-BENEFIT COMPANIES

We worked with GameChangers 5oo to bring you this list of the best companies where profits play a supporting role to the real stars: mission and purpose

GAMECHANGERS 5OO

ere’s an advantage to only having one bottom line: success is easier to quantify. Revenue-based lists like the Fortune 500 give us a handy scorecard for understanding who’s on top of the pack and how the field has changed since last year. But such rankings also reinforce the outdated idea that profit alone is a good measure of a company’s value. What if there were a way to change the game — to create a new set of rules and rank companies based on their positive impact on the world?

That new game is exactly what GameChangers 500 founder Andrew Hewitt has spent the past five years of his life building: a ranking of the world’s top for-benefit businesses. And what’s a for-benefit business? New legal breeds such as benefit corporations (US) and community interest companies (UK) operate with the revenuegenerating engine of a for-profit and the mission-driven heart of a non-profit. While laws catch up to changing worldviews and values, Hewitt has taken on the challenge of reclassifying companies as “for-benefit” based on their practices, regardless of legal structure. Thanks to the support of a 180-person advisory

council focused on legally defining the “for-benefit enterprise,” GameChangers 500 developed 12 categories of best practices that differentiate these benefitmaximizing businesses. He and his team have refined their criteria to capture and rank the world’s best companies in terms of how much benefit they create.

We’re delighted to partner with GameChangers to publish this first-ever list of the top 25 for-benefit companies, according to the

team’s most recent data. These 25 companies are incredibly diverse: some are young, others have been around almost a century; some are small, and others have more than 40,000

employees. They span industries, and their missions vary. But there’s one thing they all have in common: a worldview that defines success as maximizing benefit to all life they touch.

Consider this list a snapshot of where the rankings stand today, based

on the 2017 GameChangers 500 methodology; we hope and expect they will change throughout the year, as more companies participate and update their data. Read on to learn which companies made the cut, how they were selected, why Hewitt started GameChangers 500, and how your company can get involved. Let the new game begin!

THE PROCESS “Don’t look at GameChangers 500 as another certification,” founder Andrew Hewitt says. “We’re helping companies share best practices and providing an easy-to-understand roadmap of what ‘for-benefit’ means, while elevating companies that are doing it really well.”

HERE’S WHAT PARTICIPATING LOOKS LIKE Step 1: Sign a declaration stating your intentions to operate by for-benefit principles. Step 2: Show that your company exists for a purpose beyond profit by sharing your Theory of Change, Impact Report, and/or proof of a legal structure that upholds your commitment. Companies that succeed in this step earn the Purpose-First badge (see right). Step 3: Demonstrate your practices that provide maximum benefit for people and the planet, and work towards earning the remaining 11 badges.

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Step 4: Measure your performance across a triple bottom line. In 2017, companies will also have the opportunity to earn three Performance Leader Achievements, worth 60 points each: • Financial Strength Leader (based on revenue growth); • Stakeholder Impact Leader (based on B Lab’s B-Impact Assessment score) • Global Impact Leader (based on dollars committed to the United Nations’ Sustainable Development Goals)

THE BADGES 155 POINTS

PURPOSE-FIRST

This badge is the hardest to earn, and requires companies to clearly define their mission and demonstrate their commitment to it through a theory of change that drives strategy, impact measurements that track progress, incentives that keep purpose a priority, and/or a legal structure that ensure social and environmental objectives are upheld.

OPERATING PRACTICES

15 POINTS EACH

GameChangers 500 designed the process of earning these badges to be educational and support sharing practices across companies within the movement. A quick online self-assessment asks companies to rate their performance on a scale from 1 (not an area of focus) to 5 (world-class example) in 11 different categories. If the company scores themselves a 4 or a 5, they’re shown a list of specific practices within that category and asked to share proof — like existing reports and certification — of any practices they follow. If appropriate, GameChangers publishes that proof within the searchable best-practice section of its website. Once GameChangers verifies that a company meets the minimum requirements for a category, that company gets the relevant badge and the associated points. CONSIDERATE COMPENSATION Financial compensation that fairly considers the living expenses of workers, producers, and suppliers, and also fairly rewards all workers, owners and executives who make significant contributions to the company’s success.

PARTNERS FOR THE PLANET Choosing suppliers, distributors, and other partners that share a commitment to creating a better world and adhere to clearly defined social and environmental standards.

BENEVOLENT BENEFITS Going beyond monetary compensation to provide exceptional care for the people powering the business; including healthy food offerings, extraordinary office amenities, full health coverage, education subsidies, and an inspiring work environment.

EMPLOYEE GROWTH ECOSYSTEM An ecosystem for workers to constantly grow, learn, use their strengths, and advance towards their personal and professional goals.

TRIBE CULTURE A purpose-driven company culture that engages team members in accomplishing the company mission, fosters coworker collaboration, and hires people deeply aligned with the company mission and values.

REMARKABLE CUSTOMER CARE Demonstrating genuine care for customers through a graceful purchasing process, extraordinary support, quality guarantees, and other acts of kindness that leave customers remarking about the experience.

WATER & WASTE MINIMIZER Striving to achieve zero waste through recycling and reusing initiatives, composting and water conservation, and tracking progress towards set reduction targets.

ECO-MINDED MATERIALS Earth-friendly materials used to operate the company (e.g., recycled paper), to construct and furnish offices and facilities (e.g., bamboo flooring), and to produce products and their packaging (e.g., biodegradable materials). FREEDOM-FOCUSED WORKPLACE A workplace that focuses on creating freedom and minimizing fear by reducing the centralization of power, supporting self-management, and encouraging radical transparency, inclusion, feedback, and fairness. CARING THROUGH SHARING Caring for mission-aligned causes by generously sharing business resources such as products and services, meeting space, excess materials, media exposure, company best practices, and employee time and talent. EARTH-FRIENDLY ENERGY Striving to achieve carbon neutrality through energy minimization and monitoring, renewable energy sources, eco-friendly transport, and purchasing carbon credits to offset emissions.

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DR. BRONNER’S VISTA, CA // FOUNDED 1948 // 125 EMPLOYEES B-CORP CERTIFIED AND BENEFIT CORPORATION This quirky family company brought in $100 million of revenue in 2015 selling organic, Fair Trade soap products. The company lives by six “cosmic principles” — including “treat employees like family” and “treat the earth like home” — that guide everything it does. A key example: the total compensation of the highest-paid employees and executives is capped at five times that of the lowest-paid position.

TERRACYCLE TRENTON, NJ // FOUNDED 2001 130 EMPLOYEES

TerraCycle’s mission is to eliminate the idea of waste. The company specializes in creating national recycling systems for even the weirdest, hardest-to-deal-with “trash,” from old CDs to cigarettes to stuffed animals to human hair. In partnership with major consumer-goods manufacturers such as Kraft Foods Group Inc., Proctor & Gamble Co., and Hain Celestial Group, TerraCycle runs a network of individuals, schools, and organizations who get paid to help collect otherwise non-recyclable packaging. As of 2016, the company has diverted more than 3.2 billion products and packaging items from landfills and donated more than $15.6 million to charities.

GAMECHANGERS 5OO IMPACT MAKERS RICHMOND, VA // FOUNDED 2006 110 EMPLOYEES // B CORP CERTIFIED AND BENEFIT CORPORATION

This management- and technology-consulting firm helps companies manage transformation across areas such as IT, security, and people. It helps private companies and public-sector organizations in industries undergoing major change — like healthcare. Unlike the typical consulting firm, however, Impact Makers is entirely owned by two foundations, and contributes 100 percent of net profits to charitable partners. [For more, see our story from Issue 5 at bit.ly/Issue5ImpactMakers.]

SAN FRANCISCO, CA // FOUNDED 2006 48 EMPLOYEES // B CORP CERTIFIED

SAN FRANCISCO, CA // FOUNDED 2001 200 EMPLOYEES // B CORP CERTIFIED With sister brand Ecover, this cleaning supply brand is the largest green cleaning company in the world. Its non-toxic soaps and detergents have been sold nationwide in Target stores since 2002. In 2015, Method opened the soap industry’s first LEED Certified Platinum manufacturing plant, in Chicago.

New Resource sees banking as not just a service, but a way to create a better world. All new loans go to organizations advancing sustainability, and the bank’s $228 million portfolio is currently 89 percent values-aligned. Unlike traditional banks, New Resource invests the majority of its assets within the “real economy” (as opposed to the financial economy, which consists of buying and selling financial assets such as stocks, bonds, currencies, and derivatives).

METHOD PRODUCTS

NEW RESOURCE BANK

Photo: Jasper Sanidad

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NOVO NORDISK A/S BAGSVAERD, DENMARK // FOUNDED 1923 42,300 EMPLOYEES This Danish pharmaceutical company is a leader in delivering care for diabetes and other chronic illnesses. It supplies around half of the worldâ&#x20AC;&#x2122;s insulin, some at reduced prices in developing countries. Its majority shareholder is a foundation dedicated to promoting long-term human health, and the company has a strong commitment to triple-bottom-line practices, including measuring environmental and social impact in its annual reports.

MICROENSURE GLOUCESTERSHIRE, UK // FOUNDED 2013 200 EMPLOYEES This British insurance company has more than 40 million emerging-market customers in 15 countries, 85 percent of whom had never previously been able to access insurance. MicroEnsure pays claims in about two hours, and has worked with its customers in marketplaces and villages to develop new insurance products like micro-health, political violence, crop, and mobile phone insurance. The company started as a nonprofit in 2002, and converted to a for-profit social enterprise in 2013.

RECOLOGY SAN FRANCISCO, CA // FOUNDED 1921 3,000+ EMPLOYEES // EMPLOYEE-OWNED Recology offers commercial and residential recycling, composting, and garbage services to more than 125 communities in California, Oregon, and Washington. This year, Recology will manage approximately 2.3 million tons of materials generated within those communities, with an eye toward finding new ways to process and reuse what was once considered waste.

GAMECHANGERS 5OO

EILEEN FISHER

PATAGONIA

IRVINGTON, NY // FOUNDED 1984 1,300 EMPLOYEES // B CORP CERTIFIED

VENTURA, CA // FOUNDED 1973 2,000+ EMPLOYEES // B CORP CERTIFIED AND BENEFIT CORPORATION

Three decades ago, founder Eileen Fisher started a women’s clothing brand with $350 and a vision of simplicity and elegance. Now, without ever having engaged outside investors, she runs a $450 million company with more than 60 stores worldwide. The company is transitioning toward 100 percent sustainability in sourcing and manufacturing, which it plans to accomplish by 2020. [Read our Issue 3 cover interview with founder Eileen Fisher at bit.ly/EileenIssue3.]

This outdoor equipment and clothing company has long been a leader in the for-benefit world. Its expansive list of initiatives includes political advocacy (see page 30), $78 million in cash and in-kind donations to environmental organizations to date, Fair Trade wages for laborers, and constant innovation in its supply chain — most recently, through implementation of a responsible wool standard. The company’s mission is “to build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”

GROUPE SOS PARIS, FRANCE // FOUNDED 1984 // 14,000 EMPLOYEES // NONPROFIT

"" ''WE’'RE BETTER THAN THE PRIVATE SECTOR.''

Groupe SOS is an umbrella for a sprawling array of more than 400 businesses and associations serving 12 French states and 35 countries. Some of its “structures” are nonprofits, others social enterprises. Its mission, “To provide solutions for people at all levels in society, and especially those with few or no resources,” is broad — and so is its reach. Its businesses include residential shelters for drug addicts, homeless people, and troubled youth; AIDS assistance programs; daycares; retirement homes; hospitals; an online store selling ethically sourced items; and an event space that provides jobs to the hard-to-employ, among many other ventures. Groupe SOS also publishes several magazines. Tactically, the group has grown so big by taking over and rehabilitating troubled enterprises, as with its 2012 acquisition of a large hospital chain. One of its businesses is a central management team that handles HR, finances, legal issues, and other functions for all of the other businesses under the umbrella. “We’re better than the private sector,” Board Chairman Jean-Marc Borello told La Croix newspaper, “especially because we don’t have shareholders or dividends to pay out. We do a better job than the public sector, too, because our associations are more flexible and more efficient.” CONSCIOUS COMPANY MAGAZINE

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NATURA CAJAMAR, SÃO PAULO, BRAZIL // FOUNDED 1969 7,300 EMPLOYEES // B CORP CERTIFIED

Photo: Rich Van Every

Why did you start GameChangers?

Andrew Hewitt: I watched so many of my friends graduate from university, rise in the ranks of traditional companies, and become more and more dissatisfied by the profit-atall-cost corporate mentality. It made me wonder: What is a definition of success worth putting your life into, that gives you a deep sense of meaning, that allows you to contribute your strengths to something you really care about while meeting your financial and personal needs? What organizations would allow people to thrive like that? There was clearly a new model of business emerging. But where do you find these companies en masse? I looked and looked and looked and I could not find that database that truly represented this movement. So I decided to create it. It actually started as GameChangers 100, because I didn’t think there were many companies; then I started researching and it turns out there were way more than I imagined.

What do you hope a list like this will accomplish?

AH: These rankings are really important for two reasons. One is to separate the performers from the pretenders. How do you know that the thing driving a company is a real belief that the business exists for the benefit of all life? GameChangers 500 leans on proof of practices to verify companies are actually having an impact. This is a merit-based process; companies can’t pay to get on the list. And, two, it allows us to create models to follow. We’re not just a list. We exist to share the best practices of the top performers. The sooner we can properly communicate the for-benefit model to the masses, the sooner it will replace the traditional profit-at-all-cost model. Our GameChangers.co platform, which launches in 2017, not only profiles and ranks companies, it also includes a searchable database of best practices and experts in those areas. We want a critical mass of for-benefit businesses in every major city in the world, and we’re building tools to accelerate the transition. HOW TO JOIN THE GAME

Go to gamechangers500.com for full details on how to get your company involved.

South America’s largest cosmetics company is also one of the world’s largest B Corps. Its products help preserve the Amazon rainforest by creating greater, more lucrative demand for living-forest products — like seeds and fruit — than for wood or other forest-destroying uses. Since the company was founded in 1969, it has been driven by relationship selling, reaching millions of consumers through 1.37 million Natura Environmental Consultants in Brazil and 505,000 in Argentina, Chile, Colombia, France, Mexico, and Peru. In 2015, Natura concluded its first Environmental Profit and Loss (EP&L) assessment. In addition, the company’s Sao Paolo distribution center was designed to fully integrate people with physical and cognitive disabilities into the labor force. [Read more about the company in our Issue 5 story at bit.ly/Issue5Natura.]

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CHANGE.ORG SAN FRANCISCO, CA // FOUNDED 2007 320 EMPLOYEES // B CORP CERTIFIED This free, open online platform allows anyone to start a petition campaign and immediately mobilize people around the world to create change in 196 countries and counting, from stopping bullying in schools to ending acid attacks in India. Nearly every hour, a petition on the site achieves a victory. The company makes money through sponsored campaigns and by allowing users to promote petitions for a fee.

GAMECHANGERS 5OO

ETSY INC. BROOKLYN, NY // FOUNDED 2005 920 EMPLOYEES // B CORP CERTIFIED This global online marketplace for crafters and artisans is on a mission to reimagine commerce to build a more fulfilling and lasting world. In 2016, the company moved into new headquarters (pictured), furnished with art made by more than 250 local artists and Etsy sellers. The company is currently seeking Living Building Challenge certification.

Photo: Emily Andrews

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GAMECHANGERS 5OO

TOMS LOS ANGELES, CA FOUNDED 2006 400+ EMPLOYEES Best known for its distinctive fabric slip-on shoes, TOMS has been one of the most successful pioneers of the one-for-one business model. For every unit of shoes, eyeglasses, bags, or coffee the company sells, it donates a related product or service to people in need elsewhere in the world. As of 2016, the company has donated more than 60 million pairs of shoes, restored eyesight for more than 400,000 people, provided over 335,000 weeks’ of safe water, and supported safe birth services for more than 25,000 mothers.

AVEDA

TRIODOS BANK

BLAINE, MN // FOUNDED 1978 2,300 EMPLOYEES

ZEIST, NETHERLANDS // FOUNDED 1980 // 1,200+ EMPLOYEES

Aveda creates plant-based hair, skin, and body products for beauty professionals and consumers. Its main manufacturing facility in Minnesota uses 100 percent wind power, and the company sources 100 percent postconsumer recycled plastic for its packaging. Aveda engages in fair compensation practices with all suppliers and uses organic, plant-based, sustainable and renewable ingredients whenever possible. The company has raised more than $50 million for Earth Month since 1999 and more than $44 million for clean water initiatives.

This European bank has branches in the Netherlands, UK, Spain, Belgium, Germany, and France, and held €8.2 billion ($9.2 billion) in total assets at the end of 2015. The bank’s mission is to make money work for positive social, environmental, and cultural change, so it invests only in sustainable enterprises and only with the “real money” entrusted to it by savers and investors. One of its more unusual practices is publishing information about every loan it makes, so customers know where their money is going.

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ME TO WE TORONTO, ON, CANADA FOUNDED 2009 150 EMPLOYEES B CORP CERTIFIED First there was Free the Children, a charity founded by teenagers Craig and Marc Kielburger in 1995 to help with international development and youth empowerment. The Kielburgers also wanted a way to bring kids on volunteer trips to the places the charity was working, so they created a side business. Eventually, the charity morphed into WE Charity, and the side business expanded its scope and mission to become ME to WE, which exists entirely to help fund the WE Charity. ME to WE sells artisan goods like raffiki bracelets, runs summer camps and leadership institutes, and provides volunteer service trips to school, family, and business groups. The company gives the charity half its profits; those donations totaled $8.5 million between 2009 and 2015. Its artisan programs also give full-time employment to more than 1,500 women in Kenya and Ecuador.

D.LIGHT

SAN FRANCISCO, CA // FOUNDED 2007 400 EMPLOYEES // B CORP CERTIFIED D.light designs, manufactures, and distributes solar solutions for people in the developing world who are without access to reliable light and power. Its lanterns, multifunction lights and phone chargers, and financed solar home systems hold the largest market share in a variety of regions, and the company also has offices in New Delhi, India; Nairobi, Kenya; and Shenzhen, China. As of July 31, 2016, the company had helped generate 125 GWh of renewable energy and created 31 billion productive hours for working and studying. CONSCIOUS COMPANY MAGAZINE

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GUAYAKI SEBASTAPOL, CA // FOUNDED 1996 75 EMPLOYEES // B CORP CERTIFIED Guayakí sells organic, Fair Trade yerba mate tea. But that’s just a side gig to fund the company’s main mission, which is to steward and restore 200,000 acres of rainforest in Argentina, Paraguay, and Southern Brazil, while creating living-wage jobs for nearby residents. Growing mate in the shade of the rainforest has allowed the company to accomplish both of those goals at once in a creative, profitable, sustainable way.

VANCITY VANCOUVER, BC, CANADA // FOUNDED 1946 2,594 EMPLOYEES // COOPERATIVE Canada’s largest credit union shares 30 percent of its net profits with members and community partners — more than $287 million since 1994. It’s the first North American financial institution to become carbon neutral, and a fifth of its $4.5 billion loan portfolio is invested in impact enterprises.

Photo: Celine Frers for Guayaki

INTERFACE

ATLANTA, GA FOUNDED 1973 3,500 EMPLOYEES In 1994, this maker of carpet tiles launched “Mission Zero,” a promise to eliminate any negative environmental impact it causes by 2020. As of 2016, the company is on track to use only recycled or bio-based materials by its target date, and has already cut its greenhouse gas emissions by 92 percent, its water use by 87 percent, and its landfill waste by 91 percent. Now Interface is going even further with its new mission, Climate Take Back, which is focused on actually reversing climate change. 22

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"We took a company based on oil and turned it into one that makes sustainable products from renewable materials with renewable energy."

CONSCIOUS COMPANY MAGAZINE

- Erin Meezan, Interface'’s VP of Sustainability

GAMECHANGERS 5OO

CLIF BAR & COMPANY

EMERYVILLE, CA // FOUNDED 1992 975 EMPLOYEES This family- and employee-owned performance nutrition product maker is best known for its Clif energy bar. Five bottom lines help the company consider decisions from multiple perspectives, with an emphasis on sustaining the business, brands, people, community, and planet. Clif calls those its “Five Aspirations” in recognition of the fact that the business is on a journey and can always do more in each of those areas.

THE HONEST COMPANY

ROSHAN

PLAYA VISTA, CA // FOUNDED 2012 500+ EMPLOYEES // B CORP CERTIFIED

KABUL, AFGHANISTAN // FOUNDED 2003 1,200 EMPLOYEES // B CORP CERTIFIED

Actress Jessica Alba founded this home care, personal, and baby products retailer to sell non-toxic alternatives to the mainstream products that had made her and her child sick. The company’s mission is “to inspire and empower people to live a happy and healthy life,” and it partners with public and private healthcare, childcare, and early learning institutions to create safe spaces free from ingredients of questionable health and safety.

Afghanistan’s largest mobile phone and telecommunications company sees itself as providing a crucial service to its customers: as its slogan goes, it’s Nazdik Shodan, or “bringing you closer.” As one of the largest private companies in the war-torn country, it offers crucial job training and opportunities to Afghan nationals, with a workforce that’s 20 percent female. The company has a community engagement arm that builds schools, playgrounds, and wells, and it has also developed a model under which local communities take responsibility for the security and maintenance of the cell towers in their neighborhoods, providing both employment and a sense of engagement. All photos by courtesy unless otherwise noted. CONSCIOUS COMPANY MAGAZINE

NOVEMBER / DECEMBER 2016

SUM+SUBSTANCE

Ann Wang and Jessica Willison are co-founders of the online marketplace Enrou.

ADVICE FROM THOUGHTFUL LEADERS FROM THE SUM AND SUBSTANCE TOUR Who: Ann Wang and Jessica Willison

Wang and Willison are co-founders of Enrou, an online marketplace that showcases ethical brands from around the world, helping the artisans who produce the goods find meaningful work. The two first became friends in junior high school, then stayed close through college at UCLA. Wang pursued global activism and social justice while Willison focused on communications, fashion, and retail; in 2014, while still in college, their different passions meshed as Enrou. They won a $400,000 prize at Forbes’ 2014 Under 30 Summit, and now have grown to represent 35 impact brands helping more than 9,000 people in the communities they serve. 24

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As co-founders, how do you split roles and responsibilities? Willison: We have our own different strengths, passions, and interests. It’s a conversation between the two of us. It is an understanding about what we each are really passionate and excited about working on, and then supporting the other when they need help. Wang: That’s something that we believe in across every person on the team: that you play to your strengths. Yes, you spend a little bit of time building out the things you want to do better, but we hire based upon strengths. The interviews are about, “What are you passionate about? What do you spend all your time doing?” When you discover and dig at that passion, that’s when you find your best capacity. Watch the full interview and other inspiring stories from our Sum and Substance event series at sumandsub.com.

OPINION

DO YOU KNOW HOW YOUR BUSINESS ACTUALLY CREATES

Is your business extracting value from people, communities, or the planet? If so, it’s time to shift your thinking. BY GERRY VALENTINE

Here’s a provocative question I like to ask business leaders: How do you generate value? It’s provocative because it focuses on the core of what their businesses actually do, and that sometimes shines a bright light on questionable business models and practices. For decades, and especially since the 1970s, many leaders have used a one-dimensional, reductive view of what business should do: the idea promoted by Nobel Prize-winning economist Milton Friedman that the purpose of a business is “to make as much money as possible.” That idea has led to a proliferation of what I call “extractive” business models — businesses that don’t actually generate value, but rather extract it from somewhere else: from the planet, from people, or from communities. We need to shift how we design our business models and business strategies: away from extractive approaches and towards models that create incremental value. We need business strategies founded on real problem-solving and real ideas. This paradigm shift is critical for building a sustainable economy with shared prosperity.

EXTRACTION-BASED BUSINESSES

The term “extraction economy” describes economies that derive value by extracting non-renewable resources from the planet, people, or communities, and leave harm in their wake. These economies ultimately fail when those resources are depleted. Some of the clearest examples of this business model are oil and gas companies that employ climate-change denial to maintain profits as they extract a nonrenewable resource that does harm to the planet. Other examples include the tobacco industry and much of the soft-drink and fast-food industries, where profits correlate to long-term health consequences for customers. Amazon, an enormously profitable company, is also notorious for exploiting workers to generate those profits — like a case in 2011 when workers were subjected to 11-hour days in a 100+ degree warehouse to support the company’s revenue targets. Amazon had paramedics outside the warehouse to wheel away workers who collapsed, and fired people who complained. The high profits were extracted from employees’ health. Perhaps the most egregious extractive business model is the for-profit prison industry — a $5 billion behemoth with a business model that monetizes mass incarceration. According to the Justice Policy Institute, the commercial prison industry lobbies heavily for tougher sentencing laws, thus further increasing incarceration rates. This diverts tax revenue away from communities, and is a fundamental reason why the US imprisons more of its citizens, per capita, than any other country on Earth. Commercial prisons ultimately profit by increasing inequality and further marginalizing poor communities — so the value the industry extracts from families, communities, and human suffering is incalculable.

THE PARADIGM SHIFT: FROM GENERATING “SHAREHOLDER VALUE” TO GENERATING IDEAS AND SOLUTIONS

The fundamental issue with these and many other extractive businesses is that their profit doesn’t come from creating incremental value in the world; rather, they generate profit by shifting, i.e., extracting, value and dropping it to their bottom line. Good businesses, by contrast, create incremental value by generating ideas and solving problems in a way that customers are willing to pay for and that doesn’t leave harm in its wake. I’ve heard the counter arguments: that we sometimes need products with significant externalities (like fossil fuels); that some consumers enjoy sugary soft drinks and Twinkies; that businesses shouldn’t take up the role of judging what’s good and bad for their customers. All of these are correct in the traditional, narrow approach to business. However, the point of conscious business is to take a more principled view, a view that includes the full impact we have on planet and people and the impact of any externalities we generate. Focusing on the “how you generate value” question is a clear way to assess and hold ourselves accountable to net impact. Here’s a more sophisticated and expansive view of the role for business, to contrast with that of Milton Friedman: The purpose of every good business is to generate ideas and solutions for customers’ needs. When a business does that well, profits and increased share value are the end result. In many ways this is a paradigm shift back to the original core purpose of business and commerce. It’s actually a liberating shift, because there is no shortage of problems that need to be solved — the list grows longer every day.

IT’S MORE THAN HACKING, DISRUPTION, AND “INNOVATION”

Some might argue that we’re already making this shift, and especially in the high-tech sector where companies “hack” and “disrupt” their way to innovative solutions. However, when I hear the word “hack,” I think about my undergraduate days in engineering school (longer ago than I’d care to admit) when “hack” was a negative term. It typically came scrawled at the top of a computer science assignment along with a grade of D or F. It meant that although you’d produced working computer code, you’d taken an unsophisticated approach and hadn’t fully understood the problem — i.e., you’d produced a “hack,” not an elegant solution. Ironically, this applies to many of today’s business ideas that are incorrectly labeled as “innovation” — in truth they are hacks to make a quick profit, not innovative solutions to important problems. As Allison Arieff explores in a recent New York Times article, we’re under siege by socalled innovative products that target inane problems, and thus don’t improve quality of life; i.e., generate real value. And too many supposedly “innovative” business models ignore the problems of the people most in need — the poor, single mothers, minorities, etc. My favorite of her examples (which I initially thought was a joke) is Noti-FLY — technology to notify you if your fly is down. We can — and must — do better.

HOW DOES YOUR COMPANY GENERATE VALUE? ASK THESE 5 QUESTIONS TO FIND OUT.

1 // WHO IS YOUR CUSTOMER?

Describe the customer in detail, and perhaps create personas for each type of customer. For example, your customer might be “a mother concerned about finding affordable organic food.”

2 // WHAT PROBLEM OR NEED DO YOUR CUSTOMERS HAVE THAT YOU’RE INTERESTED IN SOLVING?

The key here is that you must state this answer from the customer’s point of view, and ideally in the first person. That helps make sure you understand the customer. Our example customer might say, “I want to feed my children organic, humanely raised food, but most brands are beyond my budget.”

3 // HOW DO YOU SOLVE THE CUSTOMER’S PROBLEM?

Answer this one from the company’s point of view — honestly. It gets at how you are able to bring value to the market, and asking it can unearth issues. In 2011, Amazon would have had to honestly answer this question with, “We can ship goods quickly and cheaply because we push our workers hard and subject them to unsafe working conditions.”

4 // WHY IS YOUR CUSTOMER BETTER OFF AFTER YOU’VE SOLVED THEIR PROBLEM?

Once again, state this answer from the customer’s point of view. The question is essentially a test for delivery of incremental value. Going back to our example customer, she might say, “I’m better off because I can now afford to feed my family in a way that’s consistent with my values.” However, if we switch to a product like junk food, it becomes much harder to find a compelling value-add answer.

5 // WHAT “EXTERNALITIES” HAVE YOU CREATED WHILE SOLVING THE CUSTOMER’S PROBLEM?

In other words, what problems have you created for your customer, employees, the planet, or communities? Again, this is a question that requires extreme honesty, and you should revisit it over time. For example, before we understood the dynamics of pollution and climate change, fossil fuel-based energy seemed like a tremendous benefit to humanity, rather than a harmful product with serious externalities.

HOW TO BUILD BUSINESSES BASED ON IDEAS, PROBLEM-SOLVING, AND VALUE GENERATION

There’s a framework I often use to help companies answer the “How do you generate value?” question. It’s a way to build business models and strategies that are based on truly valuable ideas and problem-solving. The framework is rooted in five deceptively simple questions. (See “How Does Your Company Generate Value?” at left.) There’s a bonus, too: In order to answer these questions, you need a deep understanding of your customer — something else that’s essential for a successful business.

A PRINCIPLED AND COURAGEOUS APPROACH

One day, focusing on value-generation will become the normal way of doing business. Until then, this approach requires extreme courage to go beyond the simplistic “Milton Friedman-esque” thinking that dominates today — and not everyone is (yet) up to that challenge. The paradigm shift to a more expansive, value-generating approach to business thinking requires three things: 1) equipping business leaders with the knowledge to use this more expansive approach; 2) encouraging investors to use this type of value-add framework in making investment decisions; and 3) ultimately arming consumers with the knowledge to ask these questions when making purchasing decisions. That paradigm shift starts with each of us taking a principled approach to our businesses. Start by asking the hard question: How do you generate value?

Gerry Valentine is the founder of Vision Executive Coaching. He helps build companies that work, and that work for all — supporting profit, people, and the planet. Gerry focuses on business strategy, innovation, and leadership. He has 30 years of experience with multiple Fortune 100 companies, an MBA from NYU, and a BS from Cornell University. Connect with Gerry on Twitter @gerryval or by email at gerry@VisionExecutiveCoaching.com.

POLICY CORNER

TO CHANGE THE GAME, WE MUST CHANGE THE

LAWS

To create a sustainable economy, running a successful conscious business is a great first step. But truly shifting our culture will require policy work. BY DAVID BRODWIN Whether they call it sustainable business, socially responsible business, conscious capitalism, or social entrepreneurship, today all kinds of companies across all sectors believe corporations can both do well financially and do good in the world. They know business can be not just a way to make money, but a powerful, positive force in society. Yet while the growth of responsible, sustainable, triple-bottom-line companies is inspiring, to achieve true large-scale change, businesses must also push for changes in public policy. To date, most companies advancing sustainable practices have focused on the day-to-day building of their own businesses, not on pushing for change in Washington and statehouses. The reasons for avoiding policy work are understandable: not enough time to manage it, not enough money for high-priced lobbyists and government affairs staff, worry about alienating customers, and distaste for the mess that is Washington these days. But as the saying goes, “If you’re not at the table, you’re on the menu.” When responsible companies’ leaders don’t engage with Washington, no one is there from the business world to challenge industries and business practices that are shortsighted, socially harmful, and environmentally destructive. That’s why the laws, incentives, and policies in place today subsidize fossil fuels, ignore potent toxins in our food and consumer products, eviscerate our public university system, threaten the land and water on which industries rely, undermine our ability to create a vibrant middle class, and cause countless other problems. A few enlightened business leaders are starting to engage in policy work that disrupts this status quo, challenges the old guard, and champions new ideas. For these companies, the benefits of policy work include enhanced credibility when consumers see them “walk their talk” and improved employee loyalty, especially from younger workers who seek meaning in their jobs, beyond a paycheck. This work also helps align our economy to a true-cost framework, providing a stronger economy for all businesses to thrive in. Here are two examples of companies engaging in this way.

EILEEN FISHER MAKING THE POINT The threat of climate change really hit home for apparel firm EILEEN FISHER when its headquarters flooded during Hurricane Sandy. But the company’s concern about the issue isn’t new. As a natural-fiber-based company, it uses cotton, linen from flax, rayon from trees, and wool from grass-fed sheep. “A lot of our clothing comes from the land,” explains Shona Quinn, the company’s sustainability leader, “so climate change poses a crucial threat to our supply chain.” At events like the New York State Sustainable Business Council Summit and Sacramento Lobby Day, EILEEN FISHER staff members advocate for policies from paid leave to safer chemicals. Eileen Fisher herself joined CEOs from Gap Inc., H&M, and four other apparel firms in asking world leaders to take meaningful action at COP21, the Paris climate talks. “We have to think differently about business as a bridge to change,” Fisher said in Paris. “We have the powerful opportunity to come together across our industry to co-create how we measure success, not only in dollars but in the cost to humanity and the environment.”

PATAGONIA DRAMATIC RESULTS Patagonia is one of the leading companies engaging with policy work. The brand has a deep, abiding connection to the great outdoors — and publicly supports protection of rare and beautiful natural places. President and CEO Rose Marcario has blogged, “We have to keep the pressure on. That means being loud and visible in the streets, in town halls and our capitals, and most important, in our elections.” Patagonia is raising awareness of the problems dams cause for wild rivers — which are both ecosystems and recreational attractions — and works to restore free-flowing rivers. To dramatize its message, Patagonia produced a film, “DamNation.” “We screened the film at the Capitol Hill visitor center in Washington, DC, and gave copies to legislators at every level,” says Hans Cole, Patagonia’s director of environmental campaigns and advocacy. “The film took busy legislators from 0 to 60 miles per hour on the issue, fast.” In another recent high-visibility effort, Patagonia and 14 other firms called on President Obama to designate the 1.9-million-acre Bears Ears region in Utah as a national monument, protecting it from oil and gas developers. “These businesses — including competitors — standing up together made an impact,” Cole says.

BANDING TOGETHER Responsible business leaders can lead the way to a sustainable future — if they leverage their inspiring examples through savvy policy engagement. Working together to unite conscious voices is a key part of that strategy, and that’s where we at the American Sustainable Business Council (ASBC) can play a role. “ASBC helps us work effectively together and make a bigger impact on policies, instead of each of us having to fund a whole government affairs department,” says Patagonia’s Cole. “Together, we can get the critical meetings with legislators.” In many cases, ASBC member-companies large and small compete aggressively in the marketplace, but share a common policy aim. Together, they are heard. In one notable example, ASBC grew the Companies for Safer Chemicals coalition to several thousand businesses. Leading participants like Seventh Generation, Earth Friendly Products, The Honest Company, and many others took on the reform of the Toxic Substances Control Act, a key piece of legislation that aims to keep dangerous chemicals out of consumer products. ASBC drafted documents calling for changes in the proposal Congress was considering, outlining a plan that was both economically sound and better for public health. ASBC then organized meetings with policymakers at federal and state levels. As a result, the federal bill was improved and state efforts advanced in New York, Connecticut, Minnesota, and Alaska. Our currency bears the motto E Pluribus Unum — “Out of many, one.” Many of America’s most enlightened companies are now working as one on policy, shifting the paradigm of business to build a better world. Won’t you join the effort?

David Brodwin is VP of communications and a co-founder of the American Sustainable Business Council (ASBC), which advocates for policy change to build a more sustainable economy. ASBC helps its members engage with policymakers, gain media exposure, inform the public, and more. Find out more at asbcouncil.org..

CONSCIOUS COMPANY MAGAZINE

NOVEMBER / DECEMBER 2016

Tom Chi’'s rapid-prototyping philosophy achieves incredible results by uprooting everything we think we know about solving problems.

om Chi just might be the smartest man alive. He started doing astrophysical research at 15, helped design the feel of Microsoft Outlook, led the product experience team at Yahoo!, co-founded Google X, and pioneered Google Glass. But the real magic happened when he turned his brain toward humans, and the management thereof. That’s when he started developing his ideas around rapid prototyping as a strategy for driving innovation and solving complex problems. Now, after years of using his talents as a consultant for companies like GE, Cisco, Wells Fargo, Intuit, and Fitbit, he started an online Prototype Thinking course (register at prototyping.strikingly.com) to bring his methods and insights to social entrepreneurs working to solve some of the world’s thorniest problems. You could take his class — we did — but in the meantime, you can share our peek into his amazing mind.

INNOVATION & DESIGN

Please share your story with us; particularly how you came to do the rapid-prototyping work that you’re doing. Tom Chi: I live by this idea that the more people you lead, the more people you serve. When I first moved into a management

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mental hack, because the way people get lost is they either get good enough at something that they stop improving, or they’re so bad at a thing that they can’t even start. Saying “10 percent better” addresses both of those blocks. Even if you’re quite good at something, you can imagine being

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was an executive at Yahoo! [from 2005 to 2010], I was working in this division of 600 people and my boss’s boss [Ari Balogh] ran a group of 9,600 people. We were in a strategy meeting with him trying to talk about the future of the multibillion-dollar business unit I was a part of. During the meeting,

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“Even if you’re quite good at something, you can imagine being 10 percent better at it.” role, I got very interested in what it means to serve a team of people counting on you, whether they directly report to you or whether you’re just helping run a project they’re a part of. That began a weekly practice of experimenting with different ways of working. The practice was very simple: On Friday morning, look back on the week and write down the things that you got done — the substantial things, not just sending out email. Typically, it’s three to five things. You write that on the left-hand side. And on the right-hand side of that same sheet of paper, next to each one of the things, you jot down an experiment you can imagine doing that would make accomplishing that thing 10 percent better the next week. You’re challenging yourself, week over week, to say, “Here’s what we’re getting done. Here’s how we make it 10 percent better.” That’s in itself a special

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10 percent better at it. And even if you’re terrible at something and you’re intimidated about starting, you can absolutely imagine being 10 percent less awful at it next week. That practice got me into this cadence of weekly experimentation, which I’ve been doing in various forms for the last 17 years or so. It’s the genesis of how I’ve been developing, refining, and processing new ways of rapid prototyping pretty much everything. Do you have an example of something your team would have shared in one of these Friday feedback sessions? TC: Yeah. Just to be clear, this is about reflection. You reflect upon what the team has done. There are thousands of examples of things we improved over the years. Here’s a story that rolls together a bunch of them: When I

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he comes up with an idea. I whip out my laptop and I appear to be typing out his idea so it doesn’t get lost. But what’s actually happening is I’m opening up two instant messenger windows and I’m contacting three members of my team and quickly giving them a brief on what the idea is. This was an hour-long meeting. Thirty minutes after he came up with that idea, so about 45 minutes into the meeting, I was like, “Hey, Ari. Do you remember that idea you had about such-andsuch?” And I turned my laptop around and nudged it toward him and said, “Try it out.” The whole thing was working in that time period. He sat down and he started using it and he was like, “This is crazy. This is real data, too.” He was using his idea and it was blowing his mind. At some point, he put his hands up and pushed the chair back and was like, “I have 9,600 people

INNOVATION & DESIGN

reporting to me and I don’t know how this could get made in two months. How in the world could this get made in 30 minutes?” Then I explained to him the many changes we’d made that were related to that being possible. One change I’d made is I’d created this thing called “15 Percent Learning

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but people would feel privileged to be asked to do something with their 15 Percent Time from me. That was one change. Another change was I physically set up the environment where, being the executive, I had the corner office and I was surrounded by a little circle of prototypers, and beyond the proto-

PRACTICES FROM THE MASTER TRY IMPLEMENTING ONE — OR ALL! — OF THESE TOM CHI PRACTICES WITH YOUR OWN TEAM.

WEEKLY EXPERIMENTS

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Every Friday, write down the major things you accomplished for the week on the right-hand side of a piece of paper. On the left-hand side, write down ideas for experiments you could try to accomplish that task 10 percent better in the future.

15 PERCENT TIME

Time.” Google famously has 20 percent do-what-you-want time, but I actually think that’s a little too unstructured. What I created instead was a thing that said, “I’m never going to book you up to 100 percent. I’ll book you up to 85 percent, roughly. You can tell me whether it’s getting to be too much or too little. But the 15 percent of extra time you have, you can allocate to anything you want to learn that’s going to improve your work. You want to learn a new programming language, you want to learn about management, you want to take a design class? That’s great. Go and do this stuff.” The only caveat to 15 Percent Time is: If there’s ever a point I really need that time from you, then you’ll drop everything and let me work with you during that 15 percent. This wasn’t some sort of escape hatch. I wasn’t stomping on everybody’s education time all the time. Not only was it a rare event,

typers were designers, researchers, and all the folks directly required to make software happen. What I would do, because I sat in the corner office, was if I ever needed anything built, I would just stand up and say, “Who has 15 Percent Time?” A couple people just within earshot would stand up, and I’d say, “Okay, great. Olivia, Jeremy, I need your time on…” and then we would brief it for two minutes over the cubicle walls and then we would go into action. So they were already used to these sorts of drills, that we might prairie-dog up and figure out everything we were going to go do, with the expectation that it would be built within a couple of hours. There’s a lot more to say. We kept iterating, for example, on our data platforms so it became very easy for you to prototype anything on the front end or the back end because of investments that we had made in the software. Anyway, I

Communicate with your staff to make sure you’re never filling more than 85 percent of their time. Allow them to use the other 15 percent to learn new things that will help them with their job. The caveat: You’re allowed to ask them to drop everything and devote their 15 Percent Time to an essential, urgent project. Now don’t abuse that privilege!

A CULTURE OF LEARNING Write down the group’s three biggest learning frontiers in a central, visible place. (Example: “What should be the feature set of our next release?”). Whenever your team reports the status of their projects (like in weekly staff meetings), make sure to ask what they learned. You can ask that question whether the thing is going well or poorly. Whenever team members report lessons that relate to the learning frontiers, write them down on the board. When it comes time to make a decision related to the frontier, close the loop by making it clear how the team’s successes, failures, and experiments have mattered to the company.

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INNOVATION & DESIGN

sketched out for Ari, “Here are five different things that we’ve done as a result of the whole chain of experiments, and when you add those five together, that’s why this thing could be created in half an hour.” He was dumbstruck. His model was much more the classic model of “brilliant leader comes in, makes plans, creates a specific vision and framework, sells it so people get bought in, and people follow the vision according to that plan.” My take on that kind of work is that it can only be as smart as that one person. Even if you have an incredibly smart person, one incredibly smart person is not smarter than a hundred even averagely smart people. This is a side note, but let’s say you are crazily incredible at something. Even if you’re one of the most talented people in the world, you can grab any three to five people on the street, and this person’s a better athlete than you, or this person plays this musical instrument better than you, or this person is better at public speaking than you, or this person is a better friend to their friends than you. That’s a good humility check. Anyway, given that truth, the idea of one leader — even a charismatic leader, an intelligent leader, a talented leader — being the source of truth for

an organization is kind of madness. The design of this rapid-prototyping approach was to say, “I’m going to teach you how I learn about what I learn, and you guys will have the opportunity to reflect and learn yourselves in that same way. And, collectively, we’re going to learn together and solve these problems in a way that’s going to be thousands of times better than anything any single human being could come up with.” Is working in teams a requirement? TC: Most of the big things will be done by teams. I do think there’s a place for people to express their individual brilliance by peeling away and going incredibly deep on a thing, but impact typically doesn’t happen in the world unless they come back to the world and teams are inspired. Of course, teams can absolutely inspire themselves independent of the deep work of an individual or a small group of individuals. What components have to be present to have a brilliant team? TC: This would take many, many hours to describe. Because there are so many things to say about great teams

and I’ve done so many experiments over the years, usually I like to flip it around and say, “What kind of problem are you having?” If you’re having a communication problem, the things I might say would be different than if you’re having a vision problem versus having a makingyour-deadlines problem versus having a level-of-creativity-in-the-team problem versus a motivation problem versus a team cohesion problem versus… This can go on for a very long time. The question is no smaller than, “How do humans get along?” It can be kind of a long one. Why do you feel that rapid prototyping is important, rather than just prototyping or continuous improvement? TC: The reason for “rapid” is there’s this unconscious bias we have because of how we were educated. Every single time you answered a question on any test in any school, there was enough information in the question to be able to actually answer it. It would be cruel and unusual and frustrating for somebody to have a bunch of test questions where not all the information is there and it’s truly not answerable with what they give you.

TRADITIONAL PROBLEM-SOLVING Problem

Ideas

Debate

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Days / Weeks / Months

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Presumed Solution

Success or Failure

INNOVATION & DESIGN

We’ve been unconsciously programmed into the habit of thinking we should just sit there and think about it whenever a problem arises. If we think about it enough, since all the information required to answer it must be there, then we’ll figure it out. In truth, we don’t have all the information required to solve most of the problems we face in the business world when we first get the question, so sitting there and thinking about it actually becomes not just inefficient, but actively counterproductive. Because the more we think about it, the more convinced we are that we’re right about something where epistemologically we can’t possibly be right, because we just literally do not have enough information yet to solve the problem. Anybody who’s done anything innovative, if you ask them, “On day one, did you know everything you needed to solve the problem?” they’ll be like, “Are you kidding? Of course not.” But our unconscious biases make it so that we’ll make complex strategy documents and execution documents on day one, when, clearly, we really don’t know what’s going on. This is all prefacing why the word

“rapid.” Rapid has the benefit of saying, “No, that’s enough. Just begin doing it.” The happy side-effect is, shortly after you begin to do something — as opposed to just cogitating it — then you will discover a lot of the other missing variables. As you try to put it together, you’re like, “Oh, I didn’t think about it, but the heat seal for this is going to be tough to engineer.” “Didn’t think about this before, but when we try to deploy this social-good thing to the community, then these tribal leaders need to be on board.” “Didn’t think about this before but…” This is the main virtue of doing so quickly. What most people are afraid of is they’ll do something rapidly and it’ll be the wrong thing. But what they don’t recognize is that assessing right or wrong on a body of thought does not work that well in business innovation. Number one, you don’t have all the information to go solve it on day one, as already noted. And number two, there is no single right answer. For any constrained problem space in the real world — not in a test question — there tends to be 5, 10, 15 totally satisfactory ways that a product or a business could be designed. Rapid prototyping says, “Let’s

go from the idea to something we can actually see, feel, and touch as quickly as possible, because then all these illusions around why I’m right and why you’re wrong and why my ideas or analysis or strategy are better than yours fall away.” We get to the simplicity of: Is a thing truly of service or not? Another reason for the word rapid: If you give people an incredibly small amount of time — when I teach it, there will be a thing that they’ve been working on for two years and I say, “We’re going to do the first prototype in 11 minutes,” with a stopwatch — they can’t fall into their old habit. If you give a software developer two hours to go do a thing, they’ll whip out their favorite code editor. If you give a designer two hours, they’ll whip out Photoshop and Illustrator. If you give a businessperson two hours, they’ll whip out Excel and start modeling or PowerPoint and start throwing down bullet points to go pitch. If you give them 11 minutes, they can’t do any of that. They need to break their existing habit because the time is incredibly short. The other reason to go incredibly short is that pretty much 100 percent of the time, they solve critical

RAPID PROTOTYPING METHOD Problem

Ideas + Experiment + Lessons (repeat 10x–30x)

Minutes / Hours / Days

Solution

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INNOVATION & DESIGN

problems they hadn’t solved for months and months within one or two of these 11-minute prototyping cycles. When they are able to see that things can be solved that quickly, it becomes proof that a different way of working is viable. I’m blown away by the practically flawless success rate you have in implementing this methodology. TC: It’s not flawless because it’s lacking flaws. All it’s doing is it’s mathematically saying, “Let’s not pick from the best of one or two. Let’s pick from the best of 20.” At the end of the day, a person with a

way more important than whether it worked or not. Why it worked is an enduring property. That it worked is an episodic property. Something can work today and not work tomorrow. But the reason why it worked tends to be enduring because it tends to be from inside the person you’re trying to serve. If you’re able to release attachment to right and wrong and move into a zone where learning is the thing that matters the most, then the number of trials becomes very easy to push out. When you choose from enough trials, you will do better. Even if you don’t get to a perfect answer, choosing from the

why it didn’t work. In that process, we are unconsciously passing up opportunities to move into a culture of learning and away from a culture of right and wrong. The next step, if you want to make it a culture and not just individual learning, is create a “learning board”: a big foam board or a large piece of signage in your staff meeting room that doesn’t get erased or disappear randomly. Write three learning frontiers on it, like “We want to learn what’s the ideal feature set for Version 3.4.” As people share their status in the meeting and you ask a question in order to get more deeply into what

“What you need to say, whether a thing worked or not, is, ‘Awesome. What did we learn from it?’” particular mindset can say, “When you pick the best of 20, that means you are 95 percent wrong.” The answer is, “Totally. Yeah. That’s exactly it.” When people use words like “flawless,” it’s within a culture of right and wrong. What makes this work amazing is it does away with the culture of right and wrong. I get equally excited about things working and not working. This is not true for most people and most teams. But if you’re able to get yourself into that zone, then getting to a high number of trials is easy because it goes poorly and you’re excited. “Oh, we learned why this one went poorly. We’re going to go put it into the next step.” Or it goes really well and you get excited because you learn why that trial went really well and it informs lots of other stuff that you’re going to now try. Learning why it worked is actually

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best of 30 is going to be better than choosing from the best of 3. What advice do you have for entrepreneurs or executives for beginning to implement this approach to problem-solving? TC: Start the culture of learning. Pretty much every executive has some weekly meeting where everybody gets together and reports the status of things. What I challenge folks to do is simply add one question on the end of the status reports. What you need to say, whether a thing worked or not, is, “Awesome. What did we learn from it?” You can ask that question whether the thing is going well or whether the thing went totally poorly. We let those opportunities fly by every single week, where we could be learning something huge, either from how a thing worked or

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they’ve learned, you write anything that applies to those three learning frontiers up on the big board so it becomes a permanent fixture in that room until those learning frontiers are mastered. The implicit messages it sends are, number one, we’re all learning together. Number two, whether your thing worked or didn’t work, it can absolutely still lead to us writing something down that helps us with that learning frontier. And, number three, when it actually comes time to make significant decisions on that learning frontier, like what features go into Version 3.4 or how we are actually modifying our go-to-market with this new audience, it closes the loop for people. It lets them know that what they learned on behalf of the organization actually matters. Photo: Nadya Direkova

WINDOW TO THE

FUTURE

NEXT ENERGY TECHNOLOGIES PRINTS A REVOLUTIONARY SOLAR COATING ON GLASS TO MAKE WINDOWS THAT GENERATE THEIR OWN ENERGY.

ENERGY

EXT Energy Technology CEO Daniel Emmett isn’t modest about his company’s first product: “It has the potential to fundamentally transform the way we think about buildings,” he says. But the materials and processes he and his team have brought from a lab at UC Santa Barbara to near-commercial-readiness just might be as revolutionary as he says. NEXT Energy’s key innovation is an energy-harvesting photovoltaic coating that integrates directly into glass. The coating allows the majority of visible light to pass through, while capturing infrared and ultraviolet wavelengths and converting them into power. The result? Solar cells that are truly transparent. We spoke with Emmett about how it works, how he built the company without venture capital funding, and his hopes for the future. Why is this technology a game changer? Daniel Emmett: Buildings have historically been big producers of greenhouse gas emissions as a result of all their energy consumption. Now we can think about them becoming producers of clean, renewable, carbon-free energy. Windows and facades have always been a passive part of the building. Now we’ve turned them into an active feature that captures and makes use of the light that’s hitting the building anyway. How is what you’re doing different? Isn’t it an idea that has been floating around for a while? DE: It seems so simple and obvious; why wouldn’t you do it if you could? But until now, there hasn’t been a technology that can do it cost-effectively or, what’s most important for buildings, aesthetically. For architects, designers, building owners, and occupants, these windows need to be windows first. Second, they can become power producers. If you’re compromising in terms of aesthetics, there’s just not going to be a large market for that. Other companies trying to tackle this challenge/ opportunity have tried to put a square peg in a round hole by using conventional solar materials and technology. Silicone, for example, makes power very well, but it’s opaque and black. To get it to work on a window, they have to do tricks with it, like slice it into strips or pattern it. Putting an opaque pattern in the glass fundamentally alters the aesthetics of the window.

NEXT ENERGY TECHNOLOGIES AT A GLANCE Location: Goleta, CA Founded: 2011 Team Members: 14 Awards: $3 million in Small Business Innovation Research grants from the US Department of Energy and the National Science Foundation Structure: For-profit

What we have is the first really aesthetically integrable technology. The other big piece is we’ve demonstrated excellent durability. Our coating will last for the life of the window. And we can do this at an incremental cost that pays for itself in one to three years, depending on tax incentives. Taken together, we have those three components — the aesthetics, the durability, and the cost structure — that haven’t existed before. How have you been able to solve those problems when other people haven’t? DE: Our innovation and intellectual property are the core materials. It’s kind of a mouthful, but these are “soluble, small-molecule organic photovoltaics.” Organic photovoltaic [OPV] materials simply means they are carbon-based semiconductors. Because they’re small molecules, they’re very stable, easy to purify into scale, and we get really consistent performance in terms of power production. We do have a couple competitors doing smallmolecule OPV, but we’re the first ones to be able to make these in a soluble form. Our competitors use a process that’s vapor-deposited or sputtered, which requires very expensive equipment, huge amounts of energy, high temperature, and has to happen in a vacuum. We print as an ink using traditional ink-printing processes that have been around for decades — in the photographic film industry, for example. We do it all at room temperature and at ambient pressure, on cheap equipment. That drives a lot of our cost advantage.

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ENERGY

“WINDOWS AND FACADES HAVE ALWAYS BEEN A PASSIVE PART OF THE BUILDING. NOW WE’VE TURNED THEM INTO AN ACTIVE FEATURE THAT CAPTURES AND MAKES USE OF THE LIGHT THAT’S HITTING THE BUILDING ANYWAY.”

NEXT’s solar-power-generating coating for windows comes in a variety of colors.

What are the raw materials for this OPV ink? DE: Basically, it’s plastic. It’s that simple. It’s a higher, better use of plastic and petroleum than simply burning it in a car or making a Coke bottle. We’re using very little material: our active layers are two one-hundredths the thickness of a human hair. And it will produce power for thirty years. You guys decided not to go after venture capital [VC] funding initially. Why? How have you funded the startup phase of this business?

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DE: It was partly the timing of when we started the company. VCs were not funding new solar technology startups; there had been a lot of bad bets. It’s not like we didn’t talk to them, but we pretty quickly realized it wasn’t going to be the right fit for us. Because we had this model that doesn’t require huge amounts of capital, we were able to do it with friends and family initially, and then private investors, and then a lot of government grants really helped push us along. We got money from the Department of Energy and the National Science Foundation, the California Energy Commis-

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sion. We also got funding from a corporate strategic partner — a chemical company — and now we’re in the process of negotiating a partnership with someone from the glass industry. The tough market for VC funding turned out to be a nice silver lining, because now we’re lean and mean and we’ve got great investors. How did you go about finding mission-aligned investors? DE: We built an academic advisory board and a business advisory board and we used our network to get in front of people. We

ENERGY

have a compelling story, not only in terms of the business opportunity but in terms of the potential social and environmental impact of this technology when it scales. What are the biggest challenges you’ve had to overcome so far? DE: We had to think long and hard about where to start. Our core technology is a low-cost, earth-abundant material that can be used to produce power in new ways. The transparency is just one unique thing. The other is the way it’s coated: it can be printed on flexible substrates. When we started the company, we thought our first product would be a lightweight, portable, flexible solar material. It took us a couple years to figure out where the market most valued the material’s innovative properties and get to this window-use case. We got there by literally listening to the market and to our customers.

to have higher visible-light transmission rates. But we decided to validate that thesis. We’ve been having conversations with a number of residential window fabricators and, while we were partially correct, what we didn’t see was a different use-case for integrating our materials into their windows. Increasingly, these companies are looking at smart windows that do things: auto open and close, automatic locks, a sensor for temperature or rain. Those things all need power. The manufacturers we talked to were very interested in integrating our material into the window, not to produce power for the whole house, but to produce power just for use inside the window itself, to power those sensors. That’s an example of the kinds of conversations you have to have. And you have to have a lot of them.

“ YOU’VE GOT TO BELIEVE PASSIONATELY AND DESPERATELY IN WHAT YOU’RE CREATING. FAILURE IS NOT AN OPTION.” What was that listening process like?

When are you guys expecting to go to market?

DE: It’s just showing people what you have and what it can do, and hearing what they have to say. Validating your thesis. We’ve had an interesting recent example of that: For a variety of reasons, we thought residential window companies wouldn’t be a great market for us. Compared with commercial buildings, residences typically have a smaller window-to-wall ratio, have more rooftop space available, and their windows tend

DE: We’re about two years away from the window product for commercial buildings. It may be closer than that for some of the smart-window applications. How do you think about that long horizon — on the order of seven years — between starting and going to market? DE: It’s a little different than an app or software, which has a much

quicker path to market. We spun this literally right out of university labs. We knew this was going to be a process. That’s because it’s based on hard science. Those plays just take longer; not as long as drug development, but they definitely take some time. You’ve got to prove that it works, and then you’ve got to start to scale it, and you’ve got to drive up the performance features. We’ve done all that. We have working prototypes, we have different materials, colors, transparencies. We’ve demonstrated the exceptional stability of our materials through accelerated testing and extrapolation to showing thirty-year feasible lifetimes. Now the next phase is the exciting one, where we actually get to scale to a large commercial process and to larger pieces of glass. What advice would you have for other folks at the beginning of their journeys? DE: You’ve got to have a great team, great working relationships, and great communication. Not just the internal team, but the team you build around you of investors and advisory board members. Make that a priority, because you’re going to face challenges along the way. The second thing is, you’ve got to believe passionately and desperately in what you’re creating. Failure is not an option. Be excited to come in and move the ball forward every day. To what do you attribute your success so far? DE: That’s jumping the gun to say “success so far.” Yes, we’ve made great strides, but I’m not going to say we’re successful until we’ve actually got a product in the hands of our customers that’s helping them transform underused assets on buildings into producers of renewable power. Photos: Paul Wellman

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COMPANIES

REINVENTING THE ENERGYEFFICIENCY BUSINESS

Energy efficiency is joining the “as-a-service” revolution, and these three companies are leading the charge.

Many readers may remember a time when buying computer software involved literally owning an object — a box with disks in it, a CD-ROM, or later a file to download and unlock. Now, it’s common to subscribe to, say, Microsoft Office, essentially renting the use of the service the product provides rather than owning an object. That’s the “as-aservice” model, and it’s making its way into other industries, too: music (Spotify), computing infrastructure (Amazon Web Services), solar panels (SolarCity), and lately, energy efficiency. When companies sell energy efficiency as a service, it allows smaller businesses and organizations to access technologically advanced equipment — like complicated LED lighting and control systems — that might be too expensive for them to invest in, explains Angela Ferrante, chief marketing officer of SparkFund, a company that helps facilitate energy-as-a-service transactions (see right). “Customers get the benefits of ownership much more easily than if they actually had to own this type of equipment. We see that as a critical way for energy efficiency as an industry to live up to its potential.” That potential is huge: A 2012 report by the Rockefeller Foundation estimates that investing in energy efficiency retrofits is a $279 billion market that could yield more than $1 trillion of energy savings over 10 years in the US. Yet since then, LED lights, for example, have only reached 6 percent market penetration. By removing many of the barriers to adopting energy efficiency measures, especially in commercial settings, SparkFund and other companies hope to profit even as they help solve an important piece of the climate change puzzle. Here are three of the businesses leading the charge. 44

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SPARKFUND > Washington, DC > Founded in 2013 > 24 employees

What it does: SparkFund provides the infrastructure and financing required for other companies to sell their energy efficiency products as a service without having to radically change their business models. Essentially, SparkFund provides the “as-a-service” business model as a service of its own to other energy businesses (meta, right?). SparkFund helps companies with financing, contracts, documentation, billing, and sales training as they make the transition to offering their technology as a service to other business owners.

ENERGY

“We’re at an epochal moment in energy management where all the pieces are coming together to transform the role of energy in the enterprise, driving new efficiencies, business models, and value streams.” — Current, powered by GE CEO Maryrose Sylvester, via LinkedIn

CARBON LIGHTHOUSE INC. > San Francisco, CA > Founded in 2010 > 35 employees

What it does: The engineering wonks at Carbon Lighthouse deploy a network of sensors inside buildings, run the information they collect through a machine-learning platform, and use the data to install and optimize the control of back-end building systems. The machine learning allows the company to deliver up to 30 percent energy savings simply by optimizing existing equipment. Also hugely important: The company incentivizes participation among both landlords and tenants by delivering energy savings to tenants through a services contract and paying rent to the landlord directly to access their sensors and controls.

Photo: GE

CURRENT, POWERED BY GE > Boston, MA > Founded in 2015 > 2,000 employees

What it does: This “startup” is actually a new company within industrial giant General Electric. Current brings together a whole list of GE’s energyrelated offerings — with revenues already at $1 billion as of its launch — including LED lighting, solar, energy storage, and information technology apps and software. Current offers comprehensive, customized energyefficiency solutions as a service to large commercial businesses such as Walgreens and Intel, and municipalities including San Diego, CA; Schenectady, NY; and Tianjin, China. Eventually, the business will also work with utility customers.

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CULTURE

THE

LEADERSHIP

BUSINESS

Next Jump built a $2 billion e-commerce business based on its revolutionary workplace culture that values selfdevelopment above all else. And the teamwork starts at the top, with co-CEOs Meghan Messenger and Charlie Kim.

means that Next Jump puts as much Next Jump is a tech company, but emphasis on helping employees learn that’s not really the point of this and grow as humans as it does on story. The New York-based e-comany particular traditional business merce platform makes its money or revenue goal. According to Kegan by connecting employees at large and Lahey, deliberately developmencompanies — its clients include 700 tal organizations reap more profits, of the Fortune 1000 — to product have more satisfied and functional discounts and other employment teams, and are more innovative incentives through its PerksAtWork than companies that don’t take program. But Next Jump is special this approach. “What if a company not because of what it does, but bedid everything within its power to cause of how it operates. The compacreate the conditions for individuny’s culture is so unusual, so deliberals to overcome their own internal ately different from the mainstream, barriers to change, to take stock of and has proven so valuable that more and transcend their own blind spots, than 1,000 people have already and to see errors and weaknesses attended the leadership academy the as prime opportunities for personal company created to help export its growth?” the authors ask. “What best practices and lessons to other would it look like to ‘do work’ in a institutions. In order to help other way that enabled organizations and companies even more, Next Jump is their employees to be partners in also in the process of releasing — for each other’s flourishing?” Next Jump free — 50 different technologies and offers one answer. apps its engineers have developed in “We don’t believe you can change support of its own culture. the world without changing work,” What’s so special about the place? explains Next Jump co-CEO Charlie Next Jump is a premier example of Kim. “Work is where we spend most what Harvard researchers Robert of our waking hours. It’s such a Kegan and Lisa Laskow Lahey call a central part of adulthood.” Through “deliberately developmental organidozens of ever-evolving practices zation.” The company is one of three and initiatives (see page 48), Next profiled in the pair’s 2016 book, “An Jump has created a world where Everyone Culture,” which is quickly constant self-improvement — and an becoming a new classic in the conequal commitment to participating scious business world (read it!). In in the betterment of others — is the practice, “deliberately developmental” NOVEMBER / DECEMBER 2016 | CONSCIOUS COMPANY MAGAZINE

expected social norm. The company sees everything employees do, from serving each other breakfast to leading meetings to the actual challenges of running an e-commerce business, as learning labs to help foster personal growth and the ability to help others — and by extension, create a better, more successful company. That idea is captured in the company’s core mantra: Better Me + Better You = Better Us. We sat down with co-CEOs Charlie Kim and Meghan Messenger at Next Jump’s Manhattan headquarters to learn more about how they created their unusual workplace and what lessons they’ve picked up along the way. Let’s start with some fundamentals. What is “culture”? Charlie Kim: We get asked this question a lot. It’s basically the sum and the set of what’s “normal” in your company. What time people come in, what time people leave, what happens when food comes out. It’s all these unwritten rules. And what drives the norms are rituals. Often as companies build, they just let rituals form on their own without being deliberate about it. It’s no different from us as individuals. If you just eat when you’re hungry, it’s

Next Jump’s co-CEOs Meghan Messenger and LEADERSHIPCharlie Kim

NEXT JUMP AT A GLANCE Location: New York, NY, with offices in Cambridge, MA; San Francisco, CA; and London Founded: 1994 Team members: 200 2015 Revenue: $2 billion

Photo: Brett Deustch

Recognition: • Johns Hopkins’ Top 3 Healthiest Workplaces (2015) • American Heart Association Fit Friendly Workplace Award Gold (2013), Platinum (2014, 2015), Innovator Award (2016) CONSCIOUS COMPANY MAGAZINE

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7 WAYS NEXT JUMP’S CULTURE IS DIFFERENT HERE ARE SOME OF THE SPECIFIC ROUTINES AND PRACTICES THAT SET THE COMPANY APART 1. Performance reviews are only 50 percent based on revenue contributions; the other 50 percent is about cultural contributions. 2. New employees, whether they are straight out of college or senior executives, spend at least their first three weeks in Performance Leadership Boot Camp, working customer service roles and undergoing a battery of tests and exercises to identify and work on their personal character weaknesses. If candidates don’t fully engage with the process, they either stay in boot camp longer or get $5,000 and best wishes on their next endeavor. 3. Every employee is assigned a Talking Partner who complements their weaknesses. Talking Partners start every work day with a session of checking in, venting, and strategizing for the day. 4. Every week, two sets of Talking Partners and a coach meet for a one-hour Situational Workshop, in which the participants use a real challenge they faced that week to learn about themselves and their problem-solving skills. 5. Every month, in an event called The 10X Factor, 10 employees give five-minute presentations in front of the entire company about progress they’ve made in culture- or revenue-building. Each employee gets brutally honest feedback from a panel of judges about the presentation — especially to what extent they revealed their learning process or were willing to be vulnerable. 6. Managers deliberately give employees roles they’re not ready for, along with coaching on how to grow into them. 7. New straight-from-college prospective hires are interviewed twice a year in an event called Super Saturday. All employees are invited to participate in the day-long group interview process, complete with an app that supports an intricate rating system. The process not only helps the company choose new-grad hires but also lets it understand which current employees are best at interviewing for which particular character traits in the long run.

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not necessarily the best ritual versus maybe setting up certain times for breakfast and lunch and snacking and so forth. What a lot of companies will try to do is create change in the classic New Year’s resolution style, which is all willpower. “I know what I need to do so I have now promised myself to do this.” A lot of times you’ll see companies focus on bringing in outside consultants, having a speaker series, all kinds of ways to drill in the right thing through willpower. It doesn’t work that way. We obsess about understanding the rituals that occur on a daily, weekly, and monthly basis. These rituals ends up being the building blocks of culture. People we meet don’t seem to understand that well enough. How do you define Next Jump’s culture? CK: It’s this constant responsibility to better yourself but then also have a responsibility to pay it forward and train others. The diehard conviction that human beings have an endless capacity to upgrade. People will say “I can’t” because they’re so trained to say “I can’t.” Then they point to someone else who could or is. We always say, “Why not you? Give me the reason why not you?” And we’ll throw back at them countless examples of others who have worked through the hard training and practice, the repetition, the rituals, and upgraded. Never on our watch, in the midst of our presence, will we cap someone’s potential and believe they can’t grow beyond a certain point Meghan Messenger: Part of where that comes from is the fact that both Charlie and I experienced major growth. We were the underdogs in our families. We both had siblings who went to better schools, got better grades. If we could do it, anybody can do it. It’s that feeling. Thinking back, can you tell us more about where this all started? How you came to have such deep convictions about people’s potential for growth? CK: For me, it originates from my own father. My father is the most famous corn scientist in the world. He’s made a huge impact. I grew up with so many people, some of the best scientists in the world, telling me, “Your dad has discovered the keys to ending world hunger.” He’s been nominated for the Nobel Peace Prize five times. He used to always say, “Winning the Nobel Prize would amplify my findings and technologies; it’s like an amplifier that would end world hunger.” But he’s not a very good presenter of his work, in written or oral form. As the oldest of three children, I grew up watching his struggles and his pain and how everybody tried to take advantage of his impediments. People would come and say, “I’ll help you edit your

LEADERSHIP

Nobel application, but I want to win it with you,” just for editing the application. I remember watching this, infuriated. And I had the exact same challenges as my father. I spoke too fast, I had a really bad stutter, and I couldn’t present work. I’m 14 years old, I’m in my dad’s office correcting a paper over Christmas break, and I read a one-page article on his desk that talks about how “Dr. Kim is one of the greatest scientists the world has ever seen.” But by the end, it says, “But he’ll never succeed because he can’t present his work.” I remember it was like a dagger to my own heart, because not only did I sort of understand what that scientist was saying, I had the exact same quality.

new work]. That same month, I met a billionaire who said the most profound thing. He said, “Charlie, I only buy art from living artists. I believe in putting fuel behind those who can do something with it.” That day, it felt like the Nobel Prize would not be an amplifier anymore, but it would just be a trophy on our mantle. We used to have the mantra “Build the best place to work,” as in, all the talent in the world would want to come here. We changed over the years to say, “We want to do little things so that others can do the great things they’re meant to do.” And whether it’s money for opening public after-school programs or advising and mentoring engineering for

especially top performers. Development usually gets talked about last, or not at all. We’ve found it to be reversed in order of importance. Development is the single most important element. Priority always matters. If you’re an organization that has developed talent better than anyone, you’ll end up retaining your top talent, because if, as an employee, you get a great education, you’re actually getting more from the job than just compensation. When as a company you develop people well, you retain them, and when you develop and retain well, you attract the best ones to come into your organization. Look at sports teams that are notorious for developing the

“When we didn’t screen for humility, 90 or 95 percent of the engineers were men. But when we screened for humility, diversity showed up.” Then, fast-forward 10 years, I’m successfully raising money for Next Jump, I’ve pitched a thousand angel investors, and I walk in one day and I’m like, “Where’s my stutter?” Just out of necessity for survival, to keep my own baby [company] alive, I learned to present. That was almost a spiritual moment. I said, “What am I doing? I’m trying to build a tech company. My dad’s trying to end world hunger. I’ve got to go leave and help him.” I tried to leave. But 9/11 hits, the company goes from 150 employees down to four people, we have nine months of unpaid rent, six eviction notices. My own baby is on life support and dying. I can’t leave. I’m just trying to revive Next Jump, and we build and build. Next thing you know, we get back up to 200 people. The company is doing well, and before I knew it, 10 more years had gone by. I turned 43 this year. But when I turned 34, I got a phone call from my mother that my father had a stroke — he’s still alive [but not doing

non-profits, it would only be little if our cup is overflowing. If our cup is overflowing, it’s little to us. Then we can find the right people who are making a difference and put fuel behind that. That “better me, better you” mantra is the shortened version. The phrase “Do the little things so others can do the great things they’re meant to do” was hard to remember, so we shortened it to “Better me + better you = better us.” What are the most critical elements of improving organizational culture for most companies? CK: Most organizations would now agree that talent is the number one predictor of future success. Everybody’s obsessed with three things around that: attracting, retaining, and developing talent. However, the mistake we’ve seen is that it’s done in this order of attracting first; we see a lot of obsession with the hiring process. And everyone will talk a lot about retaining talent,

best players or teaching hospitals that are notorious for building the best doctors: there’s a line of people trying to get in there and the ones who are there are trying to stay. Within development, we’ve found feedback to be the most critical part — the ability to build your culture and your environment so that feedback is occurring in real-time across the entire organization. People improve fastest by making micro-adjustments in real-time, whereas in most companies, of course, the opposite occurs: one- to two-times-peryear performance evals, and you’re making an adjustment maybe one time a year. What are some of the common mistakes you are seeing company leadership make that typically negatively affect company culture? MM: Two things. One is a lack of vulnerability in the culture, and the second is a lack of authenticity. People believe vulnerability is

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showing weakness. It’s actually something that takes courage. In many ways, when leaders demonstrate vulnerability, the rest of the team looks at this as the leadership giving permission that it’s okay to fail. They model that you can make mistakes, and that you can fail. It starts at the top. You can’t go in and ask your people to be vulnerable if you’re not vulnerable too. As an example, back in 2012, as a CEO, Charlie didn’t tend to lead with as much vulnerability. CK: It was more like none. MM: I remember distinctly there was a moment where, at an all-hands staff meeting, Charlie got up in front of the staff and shared a very personal story related to missing a graduation of his son Jackson’s, who was 3 at the

time, and how that made him feel. As he was talking about this mistake he made and how upset he was that he made a decision to not be there for Jackson, the look on the faces of our staff was sort of like, “He’s human, and I can’t believe he’s sharing this with us, and I’ve done stuff like that too.” I can’t quite put the right words to it, but I look back at it as a defining moment when our culture really started to embrace vulnerability, that it’s not weakness, that it takes a tremendous amount of courage to actually share. I think vulnerability is still lacking in so many cultures because it’s looked at as weak. The second mistake we see is a lack of authenticity, which we call the “Lying, Hiding, Faking Problem.” Being inauthentic is contagious. For instance, if you’re in a meeting and

everybody’s talking about something, and you pretend to know what’s going on, everybody else in the room takes cues from that. They don’t want to say, “I have no idea what we’re talking about,” or ask questions because they fear looking bad. This feeling that you can’t be authentic and say what’s really on your mind — that you don’t understand, or just whatever might be on your mind — is so contagious in organizations, you don’t know what the truth is anymore. We say, “You’re being judged all the time by people anyway. You’re going to look bad eventually if you don’t clarify and understand what’s happening.” We look at authenticity as a basic foundational element in life and, of course, within an organization. If you don’t have that, that’s the root cause of a lot of problems.

THE THREE DIMENSIONS OF A DELIBERATELY DEVELOPMENTAL ORGANIZATION Developing as adults requires shared vulnerability in a trustworthy community Explicit goals around adult development

DDO

Working on development takes sustained practices

Practices integrated into daily operations

Adapted from “An Everyone Culture: Becoming a Deliberately Developmental Organization” by Robert Kegan and Lisa Laskow Lahey, Harvard Business Review Press 2016

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Community where individuals are valued, nurtured, and challenged as humans first

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Practices nurture trustworthy community, and community nurtures practices

LEADERSHIP

CK: Meghan hit the point exactly right. When you don’t have authenticity, you have inauthenticity, and both are very contagious. What were the largest mistakes that you made at the beginning? CK: There are so many. In 22 years… MM: I think we probably made every possible mistake you could make because we had never run a business before. I joined four years after Charlie started the company but, oh, my God, every mistake we could have

all about who was the smartest. As we dug into the research, we found that in sports teams, stars without humility are toxic for their culture. The Blue Angels, the top fighter pilots, say, “If you don’t have humility, you die.” When you start to look at the most elite performers in the world, you see how important a role humility plays, but when you start hiring, you don’t think about that. You think more about confidence, conviction, drive, or intelligence. MM: We look for all of that, but it’s screening for that added ingredient of

that burnout is working too many hours, but actually it’s more about not feeling yourself growing. I think most employees want that; nobody comes to work saying, “I don’t want to grow.” Peer influence is one of the best motivators. We could say as leaders, “You’re not growing enough,” but when you hear it from your colleagues, it’s so much more powerful. We’ve created a culture of feedback, which is one of the most important things we do, because feedback makes you want to grow. It’s hard for people, but they actually get hungry for feedback when they see other people getting it and

“We’ve found if you want to learn how to be innovative, if you want to learn to succeed, you need to create the space for failure.” made, we made. Hiring, onboarding… CK: Firing, promoting…

humility that’s been game-changing. It has also driven more diversity. There are a lot more women in leadership roles at Next Jump.

MM: Getting in front of our skis… CK: Strategic partnerships… MM: Just everything. CK: But if I had to pick one, it’s a lesson in humility in the sense of how wrong I could be. I couldn’t believe clients like Lehman and Bear Stearns went out of business. You could have never planned for 9/11 and financial crashes and whatnot. Things go wrong. That was a very hard lesson that eventually got baked into almost everything we do, including the hiring process. Tell us more about how humility relates to hiring. CK: We used to screen for stunningly brilliant people who were driven. Before we knew it, we built a sizable team of jerks who literally did not care at what cost they won — it was

CK: When we didn’t screen for humility, 90 or 95 percent of the engineers were men. But when we screened for humility, diversity showed up. Now one-third of our leadership enrollment is female, and one-third of our engineers are women — things that you would not expect out of a tech company. What are the practices that inspire continual improvement within your team, and how do you keep people consistently motivated to want to improve once they’ve gotten in the door here? MM: We don’t look at continual improvement as optional. If you’re not improving over time, if you’re not growing, you’re dying, which sounds very extreme, but it’s true. If you’re not growing your knowledge or any facet of yourself, you start to burn out. There’s a misconception

doing something with it and improving and growing. That’s so inspiring, motivating, and rewarding when you see other people do it; that’s what makes you want to do it. Do you have any concrete tips for giving and receiving feedback? MM: If you really want somebody to take advice, they’ve got to trust you and your intention. And provide context — if you’re trying to help them grow, sometimes you need to share that with them: “Here’s why I’m saying this.” I’ve always found it very difficult to give critical feedback. I found a bit of a crutch to first say, “I’ll start by telling you how hard this is for me to tell you this, and I think it might be hard for you to hear.” It braces and prepares everybody for the difficult conversation. It takes just a few seconds and it sets the tone of “This is going to be hard.” I’ve found that if they know it’s hard for me, it’s still harder for them to hear it, but it shows vulnerability that my intention is good and I might be nervous too.

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CK: One of the most critical mistakes in giving feedback is that you don’t express and explain the potential. As a rule, we don’t give any feedback to someone we don’t believe has more potential. If they’re already done, they can never get better, so why would you give them feedback? It’s just mean. It’s cruel. But if their potential is here [raises hand] and they’re down here [lowers hand], you’re giving the feedback to bring them up to their potential. The mistake occurs when you give the feedback without actually expressing the potential you see in the person. The other big error we see more in companies is not creating the practice-ground to “do it bad.” You first learn how to take advice badly before you learn how to take it well. You first give feedback badly before you do it well. Every organization wants to skip that bad step and jump straight to doing it well. When people take advice badly, it’s usually one of two errors. They get angry, typically at the form of delivery. “That feedback was good, but I don’t like the way you said it, so I’m just going to reject all of it.”

It’s the job of the recipient to find the pearls of wisdom in the feedback regardless of how people deliver it, because most people are very bad at delivering feedback. The other side is a thoughtlessness to how you take advice: “I’ll just follow it blindly, word for word, with no thought of my own.” Where giving feedback usually goes bad is you coddle or you go brutal — there’s no in-between. The hard part is realizing you have to accept and tolerate those four things — angry feedback-taker, following-blindly feedback-taker, coddling advice-giver, or brutal advice-giver — showing up a lot before you get good. But because organizations usually feel like “We cannot have that!” you’ll never develop a culture where people are good at either taking or giving feedback. Can you speak a little about the importance of failure? MM: We look at failure as required to do anything, or to learn anything. There’s no straight path to success and growth. You’re not born knowing how to swim. You’re not born

Next Jump’s employees — including the CEOs — volunteer their/ DECEMBER time with2016 local schools. COMPANY MAGAZINE 52 NOVEMBER | CONSCIOUS

knowing how to drive a car. You have faith that you’ll figure it out, but you have to fail a little bit first before you do. CK: One of the biggest struggles in most companies is how to become more innovative. How do I get my people to take more risks? How do I get more creativity in the company? That’s a common problem for most people, and I think most companies now say, “If you don’t innovate, you’re going to die.” It’s that important, and yet they won’t tolerate failure. If you can’t tolerate failure, it’s like saying “I don’t tolerate any experimentation,” because, by definition, an experiment has to have the ability to fail or it’s not an experiment. In most companies, the fear of failure is so predominant that the company has been built to never let failure happen: Failure hurts your brand, your reputation. It leads to shame. It leads to being labeled. But we’ve found if you want to learn how to be innovative, if you want to learn to succeed, you need to create the space for failure.

Photo: Next Jump

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Word on the street is that Next Jump doesn’t fire people. Would you talk about that? How do you get people to not be on autopilot? What if someone turns out to be terrible at their role and you’re just decreasing efficiency as a result of being beholden to this policy? CK: I can’t tell you how many startups and companies we’ve met that get inspired by the no-fire policy and say, “Oh my God, I’m going to institute a no-fire policy right away!” I’m like, “No, no, no. That is not a level-one

if someone does something unethical. There’s a line you cannot cross: If there’s a criminal, ethical, or moral issue, we’re getting rid of you instantly. But if your child came home with Cs, would you say “That’s it!” and put them up for adoption, or would you work on helping them develop? Firing, in many ways, is the easier option. Choosing to commit and develop someone is the harder choice. It forced us to get better in our practice of developing people and developing leaders.

person, even when doing something wrong, can’t be vulnerable and admit to it, and the junior person, seeing an error, won’t correct them. The co-pilot will literally watch the plane crash, killing everyone including themselves, because culturally they cannot correct the pilot. What we’ve found — similar to flying a plane or even parenting — is that leadership is a two-person sport, because decision-making is that difficult. Imagine if Meghan was the coCEO but sat behind the cockpit, behind the door: she would only see what I

“When it comes to character, people will say, ‘Well, I am who I am. I can’t change.’ You’re telling me you can’t become kinder?” program. That is a much later stage.” As companies consider this, the questions they really need to ponder are how good is their hiring process? How good is their onboarding process? And how good is their development process? It took so many other programs to be in place before the no-fire policy kicked in. We used to adopt the Jack Welch model of getting rid of your bottom 10 percent. We did it for years, but we still kept hiring better and better. We got to a point in 2012 where we found that there were surveys going around the office of who was going to get fired by the end of the year. But at that point we had hired so well we actually hadn’t planned to let anybody go. I remember we sat down as the leadership team and said, “What would happen if we didn’t fire anyone? What if that was the one lever we didn’t pull, but we could press every other lever, what would happen?” It took us around six months to ponder, think through, and experiment, but then we went in front of the company and declared this no-fire policy. People always ask what happens

I was curious about the co-CEO situation. When did that happen, why did that happen, and how is it happening successfully? CK: The official title didn’t change until earlier this year, but we’ve been running the company together since around 2008. The title we initially put for Meghan was chief of staff. Our thinking was, when you watch the president of the country, the chief of staff and the president run the country together. But everyone thought Meghan was head of HR, everyone thought that she was my assistant. We went back and forth a lot on the idea that I would be CEO and she would be co-CEO. But imagine saying “I’m a parent and you’re a co-parent.” We actually believe one of the biggest mistakes in airplanes is using the terms pilot and co-pilot. I think it was Malcolm Gladwell who wrote in the book “Outliers” — and this is embarrassing because I’m Korean — that the airline with the worst safety record is Korean Air Lines. It’s a cultural thing: Most airplanes are built to be flown by two people. But Korean culture is so strong in prescribing that the senior

explain to her, as opposed to seeing it for herself. How many people have you seen read the same article and highlight two completely different parts? We have different points of view and that’s critical to decision-making. MM: The shared responsibility when you’re both co-CEO; it’s the shared stress, just like parenting. You don’t want to be just like each other, though. As I always say, I’m a bad version of Charlie and he’s a bad version of me. From a character-balance point of view, he would definitely skew towards what we would call more arrogant because he’s over-confident. I would skew more towards what we call insecure because I’m over-humble. But we can both play the other side. It’s not that I’m insecure in everything, it’s just that under stress, I would tend to not speak up. He would speak up. CK: There are many differences between Meghan and I but there are two things that we share in common. One is — MM: How important rituals are.

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CK: Not only in holding to rituals but constantly pruning the ones that don’t work and adding new ones that work. Both of us look at rituals like religion. It’s that critical. It’s the foundational root cause of most problems but it’s also where the magic occurs and it’s where we’ve spent the most time. The second thing is tied to “Better me, better you.” We feel a strong sense of being a hypocrite in teaching, sharing, and coaching someone in something that we haven’t tried ourselves and seen success with, which usually means we’ve traversed through failure.

“Firing, in many ways, is the easier option. Choosing to commit and develop someone is the harder choice.”

MM: Not willing to be a hypocrite. CK: Leading by example and especially going into danger first and trying it and learning and then teaching as quickly as possible is something that we share in common. What are the top pieces of advice that you guys have for other entrepreneurs or business leaders? CK: One of the biggest lessons I’ve learned — and why I’m even a coCEO — is if you want to do anything big in life, you can’t do it alone. There’s a formula of “team before mission,” but the two are very interrelated. The greater the strength and size of your team, the greater the mission you can tackle. A one-person team can only do so much. Also, business schools in general teach you that decision-making is a logical thing; analytical, critical skills. But if you look at all the poor decisions ever made by anyone, it’s always on what we call emotional tilt. “I was angry,” “I was sad,” “I was feeling shame.” Ego. So how do you train people to deal with that? One of the bigger discoveries we had, with the help of a guy named Jim Loehr, was that emotions and character traits are pretty much like muscles. If you exercise them, you can actually get stronger. When it comes to character, people will say, “Well, I am who I am. I can’t change.” You’re telling me you can’t become kinder? You

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can’t become more confident, more humble? With training, you can — but like exercise, if you don’t train, it atrophies. You can actually train these things, and that leads to better decision-making, which makes better leaders, better companies. MM: There’s another framework and thought that we’ve been coaching our teams on, which is the difference between doers and thinkers, and the need, as an organization is growing, to have more people who are thinking as opposed to doing. As the business gets more complex, you need more people at the top thinking, and it’s hard to make that shift because usually what happens is the best doers are promoted into more leadership roles where they’re responsible for more thinking, but they struggle because it feels like you’re not doing anything. We’re trying to solve that now, where we actually set up an environment that helps you block out, let’s say, the hours of 2:00 to 5:00 on Monday afternoon, to set up thinking time, because you need an open-ended window to do that. But that feels so hard for leaders — or for anybody — to do. CK: One of the key insights on it is that if you are a very good doer and you actually peel back “What is the driver of that?” you’ll see that there is a set of rituals; it’s almost like

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machine rules that have been written that allow you to be in your norm, your groove, of doing really well. If you want to raise the bar in being a good thinker, a strategic thinker — planning, making the right decisions and judgments — you first need to start to prune some of your doing rituals, in order to start to add thinking rituals. That is something very hard for people to grasp because they’ll say, “But it’s what made me successful to date.” They’re scared to let that go. We all have the same number of hours in a day. I always think of it like going to a buffet. Everyone has the same size plate. If you don’t first create some space on the plate... MM: For vegetables. CK: You won’t eat vegetables. The same way, if you don’t actually reduce the rituals tied to your doing, you can’t increase and work on rituals to be a thinker. What is giving both of you hope for the future? CK: I think we’re sort of in the future now — that you can do good and win big. The days of the bad guys winning — asshole leaders and companies — are numbered. Because talent is the number one asset, and the good people, the talent, aren’t going to go work for leaders who are assholes. MM: What gives me hope for the future is I believe leadership is a two-person sport, and I think a lot more companies will have co-CEOs, this partnership of men and women that will create a better team. Men tend to skew more confident, women tend to skew more humble, just by gender. To win at the highest levels, more and more organizations are going to need that balance, that team dynamic, the agility to be confident and humble, to be courageous and vulnerable, to be patient. I think you’re going to see a lot more partnerships and teams with men and women, especially at that senior level.

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GAME-CHANGING

LEADERSHIP Homeroom restaurant aims to be the best part of people’s day — including for its employees. Co-founder and CEO Erin Wade explains her new leadership model.

n 2011, when Erin Wade and her business partner Allison Arevalo started Homeroom, a mac-and-cheese restaurant in Oakland, CA, they knew it had to be an inspiring and fun place to work. “It felt like our dream of creating that for ourselves would be shallow if we weren’t creating it for other people, too,” Wade explains. But neither Wade’s previous career as an attorney nor Arevalo’s as a corporate marketer had given them positive models for the type of workplace they wanted to create. So Wade began reading everything she could, interviewing business leaders, and taking classes, trying to figure out how to create a company culture that was truly people-driven. They settled on a mission “to be the best part of people’s day” — not just for guests, but also employees. “Leaders make really different decisions when they have a view towards making both those stakeholders happy,” Wade says. The concept hit a nerve: Their first Craiglist post attracted hundreds of applicants to open interviews. Yet despite all that homework and enthusiasm, “Our first year was an absolute disaster,” Wade confesses. “We created a work environment that had almost no rules. It turns out that’s a crappy way to set up a company for success.” In the years since, Wade and her team of nearly 100 employees have settled on an evolving, successful set of practices and attitudes she calls “people-driven leadership.” And Homeroom has become a highly profitable anchor in its community, with a staff turnover rate a third less than the industry standard and revenue per square foot more than four times the industry average for chain restaurants. Here’s Wade’s best advice for other business leaders looking to redefine leadership and create a truly inclusive culture for their teams.

Homeroom CEO Erin Wade

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START WITH TRANSPARENCY Homeroom operates as an openbook company. “You can’t involve everyone in making decisions about the company unless they know what the heck is happening,” Wade says. So every week, Homeroom holds a meeting that anyone on staff can choose to attend — paid. The team goes through a “report card” of their metrics, including everything from sales figures and labor costs to staff happiness and Yelp reputation, with different team members reporting on and taking ownership for different line items. “What’s great about that meeting,” Wade says, “is that it involves every single person who’s there. Even if you’re not tracking a line, you can still contribute your ideas on why certain numbers were what they were or make predictions for the week to come.”

EMPOWER EMPLOYEES TO LIVE YOUR MISSION Homeroom gives every employee from managers to bussers both autonomy and extensive training to make their own decisions about how to “be the best part of people’s day” in any given situation. That could mean, for example, bringing a free treat to a crying child — no permission needed. “The only thing we ask is that everything gets kept track of, so we know how much we’re giving away and why,” Wade says. “Once employees start thinking like that, it’s like watching a light go off, and they have so much fun with it.”

ASK FOR EVERYONE’S OPINION OFTEN Homeroom requires employees to fill out a survey at the end of every shift. Questions include what did and didn’t go well, if they had issues

with guests and how they fixed them, and if they noticed any maintenance problems. Wade also asks how they would rate their personal satisfaction at work, and if there’s anything the company can do to make it better. “The daily survey gives a voice to people who either wouldn’t naturally speak up or aren’t usually asked their opinion in the first place,” she explains. Wade credits Homeroom’s commitment to feedback and engagement for the company’s unusually high revenue per square foot, as employees spot maintenance issues before they become big problems and small suggestions for efficiency improvements add up over time. “We don’t just have a leadership team working on improvement,” she says. “We have an entire company working on it.”

EMPOWERING EMPLOYEES DOESN’T MEAN NO RULES When Homeroom held its first all-hands staff meeting, Wade and Arevalo told people there was going to be no vacation policy or dress code. “We wanted to trust people’s own good judgment and we thought that’s what it would mean to empower them,” Wade says. They found that a lack of basic guidelines had the opposite effect. “Those aren’t the fun ways to express your individuality,” Wade explains. “You don’t want to have to ask yourself, ‘Are they going to hate me if I take two weeks around Christmastime? If I wear this shirt, am I going to offend them?’” Instead, Wade and Arevalo found that the exciting questions were about how you encourage engagement in the process of creating guidelines, and how you continue to evolve your rules in a way that incorporates people’s opinions and thoughts.

DON’T EXPECT OVERNIGHT RESULTS “You could decide to do a lot of the things I just talked about, but most new employees will not be familiar with a culture of personal autonomy, transparency, or top-to-bottom collaboration,” Wade cautions. If you decide you want those values in your company, expect to invest a lot of time and education to get your staff to understand what that really means. When Homeroom first started running its weekly open-book meeting, attendance was very low. “Honestly, I couldn’t understand it,” Wade says. “Here we are, in an industry where we’re all on our feet all day, offering to pay people to sit, have snacks, and just hang out and give their opinions. I thought everyone in the company was going to want to come, but very few people did.” Now, about a third of the company shows up on any given week, but Wade doesn’t expect turnout to ever get higher than that. “As excited as I am about all these principles,” she says, “not everyone is always excited about them. Because everything you try is so different, don’t lose hope if it’s not immediately embraced — even if it seems like it should be a slam dunk. Changing people’s paradigm surrounding how they think about work is a really slow, difficult process.”

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Homeroom co-founders Allison Arevalo (left) and Erin Wade are committed to creating a fun place to work.

COMMIT TO FINDING MENTORS “There is no easy way to get spoonfed a lot of these ideas,” Wade warns. “For some people, that’s an exciting challenge, but for some people, that’s just not how they’re going to want to spend their time.” Wade recommends the ZingTrain education program that Zingerman’s Community of Businesses runs in Ann Arbor, MI — even for companies not in the food business. “We bring a number of people with us every year to take a class there,” she says. “They talk to you about the theory of being an open-book company, and then they bring you into their businesses and show you how it’s operating in practice.” [Read our Issue 4 story about Zingerman’s at bit.ly/Issue4Zingerman.] She also recommends joining professional organizations focused on these types of issues, like the Tugboat Institute (see page 81).

HIRE MORE WOMEN As Wade researched the most people-driven businesses she could find, she noticed they were all either founded by women or had a very high proportion of female leaders. “Most companies are run to be very ‘winner takes all’: you have your leaders, you have your followers,” she says. “But if you’re looking to run a more people-driven company, that’s the competitive advantage that women bring to the table.” She likens it to an experience she had surfing recently: “Usually, surfing is very male-dominated — much like business, where 5 percent or less of CEOs at Fortune 500 companies are female. A few months ago, I went out to a beach and found 95 percent women there. And without anyone ever saying a word, it was like the rules of surfing had been flipped on their head. Instead of the normal ‘one person per wave, whoever gets there first wins,’ the

whole point was to try to get as many people safely on a wave as we could. It was one of the most fun, rewarding days on the ocean I’ve ever had.” Wade compares the culture at Homeroom to what she saw on the water that day. “Not everyone’s going to want to run their company that way,” she says. “But if you do, it’s a great opportunity to bring in more women.”

GET COMFORTABLE WITH FAILURE “If you’re doing something that’s not very mainstream, the odds of you hitting the nail on the head the first time you try are pretty slim,” Wade says. Take comfort in the fact that a lot of different roads lead to the same end point, and you’re probably going to pick some wrong ones along the way. “We continue to screw up all the time,” she says. “But I remind myself that even companies following much more well-worn playbooks make mistakes. And I think we’re having a lot more fun along the way.” Photos: Homeroom

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CONSCIOUS COMPANY MAGAZINE

New for 2017...

CONSCIOUS COMPANY

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UR HOW TO SHIFT YO URE, T L U C E C A L P K R O W STARTING WITH

YOU

Even if you’re not formally in charge, you have the power to lead your workplace toward a better culture. Here’s how to start the shift. BY LORI HANAU WITH CLAIRE WHEELER

ou’re in a meeting, the same one you attend every week at this particular time. A person at the front of the room does almost all the talking: they ask for reports, assign tasks, and set priorities. Everyone in the room respects one another, yet there is little space for input or inspiration. No one questions the agenda, each task is assigned according to prescribed roles, and efficiency and productivity are the name of the game. Perhaps that person at the front of the room is your boss. Perhaps that person is you. Regardless of your role, you do have the power to shift that meeting. You start with how you lead yourself in your work. You begin to shift the meaning of leadership with a number of small, courageous choices that add up and inspire others to join you. Leadership matters because the essence of who we are as people becomes the essence of our organizations. The new leadership paradigm is about sharing power and potential in the workplace. This is Shared Leadership — the practice of bringing out the greatest capacity in everyone by empowering us all to be responsible for and engaged in the functionality and vibrancy of the whole. When everyone is a leader, conscious companies become more collaborative and less transactional, kinder and more connected, more innovative and more responsive to the market. For any one of us, the first step in ushering in the new leadership paradigm is breaking through the belief that we are helpless to have real influence over any system or any group of which we are a part, whether we are a boss, an employee, a stakeholder, or a volunteer. Here are seven simple steps to help you start to implement change, no matter your position.

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COMMIT TO HEALTH

Health and wellness isn’t just for at home or the gym. Making your workplace a healthy space for everyone requires your genuine commitment to being as healthy as possible in all of your interactions. This commitment means being willing to see and learn about your own blind spots, unhealthy habits, and the counterproductive ways you are trying to fit in, so that you can shift the mindset that workplace problems are always other people’s problems and not our own to address. Along with feeling more connected to your authentic self, over time you will also feel more effective. Practice: Every time you think the problem is “out there,” immediately look within. Observe yourself. Be curious and ask yourself, “How am I contributing to this dynamic? Am I benefiting by letting it continue? What can I do to introduce a better way forward?”

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SHOW UP WHOLEHEARTED

Showing up to work distracted and fractured, hiding behind our screens, and dodging real human interactions is often the norm. Yet when we check out, we miss opportunities that can elevate our personal and collective potential, creativity, and satisfaction. Instead, bring all of yourself — your body, mind, heart, and spirit — to work. Whether you can do this overtly within your workplace culture or develop your own ways to practice showing up with positive intention, trust in the transformative power of taking a few moments to set an intention to bring your whole self. Practice: Observe where you are half-hearted and unclear in yourself. Which tasks, partnerships, or responsibilities leave you feeling less than whole? Be curious as you consider why this is so. Ignore any negative stories that surface. Ask yourself what it would take for you to be wholehearted, fully empowered. Practice one new way of being wholehearted every day for the next three months.

COMMIT TO RESOLVING CHALLENGES

Strive to resolve any interpersonal tension as soon as possible, so that you can build a field of shared harmony and trust. Practice: Use the 1–3–7 Rule: Try to resolve any tension directly with the other person on the same day. If you need some time to reflect and process the tension, make sure you connect with the other person about it within three days. Never go longer than seven days without connecting directly with that person. If you stall for longer than seven days, this is a flag that the underlying issue has more to do with a stuckness in you than with the other person or the situation that seemingly caused the tension.

BUILD YOUR OWN TEAM

Seek out others throughout your company who care to practice leading this shift with you. Practice: Start with observation. Notice those who are naturally skilled truth tellers, holding themselves and those around them compassionately accountable. Look for the people who seem to act and share from a place of wisdom and balance. Invite them into an intentional, collaborative practice of sharing power and leadership together. Be willing to start with even just one other person. They are waiting for you and they may not know it yet!

BECOME AN AIR FRESHENER

We habituate in groups to fit in, get along, and be liked. When there is strife and stress within a team or overall company culture, negativity rapidly leads to a toxic environment that we quickly get used to. Practice: Can you track your own patterns of feeding drama in your workplace — of repetitive negativespeak, or of too often sharing your frustrations with colleagues instead of directly with the person you really need to address? See if you can become a fresh wind by speaking generatively at least 60 percent of the time. For more paradigm-shifting practices, visit the blog at globalroundtableleadership.com/c/blog.

USE SOLUTIONSBASED THINKING

Traditional leadership structures often focus on identifying problems and then assigning somebody else to deal with them. Practice: Any time an issue or challenge arises, task yourself and your team with identifying at least three creative solutions, either individually or as a group.

DON’T ASSUME; TALK

We can’t cultivate leadership without knowing what we mean by it. Building a shared language around leadership opens up many opportunities to uncover leadership potential and opportunities within your whole team. Practice: Get some open dialogue going with your colleagues throughout your company. What does leadership mean to each of you? By leadership, do we mean roles or do we mean something else? What are the distinctions for us between individual leadership and power and shared leadership and power?

Lori Hanau is dedicated to supporting shifts in consciousness, communication, and community in the workplace through experiential learning. She founded Global Round Table Leadership, where she works co-creatively to coach, guide, facilitate, and steward individuals and teams in opening to their innate brilliance, cultivating the soul of their organizations and their work. She is faculty and Co-Chair at Marlboro College Graduate and Professional Studies and on the board of Social Venture Network.

Claire Wheeler is a freelance consultant and co-conspirator for sole practitioners, community-based businesses, and nonprofits. As principal of Re:work, her passion is to translate the creative genius of people and organizations into systems and structures that make work make sense. She finds power in prose and splendor in spreadsheets.

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FINANCE

REPORTS FROM AN AFTERNOON WITH

JED EMERSON

BY STEVEN MORRIS

*Jed Emerson, b. 1959: One of the godfathers of impact investing. Inventor of the Blended Value concept. Wealth advisor to many. Hard-rocker, horserider, book-reader, trash-talker, deep thinker.

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Photo: HaloVeg

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f you want to know what Jed Emerson* thinks about impact investing or social entrepreneurship, read his seven books or one of his numerous papers. He took a lot of time to write them, so the least you can do is get up to speed before asking for his input. Of course, his perspective has already evolved since writing them; it’s always evolving. It will have evolved between when he spoke to Amber Nystrom in August 2016 and when you actually meet him (should you be so lucky). When it comes to life-long learning and new ideas, his taste is expansive (see page 67), his appetite insatiable. But his ever-shifting thinking is also partly a sign of what his mind is like these days: Open. Reflective. Curious. After decades of pioneering the “how” of combining purpose and profit, Emerson now finds himself more interested in the “why” — the deep questions about values and meaning. He’s pulled his nose out of the weeds and is busy exploring the meadow. After enjoying an afternoon wandering alongside him, we collected this bouquet of his thoughts on the future of conscious business, authentic leadership, and why it’s important to create the space for yourself to grow.

These days, we hear a lot about impact investing. Since we’re speaking about conscious companies, what’s the link that you see between impact investing and conscious business or conscious companies? Are these one and the same? Are these related?

Within this unified field — conscious companies, authentic leadership, impact investing or conscious capital — what do you see as some of the primary challenges, the things that we really need to break through if we’re going to take this to scale?

Jed Emerson: Conscious companies are the vehicles through which impact capital can express itself. They are the organizational entities that hold within them the values and the business strategy and the market intent for what could be. It’s this idea that within the organization, we need to operate on a holistic, integrated basis, perform for financial returns together with social and environmental impacts, and manage our people in a way that is more mindful and enlightened as opposed to viewing staff and personnel as one more resource that you’re going to exploit in the pursuit of your business model. In those ways, I think conscious companies manifest the aspirations of impact capital.

JE: Obviously there are a host of operational issues. How do you measure performance? How do you incent people on a both-and proposition, as opposed to simply financially? How do you create investment vehicles that can bring investors financial return with a true measure of the extra financial value that’s being created by that capital? There are a host of those issues that I think people are grappling with, and that I’ve been a part of grappling with for fifteen years, if not longer. I actually don’t think that’s the problem in the current conversation. I think those are all things that we can figure out, that you can think your way through. I actually, over the last year or two, have been really refocusing my own energy less around the “how” of exe-

cution and more around clarifying, for myself and the folks I’m working with, the question of the “why.” I think that these issues, both of execution and of why we are executing these strategies, are really paramount to not simply being able to do the job at hand, but being able to do it in a way that is sustained and will have longevity and will allow for long growth and career and personal development for all of us. The reason that many people coming into the field and many of the actors who’ve been in the field for a long time are so challenged in the execution side and find it so hard and confusing — “How do you think about this?” and “How do you get your head around it?” and “How do you create the tools and the practices?” — is because they really blew by the first question. They assume that just because you want to do good, that’s it. That’s all you have to say: “Now let’s get to work.” It’s like, “Well, no. We need to really clarify how we understand this question of being purpose-driven. What does that really mean? What does it

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mean to live your life fully in the present as you manifest history and as you project the future? What does that functionally mean in practice?” That’s a real challenge for folks because it means stopping and it means reflecting, at a much deeper level, on how it is that you define value and purpose. It means having greater clarity around the future, but also more humility and more of an openness to the fact that you actually don’t know. We operate in this world where — look at the example of the phrase “mansplaining,” where men, regardless of whether or not they know anything about the topic, they just

As you’re unpacking all of that, what are some of the main questions that you found the most useful for you, and what are the questions that you feel you’d like to see asked more? JE: We live in this world where you expect that you can Google or Wikipedia or get whatever information you need to make your decision and to act. I think we’re confusing access to data and information with access to knowledge and wisdom. We’re taking data bits out of context and viewing them as the reality that we’re operating against, when in fact, this question of

that reflects the value they really seek to create through the deployment of their capital. It’s that same process that needs to be brought forward in relation to leaders of companies, entrepreneurs, and others, because you get so focused in the weeds of the execution that you lose sight of the meadow and the larger field that this is all a part of. Unless you can simultaneously operate with consideration of the task and the challenge before you but with real resonance with the direction and the movement that you want to be advancing, whatever answer you get will end up being the wrong answer

To start the conversation with, ‘Is this financially competitive?’ to me, reflects the fact that there’s more work to be done in terms of understanding what the value is and the nature of the impact that we seek to create.

go into this explanation. As a field, we suffer from that, because you’ve got entrepreneurs who are looking for capital, and God forbid they don’t have the right answer when they’re talking to a potential investor! Or you have investors who, on the one hand, market themselves as being impact or sustainable asset owners and investors, and yet one of the first questions they ask is, “What’s the financial return going to be on this and is it competitive with what else is out there?” People who focus on that don’t understand what this conversation is really about, and maybe have to do more thinking about the nature of total performance and what it means to invest for multiple returns. And then in that context, ask what is the right way to think about financial return. But to start the conversation with, “Is this financially competitive?” reflects the fact that there’s more work to be done understanding what the value is and the nature of the impact we seek to create.

NOVEMBER / DECEMBER 2016

purpose and intent is fundamentally the question of the human experience. We’re missing huge pieces of knowledge and information and experience that we can really bring forward from the past in order to infuse, inform, and advance our own deliberations today. It’s less an issue of “What are the right questions?” than your comment around “How do we ask the right questions and what is involved there?” That’s really where I’m having the greatest added value for the people I’m working with now, because I actually don’t come in with very many answers. I’m not your best financial analyst at this point. I’m not a data person. What I do, in the context of the work I do with the families I’m advising, is help them be better positioned to be clearer on what questions are meaningful for them — in order to understand the answers when they see them, and as they’re co-creating the answers with their investee group. That can guide that process in a way

CONSCIOUS COMPANY MAGAZINE

because it’s very focused on the weeds and not on the ultimate outcomes you seek. Can you talk about a couple of examples where there’s been a disjunction between a conscious company and its business entity and the people and the capital that flows into that company, and what can happen if those are not in alignment? JE: I think we’re seeing this not only in companies that are branded as conscious companies, we’re seeing this across the business community, where more and more executives and CEOs are having to grapple with the reality that there are very few people, actually, who are motivated simply by financial incentives alone. Especially when you talk about 20and 30-somethings who are creating not only the demand around these ideas, but now creating competitive companies that are pursuing financial return with social and environmental impact; the way that we think about

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Books Jed Is Digging Right Now

“Sapiens: A Brief History of Humankind” Yuval Noah Harari // 2011

Karen Armstrong // 2014

“The Practice of the Wild”

Gary Snyder // 1990

“I think of what I’ve been doing as open-architecture inquiry. I simply said, ‘I want to explore what other people have learned and done and how they’ve thought about the question of purpose and intent.’ If you spoke to me at any point in the last year and a half that I’ve been doing this reading, what I’m reading at that point is a great source; and then I’ll realize, ‘This only gets a certain part of what I want to explore. This other document or book or author or philosopher really speaks to where I want to go.’ What it’s shown me is that knowledge, and understanding the process and being in the process, is as important as finding a doctrine or an ideology or a framework.”

what it means to manage an organization shifts. The way we think about bringing your whole self to work and what that means operationally is a challenge, especially for older managers who weren’t necessarily raised in that environment or with that kind of vision. But, fundamentally, it remains a challenge to operate on a holistic basis in a bifurcated economic system with public capital markets that are only now coming to recognize that environmental and social factors represent offbalance-sheet risk to publicly traded companies, and if we don’t manage that risk — whether it’s this year or ten years from now — the implications of that will come home to roost, relative to the financial value of these firms. Can you explain why, from your experience, you feel it’s essential for the busiest entrepreneurs and investors and authentic leaders who are taking on this task of growing conscious companies and bringing forward impact investing and stepping into authentic leadership to take a little bit of time to get perspective? JE: I think about it like this: In my 40s, I was really frustrated by the fact that I hadn’t found a wife or somebody that I could really build a life with. I was talking to somebody, and I remember the conversation being around, “Gosh, I’ve got this, I’ve got that. I’m so successful in this area and that area, and I just can’t seem to get my personal life squared away.” Their comment was, “You’re not creating any personal space for anybody to come into your life. Until you do that, the ‘answer’ of a relationship is not going to manifest

“Fields of Blood: Religion and the History of Violence”

itself because you just have no space for it.” I go to conferences and I hear all these people pontificating. Everybody’s got their solution-set, and then you get pitched by all these different entrepreneurs, each of whom has a strategy, tactic, or enterprise that’s going to change the face of a market or a social issue or whatever it is. I’m struck by the fact that, if we just paused and worked smarter, but perhaps a little less intensively, and created a space to be able to go deeper in relationship with each of the different types of actors we come in contact with, space for new thinking and for co-creation amongst people — between ourselves as entrepreneurs and the teams we create, between ourselves as entrepreneurs and the investors we’re asking to give us capital — it will create an opening for the right answers and responses and strategies to come forward, as opposed to us having to force them forward. There are two sayings that I like very much. One is a Taoist saying: “Open mouth, first mistake.” The context for the saying is that in spiritual development, you should be calm and reflective and let the spiritual answer reveal itself. But I think that same phrase holds true for me, personally. This last year I’ve spent a lot more time shutting up and not trying to get ahead of a conversation and not trying to convince people of my perspective and solution, but to just say to myself in my own mind, “Okay, here’s what I’m thinking. Here’s my solution. That’s not going anywhere. I need to listen to what this person is saying, because the only reason I’m in this conversation, hopefully, is because I think there’s something that can be mutually beneficial to

talking with this person.” If I’m simply in this posture of trying to convince them of my righteousness, that’s not helpful. It’s not helpful to me and it’s not helpful to them. Simply shutting up more is important. The second one is from the Quaker tradition: “Do not break the silence unless you can improve upon it.” We are so fast to speak and to give an answer and a solution, and I sometimes feel that if we just paused and let the process of our engagement with each other as managers, as investors, as entrepreneurs, as people, simply let the right answers come forward — and not try to force and push and rush and always get to the solution and [get all caught up in things like] “We can Google this and you can Google that in order to find out there’s this, that, and the other…” — just pause and be in that moment. Because I think there is real value in the concept of being in that moment of management, of decision-making, being present at the same time that you and the team that you’re working with are becoming and are moving forward and are learning how to manifest the future that you aspire to create. A lot of the expressions that you’ve just used often fall within what we’ll call more typically feminine leadership; co-creation and listening and more being. I’m curious about your thoughts about feminine leadership for both men and women being one of the critical areas that we need more of. JE: It’s interesting that when you look at the leadership in impact investing, certainly there have been innovations at the institutional investor level and

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in foundations, but I think the real leadership and the real innovation has come from family offices, which tend to be much more open, and driven by female members of the family. Even if it’s not driven by female members of the family, it is a partnership, it’s a marriage, it’s a family. You’re looking at it much more holistically. The reason that I like working with families is because when they think about the solution for wealth management, they don’t think, “We have a foundation that has these restrictions…” They think, “We have this capital and

we have a foundation and we have direct investments and we have a portfolio of public securities. We have multiple vehicles. How do we position those vehicles to get us where we want to be as a family?” There’s almost a much more intuitively holistic approach because of the presence of women in that conversation; I think that’s really where you get the openness to the possibility of this [kind of investing]. Whereas I think in foundations and in funds that are dominated with male energy, if you will, or male leadership, I think there’s a tendency to want

to always be right, to want to always have the answer, to want to always convince others of your righteousness. Those elements make for bad investing. They may make for good short-term investing, but they don’t make for good long-term value creation beyond simple financial returns. What about courageous vulnerability? Can you tell us a little bit more about what that means to you and how you see the role of courageous vulnerability in the kind of leadership you’re speaking about?

“Why would you possibly spend your entire life working on things to make money and then go do it COMPANY was MAGAZINE that you wanted to do?” NOVEMBER / DECEMBER 2016what | CONSCIOUS

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More and more executives and CEOs are having to grapple with the reality that there are very few people, actually, who are motivated simply by financial incentives alone. JE: I think it takes a mindset around humility. For me it has been a function of age. When I was younger, I was pretty convinced of who I was and where I was going and what I was trying to do, and it was like, “Get out of my way if you’re not on board.” That’s who I was, and I forgive myself for the mistakes that I’ve made along the way. That said, I’m at an age now where I can look back and, number one, cut myself slack. I’m not half as hard on myself as I used to be, and I think that positions me to be in a much more open posture when I’m talking to other people because I’m open to that engagement as opposed to positioning myself for success. For me, that’s been a process of time, age, and experience. I’m not one to tell anybody how to do much of anything anymore, because I find that so much of what I’ve done that’s worked has been completely situational for who I was at that point and the actors that were around me then. I wish that, over time, I had been a little less convinced of my own correctness in terms of my analysis and my vision and ideas. I think being vulnerable means that you have to be willing to accept the fact that, “Gosh, maybe you’re not God’s gift to impact investing,” or, “Maybe your team is actually right and you should talk less and listen more to their vision and their ideas.” What are some of the largest and most exciting trends you see at the intersection of conscious business and impact investing? You’ve mentioned the rise of the Millen-

nials, the next generation, and what an astounding impact they are having and will be having over these next years. For the Millennials stepping into this, what are the most interesting innovative places you would say might be worth exploring? JE: It’s a challenge for me to actually respond effectively to that. Perspective on what is challenging and worth exploring depends on where you sit. I find the conversations I’m having with young entrepreneurs continually point me in new directions at the same time that I’m helping them appreciate the broader context within which their own life and work is unfolding. That said, obviously the difference today — as opposed to, let’s say, when I was 20 — is that people in their 20s and 30s today have access to a suite of technology tools that we did not have. Whether you’re talking about FinTech or you’re talking about sustainable ag or you’re talking about broader market development opportunities, there are tools that you can draw upon that we just didn’t have in the past. The platforms, whether it’s crowdfunding or peer-to-peer lending or any of these vehicles that we’re seeing come forward, are just fundamentally transformative. They are revolutionary at the execution level, in terms of what they allow to take place relative to disrupting the historic way to think about business and economics and social issues. The strongest opportunity that people in their 20s and 30s have is to take this idea of purpose-driven

companies to the next level. We now have an entire generation that’s coming forward who think the idea that you would not engage in profit with purpose is crazy. Why would you possibly spend your entire life working on things to make money and then go do what it was that you wanted to do? I love the fact that the mindset being applied to these new sets of tools will open a whole new way of thinking about being in the world, and ultimately that’s what conscious companies are advancing: a different way to connect with customers, a different understanding of market opportunity, a different notion about product development, a different approach to understanding supply chain management. All of those issues look completely different when you are approaching them through this mindset of holistic, integrated value creation, as opposed to “Make as much money as fast as you can and then go do something that you really care about.” I think the challenges and opportunities that will be created and will evolve are ones I certainly can’t speak to in any way, because they’re yet to be brought forward by the people who are reading this magazine. $ Photos: Ralph Reutimann

This interview was conducted by Amber Nystrom. Nystrom is a pioneer in impact investing and global systems change, and a Mindfulness and Hero’s Journey Master Facilitator. She serves as the CEO of the Dakia Institute, a global infrastructure platform for transforming the future of life, and over the next decade is leading an audacious global initiative to unite the Triple Revolution rise of women, Millennials, and the $60 trillion wealth transfer that will go to 70 percent women — into catapulting capitalism into sustainability.

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The

EALTH EAVERS

Carol Newell had a small fortune and a vision. Joel Solomon had the values and talent to bring it to life. Together, they executed a 25-year plan that began to change Vancouver and everyoneâ&#x20AC;&#x2122;s ideas about what money can do.

Photo: Kris Krug 70 NOVEMBER / DECEMBER 2016 |

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hat would you do with lotsFINANCE of money? How much is enough? What happens with more than enough? These are questions most of us fantasize about, the kind of good problems we wish we were so lucky to have. But for the small but powerful set of people who — through pure luck or hard work — control the kind of wealth that far exceeds their personal needs, deciding what to do with that money can be incredibly challenging. “When you have significant wealth, you face a lot of options, which can translate to a lot of opportunity,” explains Carol Newell, who in her 20s and 30s inherited wealth eventually amounting to $50 million in Canadian dollars from the Newell Rubbermaid fortune. “Then comes the conundrum: ‘What are the right choices?’ It’s easy to become immobilized.” On top of that pressure, the current mainstream culture around extra wealth is to turn it into more wealth. Throw in the fact that a traditional financial manager’s job is to keep growing a pot of money, and you end up with trillions of dollars deployed with the singular goal of multiplying them. “People are out there retaining their capital because they’re convinced it’s what they’re ‘supposed’ to do, or because they’re actively trying to grow it to a billion dollars,” Newell explains. For what? she wonders. But even in not spending that money, those people are making powerful choices about the world. “Our money is working 24/7,” she says. “I have not generally seen that it’s working on the kinds of things we want it working on.” Newell, on the other hand, has spent the last 25 years pioneering a completely different paradigm of what money can — and perhaps should — do. Since 1993, she’s set her own capital loose in a strategic, coordinated attempt to turn her home region of Western British Columbia (BC) into the most progressive, resilient, innovative, and sustainable community possible. Perhaps the most surprising part? It seems to have worked. With what by modern standards is actually a quite modest amount of “big money,” Newell’s influence has helped transform Vancouver’s economy from a resource-extractive environmental problem zone to one of the world’s premier hotbeds of tech innovation, sustainable enterprise, and smart growth. “We helped normalize a values-driven business orientation,” she says. “And we learned that leveraging personal capital in a radical way can actually fuel change significantly and quickly.” “Carol is one of the best models on the planet for what you can do with more than enough money,” brags Joel Solomon, her longtime business partner. “I’m very proud of what we’ve accomplished together.” If you’re a person of significant means, Newell and Solomon’s story is an important roadmap and catalyst for making sure your legacy delivers the best chance for the kind of healthy, engaged world you really want. If you’re not as fortunate, it’s still a fascinating and inspiring tale of how a clear mission and a smart strategy can move the world. We spoke with both of them to piece together the story of what they’ve done, how they went about it, and the key lessons they’ve learned along the way. CONSCIOUS COMPANY MAGAZINE

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CAROL NEWELL

Newell was born into comfortable wealth in Ogdensburg, NY, a small town on the Canadian border, and home to the Newell Manufacturing Company, which later went on to own Rubbermaid. Her father died when she was 9, and she watched as her mother took his board seat and began to manage the family’s finances. The idea that wealth was something to grow endlessly never sat right with her. Even in her 20s, she saw that the money she had could be a powerful force. “Extra wealth gave me the possibility and the opportunity to fuel people’s dreams,” she says. She also became concerned about the unsustainability of modern, western life, a notion that hit home during a trip to Egypt when she saw a team of oxen grinding grain. “I realized that this process had been going on for thousands of years, but the tools and systems we’re currently using could never continue for thousands of years,” she says. After university, she attended a few conferences about sustainably sound ways to invest capital, tended her own finances, and made a few loans. Later, she started a foundation to address environmental issues, and then, when she was 36, her mother died, leaving her even more capital to manage. She knew that she already had enough. Over the next few years, she started to seriously search for a good answer to that key, central question: What should she do with the rest? She envisioned seeding a movement of values-driven businesses to deliver values-driven solutions. But she knew she definitely didn’t want to do the deals.

THE VISION It’s 1993, and 37-year-old Newell and 38-year-old Solomon are huddled around a wood-burning stove in a cabin on Cortes Island as a storm howls outside. With a few associates, they’re gathered to start to answer their key question: How best to leverage Newell’s wealth? The 500-year anniversary of Christopher Columbus’s arrival in America has just passed, and Newell still hasn’t forgotten the stroke of insight she’d had years earlier in Egypt. So it doesn’t seem so strange when the crew decides to start by asking, “How could we have an influence on the next 500 years?” “We understood that was really a metaphor,” Solomon told us. “But the point was to look long beyond our lifetimes.” And just as importantly, beyond the quarterly earnings state-

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JOEL SOLOMON

The son of a Chattanooga, TN, mall developer, Solomon got his first taste of deploying capital when in his 20s he unexpectedly received a $50,000 payout on an investment his father had made in his name. He invested half with some friends who were buying a property they called Hollyhock Farm on Cortes Island, near Vancouver, and the other half in a startup organic yogurt company in New England called Stonyfield Farm. After his father died several years later, Solomon came to control about $3 million. Like Newell, Solomon didn’t like most of the traditional answers he saw when he looked at what people — including his own family’s business — chose to do with their wealth. And when at age 25 he was diagnosed with a serious, chronic kidney disease that had already killed several family members, his search for true meaning in life took on a new urgency. After a number of years in California and Vancouver farming and living off the land, Solomon eventually decided to engage again with the vexing questions that surround business, wealth, and how to use money. He took the helm of the Threshold Foundation, a not-for-profit organization that focuses on mobilizing money to create a more just, joyful, and sustainable world. It was there that he met Newell, and where their powerful partnership began, as Newell recruited him first to help find businesses to invest in, and later to manage her increasing fortune.

ments and short-term thinking so prevalent in investing. Soon the vision exercise comes around to the more practical horizon of 50 years — about a human working lifetime. Looking back 50 years, it’s clear to the team how much can change in just that timeframe. Looking forward, they start to get excited. As the discussions continue, more pieces of their strategy start to fall into place: They’ll focus on one region — British Columbia, especially the Vancouver area — in order to concentrate their efforts, cross-pollinate missions, and hopefully mobilize a movement, or at least a community of changemakers. Newell will remain anonymous; she doesn’t like the idea of being known for her wealth, and doesn’t want to deal with the day-to-day networking and decision-making of getting her money out into the world. Instead, Solomon will be the public face of the

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money, and Newell will approve his budgets twice a year. They’ll stay quiet about their work, in general, at least for the first decade — trying lots of things, seeing what works, learning from what doesn’t. They won’t be afraid to say yes to as many ideas as possible, won’t be caught up in perfectionism: They want that money working on projects they value, those that bring long-term health to their environment and communities, especially the food system. They’ll also work on getting the money into lots of different hands; they’re not looking to build an empire, but rather empower others to drive change. They’re especially interested in investing not just in individuals and organizations targeting particular issues, but also in infrastructure and capacity-building. They’ll pay attention to all the work the money is doing, all day every

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day — which means caring about where they bank as much as about where they invest. With their vision in place and their strategy sketched out, all that’s left to do is the hard work of spending lots of money.

THE PILLARS Newell and Solomon decided to use an integrated approach in deploying Newell’s capital. Instead of focusing just on business or on philanthropy, they simultaneously engaged with three interlocking tracks: philanthropy, business, and inner skills. They later added a fourth, power and politics. “You need the benefit of multiple structures to handle different capital and to support different parts of the strategy,” Solomon explains. “Basically, we were a machinery of finding great people and figuring out how to do something to help them. And creating ways we could do it in bulk. We wanted to support the universe of changemakers.”

1. PHILANTHROPY Newell was already involved with philanthropy when she started working with Solomon, and the pair saw good reason to keep helping that work to flourish. “The nonprofit sector has regulations, culture, and purposes underneath it that have a lot to do with tax structures,” Solomon says. “Some things are best accomplished that way.” Also, they thought it important to help build a strong and resilient philanthropic economy. “The cultural witness and imperative the philanthropic community provides and addresses is vital,” Newell says. Solomon took the helm of Newell’s pre-existing Endswell Foundation, which had a $20 million asset base at the time. Over the next 14 years, the organization made grants to dozens of social and environmental organizations in western BC in a deliberate attempt to spend down the foundation money and get it working within the community, rather than keep an ongoing endowment. In 2009, Endswell completed its spend-down,

with major investments in two organizations that continue to meet Newell and Solomon’s desire to support capacity-building infrastructure for progressive causes: Hollyhock (more on that soon), and the Tides Canada Foundation, which Newell and Solomon helped found. “Tides provides services and products to help hundreds and hundreds of people give away more money effectively, and helps many dozens of nonprofit initiatives by providing shared professional services,” Solomon explains. His friend Drummond Pike started the foundation in the US in 1976, but nothing like it existed on a national scale in Canada until Newell and Solomon helped make it so. Today, the two are still involved with the foundation, but neither of them are in positions of control.

2. BUSINESS Newell and Solomon were among the first modern investors to realize and act on the idea that the tools of business, which were harming the world

Newell and Solomon helped transition Vancouver away from an extraction-based economy.

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so severely, could also be a force for good. In 1994, they established Renewal Partners as a seed-capital mission investment firm, with $7 million to spend. The fund’s investments included organic food companies, like Happy Planet juice and Horizon Distributors; independent media, like Sounds True; responsible investing businesses; and green products, like Seventh Generation. “Joel became the go-to for anybody looking for capital and connections to advance their business or environmental work,” Newell says. “At the time, no one was investing in small enterprises or initiatives. Values-based entrepreneurs came out of the woodwork, grateful for willing seed- and second-stage capital to build their capacity. The combination of all of those investments then

Mission-building was the return, first and foremost, in my mind. Cash back and financial returns are a bonus.” In 2008, Solomon and Newell, led by long-time colleague Paul Richardson, opened Renewal Funds, an even larger mission venture-capital project that allowed outside investors to buy a stake in their methodology. In contrast to Newell’s private portfolio, Renewal Funds explicitly seeks financial returns for its investors. Their ambitious goal for each 10-year fund is to not only fuel and foster social change through their investments, but to deliver abovemarket-rate returns to their investors. “Our job is to prove that can be done while adhering to these kind of deeper principles,” Solomon says. He is still actively involved in managing Renewal Funds.

the larger mission-driven business network in North America. In essence, by investing in Hollyhock and its leadership institute, they were able to create a robust environment in which to build connections and foster shared learning among their growing regional community connected by values. “We laid groundwork and built cross-sectoral, intergenerational trust networks,” Solomon says.

4. POWER AND POLITICS Especially as their work together entered its second decade and Newell decided to break anonymity and talk about the success of their strategy so far, Solomon realized that deliberately cultivating power and politics would be a key part of their ability

“Mission-building was the return, first and foremost, in my mind. Cash back and financial returns are a bonus.” continued to build up the capacity of the whole region.” A key part of Renewal’s take on business was its unusual perspective on the idea of return. “I expanded my sense of expectation to embrace a whole continuum of potential endings to an investment,” Newell says. “Even if the invested capital didn’t come back to us, we helped seed an entrepreneur who went on to do something else, who had conversations in different kinds of ways, who learned a lot of skills and got on board with another operation and, basically, kept moving things forward. It’s important to redefine our expectations, to be willing to take risks and reframe what failures might look like: they’re not failures, they’re learnings. From the get-go it was capital designated to deploy as Mission Money. I could afford to consider it out the door and expendable. In fact, I increased my outlay to $15 million total invested.

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3. INNER SKILLS Because they were trying to foster a true community of change, Newell and Solomon realized that human connection and leadership development would be an important piece of their work. Solomon was already involved with Hollyhock; soon he and Newell became key investors in growing the property on Cortes Island where they’d had their original visioning session into a premier leadership retreat and events center. Many of the leaders of businesses and nonprofits they funded through Endswell and Renewal were able to forge and deepen connections with each other through retreats at the rustic island conference center. The events Renewal helped launch — such as the Social Venture Institute, in partnership with Social Venture Network — became important not just for the local community, but for

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to drive change. “Progressives and do-gooders are very poor around power,” Solomon says. “We’re scared of it. We don’t want it. We consider it wrong. And so we’ve made ourselves not credible for managing big systems or leadership of actual societal structures. We’ve made ourselves permanently into critics outside the system. But the end-game has to be power and leading society in intelligent ways, not just critiquing and fighting.” Partly through training at Hollyhock, Solomon encouraged their contacts in the nonprofit and entrepreneurial sectors to learn more about the political system and understand how to influence it and how to run for office. And their economic successes helped feed the work toward political influence. “Historically, power and dominant corporate culture find it easy to write off progressives because they don’t

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know how to run things,” Solomon says. “They don’t know how to manage budgets, they don’t know how to build businesses. Therefore, how can they manage the economy? That story is effective. It keeps progressives out of power. But I’m now a job-creating Venture Capitalist,” with a whole different level of credibility. And it’s not just Solomon himself. One of the two founders of Happy Planet juice, an early Renewal Partners investment, was Gregor Robertson. With major support from Solomon and Newell, he’s now the third-term mayor of Vancouver, with a majority of the city council behind him. He helped create a political party that brought together the center, left, and greens into a coalition government with an aggressive agenda of social and environmental issues and an entrepreneurial mentality. A major recent environmental and political victory in which Newell’s and Solomon’s various paths of influence converged was the 2016 declaration

on the Great Bear Rainforest, which protects a 21-million-acre tract of temperate rainforest along the coast of BC. “The power component was really about building relationships,” Solomon says. “It was effectively learning and exploring and the real work of figuring out what power-sharing is. Hollyhock now gets a lot of First Nations visiting. There are First Nations who have been there eight, nine, ten times. These are now true alliances. They have their issues and challenges, of course, but there is a power in bridging constituencies in an effective way.”

DECADE THREE These days, Newell and Solomon are continuing to work for change in their region, but mostly they’re involved in smaller ways with big projects other people are leading. Their strategy, as they head into this third decade of

their work, revolves around dispersing their ideas and influence. “We are anti-empire in our behaviors,” Solomon explains. “I have systematically attempted not to be in control of very many things. And Carol’s genius was being willing to get the bulk of her wealth out the door, into real things today.” “We really mobilized the capital and got it working in a powerful way because we were working with abandon,” Carol concurs. “If you are a significant wealth-holder, I think it’s important to just be willing to sometimes dive in, let go, let flow. Take risks. And not only for greater financial gains. One key for me was designating capital on the front end. After ‘enough,’ it’s easy; ‘the rest’ was money on a mission. To me that meant giving it permission to see the possible, to explore, invent, nurture, enhance.” Looking back, they’re proud to have pioneered and demonstrated new models of how spending big money

Hollyhock hosts conferences and leadership trainings that have helped foster a progressive community in BC.

Photo: Hollyhock

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can work. “We invested very heavily in lifting up alternate points of view,” Solomon says. “We have wanted to find progressive ideas — the divest movement, the social justice movement, the reconciliation movement, etc. — and say, ‘These are different points of view. They are valid. They are substantive. They are credible. They’re not just hippie shit that you can discount.’”

SHARING THE LESSONS Both Newell’s and Solomon’s latest projects involve reflecting on the work they’ve done together and

The core of the program consists of five decks of cards. “I settled on cards because when I was working with wealth-holders in Play BIG [a gathering she co-founded for those with large amounts of discretionary capital], we found folks would start to figure out priorities, then go home and it wasn’t clear how to accomplish them. People just didn’t have a layout of all the decisions they could make.” The decks and accompanying worksheets help start and guide conversations around Values, Concerns, Strategies, Big Questions, and Next Steps. The Values cards start by providing a discussion point

decision-making and set yourself up to actually take action,” Newell says. “I’ve worked with the prototype now for several years, and I’ve had wealth-holders tell me about life-changing moments using them. I’ve had people tell me, ‘I’m going to take these to my investment advisor. I’ve never found a tool to help me discern so quickly what I want to focus on.’” As for the next 25, 50, or even 500 years, both Solomon and Newell are hopeful. “It’s been a long haul to get here, but I think that actually the tide is turning,” Newell says. “People are beginning to open up and see how extending their

“If you are a significant wealth-holder, I think it’s important to just be willing to

sometimes dive in, let go, let flow. Take risks. And not only for greater financial gains.”

encouraging and empowering others to follow their example. Solomon has written a book, “The Clean Money Revolution: Reinventing Power, Purpose and Capitalism,” which will be available in the spring of 2017. “It’s a moral and ethical call to understand that while George Washington may have his face on your money, it has your name on it,” he explains. “What that money does through your choices, particularly the investing side, is your responsibility. We cannot carry on turning our heads away from what we are involved in and benefitting from. I consider this a joyous, loving, highly spiritual process because what it requires is really thinking about the meaning and purpose of our own lives.” Meanwhile, Newell has been hard at work on a program called ReWeaving Wealth, which she designed to help families and organizations make headway on and hold true to tough decisions about how to spend their money in a strategic, values-aligned way.

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for prioritizing the deep things you care about, such as “cooperation,” “justice,” “creativity,” or “sustainability.” The Concerns cards help you see what other issues might relate to a top-line issue you’re interested in: The “fresh water” card, for example, reminds you to think about how fracking, marshlands, pollution, and upstream issues might relate. The Strategy cards offer many of the tactics Solomon and Newell used at Renewal. These include suggestions like “tell stories,” “encourage youth engagement,” and “invest in research.” The Big Questions include conversation-starters like “How much [money] is enough?” and “What are your expectations regarding financial returns and exits?” And Next Steps starts to offer extremely specific and practical options, like “survey how your business might contribute to a shift,” with a list of ideas to help you begin to think about your answers. “The cards are a fun and easy way to move through a sequence of

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arms out to embrace the whole community creates a stabilizing effect, which will help everybody move forward.” And whether they know it or not, each of those who follow that path will find their way just a little bit clearer and easier thanks to Newell and Solomon. What to do with wealth? Solomon and Newell have provided one complicated, nuanced answer. But their biggest plea to wealth-holders is to recognize their power and choose something. Anything. Just make sure it’s truly deliberate, and in service of building the world you want to see. And that’s good advice for all of us, no matter how small or large our resources. Learn more about Newell and Solomon’s remarkable partnership and Solomon’s philosophy on the power of money in his new book, “The Clean Money Revolution,” available at JoelSolomon.org in May 2017. Learn more about Newell’s ReWeaving Wealth program at ReWeavingWealth.com.

The New

JOB SKILLS Ask yourself these five questions to make sure you’ll truly be employable in the job market of the future. BY MOE CARRICK

Are you ready to compete and ensure your vibrant employability in the workplace of tomorrow? While technology advances will continue to speed up our world, people do the real heavy lifting of global commerce. Human-to-human connection is what drives organizational performance, and it’s what makes organizations great or brings them to their knees. So before you add another degree or STEM certification to your resume, consider these five questions. Then, invest in growing your ability to work well with other messy, dynamic human beings — because in tomorrow’s job market, these “soft skills” are the real hard work.

DO YOU REALLY UNDERSTAND EMPATHY AND CAN YOU SHOW IT TO OTHERS?

People often confuse empathy with sympathy, but it’s actually quite different. Dr. Brené Brown defines sympathy as feeling for someone, and empathy as feeling with someone. Empathy is an emotional intelligence skill that falls in the social awareness skill set. When we show empathy, we powerfully convey to others that we believe them, that we can imagine the emotions they may be feeling, and that we are simply “there” with them. To be empathetic, we must resist the urge to problem-solve, and rather tune in to the other person’s reality, noticing their nonverbal cues and restraining our own tendency to judge. For leaders, empathy is an essential aspect of engaging employees; for anyone on a team, empathy paves the way for authentic trust. Ask people close to you if they find you empathetic. Notice when others show empathy to you, and what that feels like. Track your empathy effort and notice the results you get in interactions with others.

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DO OTHER PEOPLE FIND YOU COLLABORATIVE AND NICE TO WORK WITH, AND WILL THEY SAY SO?

As human beings, we have an essential need to feel connected to other people. Whether we are introverted or extroverted, we need to feel seen, valued, and appreciated. Margaret Heffernan, author of “Beyond Measure,” describes this essential element of social capital as the mortar that holds the bricks of organizations together and facilitates innovation and results. Spend time understanding the impact you have on the colleagues you work with, and develop the capability to modify your interactive style in such a way that people feel appreciative and positive about having you on their team. Ask people you work with what they see as your strengths on the team. Actively invite regular feedback from people about your strengths and weaknesses with regard to collaboration.

CAN YOU LEAD AND MOTIVATE OTHERS TOWARDS NEW IDEAS, EVEN WHEN THE WAY IS AMBIGUOUS AND SUCCESS IS NOT GUARANTEED?

If we aim to inspire others to change and follow, it’s critical to learn how to build trust based on vulnerability — meaning uncertainty, risk, and emotional exposure. That’s an uncomfortable practice for most of us. Yet Patrick Lencioni, blockbuster author of “The Five Dysfunctions of a Team,” points out that trust forms through acts of authentic vulnerability rather than just the passing of time — and it’s also the foundation of a healthy team. Team members who can say “I don’t know” or “I made a mistake” contribute profoundly to the team’s ability to navigate conflict due to their trust and openness with one another. Practice this in your own behaviors and attitudes with others when the way is uncertain or you feel stressed or uncomfortable. Consciously name your uncertainties, and do not hesitate to own mistakes you make.

DO YOU SPEND TIME AND ENERGY BUILDING RELATIONSHIPS AS IF YOUR JOB DEPENDED ON IT?

Employees today stick around and give their all when they feel seen, accountable, engaged, and activated. If you’re neglecting to form relationships at work, odds are you’ll be seen not as a silent genius working away on greatness in isolation, but as toxic and detrimental to company growth. Spend time thinking about the relationships you have with others at work, and invest energy and time in growing and enhancing them. Don’t leave your work relationships to random interaction; instead, take charge of cultivating deeper and productive partnerships.

ARE YOU ENGAGED WITH OTHERS AND SOCIALLY FLEXIBLE?

This doesn’t mean you have to be an extrovert, as evidenced by Susan Cain’s groundbreaking work on the contribution of introverts to work and the world. But your reputation for flexible, enlivened relationships will pave the way for future opportunities and connections that keep you learning and vibrant. The relationships we form over the course of our careers matter in ways large and small to the introductions people offer us, and to the reputation we each have as a solid member of a team or organization. Putting yourself out there as an engaged and attentive colleague helps others remember you and your contributions. Practice flexibility in your interactions — for example, changing your mind or being open to new ideas. Reduce your tendency to be judgmental by being patient with others and tuning in to their nonverbal social cues. Today’s fast-moving global economy requires more partnership, collaboration, and creativity with others than ever before. Machines can make production more efficient, but they cannot (yet) navigate the soft, squishy realm of people-dynamics. We are social beings hardwired for connection, and the essential talent of tomorrow’s workforce is self-actualization. Get on the bus by relating well to others, or get left behind.

Moe Carrick is the founder of Moementum, Inc., a leadership consulting business and certified B Corp. She grounds her approach in a unifying and undeniable truth: successful work is dependent upon human relationships. Moe feels privileged to work with clients such as Prudential Financial, REI, Nike, Tech Soft 3D, and many others. Find her at moementum.com or on Twitter @moecarrick. CONSCIOUS COMPANY MAGAZINE

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BUILT TO LAST With its Evergreen company certification, the Tugboat Institute is creating a new community of companies that see staying mindfully private forever as the best kind of success. There’s a dominant paradigm in business today, especially in Silicon Valley: Do whatever it takes to grow big, as fast as you can, then sell the company and move on to the next thing. After years as a successful venture capitalist and entrepreneur, Dave Whorton had seen plenty of companies follow this method. Some — including companies he founded himself, like Drugstore.com — succeeded, with profitable exits as they went public or sold to bigger firms. Others faltered along the way. But when a friend came to him looking for funding for a company

Tugboat Institute Summit participants in a yoga session at the Sun Valley, ID, conference of Evergreen CEOs.

she wanted to run for the rest of her life, it got Whorton thinking. Was there a formula to prosperity and success besides the one everybody in his industry seemed to be preaching? Was anyone else thinking differently? What happened to the idea of building a company for the long haul, which he’d witnessed as a high school intern at Hewlett-Packard? To try to answer those questions, Whorton started looking for and interviewing business owners like his friend, whose ambitions were to make a difference in the world but who had also made a

conscious decision to not raise private equity or venture capital. He wasn’t sure whether he would find 20 of them. Now, three years later, he has interviewed more than 300 founders and CEOs who fit that new mold. And he founded a business, the Tugboat Institute, to facilitate a community around the idea. He calls it the “Evergreen Movement,” and he would like you to consider joining — even if you don’t own your own business. We spoke with Whorton about what it means to be an Evergreen company, and why the world needs this mindset.

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THE 7 CHARACTERISTICS OF EVERGREEN COMPANIES Whorton and members of the Tugboat Institute have landed on these seven guiding principles that define an Evergreen company. 1. PURPOSE: Being passionately driven by a compelling vision and mission. 2. PERSEVERANCE: Having the ambition and resilience to overcome obstacles and keep pursuing the mission indefinitely into the future. 3. PEOPLE FIRST: Engaging a workforce of talented associates who excel as a team and are motivated by the mission and the culture, as well as the total compensation, in the belief that by taking care of them, they will then take care of the customers, suppliers, partners, communities, and their families. 4. PROFIT: Not mistaking profit as the purpose of a business, but recognizing it is essential to survival and independence, and the most accurate measure of customer value delivered. 5. PRIVATE: Taking advantage of the ability of closely-held private companies to have longer investment horizons, greater confidentiality around strategies, and more operating flexibility than public or exit-oriented businesses. 6. PACED GROWTH: Having the discipline to focus on long-term strategy, balance short-term and long-term performance, and grow steadily and consistently from year to year. 7. PRAGMATIC INNOVATION: Embracing a continuous improvement process built around taking capital-efficient, calculated risks to innovate creatively within constraints.

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This idea of an Evergreen company, and putting a name to it and creating a community around it: why is that game changing? Dave Whorton: Because we’ve too narrowly defined what business success looks like. Everybody should understand there is an alternative approach to building a company. Silicon Valley is all about growth; don’t worry about profits. In Evergreen, it’s about getting to profitability, then growing from your profitability. It can be good for employees, customers, suppliers, the community, owners. But you have to take a much longer planning horizon, and you’ve got to not expect it to be a silver bullet. It’s a long, persistent process of change and innovation and growth. That idea is pushing against a culture that has become prevalent in a certain community; Silicon Valley and maybe business schools. But on the other hand, it also feels like what was normal 50 years ago. DW: Yes. I’ve had people say to me, “Dave, this is old-school. This feels like the old Midwestern values.” It’s old-school intersecting with the energy and ambition of Silicon Valley; that cultural feeling like “we’re going to make a difference in the world. Over time we’re going to become an impactful, scaled business, and through that business we’re going to do tremendous good.” I’m not saying Silicon Valley is essentially bad. I love the spirit of it. Hewlett-Packard 30, 40 years ago had that spirit. It was oldschool and it was innovative. It had that energy and that can-do attitude.

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What did you find through all your interviews? What distinguishes these companies? DW: We ended up coming up with a list — the Seven Ps (see left) — to describe what I found. A couple of things stood out immediately. One, by definition of the people I was interviewing, these were all private companies. But they saw strategic value in being private. The experiments they could run, the practices they could try, they wouldn’t be able to do if they were on the traditional path of raising venture capital equity or going public. There’s a playbook that’s expected there that wouldn’t give them that flexibility. Also they know that being private for the long-haul means that they don’t have to do quarterly reporting, that they don’t have to disclose information to short-term-oriented investors. Second, most had been profitable almost from day one. They usually had extremely thin teams in the early days, but felt that was the way to stay nimble and to get to profitability and figure out what the customers really wanted. Next I noticed just how purpose-driven these entrepreneurs were. I don’t think a single one of them said, “The reason I’m doing this is to make money.” Of course, if they build a valuable company that delivers great services or products, and do it profitably, that’ll happen, but they’re always very quick to say, “But that’s not why I’m doing this. That’s just a byproduct.” Then that often led to a meaningful conversation around their teams; they deeply believe in the people. Taken to the extreme, some of the companies had open books with all of their employees. That was often

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coupled with generous profit-sharing plans; “If you keep helping me build a profitable company, I’m happy to share some profits in both cash and other benefits.” Another thing I heard is that if you’re going to build a company to last a hundred years, you’re going to need tremendous perseverance, because there are going to be ups and downs in your industry and in the macro environment. I heard many stories of what people had to do to get through tough times. It was often in the context of “people first.” They went to the team and said, “Look, it’s 2009. Revenues have slowed down and we’re going to go unprofitable. How do we do this, guys? How do we solve this problem?” It was this sense that they’re all in it together, which I thought was terrific. And then the other of the Seven Ps — paced growth, pragmatic innovation — those were ones that I heard not from all, but from some. Particularly in companies that had been around for 30 or 40 years, innovation was just wired into their culture at all levels. With growth comes change, and with change comes the need for different approaches and ideas and products. What does it mean to officially become an Evergreen company? Is there a certification? Is it like being a B Corp? DW: We just announced our Certified Evergreen program in the summer of 2016. We’re going to use the Seven Ps as a set of evaluation criteria to help people understand how Evergreen they are. They’ll submit data and information and surveys to us. We’ll validate that information and then we’ll let them know how they did. The idea is that it’s a high quality standard: There’s real data. There’s real surveying. There’s real validation. That allows them to then go out and say, if they pass, “We’re a Certified Evergreen company” and hopefully take pride in that recognition. We’ll be accepting applications at the end of 2016 and start certifying for 2017. What kind of specific metrics are you using to tell whether somebody really is being good to its people or purpose-driven? DW: All this stuff I like to do in a collaborative way. So we have a working group of members of the Tugboat Institute who are doing that with us right now. We’re looking at each of the Seven Ps and asking, “What is the qualitative and quantitative information we need to validate how somebody is on that P?” As you might imagine, looking at certain things is going to be easier. Knowing if somebody is private and has not taken outside investment that requires an exit, that’s pretty clear. But how do you measure perseverance? As far as we know, there isn’t really data to do that. That’s going to have to be stories. What has

WHORTON’S TIPS FOR FOLLOWING THE EVERGREEN PATH > INCORPORATE AS AN LLC

It makes more sense tax-wise if you’re ultimately going to be distributing cash to yourself as an owner. In a C Corp structure, you’ve got to pay corporate taxes and taxes on your dividends. In an LLC structure, you’re taxed just one time as the individual owner. Also, if you ever change your mind someday, it’s much easier to move from an LLC to a C Corp than the other way around.

> FOCUS ON THE MOST PROFITABLE EARLY OPPORTUNITIES

You may have half a dozen ideas that you’d love to offer right out of the gate, but which would require millions of dollars. Through interviews and testing and experimenting, decide which of those have the most leverage, and focus there first. If you have a business model that absorbs a lot of cash versus a business model that generates a lot of cash in the same industry, go with the business model that generates a lot of cash up front. Ask “How can I have my customers finance my growth versus having outside parties finance my growth?”

> ACCEPT MODEST CAPITAL, WISELY

Often a business does need a little bit of capital in the beginning, though it might be a lot less than Silicon Valley would suggest. Spend that wisely and source it from people who have bought into the idea that you might be an Evergreen company, even if you’re not sure yet. It’s also ok to use a little bit of debt financing.

> BE VERY HONEST WITH ANY INVESTORS YOU DO BRING IN

Be clear from the start that you don’t ever intend to sell the company or go public. You want the angel investor who says, “If you want to run this privately for the rest of your life and send me dividends, I’d be delighted to see that.”

> COMMIT TO BEING FAIR TO YOUR EMPLOYEES

Pay market-competitive salaries and overtime; provide good benefits. Set up a profit-sharing program to ensure that employees gain some of the upside of helping build a successful company — and then don’t cap it or ever take it away.

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that leader and that team done to demonstrate that, in very difficult situations, they’ve fought their way through and strengthened the company? That’s a work in progress. And then it’s going to evolve. We’ll get smarter and smarter about it. This is something that will be good at the beginning and will continue to get better over time. You can’t just say you’re certified and it’s forever. No, no, no. You’re going to have to submit annual data. Then every couple of years, you’re probably going to have to go through a pretty rigorous recertification process. A key piece: The Tugboat Institute membership is for the CEOs and presidents of these companies, but Certified Evergreen could start from any employee. I can see a 24-yearold Millennial saying, “I really want to help my company certify as Evergreen,” and leading the charge. Does the world need another certification? How do you see yourself in relation to B Corp certification, for example? DW: All of this stuff is good. People have asked me the same question about YPO [Young Presidents’ Organization]. They say, “Dave, you’ve been a member of YPO for ten years. Do you see this as an alternative to YPO?” No. It’s a complement to YPO. I say the same thing with B Corp. I don’t see us in competition with anybody because I think the more important thing is that we’re all moving forward with this different way of thinking about business. With B Corp in particular, there’s a lot in common and there’s some differences too. For example, you can be a public company and be a B Corp. You can be a venture capital-backed company and a private equity-backed company and you can be a B Corp. Those would be knockout criteria for us. We’ve got a narrower community. We’re putting additional emphasis on the importance of being able to stay private indefinitely. Forever. These are good values for building businesses. I would love to see

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Dave Whorton (left) interviews Howard Behar, former president of Starbucks.

“We’re putting additional emphasis on the importance of being able to stay private indefinitely. Forever.” Evergreens thrive all over the world, in contrast to everybody thinking the only way to do this is to grow really fast and raise outside money and sell it or break. What’s giving you hope? DW: The people in this community. These are truly remarkable human beings. They have the courage to do something they know in their gut is right. They’re acting in a way that’s very contrarian to what everybody in the world says they should be doing, and you just have to appreciate people like that. At the beginning, I didn’t know if there were a half a dozen people who built businesses under these values. Now I know there are hundreds if not thousands, and maybe tens of thousands. They just have to be awoken. That gives me tremendous optimism, because that means

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there’s a chance there can be a huge number of employees having really meaningful experiences, engaged in their work, and learning how businesses work. They’re going to leave those businesses someday and go create their own businesses and live those values, and that’s going to get spread further. Most Evergreen CEOs, while they’re investing tremendous amounts of energy in educating their employees around financial literacy and how to be great businesspeople, are more than happy to see those people leave and start their own companies. They view it as part of their role in society, to create the next generation of really talented entrepreneurs. I’ve never seen that before. In the Valley, it happens for sure, but it’s not deliberate. They’re doing this deliberately. Those are all reasons to be optimistic. Photos: Tugboat Institute

HARNESS THE POWER OF

Learn how theories of systems change can help you transform your company into an industry leader.

BUILDING THE BUSINESS Thanks in part to Darcy Winslow’s leadership, Nike Inc. is a worldwide trailblazer in reducing waste and toxins in footwear and apparel manufacturing supply chains. But the company didn’t always care about the issue. The change started when Winslow asked a simple question: “What’s in our product?” and helped trigger a deep, new, systemic approach within the organization and the extended value chain. Now Winslow is a co-founder and managing partner of the Academy for Systemic Change, a 10-year initiative with a mission to help changemakers learn to understand and leverage the forces and interrelationships that shape the behavior of systems, in order to act more in tune with natural processes as they try to make a difference. We spoke with her and another co-founder, systems-change guru Peter Senge, to create this quick-and-dirty guide to their way of thinking. “Understanding systems change is the key to eventually repositioning your whole business as a real leader in issues that historically no one even thought were your concern,” Senge says. Here are 11 things to know about systems change to get you started. 1. ALL REAL CHANGE IS “SYSTEMS CHANGE” “It can be a very off-putting term,” Senge says. “A lot of people interpret it as, ‘That’s what CEOs or presidents of countries do.’” But all real, substantive change involves systems changes, whether in a company, an industry, or even just a family.

3. SYSTEMS CHANGE IS ABSOLUTELY NECESSARY The world’s most pressing problems are big, systemic ones: climate change, poverty, income inequality, etc. “This type of thinking is becoming more critical now than ever, given the trends of what’s happening in the world,” Winslow says.

2. CHANGE IS BOTH EXTERNAL AND INTERNAL Sometimes the most obvious changes are external — rules, policies, formal structures, etc. “But those external aspects are a reflection of our assumptions,” Senge says. “External aspects don’t change without changes in people’s underlying mental models and ways of thinking.”

4. SYSTEMS CHANGE DOESN’T HAVE TO COME FROM THE TOP Anybody within an organization can initiate change by engaging stakeholders to create a vision of a new future (see “4 Questions to Jumpstart Systems Change,” next page).

5. GO BEYOND A PROBLEMSOLVING MINDSET When you start by focusing too much on what you want to change, that moves you into what Winslow calls a “siloed or reductionistic approach,” and you tend to stall. Instead, she recommends that you flip the language from a problem to an opportunity by asking, “What is the future we want to create?” She says, “A creative orientation is a much more positive, high-potential way of engaging the system.” 6. GET STARTED BY GETTING STARTED “If it’s a long journey, that means almost by definition you’ve got to start by focusing on things that are far, far short of the ultimate goal,”

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Senge says. “But those are things you can actually get moving on.” Build coalitions and collaborations around them. Know that it’s not about getting the vision perfect from the start, it’s about getting going.

4 QUESTIONS TO JUMPSTART SYSTEMS CHANGE

7. GATHER THE RIGHT PARTNERS No matter what challenge you’re facing, you can’t do much of anything by yourself. Recruit people who have passion about the issue, because systems change happens over a long period and you need people who will retain their commitment and bring others in. Also pay attention to those in formal roles of authority. “It’s not one or the other; it’s always an intersection of the two,” Senge says. It would be naïve to neglect to bring the key decision-makers on board, but don’t get caught up in thinking that you can’t doing anything without that power. “A lot of times people in power positions play a key role, but they don’t play the key roles in actually leading change,” explains Winslow.

Try asking these questions to flip what seems like a problem into an opportunity.

8. FIND YOUR KEY QUESTION Sometimes change starts with asking a simple question. “For us at Nike, it was, ‘Do you know what’s in your product?’” Winslow says. Other companies have asked, “What resources do we need to be able to make our product?” Even if your eventual goal is to be perceived as an industry leader on social issues, make sure to anchor the question in something perti-

nent to the business. “None of this is charity,” Senge says. “If you’re doing it because you think somebody should do it and you want to be a do-gooder or make people feel good, forget it.”

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What is possible? What is the future we want to create? How do we create the conditions to bring about this new possibility? What are the steps we can take to start to move in that direction?

9. KEEP YOUR SIGHTS ON THE ACHIEVABLE Look for solutions in what Senge calls “the shallow end of the pool” — something that’s immedi-

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ate, relevant, and where you could start to see results within about six months. “When you first get started, you can have this grand vision and it can be very daunting to engage the organization in something so radical,” Winslow says. “Too often people dive right into the deep end and drown.” It takes years to get to the point where a company may be open to collaborating with competitors, for example. 10. LEARN TO BE A TRANSLATOR Even once you’ve found a solid question to address, you may have to do some work to make its business relevance clear. Try to understand what may prevent someone in a particular role from engaging. What information is missing? Try to see the situation from the other person’s perspective. If they sit in the financial world, how do they see the organization? How do they see their future? 11. GET OFF YOUR SOAPBOX “A lot of times people get motivated by big issues and they become a zealous advocate, which is understandable, but it usually doesn’t get you very far,” Senge says. “People feel like you’re pointing fingers at them.” Anger and fear can motivate people to react for a short period, but they don’t bring out creativity or imagination. “You’ve got to make the work fun and exciting,” Senge says. For more about the Academy For Systemic Change, go to academyforchange.org

FOOD & AGRICULTURE

Beyond Meat CEO Ethan Brown is on a mission to reinvent the human relationship with one of our most primal foods: meat. Here’s what he’s learned so far.

AT A GLANCE Location: El Segundo, CA Founded: 2009 Employees: 125 Traction: In 11,000 grocery stores nationwide Recognition: Named #1 Food Innovation for 2014 by Fast Company Structure: Private for-profit

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eat doesn’t have to come from animals. That’s the radical perspective shift that Ethan Brown, founder and CEO of Beyond Meat, is trying to sell — and not just to vegetarians: He wants to put plant-based meat at the center of plates all across the world, including via mainstream channels such as fast food restaurants. “A large segment of the population loves [animal] meat but is beginning to realize that there are reasons they may want to consume less of it,” Brown explains. High meat consumption has been linked to health problems ranging from heart disease to cancer, and animal agriculture is a huge water user and a major contributor to climate change, pollution, and deforestation — not to mention the violence involved for workers and the animals themselves. But Brown insists that even people attuned to these issues can continue to enjoy meat. That’s because Beyond Meat’s goal is to offer them a “plant-based meat” indistinguishable from its animal-protein equivalent.

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The Beyond Burger is sold in meat cases and bleeds beet juice when cooked.

At the core of Brown’s plan is the idea that we’ve been thinking about “meat” all wrong. While we usually define meat by its origin — chicken, cow, pig, etc. — Brown wants people to think about “meat” in terms of physical and chemical composition. “At a high level, meat is basically fat, protein, and water,” he says. If you can source those elements from plants and assemble them in the architecture of animal muscle with the same aroma, taste, and structure, he asks, then “Who’s to say that’s not meat?” So far, Beyond Meat’s plantbased chicken strips, burgers, and beefy crumbles have earned a loyal following from the vegetarian community, positive reviews from food critics (Alton Brown called the

chicken strips “most impressive”), and a roster of professional athletes who swear by the food’s power to keep them fueled. The brand’s latest offering, an ultra-realistic hamburger patty called the Beyond Burger, sold out in an hour on its launch day at a Boulder, CO, Whole Foods Market. Meanwhile, the brand has also attracted big-name supporters: Its high-profile investors include Bill Gates and Twitter founders Biz Stone and Ev Williams, whose Obvious Ventures put in $17 million. Former Oracle president Ray Lane, Seth Goldman of Honest Tea, and former McDonald’s CEO Don Thompson sit on the board, and the company’s scientific advisors include researchers from Stanford,

UCLA, and NYU. With star power like that behind him and business on track to double in 2016, Brown just might have a chance of achieving his audacious goals. We caught up with him to hear more about his vision for the company and understand his strategy for changing how the world thinks about meat. Is it fair to say that your mission at Beyond Meat is to make animal agriculture obsolete? Ethan Brown: My mission is to create meat directly from plants so you no longer need to use the animal. How the meat industry changes, I have less influence over that. Proving that you can do this is really my mission.

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Brown’s Top

Pieces of Advice for Mission-Driven Entrepreneurs 1. GET RID OF YOUR SAFETY NET “Part of that includes investing in the business yourself; you make decisions differently when you put your own savings into it. Put yourself in a position to have no option other than to be successful, and you’ll be really surprised at the lengths you’ll go to.” 2. BE HUMBLE “Don’t be one of these companies that thinks they can just hire a bunch of smart people out of good schools and disrupt an industry. Hire people who understand the industry, give them the support they need, and listen to their wisdom — your life will be easier. I’ve watched companies that haven’t done that and they do silly things. They waste a lot of money.” 3. MAKE SURE THE BUSINESS’S MISSION IS WHAT YOU WANT TO ACCOMPLISH IN YOUR LIFE “For me, [Beyond Meat’s] goal is central to how I define myself as a person. If you feel you’re truly on a mission in your heart and your spirit, you can tap into something that’s much greater than just building a successful business for monetary reasons.”

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How will you know you’ve fully accomplished your mission? EB: There are two things. One is a very objective outcome, which is to have gotten this right from a scientific perspective, to be able to provide center-of-the-plate protein in the form of meat that has not come from an animal, where 99 out of 100 people say that they are completely indistinguishable. That is success. From a market perspective, I have a very personal goal. My kids are 11 and 12. By the time they graduate high school, I want them to be able to go to any major fast food chain, whether it’s McDonald’s, Burger King, Wendy’s, etc., and have a Beyond Burger or equivalent, whatever we’ve iterated to at that point, and have it be a non-event. Not have it be something special or novel or unique, but commonplace in the same way that a Big Mac or a fish fillet is today. Impossible Foods has a similar mission, and launched a realistic plant-based burger at a restaurant in New York in July 2016. Is having competitors in this space now good or bad with regard to your mission? EB: I think it’s good. The meat market in the United States is almost $200 billion. There’s plenty of space for multiple companies, and if there’s more than one company, it will encourage people at the academic level to get into this field. It’s also good for our team to have a credible competitor. In our conference room, for a long time we had a sign that said, “There’s someone, somewhere working harder than you to do the very thing that you’re trying to achieve.” I believe that type of mentality is really important. You can’t assume that your goal isn’t going to be achieved by somebody else. You always need to be working the hardest that you can in the

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most focused and disciplined manner if you want to be the group of people that gets this right. For about two million years, we’ve been consuming meat — since even before we were defined as homo sapiens. Meat really contributed so much to who we are: Many anthropologists will attribute the size of our brain, for example, to the high nutrient delivery of animal meat. Everything about meat is important to our culture. So if we’re going to be the first group of people to separate meat from an animal, we have to have an almost religious commitment to that idea. Because [eating meat from animals] is something that we’ve been doing for so long, to create a new form of meat directly from plants will be a very significant event in human history. I always joke with the scientists here that it’s a lifetime employment project for them, because I don’t think we’re going to be perfect any time soon — why would you? [Humans’ relationship with meat] took many years from an evolutionary perspective to get to where it is today. To think that over the seven years of the company’s history we could get it all right, that’s naïve. Are there particular role model CEOs or leaders you look to for inspiration in leading this kind of innovation? EB: I’m blessed to have a strong board. But I also look to the athletic world quite a bit for thoughts on management — how to get people focused on a single goal, and how to get them to believe in that goal and to block out distractions and other priorities. Anyone from John Wooden to Phil Jackson. I think there’s a lot of wisdom in that work of how to organize people around a single goal. Is there any particular practice that you’ve taken from the sports world?

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EB: It’s basic human values that ultimately lead to a successful team. Are we sharing the ball? Are we sharing credit? Are we respectful of one another? Do we give everyone an opportunity to express who they are and to attain their own selfrealization through the company? Those are the things, at the end of the day, that matter more than someone’s capability on a spreadsheet. I’m envious of the singularity of focus that a lot of athletic teams get to have. They start the season, they say, “I want to win the NBA Championship,” and then they organize themselves around that. It’s that relentless pursuit of a single goal that I think is so important.

“If we’re going to be the first group of people to separate meat from an animal, we have to have an almost religious commitment to that idea.”

Global industrial-scale-anything is hard to do without pretty serious negative externalities. How are you guys balancing achieving your goals regarding growth and market penetration while still mitigating Beyond Meat’s own impact on the environment or communities or workers? EB: There’s a saying I share a lot: “The world is as we make it.” We have the ability to influence what kind of world we’re living in. Providing a plantbased meat in a way that’s harmful to the environment is just not consistent with the type of world we want to live in, so we’re not going to do that. Every chance that we get, we try to apply that lens of, “Let’s do this as sustainably as we possibly can.” But I will say I’m a fan of this idea that you can’t serve too many masters. It’s very easy to get caught up in the trap of trying to do that. We often get asked, “Can you make all your ingredients organic?” “Can you have an ingredient list that is no longer than my pinky?” and things of that nature. You can try to do that, but if you also want to serve mass market, you’re going to get off track. I try to think about it from a very broad perspective — if we can get this right, we can truly create meat that fills the center of the plate for mainstream consumers throughout the world. By virtue of being so much more efficient in how we produce that meat, it will be a huge win for climate

Beyond Meat founder Ethan Brown imagines a world where mainstream, centerpiece protein comes from plants.

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“At a high level, meat is basically fat, protein, and water.”

change and for natural resource use. It doesn’t mean we have the freedom to ship our product in Styrofoam, but at the same time, I’m focused very much on that goal. We certainly do lose some early supporters who say, “I wish this was organic,” or “How can you possibly use plastic in your packaging?” But I think you’ve got to tackle one thing at a time. How does workplace culture fit into that equation? Is that something that could be one of these “too many masters,” or is that a key to achieving your goals? EB: I’m laughing because… we have a lot of extremely bright scientists here from the best universities, the best institutions, etc. And I remember walking in one day and on one side of the lab they had the heat on. On the other side, they had the AC on. I was like, “Guys, we’re trying to solve climate change here.” It was just by mistake. They hadn’t figured out the system yet. But it’s little things like that. What messages can we send? “When you leave a room, take the lights down.” “Do you really need AC on this particular day?” Everywhere you go in the company you’ll see signs about what our goals are. I’m looking at them in one of our conference rooms. There are four posters up. One is, “Positively impact climate change,” one says “Improve animal 94

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welfare,” another says “Address global resource constraints,” and the last one says “Improve human health.” We’re trying to build a company where the motivation for doing this is always front and center. You’ve been talking about your product being fairly indistinguishable from animal meat on a chemical level. How is it both better for your body and exactly the same? EB: This is part of the reason I’m very thankful to have these talented scientists with us. We said to them, “Make it indistinguishable [from animal meat] from an experience perspective and from a positive nutritional perspective, but you can’t put in tons of saturated fat and you can’t add cholesterol.” How do you then make it as enjoyable without those fat levels? It’s a real challenge. My kids eat this product every day. I want to make sure I’m not loading them up with tons of saturated fat. There’s ways you can get there, but it creates a tougher set of boundaries than if you just said, “Hey, make this thing taste great.” What trends do you see for your industry moving forward? EB: Something that’s amazed me over the last seven years is just how much more pull there is for these products than there was when we started.

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Today, our biggest issue is production capacity; we just don’t have enough of it. That was not always an issue. There were years where we overproduced and couldn’t sell everything we made. It’s completely different now. I think you’re going to see more and more plant-based eaters and more and more plant-based protein on the plates of mainstream consumers. It’s incumbent upon us to make that product indistinguishable from its animalprotein equivalent. If we don’t do that, we’re not going to be successful. If we can continue to research and innovate and get it to the point where there’s no tradeoff whatsoever, I think you’ll see a very sizable part of the US population consuming plant-based meat on a regular basis. What’s giving you hope? EB: Consumers want this to be successful. They’re rooting for us. At the end of the day, people sit down and think, “Okay. This choice is more sustainable. Obviously, it’s more humane and it’s better for my body. I want to make this choice.” People are inherently drawn to try to do the right thing. If we can get the science right and get it to where taste and aroma and texture is as satiating as an animal protein, people will make that choice; they’ll make the right decision. That gives me a ton of hope. Photos: Beyond Meat

parting thought...

“I have a different definition of evil from most people. Evil doesn’t have to be an overt act; it can be merely the absence of good. If you have the ability, the resources, and the opportunity to do good and you do nothing, that can be evil.” - Yvon Chouinard, founder of Patagonia

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