Linkedin X-twitter Facebook Youtube
Traps
Test

Month: April 2020

Sustainable Leadership on the 50th Earth Day

by

Today marks the 50th anniversary of Earth Day, a day on which we honor our planet and recognize the importance of environmental stewardship and our mind-boggling interconnectedness. Since 1970, the world population doubled, from 3.7 billion people to 7.6 billion today. We have made great progress on some fronts, but not nearly enough.

In our triple crown leadership model, there are three mains aims: excellent, ethical, and enduring. We define the latter one, enduring, as “standing the test of time and operating sustainably.” Sustainability can be defined as “meeting the needs of the present without compromising the ability of future generations to meet their own needs” (United Nations) or, quite simply, as “the capacity to endure.”

 

Two Dimensions of Sustainability


We view sustainability as having two dimensions—external and internal—the latter of which is often overlooked:

  • External: ensuring appropriate and sustainable levels of resource consumption, while minimizing harm
  • Internal: sustaining people and maintaining the financial health of the organization

Business leaders of course must address cash, profits, and growth as they manage their organization’s financial health. Here, it turns out, there are not just costs associated with environmental stewardship but real opportunities. Businesses operating sustainably have the potential for:

  • Increased sales
  • Cost reduction
  • Risk mitigation
  • Reputation enhancement
  • Operational efficiency
  • Customer loyalty
  • Pricing premiums
  • Innovation benefits
  • Competitive advantage
  • Talent attraction, motivation, and retention

“We see that sustainability drives growth, cuts costs, reduces risk, and helps us serve a multitude of stakeholders.” –Paul Polman, CEO, Unilever


Of course, these gains are not automatic. Leaders must figure out viable business models and strategies, leveraging innovation and efficient operations while engaging with partners in the community and their supply chains.

None of this can happen without leading people well. Organizations must have a conscious culture that allows people to sustain excellent and ethical work over time.

Here too, we have much work to do. Take, for example, the problem of burnout:

  • 44% of employees report feeling burned out sometimes (Gallup, 2018)
  • 23% of employees report feeling burned out at work very often or always; 28% of millennials (Gallup, 2018)
  • Nearly all of the 72 senior leaders randomly surveyed reported at least some signs of burnout (Harvard Medical School, 2014)
  • 60% of health care workers felt burned out; 21% always or often (Harris Interactive, 2013)

“Creating the culture of burnout is opposite to creating a culture of sustainable creativity.” –Arianna Huffington, Cofounder, Huffington Post, and CEO, Thrive Global

 

The Conditions for Conscious Capitalism


Wise leadership can help create the conditions for “conscious capitalism,” including:

  • Long-term thinking
  • Better benefits and long-term employment for workers
  • Embracing diversity and inclusion in the workplace
  • Consumers valued as key stakeholders and not taken advantage of by deceptive practices
  • Responsible environmental stewardship
  • Reducing inequality (e.g., by addressing executive pay)
  • Uniting communities around common causes and solving problems

See John Mackey and Raj Sisodia, Conscious Capitalism (Harvard Business Review Press, 2013)

There have been big developments on this front in the business world. For example, in Larry Fink’s 2018 Annual Letter to CEOs, he wrote about how companies must have a social purpose and pursue a strategy for achieving long-term growth:


“Without a sense of purpose, no company, either public or private, can achieve its full potential.” -Larry Fink, CEO, BlackRock


This was big news coming from the CEO of BlackRock, one of the world’s largest asset managers, with trillions of dollars in assets under management.

In 2019, the Business Roundtable published a statement on the purpose of a corporation. Columnist Barry Ritholtz wrote the following in Bloomberg about that dramatic statement: “For 47 years, the Business Roundtable has lobbied on behalf of corporate America. Much of that time, it maintained a fiction—that the sole purpose of a corporation was to maximize profits on behalf of shareholders. This philosophy has been under assault for several years now, and this week the Business Roundtable announced it wants to put it to rest. In a widely circulated memo, the 200-member organization reversed itself, writing that ‘shareholder primacy’ is no longer the sole purpose of a corporation. Instead, corporations must include a commitment to ‘all stakeholders,’ which includes customers, employees, suppliers and local communities.” By now, we should all be including the environment in our list of essential stakeholders, given our dependence on its resources and conditions.

According to management theorist R. Edward Freeman (creator of stakeholder theory), “Managing for stakeholders is not about trade-off thinking. It is about using innovation and entrepreneurship to make all key stakeholders better off and get all of their interests going in the same direction.” John Mackey and Raj Sisodia note that the way to enable such stakeholder synergy (avoiding trade-off thinking) “is to focus on value creation rather than on value division,” taking us back to the innovation imperative.

When it comes to the external aspects of sustainability, we are today seeing great advances in areas such as biomimicry, circular economy business models, carbon sequestration, regenerative and restorative practices, and more, in part capturing the attention of the world through the U.N.’s Sustainable Development Goals (SDGs).

These matters are not only the province of CEOs, entrepreneurs, philanthropists, and policymakers. They are our own.

“If the success or failure of this planet, and of human beings, depended on how I am and what I do, how would I be? What would I do?” –Buckminster Fuller


On this 50th anniversary of Earth Day, we must take careful stock and act appropriately—and urgently. So much is at stake.

+++++++++++++++++++++++++++
Gregg Vanourek is a writer, teacher, speaker, and coach on personal and leadership development. He is co-author of three books, including LIFE Entrepreneurs: Ordinary People Creating Extraordinary Lives (a manifesto for integrating our life and work with purpose and passion) and Triple Crown Leadership: Building Excellent, Ethical, and Enduring Organizations (called “the best book on leadership since Good to Great“). Take Gregg’s Traps Test (Common Traps of Living), check out his Best Articles, get his newsletter, or watch his TEDx talk. If you found value in this article, please forward it to a friend. Every little bit helps!

What This Pandemic Teaches Us About Business and Society

by

“The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty and we must rise with the occasion. As our case is new, we must think anew and act anew.” –Abraham Lincoln

As an insidious virus spreads around the world, we are wise to stop and ask: what can it teach us?

Much, I think. One question I am drawn to lately is this: what does the pandemic teach us about the role of business in society?

“This moment is the curriculum.” –Jon Kabat-Zinn

 

Shareholder Primacy?

First, some context. For half a century, an epic battle has been raging in board rooms and business schools about the purpose of business. Economist Milton Friedman took the first shot:

“There is one and only one social responsibility of business—to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” -Milton Friedman

His work laid the groundwork for “shareholder primacy theory,” the idea that shareholders should come first when business executives make decisions, that the primary purpose of business is to increase shareholder (owner) wealth, and that the ultimate measure of a company’s success is the extent to which it rewards shareholders. Jack Welch, former CEO of General Electric (in the 1980s and 1990s), is also credited with fueling this idea in practice.

This idea was so successful that, now, many people take it for granted, as business school gospel, as a law of nature. Of course the role of business executives is to maximize profits and reward shareholders. Right?

 

A New Take: Stakeholder Theory

Not so fast. Edward Freeman, a business school professor, had a different idea:

“Business is not about making as much money as possible. It is about creating value for stakeholders.” -Edward Freeman

Freeman’s “stakeholder theory” focused not just on shareholders but also employees, customers, suppliers, communities, and the environment, since these are all necessary for the business to survive and thrive. This was not an exercise in wishful thinking or naive altruism. There is a systemic view and innovation imperative that fuels the engine of value creation:

“Managing for stakeholders is not about trade-off thinking. It is about using innovation and entrepreneurship to make all key stakeholders better off and get all of their interests going in the same direction.” -Edward Freeman

The battle was afoot, continuing even to this day.

 

Systems Under Strain

What does this have to do with a tiny virus (SARS-CoV-2) that causes a global pandemic due to the rapid spread of a novel coronavirus disease (COVID-19)? Much, I think.

Today we see that our health care systems are strained, in some places to the breaking point. These systems are complex, relying on private, nonprofit, and public hospitals and chains and their personnel, equipment, technologies and related links like supply chains, research, labs, insurance providers, laws, regulations, information flows, and data models.

These complex health systems rely heavily on business products and services (e.g., ventilators, masks, vaccines, etc.), which arise from an amalgamation of complex business systems: raw materials, suppliers, manufacturers, distributors, customers, etc., each with their own business models, incentives, and limitations.

These business systems are heavily influenced by complex government systems at different levels—federal, state, and local—which are not used to close collaboration amidst the cascading timing crunches imposed by crises.

These government systems include the three branches of government (executive, legislative, judicial) purposely designed to provide checks and balances to each other (i.e., slowing things down) and an array of challenges and sometimes bizarre influences (e.g., laws, regulations, court orders, campaigns, elections, lobbying, committees, messaging, press briefings, inspectors general, etc.).

During this health + economic crisis, those of us who are parents are also seeing how reliant we are upon a functioning education system, with its own complexities (federal, state, and local laws, regulations, and funding streams). When schools are closed, the impacts on families, workplaces, communities, etc. are vast.

All these systems are affected by a complex financial system. And transportation system. Travel industry. And food industry. Media industry. All of which are complex systems under strain.

All these complex systems exist not only within nations but also across borders, with each country having its own systems and context.

And all of this sits on our planet, itself a vastly complicated system of oceans, winds, climate, biology, chemistry, physics, and more.

Meanwhile, our own personal virus risk profile comes down to an interplay between our own internal systems, including our respiratory and immune systems but also our overall physical and mental health and our own decisions and context related to our work, families, home, movement, and social milieu.

In short, we see compounding strains on systems of systems of systems. In all the death, suffering, and disruption, we are faced with a powerful reminder of just how interdependent we all are, and how relevant systems are to our life, work, and leadership.

 

The Role of Business… And Conscious Capitalism

In an age of global pandemics that threaten our lives and livelihood, business has a vital role to play. Many business executives are facing their greatest professional trial. A retreat to previous thinking about narrow shareholder focus and short-term profits will be a recipe for disaster—for the business and its stakeholders (us). We need more—and must demand more.

This brings us to a newer idea: “conscious capitalism.” John Mackey and Raj Sisodia wrote a book about it and conceptualize it to include higher purpose, a focus on stakeholders (not just shareholders), conscious leadership, and conscious culture.

“Conscious businesses believe that creating value for all their stakeholders is intrinsic to the success of their business, and they consider both communities and the environment to be important stakeholders. Creating value for these stakeholders is thus an organic part of the business philosophy and operating model of a conscious business.” -John Mackey and Raj Sisodia, Conscious Capitalism

The conscious capitalism movement is dynamic and growing, but up against an entrenched ideology and powerful array of forces, interests, and funds. It is not wrong to view it as an epic battle between two versions of capitalism, but we should place this war of ideas in historical context: capitalism has been around for centuries.

Many view Adam Smith’s classic book, The Wealth of Nations (published in 1776), as a landmark of capitalism, but we forget that his prior book, The Theory of Moral Sentiments, provided important underpinning to it.

Capitalism, business, entrepreneurship, and leadership are all social phenomena with ethical dimensions, and have always been so. What’s more, we have always had “flavors” of capitalism. Some are crass, mercenary, brutal, and short-sighted. Others not. Look to the current practice in northern Europe and the Nordic countries as intriguing examples, and that sync well with the way that many family businesses have operated for centuries (e.g., valuing workers, stewarding resources, taking the long view).

No, Milton Friedman does not have a monopoly on the industry of business ideas.

And no, the choice is not between capitalism and socialism.

No, the answer is not to discard the dynamic engine of progress created by a capitalist system of enterprise. It has lifted so many worldwide out of abject poverty and taken so many into days of prosperity.

And no, businesses cannot just hunker down and maximize profits in a pandemic. They are part of the social fabric, with a vital role to play in getting us through the crisis.

No, the purpose of business is not to make a profit.

Profit is the oxygen which allows the business to survive so that it can create value and pursue a higher purpose, for its people and its customers, and ideally also for its community and our world.

“The purpose of business is not to make a profit. The purpose of business is to find profitable solutions to the problems of people and the planet.” -Robert Fish, co-founder, Biggby Coffee

This is not about turning business into charity. It is instead a challenge to recognize the role of business in society and to look for ways for business to “do well by doing good”—a bold creative challenge. The idea, then, is not profit versus purpose. It is both.

“Just as happiness is best experienced by not aiming for it directly, profits are best achieved by not making them the primary goal of the business.” -John Mackey and Raj Sisodia, Conscious Capitalism

These are the hidden lessons of the virus. They are calling us to think and act anew. And the call is urgent.

+++++++++++++++++++++++++++
Gregg Vanourek is a writer, teacher, speaker, and coach on personal and leadership development. He is co-author of three books, including LIFE Entrepreneurs: Ordinary People Creating Extraordinary Lives (a manifesto for integrating our life and work with purpose and passion) and Triple Crown Leadership: Building Excellent, Ethical, and Enduring Organizations (called “the best book on leadership since Good to Great“). Take Gregg’s Traps Test (Common Traps of Living), check out his Best Articles, get his newsletter, or watch his TEDx talk. If you found value in this article, please forward it to a friend. Every little bit helps!

Five Words that Changed Me as a Parent

by

There I was, a new father, my wife and I blessed with a beautiful young daughter, before our second daughter came along.

I had been awed at her birth, feeling the world move. Growing up, I had always hoped to have a family and be a father. I knew it would be a tremendous responsibility to be in charge of someone’s care.

I knew it conceptually and thought I understood it but really had no idea whatsoever—no clue—until I became a father and experienced how magical, and sometimes how trying, it could be.

I recall one day home alone with her, around age two, and we were both out of sorts. I was trying to get things done and felt so much pressure about all she needed and all I needed to get done. I was trying to juggle, but she was not having it. I was overwhelmed. I felt an unbearable pressure.

How is it possible to do all this?
How do others do it?
What’s wrong with me?

I was at my wit’s end, and it just kept getting worse. She resisted everything with her signature strength. I reached a breaking point. Out of ideas, I sensed that my only option was to give myself over to her. Completely. There would be nothing else: 

I am here for you, only you, all for you, totally you.

When I did that, she saw that something in me had shifted, and she stopped resisting. Just like that. A total reversal. Everything was okay, and perhaps would be, as long as we remembered that silent, secret pact.

Take the Traps Test

We all fall into traps in life. Sometimes we’re not even aware of it, and we can’t get out of traps we don’t know we’re in. Evaluate yourself with our Traps Test.

Take the Test

 

Five Words that Changed Me

Some time later, I was talking to a friend about being a father and raising children and he–further along the parenting journey with older children–shared something that stopped me in my tracks:

They are only young once.

With five words, he engraved something on my heart. I suppose it hit me because it was something deep down that I worried about, as someone deeply committed to being a good and present father and also deeply committed to working hard and doing good work in the world and–like so many of us–sometimes feeling caught in between.

Those five words often come back to visit me. I’ve shared them with many friends who are parents.

“Once” is of course a slippery concept. “Once” is the mystical sequence of days that, for us, God willing, can last a couple decades in raising our daughters as they discover their way in the world. And “once” is also the blink of an eye. An eternity, and a millisecond, just the same.

“Young” is also a slippery notion. There’s the miracle of youth, with all its hope, promise, energy, enthusiasms, heartbreaks, insecurities, and triumphs. And there’s also a state of mind, and of being, that can last long after those early years.

In the end, I know he’s right: they are only young once.

We will only have what we have now for a time. We will, I trust and pray, stay deeply connected in the years beyond, but it will be different, as it must be.

Looking back, I want to stand behind these times we had together, as a family, together, connected and committed to a bond like none other in all the world.

So I try to live up to that charge. Some days are better than others, some a complete disaster. But the words keep calling to me and reminding me of this amazing gift before me. Today, like all days, is a good day to treasure it. 

They are only young once.

 

Tools for You

Quality of Life Assessment

Evaluate your quality of life in ten key areas by taking our assessment. Discover your strongest areas, and the areas that need work, then act accordingly.

Take the Assessment

 

Related Articles

 

Postscript: Quotations on Family and Parenting

  • “The fingerprints on the wall get higher and higher and then they disappear.” -unknown
  • “If your children look up to you, you’ve made a success of life’s biggest job.” -unknown
  • “The question isn’t so much, Are you parenting the right way? as it is: Are you the adult you want your child to grow up to be?” -Brené Brown, researcher and author
  • “Everyone knows that if a child’s parent dies, the child will suffer with sadness, loss, and possibly depression. No one thinks about this being the case when a child loses a parent to success.” -Jonice Webb with Christine Musello, Running on Empty: Overcome Your Childhood Emotional Neglect
  • “Parenthood is the most important leadership responsibility in life and will provide the greatest levels of happiness and joy. And when true leadership–i.e., vision, discipline, passion, and conscience—is not manifested in parenthood, it will provide the greatest source of sorrow and disappointment.” -Stephen R. Covey, author, executive, and teacher
  • “If I had written the greatest book, composed the greatest symphony, painted the most beautiful painting or carved the most exquisite figure I could not have felt the more exalted creator than I did when they placed my child in my arms.” -Dorothy Day, journalist and social activist
  • “Imagine life as a game in which you are juggling five balls… work, family, health, friends, and spirit. Work is a rubber ball. If you drop it, it will bounce back. But the other four balls are made of glass. If you drop one of these, they will never be the same.” -Brian Dyson, former CEO, Coca-Cola Enterprises
  • “Every home is a university and the parents are the teachers.” -Mahatma Gandhi, Indian lawyer and transformational leader
  • “I’ve had a wonderful and successful career. But next to my family, it really hasn’t mattered at all.” -Lee Iacocca
  • “The home is the ultimate career. All other careers exist to support the ultimate career.” -C.S. Lewis, British scholar, writer, and lay theologian
  • “Family is a way of holding hands with forever.” -Noah benShea, author, poet, philosopher
  • “Making the decision to have a child is momentous. It is to decide forever to have your heart go walking around outside your body. Wherever our children go and whatever they go through, our hearts are with them, rising and falling with each victory or defeat.” -Elizabeth Stone
  • “Being a role model is the most powerful form of educating… too often fathers neglect it because they get so caught up in making a living they forget to make a life.” -John Wooden, basketball player and coach, one of the most revered coaches in the history of sports

Gregg Vanourek’s Newsletter

Join our rapidly growing community. Sign up now and get monthly inspirations (new articles, opportunities, and resources). Welcome!

Sign Up Now

 

++++++++++++++++++++++++++++++
Gregg Vanourek is a writer, teacher, and TEDx speaker on personal development and leadership. He is co-author of three books, including LIFE Entrepreneurs: Ordinary People Creating Extraordinary Lives (a manifesto for living with purpose and passion) and Triple Crown Leadership: Building Excellent, Ethical, and Enduring Organizations (a winner of the International Book Awards). Check out his Best Articles or get his monthly newsletter. If you found value in this article, please forward it to a friend. Every little bit helps!

Linkedin X-twitter Facebook Youtube