In a profile of him in the New Yorker magazine three years ago, John Mackey was described as a “right wing hippie” who is probably not well understood by most of the upscale shoppers at Whole Foods Market, the hugely successful business he co-founded and has headed since 1980.

Whole Foods Market practically created the large-scale market for organic foods in the U.S.  With some 342 stores, last year it boasted more than $11 billion in annual sales.  The company is often included in lists of most ethical/sustainable businesses.  It supports and distributes Fair Trade goods.  And it has a reputation as a responsible employer, one of only 13 companies included in FORTUNE magazine’s list of “100 Best Places to Work For” every year since the list was created in 1998.

Yet Mackey clearly doesn’t fit the typically progressive political stereotype of an executive focused on corporate social responsibility.  A self-described libertarian, he acknowledges having been heavily influenced by free-enterprise thinkers including Friedrich Hayek, Ludwig von Mises, Milton Friedman and Ayn Rand.  Fiercely anti-union, he has successfully resisted labor organizers at Whole Foods Markets.  And just this month he amended a previous criticism of Barack Obama’s health care law, volunteering to an NPR interviewer that it was not “socialism” but, instead, more like “facism.” (Mackey later said his characterization was a “poor use of an emotionally charged word.”)

In a new book, Conscious Capitalism:  Liberating the Heroic Spirit of Business, Mackey takes shots at multiple targets on the left and right.  While he worships free-market capitalism as “unquestionably the greatest system for innovation and social cooperation that has ever existed,” he also challenges the “myth of profit maximization” as espoused by Milton Friedman and embraced by many to justify short-term financial goals for American business.  While he opposes unnecessary regulation – a favored mantra of American business – he also attacks “the cancer of crony capitalism” in which “crony capitalists and governments have become locked in an unholy embrace, elevating the narrow, self-serving interests of the few over the well-being of the many.”

Whole Foods Market is Mackey’s day job, but for him conscious capitalism is a serious avocation.  He has been involved in several organizations dealing with related subjects and is a director of Conscious Capitalism Inc., a non-profit organization headed by his co-author, Raj Sisodia, who is also a professor at Bentley University.

According to the authors:

Conscious Capitalism is not about being virtuous or doing well by doing good.  It is a way of thinking about business that is more conscious of its higher purpose, its impact on the world, and the relationships it has with its various constituencies and stakeholders.  It reflects a deeper consciousness about why businesses exist and how they can create more value…

Our dream for the Conscious Capitalism movement is simple: one day, virtually every business will operate with a sense of higher purpose, integrate the interests of all stakeholders, elevate conscious leaders, and build a culture of trust, accountability and caring.

And the aspirations are enormously high:

Picture a business built on love and care rather than stress and fear…Think of a business that cares profoundly about the well-being of its customers…Envision a business that embraces outsiders as insiders, inviting its suppliers into the family circle…Imagine a business that exercises great care in whom it hires, where hardly anyone ever leaves once he or she joins…Imagine a business that exists in a virtuous cycle of multifaceted value creation, generating social, intellectual, emotional, spiritual, cultural, physical and ecological wealth and well-being for everyone it touches…”

In addition to Whole Foods Market, companies currently practicing conscious capitalism, according to the authors, are The Container Store, Patagonia, Eaton, the Tata Group, Google, Costco, Amazon.com, Panera Bread, Southwest Airlines, Bright Horizons, Starbucks, UPS, Wegmans, Nordstrom, Trader Joe’s, REI, Zappos, Twitter, POSCO (a South Korean steelmaker) and  “many others.”

Notably absent from that list are most Fortune 500 companies and a number of firms that regularly appear on lists of those exceling in sustainability and corporate responsibility.  In fact, Mackey and Sisodia include an Appendix to their narrative which attempts to explain how conscious capitalism is different – and, in their view, superior - to “corporate social responsibility,” the “triple bottom line,” “shared value,” and other popular terms used to describe most long-term corporate citizenship and corporate responsibility practices.

While the book’s narrative alternates between “I” and “we,” the voice heard most clearly is Mackey’s and the examples used are by far those of Whole Foods Market.   The tenets of conscious capitalism seem to suit new ventures and entrepreneurs far more than mature businesses with decades of corporate cultural baggage.  And it’s often difficult to sort out what’s critical to the practice of conscious capitalism and what’s particular to John Mackey.

For example, according to the book, in addition to contemplative practices such as meditation and Tai Chi, it is “imperative” for an executive interested in becoming a “conscious leader” to eat a wholesome diet which includes being “plant-strong,” eating “primarily foods such as raw and cooked vegetables, fruits, whole grains, legumes, and nuts and seeds, with no more than about 10 percent of calories coming from animal foods.”  (That would presumably eliminate many martini-drinking meat-loving candidates for CEO positions, even if they are skilled in strategies to save the planet.)

If you can filter out that kind of practical and philosophical arrogance, Conscious Capitalism contains a bold statement of optimism about the role of business in society in an age when cynicism often merits out-sized rewards. In fact, Mackey and Sisodia are certain their dream will come true. “One day,” they write,” Conscious Capitalism will no doubt become the dominant business paradigm for one simple reason: it is simply a better way to do business.  It just works better, and over the long term it will outcompete other business philosophies.”

Leaders who are hyperactive -- doing more and more, faster and faster – in their response to an ever-changing, complex world are less likely to be innovative and are more vulnerable to making ethical mistakes, according to Kevin Cashman.

Why? Because “when we get hyperactive, we get self-focused and we move into coping,” says Cashman, who is a global thought leader on leadership development. Hyperactivity wears us, our team, and others out: “it puts us at character, ethical, and innovation points of compromise.”

I talked with Cashman recently about his new book, The Pause Principle: Step Back to Lead Forward, and how it can connect the dots in ethical behavior. The distinction he makes between coping and character adds to our growing understanding of the behaviors that set in motion the conditions for corporate scandals, crises, and financial meltdowns.

“Many leaders’ characters would barely recognize their reputations if they met them on the street,” he writes in the book. “Character, in its highest state is the leader who serves; in its lowest state, it is the leader who self-serves.”

How does pause fit into this dynamic? Cashman describes the Pause Principle as “the conscious, intentional process of stepping back, within ourselves and outside of ourselves, to lead forward with greater authenticity, purpose and contribution.”

As authenticity is a much used word, I asked him to elaborate. “We are authentic to our current state of development,” he said, “but inauthentic to our potential state. It is that tension that keeps us growing in authenticity; not being complacent that we are there, because in all of life, if we ever think we are there, life will teach us that we are not.”

He makes the same case for not being complacent in one’s own ethical development. He explains that most people view character as either you have it (100 percent) or you don’t (zero); they put themselves in the 100 percent category, not wanting to admit any lack. The reality, he says, is that we are all going in and out of character all the time.

I asked Cashman about the juxtaposition in the book between character and coping. He indicated that we tend to go into coping when we are more in the survival mode: “we collapse into ourselves for protection, and sometimes we go into fear or mistrust, so we collapse “more into self service and self interest.”

Family patterns, histories, and cultural bases for ethical behavior are some of the factors that stimulate going into coping. The key, he says, is to have an awareness of “when do we go there, when are we vulnerable, and what are the triggers that put us into self interest.”  For some, the coping response is tweaked by relationships, for others it is more financial. In turn, he adds, we need to be aware of what the situations and conditions are when we are more in character and what our behaviors look like.

Being in coping and being in character create different physiological states; our bodies and our emotions react differently in each. “Physiology doesn’t know how to lie: it just reacts, it just expresses what is happening,” unlike the mind, he says, that will lie to us all the time. Our developing and deepening our self awareness moves us away from our intellect and sense of self image to allow us to see when we are about to go into coping and what we need to do not to head down that road.

I asked about the role of coping in financial crises. The core of the financial crisis is a character crisis, he said. “It is an ethical crisis because when you trace back most of these disasters, they go to the core of very competent people who are not thinking about others and are thinking about self;” While we can regulate, he says, “if people are in power with great competency and low character development, we are all at risk.”

The purpose of pause is to bring clarity to complexity and enable the leader to move from a hyperactive way of being, that relies heavily on coping, to transformative leadership which is about character. I asked Cashman how the Pause Principle addresses ethical breakdowns.

He indicated that breakdowns occur when we are not attending to three things:

• Not pausing enough for self awareness to see if we are in self-interest versus the broader interests of constituencies we serve;
• Not pausing enough in high complexity situations when we are likely to make mistakes, miss something, or make poor decisions; and
• Not pausing enough in high importance situations where decisions are far reaching, or very strategic, or have a lot of downside potential.

In addition to the lens of character and coping, Cashman’s book includes 20 “pause points” with questions to reflect on one’s leadership in many areas, as well as offering seven pause practices.

In an ever-complex global arena, with constant pressure on short-term results, the power of pause, especially when we consciously direct it to our leadership and what we say we stand for, can offer the best of all possible risk mitigation strategies.

Gael O’Brien is a Business Ethics Magazine columnist. Gael is a consultant, executive coach, and presenter focused on building leadership, trust, and reputation. She publishes the The Week in Ethics

Marjorie Kelly, co-founder and former President of Business Ethics magazine, describes her new book, Owning Our Future: The Emerging Ownership Revolution, as “a journey into the territory of the possible, a kind of advance scouting expedition for the collective journey of our global culture.” She travels from Cleveland to Copenhagen (and points in between) to document the positive forces behind an emerging “generative economy.”

Critical to this new economy, Kelly suggests, is the concept of ownership.  “Ownership is the underlying architecture of our economy,” she writes.  “How ownership is framed is more basic to our lives than democracy.”  In the following excerpt from Owning Our Future, Kelly discusses what ownership means to the global economy - and to her personally.

By Marjorie Kelly

A PERSONAL ODYSSEY

As significant as different patterns of ownership are, they’re hard to see, because they’re deep structures lying beneath the surface of things. I learned about the importance of ownership from my father, and it was a lesson he delivered not in words but with the arc of his own life.

I grew up in a family of eight children, raised fairly comfortably on my father’s single salary from the small business he owned in Columbia, Missouri. My maternal grandfather owned his own company, as did many of my uncles. When I was a child, no one in my extended family was rich.

But we had what all families deserve and few today enjoy, which is economic security. The reason was that my parents owned things. They never saved much money, but they owned my father’s business, our house, and a few other pieces of real estate. It was enough that when my father died at the young age of 62, my mother was able to live at ease for decades without working outside the home. There was no shortage of emotional dysfunction in our household (including a good bit of Irish Catholic drinking and stormy tempers). But the economic security we enjoyed helped my siblings and me to mature into stability. In a visceral way, I experienced financial security as a form of nurturance, as vital as food or shelter—something that sustained me and allowed me to thrive.

If I saw the positive side of ownership as a child, I saw its negative side at Business Ethics, a magazine I cofounded in 1987 and where I served as president for 20 years. In that time, I watched corporations rewrite the social contract. I saw mass layoffs shift from something companies did in a dire emergency to become ordinary practice. I watched companies I once admired hire union-busting consultants. In five short years, I saw the number of Washington lobbyists double. I watched wages flatline and the proportion of taxes paid by corporations fall. When the scandals at Enron, WorldCom, Adelphia, Parmalat, and other companies broke out, it became clear that cooking the books had become disturbingly widespread.

At every turn, companies claimed to be acting in the interests of their owners, their shareholders. Ironically, the owners supposedly demanding those acts were us, all of us with investing portfolios holding stock in corporations, all of us who have children attending colleges with endowments, all of us who support churches, museums, and nonprofits that rely on donations paid for from financial holdings.

We’re all tangled up in our system’s ownership designs. And we’re all tangled up in the messes they’ve left in the economy and the biosphere. Because we’ve yet to grasp how the crises we face are symptoms of deep structural problems, what lies ahead may be worse still.

Wanting to help in the search for alternatives, a number of years ago I sold Business Ethics and moved to the Tellus Institute in Boston. There, my colleague Allen White and I cofounded the initiative Corporation 20/20, bringing together hundreds of leaders from business, finance, law, government, labor, and civil society to explore alternatives to the dominant corporate form. That work confirmed my growing conviction that ownership is the root issue. I remember a particular moment when it snapped into focus for the whole group.

It was 3 p.m. on a Friday and the energy in our group was flagging. Seated around the conference table were 30 of the most innovative thinkers I knew, all struggling to stay awake. If the topic we’d come together to explore, redesigning capitalism, was a worthy subject, by late on a Friday it was a boring one. We were in day three of our time together, in the third of these gatherings. It had begun to feel like we were half-crazed survivors dragging ourselves through one jungle of impenetrable concepts after another: stock options, Delaware law, fiduciary duty, and more. I looked around the table, thinking, we’ve got to get these people into a break. They need coffee, fast.

Then someone uttered a simple statement. I wish I could remember who said it. But I’ll never forget what he said: “Ownership is the original system condition.”

There was a pause, the nodding of many heads. Some chatter of agreement.

Then the facilitator called for a break. Yet no one left the room. No one even touched the cookies wheeled in at the back. You would have thought the coffee had been delivered intravenously. The room was so alive with animated talk that it was as though we’d been huddled in a dark cellar, and someone had opened a door and thrown on the lights.

The energy in the group was back because we’d touched the root issue that defines corporations and capital markets today. It’s ownership.

Ownership is the gravitational field that holds our economy in its orbit, locking us all into behaviors that lead to financial excess and ecological overshoot.

During my work with Corporation 20/20, my premise was that the answers were about redesigning corporations. But then my Tellus work shifted to a new project with the Ford Foundation involving rural communities, and I began looking at forms of ownership that didn’t involve corporations at all.  I studied shared ownership and governance of homes, farms, forests, wind farms, fishing rights, and more.

As I discovered more and more models, I realized that I’d found my way to the edge of a movement much larger than corporate redesign. Something is emerging that goes to the root issue, the institution with which civilized economic life began, back beyond the age of industry in the age of agriculture. That root issue is ownership. We are witnessing its spontaneous evolution.

HARBINGERS OF THE NEW

New models are emerging today, not from the head of some new Adam Smith or Karl Marx but from the longing in many hearts, the genius of many minds, the effort of many hands to build what we know instinctively that we need.

In both the United States and the United Kingdom, there’s burgeoning interest in social enterprises, which serve a primary social mission while they function as businesses—like Greyston Bakery in Yonkers, New York, an $8 million profit-making business started by Zen monks with an aim of creating jobs for the homeless. Community development financial institutions (CDFIs)—which in the United States provide financial services to under-served low-wealth communities—are growing by leaps and bounds. In little over a decade, assets have climbed from $5 billion to $42 billion, with new funds coming from depositors, investors, and government grants.

Emerging experiments with catch shares, ownership rights in marine fisheries, have been found to halt or reverse catastrophic declines in fish stocks. Conservation easements now cover tens of millions of acres, allowing land to be used and farmed even as it’s protected from development, preserving it for future generations both human and wild.

There’s a growing movement to protect the commons, honoring areas of our common life that need shielding from market forces. And there’s the viral world of entities like Wikipedia, owned by no one and run collectively.

Revolutionary lawyers are busy crafting new models through law—like the community interest corporation, created in UK law. And the low-profit, limited liability company (L3C) in the United States, intended to facilitate more social investments by foundations. In the space of only a few years, this model has been enacted or come under consideration by nearly 20 states. And there’s the notable success of the Bank of North Dakota, the only state-owned bank in the United States, which in the initial financial crisis enjoyed record profi ts even as private-sector banks lost billions. Its unexpected resilience has led some 14 states to begin considering legislation to create their own banks. (State banks are not privately owned, but they do represent alternative ownership focused on the common good rather than on maximizing profits.)

In Quebec and Latin America, among other places, there’s a growing movement for the solidarity economy—consisting of cooperatives and nonprofits—which in Quebec has gained formal recognition and government funding as a distinct sector of the economy.  And a surprising number of large corporations have adopted mission-controlled designs. Among these are the foundation-owned corporations common throughout northern Europe, such as Novo Nordisk, a Danish pharmaceutical company with $11 billion in revenue, as well as Ikea, Bertelsmann, and other large companies.

Also included in mission-controlled designs are family-controlled companies with a strong social mission, such as S. C. Johnson and the NewYork Times.

More exotic designs are also popping up, like Grameen Danone, a social business in which village women in Bangladesh sell yogurt through a joint venture between multinational yogurt maker Groupe Danone and Grameen Bank, the fi rst microfinance lender. The enterprise is designed to improve the nutrition of the poor as it aims to pay investors a modest, 1 percent dividend.

Two pioneers in the field of emerging economic architectures have received Nobel prizes—Muhammad Yunus, who founded Grameen Bank and helped create Grameen Danone, and Elinor Ostrom of Indiana University, who studies economic governance of the commons. She and her colleagues have found communities all over the world that have spontaneously devised effective ways to govern fish stocks, pastures, forests, lakes, and groundwater basins in ways that preserve rather than harm those ecosystems.

Emerging ownership models are new members of an older family of designs that include cooperatives, employee-owned firms, and government- sponsored enterprises. In the UK, these include the John Lewis Partnership—the largest department store chain in the country—which is 100 percent owned by its employees and has an employee house of representatives in addition to a traditional board of directors.

As a class, these alternatives represent an emerging family of design. If industrial-age ownership is based on a monoculture model, emerging designs are as rich in biodiversity as a rainforest. Through studying these, grafting pieces of them together to create still more models, we just might create the greenhouse of design experimentation where the future of our economy could be grown.

These social architectures are harbingers of something profoundly new. They aren’t yet fully formed, not yet ready to serve as the framework of a new social order. But their growing profusion is a signal. It tells us that we’re entering one of the most creative periods of economic innovation since the Industrial Revolution. For what’s at work isn’t economic innovation as it’s usually meant, which is about better and better ways to make more and more money. This innovation is almost unimaginably more profound. It is a reinvention at the level of organizational purpose and structure. It is about creating economic architectures that are self-organized around serving the needs of life.

Marjorie Kelly is a fellow with the Tellus Institute in Boston and director of ownership strategy with Cutting Edge Capital.  Kelly cofounded Business Ethics magazine and Corporation 20/20. She specializes in ownership and financial design for social mission.

Owning Our Future: The Emerging Ownership Revolution can be purchased  from Berrett-Koehler, Amazon or at local book stores. 

In tackling huge agendas, it helps to remember that we climb a mountain one step at a time, using equipment that supports us, with each step building on the last until we reach the summit.

How does this apply, for example, to dwindling global natural resources  and the impact on the environment of how companies do business?

In the particular, the metaphor speaks to how Patagonia and its founder Yvon Chouinard  have undertaken the commitment to environmental and social responsibility over the past few decades. Big picture, the mountain climbing metaphor also offers a way any company might create a consistent and meaningful approach to corporate social responsibility (CSR).

In a new book, Chouinard and co-author and nephew Vincent Stanley raise the question, “How is a company responsible?” Their answer includes earning a profit for shareholders and owing obligations to four key stakeholders (employees, customers, communities and nature). A responsible business, the book explains, is a conscious business, very aware of how it achieves its profit, impacts stakeholders, and creates engagement through meaningful work.

Conscious of a responsibility to share what has been learned in Patagonia’s journey, the authors provide checklists of 263 recommendations in the appendix to The Responsible Company: What We’ve Learned from Patagonia’s First 40 Years and as a download from Patagonia’s website.

The checklists are organized under the five responsibilities Chouinard and Stanley discuss in the book – responsibility to business health and responsibility to the four key stakeholders. To avoid overload, they advise a company start by going through the lists to check off what they’ve already done or are doing. Next, they suggest companies do what is in their control to do, starting “where you get the least resistance and most cooperation” and going on from there. With each step, the authors point out, you redefine what is possible.

Very conscious that in order to end somewhere, one has to make a start, the book tackles how to begin going greener in the face of opposition – what CEOs might face if Boards, stockholders, or other executives aren’t concerned about climate change, and the roadblocks others in a company would be up against if the CEO isn’t interested.

The methodology is entrepreneurial – gather information (in this case, what is the worst thing the company does), analyze it (costs in profit and reputation), share/discuss information broadly, determine what you can afford to do, take that step, analyze impact and determine what can be done next, and keep building on it. Engagement and trust are built through the process. The authors frequently reference Daniel Goleman’s creed – “know your impacts, favor improvement, share what you learn.”

Chouinard and Stanley don’t offer Patagonia as the model of a responsible company. They point out: “We don’t do everything a responsible company can do, nor does anyone else we know. But we can illustrate how any group of people going about their business can come to realize their environmental and social responsibilities, then begin to act on them; how their realization is progressive: actions build on one another.”

The authors tell stories about when Patagonia wasn’t aware of the harm it was doing -- directly or indirectly through suppliers or offshore factories -- in the making of its products, how it gained awareness, and then acted on what it learned to take responsibility for its impact. The stories provide insight into Patagonia’s culture and the importance of meaning in one’s work and the role of continuous improvement.

“Regardless of our talent or education; our preference for working with words, numbers, or our hands; our ability to cut a pattern, lay out an ad, or negotiate with a supplier,”  say Chouinard and Stanley, “we have meaningful work at Patagonia because our company does its best to be responsible to nature and to people.”

What is one way engagement is built at Patagonia? “To take one step toward responsibility, learn something, take another step, and let self-examination build on itself has engaged everyone at Patagonia...Lively, gratified workers make good business possible – make it thrive.”

For Patagonia, this is a story about conscious business and conscious leadership, it is a tale about doing significant good through environmental and social responsibility and doing well financially;  since 2008 Patagonia has tripled its profit and doubled its revenues. In a recent interview Chouinard said Patagonia is “my resource to do something good. It’s a way to demonstrate that corporations can lead examined lives.”

How far other corporations are willing to take self examination will point the way to how far up the mountain to create consistent and meaningful CSR their steps take them.

Gael O’Brien is a Business Ethics Magazine columnist. Gael is a consultant, executive coach, and presenter focused on building leadership, trust, and reputation. She publishes the The Week in Ethics.

The following excerpt from the book focuses on the importance of staying true to one's personal principles and "why 100 percent of the time is easier than 98 percent of the time."
___________________________________________________________________________________

How do you stay out of jail?

It may sound like a flip question, but it’s actually one of the most important things I discuss with my students all year.  So often, people use what we call a “marginal-cost” argument to make decisions: they decide that the cost of one small decision is inconsequential. But in reality, as businesses have shown time and again, the full costs of that decision are typically much higher. A voice in our head says, “Look, I know that as a general rule, most people shouldn’t do this. But in this particular extenuating circumstance, just this once, it’s okay.” And the voice in our head seems to be right; the price of doing something wrong “just this once” usually appears alluringly low. It suckers you in, and you don’t see where that path is ultimately headed or the full cost that the choice entails.

Recent years have offered plenty of examples of people who were extremely well-respected by their colleagues and peers falling from grace because they made this mistake. Many of us have convinced ourselves that we are able to break our own personal rules “just this once.” In our minds, we can justify these small choices. None of those things, when they first happen, feels like a life-changing decision. The marginal costs are almost always low. But each of those decisions can roll up into a much bigger picture, turning you into the kind of person you never wanted to be. That instinct to just use the marginal costs hides from us the true cost of our actions. The first step down that path is taken with a small decision. You justify all the small decisions that lead up to the big one and then you get to the big one and it doesn’t seem so enormous anymore. You don’t realize the road you are on until you look up and see you’ve arrived at a destination you would have once considered unthinkable.

I came to understand the potential damage of “just this once” in my own life when I was in England, playing on my university’s varsity basketball team. It was a fantastic experience; I became close friends with everyone on the team. We killed ourselves all season, and our hard work paid off—we made it all the way to the finals of the British equivalent of the NCAA tournament. But then I learned that the championship game was scheduled to be played on a Sunday. This was a problem. At age sixteen, I had made a personal commitment to God that I would never play ball on Sunday because it is our Sabbath. So I went to the coach before the tournament finals and explained my situation. He was incredulous. “I don’t know what you believe,” he said to me, “but I believe that God will understand.” My teammates were stunned, too. I was the starting center and to make things more difficult, the backup center had dislocated his shoulder in the semifinal game. Every one of the guys on the team came to me and said, “You’ve got to play. Can’t you break the rule, just this one time?” It was a difficult decision to make. The team would suffer without me. The guys on the team were my best friends. We’d been dreaming about this all year.  I’m a deeply religious man, so I went away to pray about what I should do. As I knelt to pray, I got a very clear feeling that I needed to keep my commitment. So I told the coach that I wasn’t able to play in the championship game.

In so many ways, that was a small decision—involving one of several thousand Sundays in my life. In theory, surely I could have crossed over the line just that one time and then not done it again. But looking back on it, I realize that resisting the temptation of “in this one extenuating circumstance, just this once, it’s okay” has proved to be one of the most important decisions of my life. Why? Because life is just one unending stream of extenuating circumstances. Had I crossed the line that one time, I would have done it over and over and over in the years that followed.

And it turned out that my teammates didn’t need me. They won the game anyway.  But that is beside the point. It would have been so easy to give in that one time. After all, it was for a good cause, one that I had worked for myself for a long time. But I don’t regret the choice I made.

There will be no shortage of opportunities in your career—and your life—to cut corners, cross your own moral line just this one time. But if you give in to “just this once,” based on a marginal-cost analysis, you’ll regret where you end up. That’s the lesson I learned: it’s easier to hold to your principles 100 percent of the time than it is to hold to them 98 percent of the time. The boundary is powerful, because you will never cross it. When you have justified doing it once, there’s nothing to stop you from doing it again. It’s not really a boundary anymore.

You have to decide what you stand for. And then stand for it all the time.

From “How Will You Measure Your Life?” by Clayton M. Christensen (@claychristensen), James Allworth (@jamesallworth), and Karen Dillon (@dillonHBR), Copyright  © 2012. Reprinted courtesy of Harper Business, an imprint of HarperCollins.

• HAVING AN INCLUSIVE CULTURE

By Caroline Turner
Author, Difference Works: Improving Retention, Productivity and Profitability through Inclusion

Most people don’t change, or willingly go along with change, because the change is “the right thing to do.” They do it if there is an important reason to change. Businesses don’t change their corporate cultures so that they retain women because doing so is nice for women. They do it if there is a compelling business reason to do so. The bottom line reasons to achieve gender diversity in leadership are exactly that—compelling.

You may already understand the business value of gender diversity. You may know that an organization can only achieve sustainable gender diversity in leadership by having an inclusive culture. But enrolling others in creating a culture of inclusion requires that you present a clear business case that fits your industry and organization. It requires that the leaders of your organization understand the business value of inclusion and gender diversity.

This article will get you started (or fill in gaps in your business case) so you can get more managers to appreciate what’s in it for them. It is divided into two parts: the business benefit of an inclusive culture generally and the business benefit of gender diversity in particular. It includes significant costs that can be avoided and significant gains to be captured.

HAVING AN INCLUSIVE CULTURE

Engagement, Inclusion and Results: Engagement has been convincingly linked with productivity, profitability, employee commitment and retention. An organization where more of today’s diverse workforce is engaged is an inclusive workplace. According to Cumulative Gallup Workplace Studies cited in “Business Case for Diversity with Inclusion,” organizations with inclusive cultures do better on several scores than those that aren’t inclusive - with 39% higher customer satisfaction, 22% greater productivity and 27% higher profitability.

Decreased Turnover: Turnover has significant direct and indirect costs.  According to the Gallup Study just cited, companies with inclusive cultures have 22% lower turnover. As the economy recovers, turnover will become more front-of-mind for business leaders; studies show a staggering percentage of employed Americans (particularly Millennials) indicate they intend to look for a new job once the economy improves.

Easier Recruitment: An organization with a reputation for being a good place to work for diverse groups has an easier time recruiting talent from today’s diverse hiring pool. That saves money and time.

Better Decisions: Many people have a sense that decisions are better when they come from a group with diverse backgrounds and perspectives. A recent study from the Kellogg School of Management concludes that heterogeneous groups getter better results than homogeneous groups because the tension or discomfort leads to more careful processing of information.

Diverse Markets: Businesses with diverse workforces have an easier time tapping the diverse marketplace. The buying power and influence of “minority” groups are large and growing according to buying power studies like that from the Terry College of Business.

GENDER DIVERSITY IN LEADERSHIP

In addition to the benefits of inclusiveness generally, the case for a gender-inclusive workplace includes:

Gender Diversity and Returns: Catalyst, a research and consulting organization focusing on women in business, and McKinsey have both shown correlations between gender diversity in leadership and the bottom line.  Catalyst found significantly higher returns in Fortune 500 companies with more women at the top and on their boards of directors. McKinsey found that, of 89 listed companies studied, those with gender diversity in leadership experienced higher return on equity, operating profit, and stock price. While neither Catalyst nor McKinsey say that having women in leadership causes better results, the numbers indicate that having both men and women in leadership is good for the bottom line.

Women in the Hiring Pool: According to The Shriver Report, women are now half of the workforce and hiring pool. According to the U.S. Department of Education data and projections, the pool of educated workers has and will continue to have more women than men as women earn more undergraduate and graduate degrees than men. It’s simple: To have the most skilled and talented workforce, a business must attract and retain women as well as men.

The Women’s Market: A diverse culture that mirrors its markets tends to do better than its homogeneous competitors. The women’s market is key to many industries as women are important decision-makers, customers and potential customers. Women influence more than 85% of retail decisions. Women are decision-makers in more and more business-to-business relationships.  Women-owned businesses are a growing sector of the U.S. economy.

Bang for the Buck: If a business wants to increase engagement and retention from any group other than the group most highly represented at the upper levels of business (white, male, heterosexual, Christian), the largest return may be in increasing engagement in the largest such group--women. And there is more bang for the buck. Women’s needs and approaches to work are shared by other growing sectors of the workforce. Members of Generation X and Millennials share women’s need for flexibility, desire for closer workplace relationships and preference for less hierarchical structures. Steps to make a culture work better for women will also make it work better for these growing workforce sectors.

Creating an inclusive culture is great for those who would otherwise feel less included. Supporting the advancement of women in business is great for women. But these aren’t the ultimate goals; and they won’t inspire action. Inclusive cultures and organizations with gender-diversity achieve superior business outcomes--customer satisfaction, retention, productivity and profitability. That’s what can drive action and culture change.

Caroline Turner is a business consultant, advising clients on creating cultures of inclusion, facilitating workshops and delivering speeches. Formerly, she was the Senior Vice President at Coors Brewing Company (now MillerCoors and MolsonCoors).  Her new book is Difference Works: Improving Retention, Productivity and Profitability through Inclusion.

Dear EarthTalk: Some friends of mine were talking about a book called “Plan B” that proposes a plan for rescuing the environment and ending poverty around the world. Is it a realistic plan or just some utopian pipe dream? -- Robin Jackson, Richmond, VA

What started as a book has grown into a movement known as “Plan B” which presents a roadmap for achieving worldwide goals of stabilizing both population and climate. According to Lester Brown, author of the 2003 book, Plan B (and three subsequent updates) and founder of the non-profit environmental think tank, Earth Policy Institute, the plan is based on replacing the fossil-fuel-based, automobile-centered, throwaway economy with a new economic model powered by abundant sources of renewable energy.

Brown argues for transportation systems that are diverse and aim to maximize mobility, widely employing light rail, buses and bicycles. “A Plan B economy comprehensively reuses and recycles materials,” he says. “Consumer products from cars to computers are designed to be disassembled into their component parts and completely recycled.”

Brown even proposes a budget for eradicating poverty, educating the world’s youth and delivering better health care for everyone. “It also presents ways to restore our natural world by planting trees, conserving topsoil, stabilizing water tables, and protecting biological diversity,” says Brown. “With each new wind farm, rooftop solar water heater, paper recycling facility, bicycle path, marine park, rural school, public health facility, and reforestation program, we move closer to a Plan B economy.”

Plan B is an integrated program with four interdependent goals: cutting net carbon dioxide emissions 80 percent by 2020, stabilizing population at eight billion or lower, eradicating poverty, and restoring the Earth’s natural systems. Where Plan B really hits home is in the numbers: Brown puts realistic dollar values on the various aspects of his plan, and compares these costs with current military spending. Needless to say, restoring the environment and economy looks like a bargain when viewed against what the developed nations of the world spend on being ready for battle.

The beauty of Plan B is that it is feasible with current technologies and could well be achieved by 2020 with a concerted international effort. Brown reportedly wrote the latest incarnation of Plan B as a warning call for leaders of the world to begin “mobilizing to save civilization” given that time is more than ever of the essence. Luminaries from Bill Clinton to E.O. Wilson to Ted Turner have spoken highly of Plan B, and at least one university (Cal State at Chico) has made the latest version of the book (Plan B 4.0) required reading for all incoming freshmen.

Those looking for more up-to-date information on the evolution of the Plan B model and progress toward its goals should tune into the website of the Earth Policy Institute, the think tank started by Brown in 2001 and currently used as a central node in the growing network of thousands of entities and individuals around the globe supportive of making Plan B into reality. Prior to founding Earth Policy Institute, Brown was well known in environmental and policy circles for his work with the Worldwatch Institute, a pioneering environmental think tank he launched back in 1974.

EarthTalk® is written and edited by Roddy Scheer and Doug Moss and is a registered trademark of E - The Environmental Magazine (www.emagazine.com). Send questions to: earthtalk@emagazine.com. Subscribe: www.emagazine.com/subscribe. Free Trial Issue: www.emagazine.com/trial.

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• Start Something that Matters
• by Blake Mycoskie

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Start Something that Matters

by Blake Mycoskie

Reviewed by Blake P. Robinson

Blake Mycoskie, the founder of Toms Shoes, has written Start Something that Matters “with the aim of inspiring, entertaining and challenging you to start something that matters.”  In a breezy, familiar tone that doesn’t take itself too seriously, he succeeds in encouraging readers to do just that. Unless you’re quite resigned to the status quo, you’ll find it difficult to avoid daydreaming about your own personal entrepreneurial dream while reading this book – and when you’re finished reading, the odds are you won’t be resigned to the status quo.

The book is organized around six traits or lessons that Mr. Mycoskie believes “everyone should follow to start and sustain something that matters.”  Each lesson is supported by a host of stories from a variety of sources, including a powerful tale from his mother, Pam Mycoskie, the author of a best-selling diet book, Butter Busters, which she self-published with much perseverance and more than $30,000 in personal loans. The entrepreneurial spirit, it seems, runs in the family.

A native of Arlington Texas, the 35-year-old Mr. Mycoskie speaks with authority about start-ups, having launched four entrepreneurial ventures ranging from a laundry service to an all-reality-TV network (the cultural merits of which will not be commented upon here). He founded Toms Shoes in 2006 and pioneered a novel cause marketing concept called “One for One,” which means that for every pair of Toms Shoes that someone buys, a pair is given away to someone who needs it in the developing world.

In just four years, Toms has given away over 600,000 pairs of shoes to people in need – suggesting revenue for the privately-held company of at least $33 million, according to the Wall Street Journal. Meanwhile, “One for One” has become a media sensation: Toms’ first drop of ten thousand shoes became the subject of a documentary; Mycoskie has been written up in dozens of magazines and newspapers. And every April 5^th thousands of people mark an event called “One Day Without Shoes,” forgoing their shoes for a day in solidarity with those who don’t have any.

Critics claim Toms’ philanthropic marketing practices undermine local shoe production and distribution.  Toms is certainly aware that giving away shoes potentially undermines local businesses; the company says it tries to avoid that by partnering with established charities that presumably have the expertise to give strategically.  Although it is outside the scope of this article to investigate the merit of the criticism, the effectiveness of Toms’ giving program does matter.  And, the book, in my opinion, could have benefited from engaging with this thorny question.

Before starting to read Start Something That Matters, one of my concerns was that Mr. Mycoskie would overemphasize the grand, socially transformative endeavor at the expense of the small improvements that we each can and do make to our world each day. He goes out of his way to dispel that concern, opening the book by quoting from a poem entitled “Success”: “To know even one life has breathed easier because you have lived | This is to have succeeded.”  Mr. Mycoskie is faithful to this line, which offers some solace to those of us who are unlikely to start a socially conscious business that changes the world.

Indeed, Start Something that Matters will provide inspiration and motivation for current and upcoming social entrepreneurs. The pitfall that Mr. Mycoskie does not avoid is that of looking down upon “mainstream” businesses – such as ExxonMobil, Union Carbide, Philip Morris and Goldman Sachs – the focus of which, he argues, “will always be on making money above all else, a perfectly defensible capitalist motivation.” While it is true that from most perspectives these companies have a less compelling story than Toms, they nonetheless have achieved much that matters.

Start Something that Matters is aimed squarely at the Toms demographic: young, fashion-conscious men and women who want to change the world.  The book maintains integrity with the simple, folksy style of the Toms brand.  It’s a style that certainly is not for everyone, and it can, at times lead a reader to look for more substantive analysis and justification for the principles in the book.  On the other hand, if Start Something that Matters gets people dreaming their entrepreneurial dreams – and not accepting the status quo – it will have indeed accomplished something that really matters.

A financial advisor at Fulcrum Securities, Blake P. Robinson helps individuals and foundations with a strong set of values to invest in a way that supports those values. Blake writes and speaks frequently on the topic of ethical investing.

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• We First: How Brands & Consumers Use Social Media to Build a Better World by Simon Mainwaring

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We First: How Brands & Consumers Use Social Media to Build a Better World by Simon Mainwaring

Reviewed by Michael Connor

The only thing hotter than social media these days may be the business of writing about it, with pundits by the Google-load now relentlessly analyzing the impact on everyday life of technology platforms like Twitter, Facebook, YouTube and dozens of new social apps that promise to connect us all in ways that we’ve never before imagined.

The same might also be said of corporate social responsibility (CSR), with observers and analysts of that movement sometimes seeming to outnumber true practitioners in the field, speculating on how the world could be a much better place if only companies would try harder.

Combining the two – CSR and social media – can lead one to believe a revolution is just around the corner. The theory seems to be that if one could hit a CSR “reset” button on traditional corporate attitudes toward environmental and social issues – while at the same time inspiring consumer action through millions of tweets and status updates – we’d be well on our way to solving many of the world’s pesky and complicated problems.

We First: How Brands & Consumers Use Social Media to Build a Better World is not the first book to suggest a linkage between digital media and social change.  But author and advertising executive Simon Mainwaring is more forceful than many, making a powerful argument to “temper the excesses of free-market capitalism” before proceeding to outline nothing less than a consumer-driven “comprehensive system to build a better world.”

“The application of We First means that corporations must recognize that they are part of society and have a responsibility to create something more than profit,” Mainwaring writes.  “As for consumers, they, too, need to understand that they play a role in preserving the Earth and helping a better form of capitalism take root by requiring the businesses they deal with to become responsible corporate citizens.”

The We First plan for building a better world has two specific elements.  The first, which builds on fundraising precursors such as 1% For the Planet, is what Mainwaring calls “contributory capitalism,” in which every single consumer transaction for products and services globally “would include a contribution toward building a better world.”  The second element is what he calls the Global Brand Initiative, an association of hundreds or thousands of leading corporate brands working together to put their “collective power and resources” to work addressing some of society’s most difficult problems.

Simon Mainwaring

It’s difficult to imagine this becoming reality.   Then again, CSR was a nascent movement only 10 years ago; WalMart embracing sustainability would have been impossible to imagine in 2001.  And the modern Internet was still being born only 20 years ago, before web browsers were introduced.  Who would have imagined then that democratic movements in countries like Egypt and Tunisia could harness the power of status updates and tweets to help overthrow entrenched dictators?

Social media has its limitations, and Mainwaring acknowledges a phenomenon that critics of these new platforms call “slactivism” – slacker activism – wherein “it is easy to sign up on a fan page for a cause and do almost nothing.”  But Mainwaring says the future will be more complex than that, and he outlines six levels of engagement offered by social media which provide “a complex and rich infrastructure for the activist processes of social transformation.”

The hope, of course, is that such “social transformation” will be positive.  It’s also possible that new forms of media could be employed more nefariously for less desirable social outcomes.

In an interview, Mainwaring admits the challenges are huge. “In the context of being realistic, if consumers do not shift their behavior sufficiently, none of this will happen,” he says. “At the same time, we should not underestimate the engagement of consumers both with social technology and with their responsibility to improve the world that they want in the way that they want.”

“Still, the world we want will not be built by fiber optics, cell-phone towers, or social media platforms,” Mainwaring writes. “It will be created choice by choice, in our hearts and minds, and with our hands.” The process could take many years, he says.  At the moment, “we're at about 3 o'clock on Day One.”

Where can you find a company where employees are happy, have high energy, great morale, and speak the same organizational language? Where people know not only what the organization’s values are, but use those values as their basis for making decisions?

No, we don’t need to go to Shangri-La to find it. The road map, according to Joel Kurtzman, leads to common-purpose companies.  Kurtzman has spent more than 30 years working with global companies and their leaders.

Common purpose is a term Kurtzman uses to talk about a quality of leadership that creates an enormous impact in an organization’s culture and spirit – its soul, if you will - that drives success beyond financial statements. While the concepts aren’t novel, when taken together he has observed significant patterns of success for leaders and in companies when they are integrated and authentically and consistently applied.

In a recent interview, I asked him for some current examples of common purpose organizations: American Express , FM Global and Li & Fung Limited were on his list. Common purpose is about the type of leader a company has, he says: Amex’s CEO Ken Chenault has followed in the footsteps of former CEO Henry Golub who put a high priority on people, values and brand, helping employees understand the brand and values sufficiently that they make good decisions based on them.

Common purpose occurs, Kurtzman says, “when a leader coalesces a group, team, or community into a creative, dynamic, brave and nearly invincible we.”

“We,” that elusive grail which is the subject of countless team building exercises, Human Resources’ angst, and management books, is an outcome when the CEO creates a bigger purpose for the organization than just making money or reaching quarterly numbers. Kurtzman cites as examples Microsoft’s aim to change the world and NASA’s executing President Kennedy’s vision to put a man on the moon. In both, everyone knew what they were focusing on and what the organization stood for – a common purpose.

As a result of the financial crisis, the focus for most CEOs now, says Kurtzman, is thinking about making money, meeting next quarter’s numbers. As an economist he knows all about the importance of numbers, but what he sees changing and engaging cultures is more fundamental: tapping into the passion behind what a company stands for, to drive a common purpose.

Too many organizations, he points out, develop company values and purpose but don’t use them in decision making, so they exist on paper, or on a web site, but don’t become a daily way of creating and reinforcing a shared culture, a sense of “we.”

The sense of “we” starts with the leader. Leaders in any organization are under intense scrutiny, Kurtzman says. Those watching CEOs copy their style and behavior. In his extensive interviews with CEOs over the years, leaders have admitted the connections they have to their respective organizations are fragile, and can be easily broken.

CEOs need to know how to read their organizations’ emotional tone. Committed-to-developing-a-shared-“we” CEOs need to engage in a number of behaviors that build trust including leading-by-listening, building bridges, showing compassion and caring, demonstrating their own commitment to the organization, and giving employees the authority to do their job while inspiring them to do their best work.

Excessive executive compensation is a big barrier to being a common-purpose company Kurtzman says. “When people feel compensation is too much for those in leadership roles, it creates mistrust.” Leaders think they can survive with mistrust but ultimately they can’t,” he says.

More than 20 years ago, when Kurtzman was business editor at The New York Times, he asked leadership guru Warren Bennis a question: How do leaders inspire and encourage followers to take action? Bennis replied that good leaders are deeply integrated into the business and emotional life of the organization and have a deep connection, a real fit.

That question became the catalyst for Kurtzman’s most recent book, Common Purpose: How Great Leaders Get Organizations to Achieve the Extraordinary. The book is essentially a collection of leadership stories from Kurtzman’s interviews and research that illustrate how those in charge have developed or lost common purpose in their organizations, or whose styles precluded its possibility.

Kurtzman refers often to the success of 175-year-old FM Global, a commercial insurance company, and its current chairman and CEO Shivan Subramaniam in building a common-purpose company. The company is united around the purpose that most losses are preventable. One-third of employees are engineers and the other two-thirds are trained to think like engineers. Their focus is help clients identify and mitigate risks that would impact property, product or lives.

Common purpose is reinforced in several ways at FM Global: people hired are a fit with its goals and purpose; leaders are accessible, seek out opportunities to learn from employees, and believe knowledge is developed and embedded throughout the organization; employees have a common language and are developed to have a common understanding of the business and a quick, effective way to set directions;  communication is transparent; employees learn from and support each other, examining what goes wrong to fix it; and there is a formula for everyone sharing in the company’s success.

Subramaniam, who often eats in the cafeteria sitting with employees to listen to their ideas and comments, thinks of himself as an employee as well as the CEO. He follows, for example, the company policy that executives at a certain level fly business class in flights over two hours, rather than buying a corporate jet - which the board had encouraged him to do. He explained in his interview with Kurtzman: “But I told the board I felt it would send a terrible message throughout the company if we bought a private jet.”

Kurtzman’s book shares many other stories of when companies have created common purpose, healthy and functional organizations, and financial success. Some examples: Pixar, Google, Apple, Wynn Resorts, Continental, IBM, Ritz-Carlton, and Clayton, Dublier & Rice.

However, Kurtzman points out in our discussion that while HP was a common-purpose company under its founders (where people lived the HP way) and Toyota in his experience operated with true common purpose in the 1970s (with a sense of empowerment and respect for the individual) in neither case was it sustained.

He is the first to admit that achieving and maintaining a common-purpose company is hard work. “It is difficult for a company to keep a sense of common purpose for longer than a decade,” says Kurtzman. “It has to be nurtured or it goes away. Things happen. Leaders start losing touch with the organization.”

He estimates that 25 percent of companies have achieved creating a common-purpose organization. In general, he says, those that are likely candidates include: a young company (about 40 – 50 percent of start ups begin as common purpose); a company with a new, energized CEO; or an organization on its way back from losing its balance.

Leaders of conscious capitalism companies and those involved in creating and sustaining common-purpose organizations share a leadership style that involves a sense of “we,” that recognizes and rewards employees beyond money and creates a value proposition throughout the organization that impacts stakeholders.

What will it take for other business leaders - looking at the impact on their organizations of high turnover, poor morale, lost productivity, quality problems, and lost clients - to consider whether building a common-purpose leadership style might be worth the effort?

Gael O’Brien is a Business Ethics Magazine columnist. Gael is a thought leader on building leadership, trust, and reputation and writes The Week in Ethics.