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Conscious Capitalists share their smarts

Six top business leaders describe how to create and sustain companies with purpose.

Jim McCann
Founder and Chairman
1-800-FLOWERS.com
Carle Place, New York

Q1.  If any company—large or small—wanted to get involved in Conscious Capitalism, how would they get started?
First, identify how you want to behave in business and in life—they’re not separate—and how you want your employees to behave. In a small company, you can set the tone, but a larger company might have to use more lobbying and educational programs. Shape a vocabulary specific to your company that’s consistent with Conscious Capitalism.

Q2.  How did your company get involved?
We started as a small, family-run business and these values came naturally—they are the same core lessons I learned at my [entrepreneur] grandmother’s table. We’ve always worked to meet the needs of our customers, employees, growers and vendors; to get to a place of mutual trust and benefit. It’s not only about getting a return on capital and maximizing earnings; it’s about the allocation and development of human capital.

Q3.  What are the greatest challenges?
The biggest challenge is staying consistent. You have to be a bit of a preacher. In a world where there are a lot of doubters, you have to know how to recruit the right people and on-board them. We’ve had some issues with employees who didn’t “get it,” who wanted to squeeze vendors for every cent. We had to eventually change out those employees because they wouldn’t change.

Q4.  What are the greatest benefits?
My job is to be a cultural engineer; to create an environment that encourages employees to unleash their talents in pursuit of a common goal. As a result, our people are very philanthropic. Ever since 9/11, our people volunteer time and talent every year, to bring solace to those in distress. We’re in the business of putting smiles on people.

Doug Rauch
Former President, Trader Joe’s
CEO, Conscious Capitalism, Inc.
Newton, Massachusetts

Q1.  If any company—large or small—wanted to get involved in Conscious Capitalism, how would they get started?
Start by looking at why you exist as an organization—who would miss you if you disappeared and why… Think about the role you play as a leader…work to build a culture that is based upon trust and care. Conscious Capitalism is really a culture, not a strategy; it’s the ground of an organization’s being.

Q2.  How did your company get involved?
While every business clearly has to earn a profit, that can’t be your highest ambition if you want to win the hearts of your customers, employees and communities. Trader Joe’s practiced the principles of Conscious Capitalism long before I had ever heard the term. It honed these practices with a deep sense of purpose and by paying attention to what was best for the long-term benefit of the company and all its stakeholders.

Q3.  What are the greatest challenges?
The greatest challenges are making decisions that benefit the short term but damage the long-term benefit; buying into a world of trade-offs (win-lose scenarios) instead of synergies (optimizing value to all constituents). What I call getting stuck in the “story of me”—not looking beyond our own short-term self-interest to create something of value to all parties.

Q4.  What are the greatest benefits?
I’m absolutely confident that practicing the principles of Conscious Capitalism brings both a deeper sense of meaning and purpose to your employees (and customers), as well as higher financial returns in the long run. It provides an authentic context to the “story of us,” the fact that business is about relationships, about creating value and not extracting value from those relationships.

Brian C. Walker
CEO, Herman Miller, Inc.
Holland, Michigan

Q1.  If any company—large or small—wanted to get involved in Conscious Capitalism, how would they get started?
Conscious Capitalism starts with the leadership of a company developing or embracing a set of core values as to how they will manage the enterprise. Those core values have to include a belief that an enterprise has a responsibility beyond its shareholders and financial value creation. If that is in place, the next step is to align your goals, objectives and actions with these values.

Q2.  How did your company get involved?
The idea of Conscious Capitalism has been in the DNA of our [furniture] company for over 70 years. Our founder was a deeply religious man and believed that companies were made up of people who were all special and important. These beliefs extended to his commitment to giving back to his community with a tithe. And he believed that the inputs needed for the business belonged ultimately to a greater authority… These principles are still at the center of our philosophy.

Q3.  What are the greatest challenges?
The challenge of running a company like this is that it requires a longer-term horizon for your thought process. And, there are often apparent conflicts between each of your stakeholder’s interests that are not easy to think through. As such, it is much easier to simply say you will maximize for one group or order their importance.

Q4.  What are the greatest benefits?
When done right, however, the Conscious Capitalism approach will give greater meaning to your employees, customers and investors as to why they want to be part of your community. We believe a greater sense of purpose in the organization will lead to higher performance and attract better talent.

Henry Juszkiewicz
Chairman and CEO
Gibson Guitar
Nashville, Tennessee

Q1.  If any company—large or small—wanted to get involved in Conscious Capitalism, how would they get started?
Whether you run a small or big business, you have many constituents who rely on you for their livelihood—vendors, employees, bankers, etc. You have to allow all these constituencies to do well; to acknowledge them as your partners in business. That is the first step in Conscious Capitalism.

Q2.  How did your company get involved?
I began to embrace Conscious Capitalism after being contacted by another corporate leader… he was so fired up, that he got me fired up. But it’s a philosophy I’ve always followed; it’s part of how I believe business should work. When you look at your constituents as partners, everything you do is a win-win; the success of the business follows. Once you embrace this thinking, you do more than succeed—you become exceptional.

Q3.  What are the greatest challenges?
The biggest challenge is keeping all your constituents happy. It’s much easier to focus only on making money, thinking “I can always get another vendor or replace an employee.” It takes time and work to build relationships; to always be listening to all sides and understand everyone’s concerns. But in the end, it’s hugely productive work.

Q4.  What are the greatest benefits?
It’s in times of stress when the hard work of relationship building comes to bear. When our main production facility in Nashville was wiped out by a flood, all our employees came together and took it as their personal mission to get the facility back up to speed. This all-volunteer effort succeeded in just six months, and I attribute that to the way our workers are treated—as a respected workforce and our partners in success.

Howard Behar
Former President, Starbucks
Author, Speaker
Mercer Island, Washington

Q1.  If any company—large or small—wanted to get involved in Conscious Capitalism, how would they get started?
It doesn’t make a difference how big or small you are—Conscious Capitalism is more a state of mind; understanding that you have a bigger responsibility than the bottom line. It means paying attention to the health of the communities in which we live and work and returning something to those communities. By that, I don’t mean a dollar amount. Even a small company can give employees off one or two hours per month to help build a park or participate in an educational program.

Q2.  How did your company get involved?
At Starbucks, we became active in state and local legislation. Instead of chastising the lawmakers, have a conversation with them. Build trust. For example, we worked on food safety regulations together and got involved in health insurance mandates. Overseas, we helped set the standards for fair trade coffee. Working in a community means getting involved with things for people, not profits.

Q3.  What are the greatest challenges?
Overcoming the fiction that there is a conflict between being a capitalist and doing the right thing. The key is to optimize—not maximize—profits and returns to shareholders. Look at all the different pieces and make Conscious Capitalism decisions about how you want your life to be. Many businesses do the right thing and make plenty of money but don’t put it all in their pockets.

Q4.  What are the greatest benefits?
Both Panera and Starbucks are very successful companies that lead by example. It is an “exercise of the heart” not of the wallet. Their actions set the tone for their customers. People come into their stores and after awhile say, “How and what can I do to give back to my community?”

John Replogle
President and CEO
Seventh Generation
Burlington, Vermont

Q1.  If any company—large or small—wanted to get involved in Conscious Capitalism, how would they get started?
Start with a clearly defined purpose that goes beyond simply creating short-term shareholder value. Identify your company’s mission and purpose and use that as your North Star to determine how you will, as Steve Jobs said, “Make a positive dent in the world.” Consider viewing your success beyond profits to include the value you deliver to people and the planet. Embracing the triple bottom line is one way for a company to create richer long-term returns.

Q2.  How did your company get involved?
Nearly 25 years ago, Seventh Generation was founded with the notion that business can be a positive force for good. We have led the industry to disclose ingredients, pioneer sustainable packaging and deliver a trusted brand to consumers that helps them lead a healthy life. Our commitment to transparency fosters a great deal of employee participation and community engagement. Last year, 75 percent of Seventh Generation associates volunteered 1,220 hours— surpassing a goal of 1,000 hours.

Q3.  What are the greatest challenges?
One of the biggest challenges of Conscious Capitalism is trying not to bad mouth your competitors who simply don’t get it!

Q4.  What are the greatest benefits?
The benefits far outweigh this challenge. Employee morale and engagement increase, innovation flourishes and the principles
of your brand relationship with consumers, namely trust, is reinforced by living core values that align with your consumers’ own values. We feel a remarkable sense of duty and accomplishment in building a better business model and caring today for seven generations of tomorrow.

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