Stephanie Strom’s article (NY Times October 5, 2010) headlines Hybrid Model for Nonprofits Hits Snags. Of course it has - It’s a relatively new business model, at least here in the United States, and it has hit snags. It’s cutting edge. If it were simple we’d be doing it already. And look where simple has gotten us.
Our traditional business model has one simple measure of success – profits to shareholders. This approach focuses on the bottom line to the detriment of us all. It creates externalities that are killing us but which have no place in the simple business model. Externalities such as depleted natural resources, diminished air quality, over fishing, and climate change. With this simplistic business mindset it makes sense to outsource and offshore work. In the name of profit companies have cut everything to the bone, and dispensed with loyalty, common sense and decency, all in the name of the clear mission that Mr. Hussy the “no-nonsense investor” speaks of. Clearly our traditional business model has hit some snags too.
Social Enterprise solutions are springing up everywhere from the nonprofit end of the spectrum to the market oriented domain. Social Enterprise, for those new to the term, is any organization structured to use the free market to make a social contribution. For the nonprofit sector social enterprise offers a path to become self-sustaining - an attractive alternative to any organization now relying on the dwindling beneficence of public and profit sectors. For the more tradition businesses it offers a way out of the soul numbing world of business as usual and offers an opportunity to use ones business to make a difference.
There are a lot of questions to be answered and a lot of problems to be ironed out for sure. But let’s not wave the white flag yet. Creating investment vehicles for these new structures is one of the key areas for development. Traditional investors are out to maximize their return. Social Investors are willing to take less of a monetary return in exchange for a larger social return. Involving traditional venture capital in a social enterprise is like asking a fox to manage a chicken orphanage. Chances are the fox sees a meal rather than an opportunity to contribute. No one should be surprised at the outcome.
Describing the hybrid as a pushmi-pullyu is a wonderful analogy but perhaps the more descriptive picture is that of the typical human being with an angel on one shoulder and a devil on the other. Everyday we’re faced with decisions of me versus we. Should you turn in the wallet you found on the sidewalk, should you lie on your expense report or cheat on the exam. Should you use the emergency lane to get around the traffic jam at rush hour. We make these complicated decisions daily, jumping over the mental hurdles of conflicting goals of maximize personal gain with something more beneficial to the whole. It’s what we do as human beings functioning in a society. We compromise and cooperate.
The news isn’t that we’ve hit snags. You don’t see the headline “Search for Cancer Cure Proves Difficult.” The news is that we’re trying brave new approaches and the intrepid explorers like the founders of GlobalGiving, Unitus, and Freelancer’s Union should be applauded for venturing out into this new terrain.
There will be failures and there will be setbacks. But progress is being made and will continue to be made until someday, like the hybrid car, the hybrid business becomes ubiquitous and we’ll wonder what all the fuss was about. We’re inching forward, mistake by mistake, and that is how evolution works.
Wednesday, November 10, 2010
Sunday, November 7, 2010
Jessica Jackley on poverty, money, and love
Listen to the co-founder of Kiva.org talk about how we can participate in community and help each other through micro loans and love. It's a beautiful and inspiring 18 minute talk.
Jessica Jackley: Poverty, money -- and love
Video on TED.com
Jessica Jackley: Poverty, money -- and love
Video on TED.com
Tuesday, September 21, 2010
The flawed logic against Social Responsibility
In his Case Against Corporate Social Responsibility (Wall Street Journal, August 22, 2010), Aneel Karnani questions the efficacy of social responsibility, saying the idea that companies should act responsibly and will profit from it is fundamentally flawed. This is true, but the flaw is in his vision.
Today, as Karnani indicates, any officer of a publically traded company is legally bound to maximize shareholder profit. Given this mandate morals, ethics, and good conscience are (must be) shunted, unless of course they can be rationalized as being in the shareholders’ best interests. And it is often true that more profits can be gleaned, at least in the short term, if a company is willing to forgo the niceties of social responsibility.
Karnani goes on to explain that regulators, watchdogs, and advocates should play the role of pulling in the reins on companies that would otherwise run amok and destroy us all for the sake of quarterly returns. And if we could ensure that these roles were played by uncorrupt, impartial, and passionately just persons perhaps we wouldn’t be in the pickle we’ve found ourselves in today. But given what’s happened this solution seems a bit dated or naïve… been there, done that.
But where his logic and his vision really fails is when he says that “In the end, social responsibility is a financial calculation for executives,” because it assumes that we must always continue to based everything on financial calculations. I think the world is opening up to some other options.
Social Enterprise is one of those options and it’s catching on. A Social Enterprise is any venture that is structured to use market forces to make a net positive social impact. Social Enterprise, can be seen as a step back to a time when social responsibility was part of the nobles oblige pact that successful company founders made with the communities in which they lived, brought up their children and left their legacy. Or Social Enterprise could be seen as a step forward in our evolutionary development as a species beyond selfish greed and toward a more just and compassionate society.
Either way, it is enables businesses to form based on the premise that purpose, people, and planet come before profits, and that while profits are an important metric of health, they do not have to be the raison detre for a company. This is the free market at its best. Not only are all of us free to pursue happiness, but we can each determine what happiness means.
As a Social Enterprise, the company that I founded over 25 years ago is required to act in a Social Responsible way (in other words we are required to avoid doing harm whenever we can). We are required to be transparent, and engage in participative governance, and any profits that we distribute have to be split equally among employees, investors, and the community. To ensure that this pact isn’t undone at the whim of a future majority shareholder we’ve created a separate class of preferred shares that are held by a nonprofit reSET(Social Enterprise Trust) which has as its mission to “promote, preserve, and protect social enterprise.” This class of stock doesn’t give reSET any day to day control of our operations, but it does give a majority vote to reSET on any changes to the Social Enterprise status of the company. This protects and preserves our Social Enterprise structure and while it may reduce the sale value of the company, it makes it much more satisfying to me as the owner wanting to leave a legacy that’s greater than the sum of my balance sheet.
The main difference between a Social Enterprise and a traditional business is that the Social Enterprise exists to make a contribution, while the traditional business exists to make a profit for its shareholders. Two different games, two different sets of rules, and the great thing is we don’t have to choose one or the other. In a free market there’s room for both.
Can these Social Enterprise ventures scale? Ask Muhhamed Yunus, nobel prize winning father of micro finance who started Grameen Bank as a Social Enterprise, not to get rich of the backs of the poor, but to make a difference, which he has done in the lives of millions through the almost 9 billion dollars that have been loaned out. Yes they can scale, and as an investor it’s where I would put my money every time: One, because it feels better to me, and two, because in the long run I think that will be the better investment.
Karnani says social responsibility is “ an illusion, and a potentially dangerous one.” On the contrary, I think believing that we can continue to let GDP and other financial metrics define success for us a company or a country is an illusion and clearly a dangerous one.
The exciting thing is that what America has always stood for is initiative and creativity. We’re great at innovation. We got ourselves to the moon. We created the first PC and the rolling suitcase. It feels like we’re the crew of Apollo 13 and we’ve been handed a cardboard box of odds and ends and asked to cobble something together to save our butts. To stay on course is not an option. To freak out and dive for cover is an understandable but not particularly helpful response. Time is not on our side and we don’t have a lot to work with. But we have brains and hearts of many passionate people. I think we can do it.
Of course we also invented the Stop Sign and the Revolving Door. But I think Social Enterprise will prevail. I think we will prevail. Winston Churchill once said: “Americans always do the right thing, but only after exploring all the alternatives.” Our hearts are in the right place, but we’ve got to open our minds to other possibilities.
Today, as Karnani indicates, any officer of a publically traded company is legally bound to maximize shareholder profit. Given this mandate morals, ethics, and good conscience are (must be) shunted, unless of course they can be rationalized as being in the shareholders’ best interests. And it is often true that more profits can be gleaned, at least in the short term, if a company is willing to forgo the niceties of social responsibility.
Karnani goes on to explain that regulators, watchdogs, and advocates should play the role of pulling in the reins on companies that would otherwise run amok and destroy us all for the sake of quarterly returns. And if we could ensure that these roles were played by uncorrupt, impartial, and passionately just persons perhaps we wouldn’t be in the pickle we’ve found ourselves in today. But given what’s happened this solution seems a bit dated or naïve… been there, done that.
But where his logic and his vision really fails is when he says that “In the end, social responsibility is a financial calculation for executives,” because it assumes that we must always continue to based everything on financial calculations. I think the world is opening up to some other options.
Social Enterprise is one of those options and it’s catching on. A Social Enterprise is any venture that is structured to use market forces to make a net positive social impact. Social Enterprise, can be seen as a step back to a time when social responsibility was part of the nobles oblige pact that successful company founders made with the communities in which they lived, brought up their children and left their legacy. Or Social Enterprise could be seen as a step forward in our evolutionary development as a species beyond selfish greed and toward a more just and compassionate society.
Either way, it is enables businesses to form based on the premise that purpose, people, and planet come before profits, and that while profits are an important metric of health, they do not have to be the raison detre for a company. This is the free market at its best. Not only are all of us free to pursue happiness, but we can each determine what happiness means.
As a Social Enterprise, the company that I founded over 25 years ago is required to act in a Social Responsible way (in other words we are required to avoid doing harm whenever we can). We are required to be transparent, and engage in participative governance, and any profits that we distribute have to be split equally among employees, investors, and the community. To ensure that this pact isn’t undone at the whim of a future majority shareholder we’ve created a separate class of preferred shares that are held by a nonprofit reSET(Social Enterprise Trust) which has as its mission to “promote, preserve, and protect social enterprise.” This class of stock doesn’t give reSET any day to day control of our operations, but it does give a majority vote to reSET on any changes to the Social Enterprise status of the company. This protects and preserves our Social Enterprise structure and while it may reduce the sale value of the company, it makes it much more satisfying to me as the owner wanting to leave a legacy that’s greater than the sum of my balance sheet.
The main difference between a Social Enterprise and a traditional business is that the Social Enterprise exists to make a contribution, while the traditional business exists to make a profit for its shareholders. Two different games, two different sets of rules, and the great thing is we don’t have to choose one or the other. In a free market there’s room for both.
Can these Social Enterprise ventures scale? Ask Muhhamed Yunus, nobel prize winning father of micro finance who started Grameen Bank as a Social Enterprise, not to get rich of the backs of the poor, but to make a difference, which he has done in the lives of millions through the almost 9 billion dollars that have been loaned out. Yes they can scale, and as an investor it’s where I would put my money every time: One, because it feels better to me, and two, because in the long run I think that will be the better investment.
Karnani says social responsibility is “ an illusion, and a potentially dangerous one.” On the contrary, I think believing that we can continue to let GDP and other financial metrics define success for us a company or a country is an illusion and clearly a dangerous one.
The exciting thing is that what America has always stood for is initiative and creativity. We’re great at innovation. We got ourselves to the moon. We created the first PC and the rolling suitcase. It feels like we’re the crew of Apollo 13 and we’ve been handed a cardboard box of odds and ends and asked to cobble something together to save our butts. To stay on course is not an option. To freak out and dive for cover is an understandable but not particularly helpful response. Time is not on our side and we don’t have a lot to work with. But we have brains and hearts of many passionate people. I think we can do it.
Of course we also invented the Stop Sign and the Revolving Door. But I think Social Enterprise will prevail. I think we will prevail. Winston Churchill once said: “Americans always do the right thing, but only after exploring all the alternatives.” Our hearts are in the right place, but we’ve got to open our minds to other possibilities.
Friday, August 13, 2010
Running with bugs
I began my run of the first mild day of spring light of step and full of joy and was immediately welcomed by the season’s first black fly. Soon two, four, ten were buzzing around my face in tight formation, and by the time I reached to top of our driveway these first scouts were joined by the whole squadron of killjoy.
Happiness gave way to panic. My arms began to windmill. Shooing and swearing had no effect whatsoever, flapping and slapping worked to a degree. When the next wave of hungry bloodsuckers descended, I picked up my pace hoping to outrun them. Flailing while running is great exercise and within minutes I was taking deep heaving breaths - inhaling bugs by the battalion. Not up for the triathlon of running, flailing, and coughing, I came to a retching stop, which gave even the slowest recruits time to catch up. What started out as such a promising run was instead sucking the life from me (literally) and threatening my sanity.
Running a business is often like this. There are cold, harsh winters when it’s all you can do to keep it together, followed by spring and the promise of easier times. Then, when the halcyon days arrive, you barely have time to celebrate before the bugs show up. And in business, the bugs are everywhere: The client that refuses to pay, the unexpected bill, rising taxes, economic collapses. Some bugs are big and ugly, but even the little ones, when they come in clouds, can drive you crazy.
So here’s what I’ve learned from running with bugs:
Stay calm – running faster, and working up a sweat just makes you more attractive to their blood sucking ways. Instead, run calmly at a steady pace and you’ll outpace most of the rascals while maintaining your dignity and composure.
Practice restraint – there’s something deeply satisfying in crushing the carapace of a deerfly that’s been dive bombing you for miles, but showing restraint is a powerful feeling too. Buddhists are taught to honor all life, even the life of a bug and I respect this, but at the same time I also respect my instinct to swat. (I rationalize it this way: I’m doing the bug a favor - sending it sooner to its next and hopefully more elevated incarnation). So swat if you must, but don’t fool yourself into thinking you’re going to kill them all. And know there is power in choosing when to swat and when to let it be.
Practice patience. Bugs exist. This is life. They come and they will go. After the bugs of spring there will be the heat of summer, followed by the wonderful gift that is running through crisp falling leaves. This will naturally be followed by cold and ice and the dream of another spring.
Practice gratitude – Even bugs serve a purpose (no bugs, no birds for instance). In every season there are things to feel grateful for and things to annoy you. Whether you feel blessed or drained is often a matter of what you pay attention to.
Practice joy – With every annoyance challenge yourself to think of three things for which you are grateful. Celebrate these things and feel the joy.
Practice resilience -Don’t give up. The only way to avoid bugs is to stay inside and then the bugs win. So head out into the challenge. Pay attention to your form – head high, chin tucked, core engaged.
And don’t forget to smile… with your mouth closed of course.
Happiness gave way to panic. My arms began to windmill. Shooing and swearing had no effect whatsoever, flapping and slapping worked to a degree. When the next wave of hungry bloodsuckers descended, I picked up my pace hoping to outrun them. Flailing while running is great exercise and within minutes I was taking deep heaving breaths - inhaling bugs by the battalion. Not up for the triathlon of running, flailing, and coughing, I came to a retching stop, which gave even the slowest recruits time to catch up. What started out as such a promising run was instead sucking the life from me (literally) and threatening my sanity.
Running a business is often like this. There are cold, harsh winters when it’s all you can do to keep it together, followed by spring and the promise of easier times. Then, when the halcyon days arrive, you barely have time to celebrate before the bugs show up. And in business, the bugs are everywhere: The client that refuses to pay, the unexpected bill, rising taxes, economic collapses. Some bugs are big and ugly, but even the little ones, when they come in clouds, can drive you crazy.
So here’s what I’ve learned from running with bugs:
Stay calm – running faster, and working up a sweat just makes you more attractive to their blood sucking ways. Instead, run calmly at a steady pace and you’ll outpace most of the rascals while maintaining your dignity and composure.
Practice restraint – there’s something deeply satisfying in crushing the carapace of a deerfly that’s been dive bombing you for miles, but showing restraint is a powerful feeling too. Buddhists are taught to honor all life, even the life of a bug and I respect this, but at the same time I also respect my instinct to swat. (I rationalize it this way: I’m doing the bug a favor - sending it sooner to its next and hopefully more elevated incarnation). So swat if you must, but don’t fool yourself into thinking you’re going to kill them all. And know there is power in choosing when to swat and when to let it be.
Practice patience. Bugs exist. This is life. They come and they will go. After the bugs of spring there will be the heat of summer, followed by the wonderful gift that is running through crisp falling leaves. This will naturally be followed by cold and ice and the dream of another spring.
Practice gratitude – Even bugs serve a purpose (no bugs, no birds for instance). In every season there are things to feel grateful for and things to annoy you. Whether you feel blessed or drained is often a matter of what you pay attention to.
Practice joy – With every annoyance challenge yourself to think of three things for which you are grateful. Celebrate these things and feel the joy.
Practice resilience -Don’t give up. The only way to avoid bugs is to stay inside and then the bugs win. So head out into the challenge. Pay attention to your form – head high, chin tucked, core engaged.
And don’t forget to smile… with your mouth closed of course.
Sunday, July 18, 2010
Is your business for-profit or for-purpose?
The fact that we divide our world into business and nonprofits says a lot about our priorities. The word “business” dates back to the 14th century and pertains to purposeful activity. This differentiated it from “desport” (later shortened to sport) which referred to leisure activities. So the Executive Director of a homeless shelter is engaged in business (purposeful activity) every bit as much as our Wall Street friends. It’s just that one is focused on making a contribution to society while the other is focused on making a profit.
There are a number of problems with bifurcating the business world this way. First and foremost it introduces the strange misconception that a nonprofit business doesn’t need to be or even shouldn’t be profitable. I heard our town Zoning Commissioner light into the Executive Director of a local museum for operating a revenue-generating farmers market “You’re not acting like a nonprofit – you’re acting like a business.” This confusion is understandable given the nomenclature. If this were really the differentiating point then a friend of mine would be right when he called his auto-body shop a nonprofit – he admitted that had started it as a for-profit but it just didn’t turn out that way.
It’s interesting that while every nonprofit will declare itself as such early on in its mission statement, rarely do you hear the non-nonprofit describing itself as “for profit” anywhere. Maybe they think it just goes without saying, but I suspect there’s a touch of guilt in the omission. So Merk, the Fortune 500 pharmaceutical company says its purpose is “preserving and improving human life,” when the unspoken truth carries a significant modifier of that loftier goal.
My problem is not with the “for profit” moniker -I just think it should be required to be included in the for-profit’s mission statement in the name of full disclosure. Merk’s purpose would be restated as “our purpose is to make a profit from selling things that will hopefully preserve and improve human life.” I realize it goes without saying, but why aren’t we saying it? Other than it’s not as picturesque. Like asking Miss America to describe what she thinks is important in life and having her answer “Gee, well, the most important thing for me, of course my looks. I spend a lot of time at the gym and in front of a mirror to make sure I look my best. Then if there’s time left over, and that’s a big if (smile) then I’m all for volunteering to help save the world. (teeth).” The truth may set you free, but it may not win you the PR contest.
My bigger problem is why those businesses who have as their purpose making a contribution to society have to walk around with the label of nonprofit. It’s like “disabled” or “nonwhite” or “non[fill in your religious affiliation]” It just carries a stigma. There’s a value judgment inherent in the orientation. We create a certain filter for ourselves when we describe the world this way and it says a lot about our priorities.
First of all – it’s always a bad thing to label yourself as what you are not. It’s just so negative. I’m a middle-aged, quiet, laidback, sensitive, spiritual, mother and business owner. It would be equally true to describe me as nonyoung, nonreligious, nonmale, nonurban, nonfashionable, and nongregarious. But please don’t.
So let’s get away from what it’s not. The universe we’re talking about consists of people organized around “purposeful activity”. For some the purpose is profit. For others the purpose is to make a contribution – to have a positive net social impact (PNSI). So why not call them For Profit and PNSI organizations? I think it’s important to be clear and upfront about your purpose.
It makes a difference. Purpose matters.
What’s your take on the over-muscled body builder who spends all day at the gym watching his biceps grow? Now what if I told you Mr. Universe was an EMT and regularly used his strength to rescue people and animals from tight situations and that once he single-handedly lifted a semi-tractor-trailer off a car which had been pinned, allowing his team mates to rescue a woman and her baby from the car before it burst into flames. Muscles with purpose are so much sexier.
At least if we define the universe as For-Profit and PNSI we’ve more correctly divided the universe. But aren’t profits a contribution? Depends on how they are used. Providing a return to investors is positive. providing a return to employees is positive. Providing a return to community and planet is good. And providing needed goods and services to customers is good. But if you harm any of these stakeholders while serving the others this creates negative impact. It’s important to look at the whole equation. The danger of focusing on any one piece is that the others get lost. And when we look only at profit there’s danger ahead.
Here’s an experiment you can try at home. Bring up one of your children as Forprofit. Let him know that the single most important thing is how much money he earns. Don’t let a day go by without asking him whether he’s earned anything, and give him a quarterly report card on what his worth is as measured by the money he earned over the expenses of keeping him in your house. When he does make money be lavish with the praise, tell the neighbors, and write about it in your blog. Give him a bonus, and suggest that with some small percentage of his earnings he may want to think about giving back. Whatever. When he has a bad week, use it as a learning opportunity. Explain how the free market works and the importance of having revenue exceed expense. Don’t listen to the sorry excuses of having spent time or money helping a friend. Suggest he stop feeding his dog, or better yet selling it. If he continues to over spend or under earn threaten to trade him in for a kid that can do better.
Raise your second child to focus on her PNSI (positive net social impact). Explain that every one of her actions has an impact on the PNSI and that her goal is to maximize it over the years. Tell her that earning money, sharing, helping others, and being a steward of the planet all add to the positive and that being greedy, reckless, lazy, and abusive of others or the planet create a net loss. Tell her that happiness- hers and others’, is important and that true happiness doesn’t come from stuff but from our ability to be grateful for and find joy in what we have right now. Tell her to work hard, laugh often, and never to lose focus on her PNSI. Tell her it’s important to be grateful, to share, to give, to make a contribution.
Then wait 20 years and let me know.
How do you measure PNSI? Unfortunately it’s not as simple as Revenue-Expenses, nor can it always be measured in dollars. But we’re clever people we’ll figure out a way. The first step is realizing that profit is only part of the equation.
There are a number of problems with bifurcating the business world this way. First and foremost it introduces the strange misconception that a nonprofit business doesn’t need to be or even shouldn’t be profitable. I heard our town Zoning Commissioner light into the Executive Director of a local museum for operating a revenue-generating farmers market “You’re not acting like a nonprofit – you’re acting like a business.” This confusion is understandable given the nomenclature. If this were really the differentiating point then a friend of mine would be right when he called his auto-body shop a nonprofit – he admitted that had started it as a for-profit but it just didn’t turn out that way.
It’s interesting that while every nonprofit will declare itself as such early on in its mission statement, rarely do you hear the non-nonprofit describing itself as “for profit” anywhere. Maybe they think it just goes without saying, but I suspect there’s a touch of guilt in the omission. So Merk, the Fortune 500 pharmaceutical company says its purpose is “preserving and improving human life,” when the unspoken truth carries a significant modifier of that loftier goal.
My problem is not with the “for profit” moniker -I just think it should be required to be included in the for-profit’s mission statement in the name of full disclosure. Merk’s purpose would be restated as “our purpose is to make a profit from selling things that will hopefully preserve and improve human life.” I realize it goes without saying, but why aren’t we saying it? Other than it’s not as picturesque. Like asking Miss America to describe what she thinks is important in life and having her answer “Gee, well, the most important thing for me, of course my looks. I spend a lot of time at the gym and in front of a mirror to make sure I look my best. Then if there’s time left over, and that’s a big if (smile) then I’m all for volunteering to help save the world. (teeth).” The truth may set you free, but it may not win you the PR contest.
My bigger problem is why those businesses who have as their purpose making a contribution to society have to walk around with the label of nonprofit. It’s like “disabled” or “nonwhite” or “non[fill in your religious affiliation]” It just carries a stigma. There’s a value judgment inherent in the orientation. We create a certain filter for ourselves when we describe the world this way and it says a lot about our priorities.
First of all – it’s always a bad thing to label yourself as what you are not. It’s just so negative. I’m a middle-aged, quiet, laidback, sensitive, spiritual, mother and business owner. It would be equally true to describe me as nonyoung, nonreligious, nonmale, nonurban, nonfashionable, and nongregarious. But please don’t.
So let’s get away from what it’s not. The universe we’re talking about consists of people organized around “purposeful activity”. For some the purpose is profit. For others the purpose is to make a contribution – to have a positive net social impact (PNSI). So why not call them For Profit and PNSI organizations? I think it’s important to be clear and upfront about your purpose.
It makes a difference. Purpose matters.
What’s your take on the over-muscled body builder who spends all day at the gym watching his biceps grow? Now what if I told you Mr. Universe was an EMT and regularly used his strength to rescue people and animals from tight situations and that once he single-handedly lifted a semi-tractor-trailer off a car which had been pinned, allowing his team mates to rescue a woman and her baby from the car before it burst into flames. Muscles with purpose are so much sexier.
At least if we define the universe as For-Profit and PNSI we’ve more correctly divided the universe. But aren’t profits a contribution? Depends on how they are used. Providing a return to investors is positive. providing a return to employees is positive. Providing a return to community and planet is good. And providing needed goods and services to customers is good. But if you harm any of these stakeholders while serving the others this creates negative impact. It’s important to look at the whole equation. The danger of focusing on any one piece is that the others get lost. And when we look only at profit there’s danger ahead.
Here’s an experiment you can try at home. Bring up one of your children as Forprofit. Let him know that the single most important thing is how much money he earns. Don’t let a day go by without asking him whether he’s earned anything, and give him a quarterly report card on what his worth is as measured by the money he earned over the expenses of keeping him in your house. When he does make money be lavish with the praise, tell the neighbors, and write about it in your blog. Give him a bonus, and suggest that with some small percentage of his earnings he may want to think about giving back. Whatever. When he has a bad week, use it as a learning opportunity. Explain how the free market works and the importance of having revenue exceed expense. Don’t listen to the sorry excuses of having spent time or money helping a friend. Suggest he stop feeding his dog, or better yet selling it. If he continues to over spend or under earn threaten to trade him in for a kid that can do better.
Raise your second child to focus on her PNSI (positive net social impact). Explain that every one of her actions has an impact on the PNSI and that her goal is to maximize it over the years. Tell her that earning money, sharing, helping others, and being a steward of the planet all add to the positive and that being greedy, reckless, lazy, and abusive of others or the planet create a net loss. Tell her that happiness- hers and others’, is important and that true happiness doesn’t come from stuff but from our ability to be grateful for and find joy in what we have right now. Tell her to work hard, laugh often, and never to lose focus on her PNSI. Tell her it’s important to be grateful, to share, to give, to make a contribution.
Then wait 20 years and let me know.
How do you measure PNSI? Unfortunately it’s not as simple as Revenue-Expenses, nor can it always be measured in dollars. But we’re clever people we’ll figure out a way. The first step is realizing that profit is only part of the equation.
Sunday, July 4, 2010
Friday, July 2, 2010
It's not the economy stupid
Carville’s famous sound bite, which may have helped Bill Clinton win election in 1992, like karma, has come back to bite us. Now - it’s the economy that's stupid. What else can you say about an economy that causes us to forget our principles and ignore the pain being inflicted on people and our planet in the name of profits. We’re paying for having lost our way to an extent which makes the aforementioned president’s peccadilloes seem quaint.
It’s a stupid economy that has us thinking things which can’t be measured, like love, honesty, integrity, kindness, compassion, and neighborliness are somehow less valuable simply because they cannot be monetized. It’s a stupid economy that has us thinking the only way to get back on our feet is to consume ever more crap, spurring the use of our ever dwindling resources, and accelerating the degradation of our ever more stressed planet. It’s a stupid economy where those at the top make billions in bonuses for having screwed millions of honest people who trusted them. It’s a stupid economy when this type of behavior becomes business as usual. It’s a stupid economy when companies and their leaders are rewarded by Wall Street for laying off thousands and shipping jobs overseas. It’s a stupid economy when companies cannot legally do the right thing out of a fiduciary responsibility to shareholders. It’s a stupid economy when no value is registered if you volunteer to help solve some of the world’s problems, stay home to raise a child or take in a shelter dog bound for euthanasia, but which registers positive growth if you spend your time at the mall, put the child in day care or have the puppy destroyed; where building bombs and jails adds to our national bottom line. It’s a stupid economy where in the name of free trade, corporations are given the rights of citizens, but bear no responsibility for the damage and death they cause. It’s a stupid economy that forces companies to take unacceptable safety risks for the sake of profits. It’s a stupid economy that asks us to check our ethics, our values, and our hearts at the door of businesses which are likely to lay us off if we can’t continue adding to the bottom line by working harder for less (and probably even if we do).
Fortunately we’re beginning to wake up. We realize that it’s not about the economy or the bottom line. It’s about people, planet, and purpose. And we’re not calling anyone stupid.
It’s a stupid economy that has us thinking things which can’t be measured, like love, honesty, integrity, kindness, compassion, and neighborliness are somehow less valuable simply because they cannot be monetized. It’s a stupid economy that has us thinking the only way to get back on our feet is to consume ever more crap, spurring the use of our ever dwindling resources, and accelerating the degradation of our ever more stressed planet. It’s a stupid economy where those at the top make billions in bonuses for having screwed millions of honest people who trusted them. It’s a stupid economy when this type of behavior becomes business as usual. It’s a stupid economy when companies and their leaders are rewarded by Wall Street for laying off thousands and shipping jobs overseas. It’s a stupid economy when companies cannot legally do the right thing out of a fiduciary responsibility to shareholders. It’s a stupid economy when no value is registered if you volunteer to help solve some of the world’s problems, stay home to raise a child or take in a shelter dog bound for euthanasia, but which registers positive growth if you spend your time at the mall, put the child in day care or have the puppy destroyed; where building bombs and jails adds to our national bottom line. It’s a stupid economy where in the name of free trade, corporations are given the rights of citizens, but bear no responsibility for the damage and death they cause. It’s a stupid economy that forces companies to take unacceptable safety risks for the sake of profits. It’s a stupid economy that asks us to check our ethics, our values, and our hearts at the door of businesses which are likely to lay us off if we can’t continue adding to the bottom line by working harder for less (and probably even if we do).
Fortunately we’re beginning to wake up. We realize that it’s not about the economy or the bottom line. It’s about people, planet, and purpose. And we’re not calling anyone stupid.
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