Posted tagged ‘Conscious Capitalism’

The Week in Ethics: IBM Global CEO Study, Values Empower Employees

May 31, 2012

Interviewing 1709 CEOs from 64 countries and 18 industries, (from September 2011 to January 2012) IBM identified that the top organizational attribute to draw out the best from their workforces was ethics and values (65%),  followed by collaborative environment (63%), and purpose and mission (58%); these findings are part of IBM’s 2012 study Leading Through Connections.

IBM set out to find out how CEOs are “responding to the complexity of increasing interconnected organizations, markets, societies and governments,” what they call “the connected economy.” The highly connected era, changing how people engage, puts new demands on leaders.

The study findings indicate that CEOs intend to differentiate their organizations through “new and deeper connections,” driving outperformance through:

  • Empowering employees through values
  • Engaging customers as individuals
  • Amplifying innovation with partnerships

Focusing here on values — in this highly connected world environment, openness, transparency and collaboration become extremely important. Each has implications for corporate culture.

Openness brings with it vulnerability and risk. To be effective, the study points out: “As rigid controls loosen, organizations need a strong sense of purpose and shared beliefs to guide decision making. Teams will need processes and tools that inspire collaboration on a massive scale….Organizations must help employees develop traits to excel in this new type of environment.”

Growth-market CEOs are 79 percent more likely to make significant changes to their organizational values over the next three to five years than are CEOs of mature market companies, the study found.

According to IBM’s study, “…to develop a shared belief system, employees must help create it.” Rather than becoming more rule based, the study suggests “seek to eliminate those (rules) that can be ‘controlled’ through values.”

The CEOs surveyed told IBM that three leadership traits most critical to steer their organizations effectively are: inspirational leadership, customer obsession and leadership teaming across the C-suite.

Thinking about the IBM study, these CEOs appear to have found a possible remedy to help business regain what has been lost in public confidence in the last several years. Empowering employees through values means they and the organization are driven by a purpose that defines shareholder value in broader terms than profit.

How employees will be led to internalize company values and purpose will require a lead-by-example tone at the top, an inspirational leader who engages and empowers. In my experience, the most evident examples of consistently inspirational leaders have been at common purpose companies, companies practicing  conscious capitalism and those committed to investing in shared-purpose cultures.

If companies plan to differentiate themselves through ethics and values, they will transform business and the world.

There is a lot of work to do. It will be worth every effort.

Gael O’Brien       May 31, 2012

The Week in Ethics

Gael O’Brien is also a columnist for Business Ethics Magazine. Her May 31, 2012 column is Women Advancing to the C-Suite: Why so Difficult?

The Week in Ethics: TOMS, Starting Something that Matters

September 29, 2011

When Social Responsibility is really a part of the character of the company — rather than one of the many things a company does that stakeholders expect — it becomes an organic part of the story of who the company is, what it stands for.

Social Responsibility is second nature to companies that are aligned with the principles of Conscious Capitalism. For the Container Store, Stonyfield and TOMS, among many others, having a successful business is linked with a mission to impact society in a positive way.  For these companies social responsibility is in their identity and business strategy.

A recent book, Start Something That Matters, by Blake Mycoskie, tells the story of TOMS, but the larger point is what happens to leadership when the mission is allowed to transcend the leader.

TOMS name evolved from the idea of Shoes for a Better Tomorrow and Tomorrow’s Shoes. For every pair sold, TOMS donates a new pair to poor children. Since its founding five years ago, TOMS has donated one million pairs of shoes to needy children.

While TOMS story is significant, Mycoskie’s focus invites readers to find and develop their own story. He relies on   entrepreneurial advice  to start small, taking one step at a time. His table of contents includes wisdom like: “face your fears,” “be resourceful without resources,” “keep it simple,” “build trust,” “giving is good business” and “the final step.”

“When you have a memorable story about who you are and what your mission is,” he points out, “your success no longer depends on how experienced you are or how many degrees you have or who you know. A good story transcends boundaries, breaks barriers, and opens doors.” He adds that this is not only a key to starting a business, but also “to clarifying your own personal identity and choices.”

In the world of social media in which we live,  a story evokes emotion and forges a connection, he says; people who buy TOMS “talk about the support of our mission rather than simply telling people they bought a nice shoe from some random shoe company.”

Mycoskie’s views on leadership changed. He said he had wanted to become a rock-star business leader, a CEO cult figure of his generation, when he started out in business more than ten years ago in his early twenties. However, the more he learned, the more he aspired to servant leadership. He wanted to create a culture where everyone in the organization feels attached to TOMS, can be a spokesman when appropriate, and is helped to help others perform to their fullest abilities.

At a time when trust is very low – in business and politics – with ongoing examples of leaders not owning mistakes, Mycoskie believes in admitting and correcting them. While there is tolerance for making mistakes, trust is such an important value at TOMS that there is  zero tolerance for breaking trust internally.

TOMS and other conscious capitalism companies help drive awareness that trust is gained through a focus on respecting  customers and employees with both products and work environments that value the person.

Mycoskie says he has shifted the goal for his business. While relieving children’s suffering by giving shoes to those without them is still a powerful driver, engaging more people in identifying and creating solutions to the world’s problems is his goal.

It is a goal that encourages and influences people to start something that matters.

A timeless message for any of us at any age but one that in 2011 seems especially important; it opens up further possibility for what social responsibility can mean in an ever uncertain world.

Gael O’Brien    September 29, 2011

The Week in Ethics

Gael O’Brien is also a columnist for Business Ethics Magazine

The Ethics of Loyalty: Lessons From Conscious Capitalism

July 5, 2010

A mother, who had a few young children with her, was trying unsuccessfully to placate a crying child at the register of a Trader Joe’s food store while a clerk tallied her purchases. When she reached for her wallet to pay, it wasn’t in her purse. The clerk – or more correctly “crew member” as the company calls its employees – immediately told her he would pay for the groceries and she could pay him back.

He didn’t know her. His offer wasn’t part of Trader Joe’s policy or practice; he just quietly did it, he said later, because he felt it was the right thing to do in that circumstance. The mother returned with her wallet to pay him back, and is quick to pass the word now that Trader Joe’s is a wonderful store.

The story illustrates that if a company, like Trader Joe’s, puts a high priority on creating outstanding customer experience, with the expectation that crew members will “look through customer’s eyes;” and at the same time, the company also gives crew members a voice, listens to their opinions and looks out for their advancement, that company can reap the benefits of both engaged people who work for them and loyal people who buy from them.  This is a pretty good definition of win-win.

Trader Joe’s, a specialty grocery, sells preservative-free, organic and regular foods it buys in bulk so it can offer lower prices. By the end of 2010 it will have almost 340 stores in 27 states, according to Doug Rauch, its former president. As Trader Joe’s is privately held, Rauch said he wouldn’t give details about the chain’s profitability except to say it is very successful, enjoys double-digit growth, and is more profitable than Whole Foods. Rauch calls Trader Joe’s a “purpose-driven business”

Rauch’s remarks came recently at a conference on conscious capitalism. Companies that practice conscious capitalism aspire to more than just turning profits; Trader Joe’s, Whole Foods, the Container Store and Stonyfield Farms are examples of successful companies that have a higher purpose. Their definition of stakeholder reaches beyond those who benefit directly from the company, to larger social and environmental purposes affecting society.

Profit is essential. But we’ve seen what has happened when good intentions aren’t acted on and profit is the driver that overrides safety issues, customer interests, and the welfare and ecological environment of a region. Crisis ensues. Toyota, Goldman Sachs, and BP have become capitalism’s fallen angels. Going forward, putting ethical behavior at the center of how they do business might be something to consider when – as we’ve seen all too often lately – all else fails.

Gael O’Brien   July 4, 2010

The Week in Ethics


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