I returned recently from the C3 Summit in Austin TX - that’s the Catalyzing Conscious Capitalism Summit.In attendance were some well known CEOs such as John Mackey CEO of Whole Foods, George Zimmer of Men’s Warehouse, and Casey Sheehan of Patagonia, to name just a few.In addition, we had such luminaries as Jean Huston and Deepak Chopra as some of our keynote speakers.
What do these stalwarts of our capital system have to do with consciousness gurus such as Deepak and Jean?Believe it or not these and the more than 100 other attendees came together because of the common belief that consciousness is the next competitive advantage for business in the 21st Century.
What exactly is consciousness?It exists when we live in attunement with what we at Quantum Leaders call the Context field of energy.This is the field of meaning and purpose, the underlying context for all that we do.For some, this field remains unconscious and therefore unavailable to them.Yet this field is rich in information that when accessed, can guide and direct any person and any organization to the most effective way to achieve their goals.
As one of the attendees described it, we are at a critical crossroads in business today. We are all standing at the center of the intersection of where capitalism intersects with consciousness.This is more than the traditional view of the socially responsible organization or even being environmentally friendly or “green”.All of that is of course part of being a conscious capitalist, but being conscious recognizes more than just the actions one takes.
It begins to draw on the realization that we are all part of a collective whole and as such what we do to others has a direct impact on what happens to us.Hmm, that sounds a lot like one of those spiritual rules often referred to as the Golden Rule.Hence, one of the pillars of conscious capitalism is that we as business leaders are here in service to all our stakeholders.Yes, I said “in service to”.As today’s new conscious capitalists recognize, it is more about those we are here to serve than it is about serving ourselves.
And what guides our service to others? It is the second pillar of conscious capitalism, meaning and purpose.At Quantum Leaders, we call this the Soulful Purpose of the organization; a purpose so core it touches the very soul of the organization and is in fact the very reason for its existence.Like the acorn that recognizes its purpose is to ultimately become an oak tree, each individual and each living organization has a soulful purpose that will guide and direct its success.
The third pillar of conscious capitalism is leadership.To the degree that the leadership for an organization has matured and developed along the three dimensions of functional skills, interpersonal skills and their own intrapersonal skills is the degree the leader will be able to create a consciously living organization.Each of these domains of skills translates to the ability of the leader to manage the organization, to create collaborative team environments and inspire and motivate the workforce to become fully committed and engaged to the fulfillment of the organizations’ Soulful Purpose.
Some might say this is a new beginning; I however believe it is but the next step in the evolutionary process for individuals, organizations and our society as a whole.For those of you who are interested here is a highlight video of the conference. I encourage you to watch and consider your own growth as an individual, a leader, and as an organization.
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My dear friend Paul Walker just posted and interesting blog
on his Huffington Post site.In it he
proposes that the first thing he would do if the USA was his client is “do is a teambuilding to improve honest
communication and trust.”And
then goes on to say that “If we do not stop fighting
each other, we will fall behind as a nation-state, just like companies whose
leadership fights each other.”
Paul is a CEO Coach and works wonders with his business clients to align
the teams to implement their business strategies.And in business conflict among team members
is the surest way to impeded success.
The problem with associating
the success parameters from business to politics is that they are not the same
"game", anymore than one can play rugby by the rules of baseball.
Our government was set up to achieve certain ends; it was designed primarily
for control of power. Our three divisions, executive, legislative and judiciary
were purposely designed to ensure no one function could gain complete control
of our nation. Checks and Balances was the designing objective.
And as for organizations who “explore ideas to find the
best way instead of playing win/lose games” I have to remind you that our whole
society is based on the adversarial principle (a win/lose game).Our founding fathers recognized that we were unlikely
to find A Solomon the Wise to discern the truth or the best solution so they
set up our system based on the idea that the truth can best be is discovered by
opposing views being voiced and through the "jury of one's peers" truth
would emerge.This is the basis of our
legal system and it is also the foundation of our Two Party System. It was once
said that the political extremes define the issues and the moderates pass the
laws. We need a return of the moderates
to act as “jury of one’s peers.”
The problem we have is not one of team building but organization design. We
designed it to have opposing positions compete with the belief that the best
solution would emerge from the conflict.We could of course redesign our system and create one that relied on the
same principles of business.However
business is governed as much by market forces as they are by leadership team dynamics.
Government was never designed to run efficiently, it was
designed to control misuse of power and given that we are dealing with humans
playing with immense powers, I am not sure I want to change the design.
I coach organizations and the CEOs who lead them.
Organizations are living entities and have their own Soulful Purpose. When
coaching the Organization my goal is to help it realize its unique contribution
to our world. When coaching business leaders I am working within a certain Context,
a certain set of objectives and governing rules.To coach political leaders as if they were business
CEOs would be like coaching an artist as if she was a football player -
different Context, different objective, different game.
I read in the Wall Street Journal how congress has passed legislation to provide shareholders a say on pay.And everyone is celebrating this victory as if it will curb in the large levels of pay received by executives of Wall Street.
Then on the front page of Financial Time I read an article about how large Wall Street Banks are “gaming the system.”It seems that "Wall Street banks are reaping outsized profits by trading with the Federal Reserve." The Fed is "buying massive amounts of securities to help stabilize the markets," and, to promote transparency, "it often announces its intention to buy particular securities in advance."
The article goes on to say that according to a former Fed official, "this strategy enables banks to sell these securities to the Fed at an inflated price," and "Wall Street has geared up to take advantage"… "the situation had reached the point that 'everyone games them.'"
OK that in itself seems absurd but then you have to hear Barney Frank’s response to the situation.Here is what the paper reports, "Barney Frank, chairman of the House financial services committee, said the potential profiteering may be part of the price for stabilizing the financial system."
Just so I am not missing anything we have the congress complaining about the “excessive pay” being awarded to financial executives and writing legislation that is going to make access to public markets in this country less and less attractive.And then the same leadership is accepting that profiteering is the price we have to pay.
We have already seen that Sarbanes-Oxley Act of 2001 created a high price for companies in the public sector and did nothing to prevent executives from behaving in ways that are considered by most to not be in the best interest of society.And now we are passing more legislation that will further constrain the decision making and innovation (which by the way requires risk taking) of our public companies.
But as a society we still hold the core underlying values that gaming the system is part of doing business.Or said another way, behaving in ways that maximizes profits at all costs is what we expect from business.
A friend of mine said you cannot suck and blow from the same straw at the same time.I will add to that that - you cannot legislate morality.
We are trying to create, through legislation and litigation, behaviors that are not supported, even encouraged within the context of our society.Return on Investment, Maximize Shareholder Value, Profit at any cost are the themes, the stories we live by.It is what defines the container and hence molds the shape of our society and behaviors of our leadership.It is what enables Barney Frank to demand legislation against executive compensation and at the same time state “profiteering is the price we have to pay.”(Oh and by increasing profits these executives will earn greater bonuses).
Until we recognize that we live in and are part of a living organic system and our choices are defined by our Context, we will never solve the ills of our society.
I read today an article in the New York Times titled “Weary of Looking for Work, Some Create Their Own”.It discusses the trend among many of todays laid off workers to turn their energies toward starting their ownbusinesses rather than looking for work.
Quoting from the article “Mark V. Cannice, executive director of the entrepreneurship program at the University of San Francisco, calls the phenomenon “forced entrepreneurship.”“If there is a silver lining, the large-scale downsizing from major companies will release a lot of new entrepreneurial talent and ideas — scientists, engineers, business folks now looking to do other things,” Mr. Cannice said. “It’s a Darwinian unleashing of talent into the entrepreneurial ecosystem.”
As I said in my previous blog, “The Future Looks Promising” I shared how usingThe Living Organization Model™ one can predict that the release of a huge amount of potential energy into the pool will invariably without it finding creative ways to again contribute to society.
As with all entrepreneurial efforts many will not make it past the early attempts but those that do will bring to our society new and valuable contributions to our lives.So it was at the beginning with Ford, IBM, Microsoft, Yahoo, Google and countless others – all bringing forward ideas and products that transformed our society.
Yes this is a very difficult period for our society and those who are without employment.But as the saying goes, when one door closes another opens.For those who are without work there is a plethora of opportunities to apply their energy, their innate creativity potential, to make a contribution.
Some of those will be the next corporate giant, some will become one of the 3.8 million companies employing less the 10 people who collectively employ over 12% of our workforce, and some will not make it at all.And even that will make a contribution.Anyone who swims in the waters of entrepreneurism learns the valuable skills of self sufficiency, accountability
Lawrence Summers, Barack Obama’s top economic adviser has urged world leaders to pump more public money into the economy in a coordinated effort to boost demand and lift the world out of recession.Is this a mistake?
Clearly the governments have to do something to help stem the tide of a major correction to the world economies.A correction that came about because of the inflated consumption, consumption based on most of the world living outside our means.
As with all systems of energy flows, and the economy is nothing more than a system of energy flows, it will seek a state of equilibrium.What goes up must come down.And this is a good thing.
But now the government is calling for a re-insertion of demand.While this may solve the problem in the short term, it can also lead to yet another correction.The real question is what is a sustainable level of demand?What is the level of worldwide demand that will allow for continued and sustainable growth? Clearly it is not the level we have experienced for the last decade.
On one hand this is a good thing.All around me I hear people talking about changing their life style, reducing their expenditures to those items that are truly meaningful.People are asking, do I really need a new car every three years, do I really need to eat as often as we have, can’t I find meaning and purpose in what we have and not seek to fill a void through consumption?
But such a switch in values, while overall a very healthy move for our society, leaves a level of uncertainty in the markets that I believe is underlying the weakness we are experiencing.Do automakers plan for 17 million cars a year or is the current rate of 9 million where it will stay?
The question I do not see anyone talking about is the one that will attempt to forecast what the real sustainable level of demand is.Until this question is answered governments will not know how much stimulus is the right amount, business will not know how much growth or contraction to plan for and we will limp along in a state of uncertainty.A state that is never good for the collective psyche.
In these days of severe decline in economic activity when the very foundation of our economic system seems to be imploding, how can I say the future looks promising?
It is true that we are experiencing some real changes to our economy where the very building blocks of our society, our financial systems, and our business model no longer produce the results to sustain and grow our country. It is true that we are experiencing massive numbers of people out of work and companies that were thought to be the bedrock of society, Bear Stearns, Lehman Brothers, GM, Chrysler, and the like are gone or on the way out.
So how can I say the future looks promising? Because I know life does not stop in this moment of change, chaos, and uncertainty. That our society, like indiviudal business are living entities.
For example the massive number of people unemployed. While it is awful for those of us that are effected, what is occuring is the release of a tremenodous amount of energy into the available pool.
And looking at our society as The Living Organization™, this represnets an unbelievable amount of potential energy, which we know will not lay dormant for long. It will again begin to flow but in wonderfully creative ways making new contributions to society.
I cannot say what will be created only that this huge source of energy, in the form of the talents, and passions of all the people who are being let go, will soon turn to creating something. That is the nature of energy and living beings.
For those of us who are old enough to remember the major downsizing of the 1980s, we also remember the major growth in innovation of the 1990s.
Yes, this is a horribly painful period for many of us who are in this transition period. There is great uncertainty and change. And there is hope. There is hope becasue of the very fact that we are going through this period. Out of the chaos, confusion and uncertainty will emerge creativity and innovation in proportion to the magnitude of the release of energy.
This view of the future looks very promising indeed.
Norman Wolfe | President/CEO | Quantum Leaders, Inc
My partner Gregg sent me an article from New York Times columnist Thomas L. Friedman entitled “Time to Reboot America”.Quite a good article and I want to just quote on key section form it.
“…we’ve fallen into a trend of diverting and rewarding the best of our collective I.Q. to people doing financial engineering rather than real engineering. These rocket scientists and engineers were designing complex financial instruments to make money out of money — rather than designing cars, phones, computers, teaching tools, Internet programs and medical equipment that could improve the lives and productivity of millions… That’s why we don’t just need a bailout. We need a reboot. We need a build out. We need a buildup. We need a national makeover.”
I couldn’t agree more, but the makeover we need goes beyond the way we invest in the stimulus package, it goes to the very core of how we think and what we value.
We have been seduced for too long into thinking that success is the same as the measure of success.We have been lulled into thinking that if the numbers look good we are successful; whatever the number we choose – stock price, profit, size of my bank account.While the numbers do give us a a to measure our progress, it is not in itself the progress.
But it is often easier to adjust the numbers than it is to adjust the contribution we are making.It is easier to change the scoreboard than play the game better.It is easier to do financial engineering than it is to do real engineering.
We have lost our focus on the systems that contribute to the growth and welfare of our society and instead focused on the system that provides the measurements. The crisis our country is in is not only a financial crisis, it is a value crisis.We have lost our moral compass.We have confused the measurement system with the system under measurement.
Every company, every person should take time this holiday season and ask the question – What is it that we are here to contribute to our society.What is our soulful reason for existing and who do we serve.Whether it be the marketplace for our goods or services, or our friends and family with the essence of our being, we are here to serve.And when we do that the energy of our service is transformed into another energy form to let us know we have truly fulfilled our purpose and made a contribution.Sometimes that energy is in the form of money other times it may just be in the form of a smile or a hug.
However it comes to you remember it is an exchange for the gift of giving for the gift of being in service to another.
Tonight I attended a conference on Venture Capital and the recession.The panel was comprised of VCs and CEOs who are funded by VCs.The audience was mostly entrepreneurs who hope to someday be able to attract VC funding.This is not a new subject for me. I first got involved in the VC – Startup world back in 95 when I was involved with my first startup.Almost 15 years later and I am amazed that the conversation has not changed much.The entrepreneurs need the money and the VCs holding the keys to the kingdom. As I listened to the entrepreneurs ask their questions and the panel gave their answers I was reminded of that old 1955 Ernie Ford song Sixteen Tons and the lyrics - Saint Peter don't you call me cause I can't go, I owe my soul to the company store.How many of these entrepreneurs are selling their soul, worse yet, the soul of their child – the company, for the “need for money.”
I couldn’t help but ponder what would happen if the dynamics were reversed.Let’s face it the VC needs the entrepreneur as much, if not more that the entrepreneur needs the VC’s money.A VC cannot make any return if he doesn’t invest the money in some enterprise but an entrepreneur can make a go of their business without the VC investment.It may take longer to follow a bootstrap strategy but it is clearly done all the time.Imagine a startup world where the VCs come seeking the entrepreneur to allow them to invest their money.
Sound silly?Not really.Ask any CEO of a successful company how many letters they get asking if they want to sell their company.Even I have begun to receive such requests and I have hardly gotten my company off the ground (as least by my standards).Imagine how the world might be better serve d if the focus was put back on what the soulful purpose of the startup is meant to be and that it was guided to fulfill this purpose and serve the marketplace in ways it was intended to.
How did we get the system turned around?How did we allow the soul of the company become corrupted to serve the purpose to provide a return to money managers?
Perhaps it is time for entrepreneurs to take back their companies and become true to the reason they started the firm in the first place –to serve a need in the market in a way only their unique contribution can make.
I sat through a very interesting presentation on the problems with executive pay and the associated comp plans being used in today’s corporations.As I listened to the presenters very eloquent arguments, it dawned on me we are having the wrong conversation.The whole underlying hypothesis that frames the conversation is flawed.
His opening remark was that executive pay plans should be designed to align the interests of the CEO and other executives with those of the shareholders.A premise that underlies all conversations on executive pay and one I certainly have agreed with, that is up till now.
I don’t know what made me all of sudden see the fallacy in that premise, but as the presenter said those words I realized that is the problem.
Here is how the reasoning goes.We are interested in aligning the interests of the CEO with that of the Shareholders.We believe that the best way to do that is to incentivize the CEO through his pay package.This assumes another belief that the CEOs behavior is driven by his self serving interest in maximizing his pay.Therefore with the properly designed pay plan and the CEO innate desire to maximize his pay, he will behave in ways that create long term shareholder value.
Here is the fallacy.A CEO maximizing his pay can perform in a myriad of ways that are not in the shareholders value creating interests.In fact the whole focus on pay as the key objective for a CEO to attain sends the very opposite message that we as board members want the CEO to have.
Let me explain a little further.When I was an executive hiring managers and other employees I sought out people who would communicate a real interest, even a passion, for the job I needed to have performed.It is an age old belief that if anyone came seeking a position based on how much they can earn, they were not the type of person we would hire.
Why, because we knew that salary followed performance and performance was driven as much by their interest and passion for the job as well as their skills and abilities.And anyone who was in it just for the money was not in it for the long term and would leave as soon as a better offer came along.
Yet in the current discussion on CEO pay we take as a given that CEOs are in it for the money and we have to pay them to get them and keep them.Yet these very same people would not take this position with their own organizations.Or if they do is this the kind of culture or tone at the top you want for your company.
Let’s bring the conversation on executive pay back on track.How do we recruit and retain CEOs who have a true passion for the Soulful Purpose of the organization they are being asked to lead.How do we as board members ensure they are behaving in the best interest of the corporation and the realization of its fullest potential The Living Organization™ that is.And then after all that is done, how can we ensure they are receiving the proper remuneration for their efforts.
A friend of mine sent me a wonderful piece called “Catching the Wild Pig”.For those of you who have never heard this parable (and I hadn’t until now), here it is:
A chemistry professor at a large college had some exchange students in the class. One day while the class was in the lab the Professor noticed one young man (exchange student) who kept rubbing his back, and stretching as if his back hurt.The professor asked the young man what was the matter. The student told him he had a bullet lodged in his back. He had been shot while fighting communists in his native country who were trying to overthrow his country's government and install a new communist government.
In the midst of his story he looked at the professor and asked a strange question. He asked, 'Do you know how to catch wild pigs?'The professor thought it was a joke and asked for the punch line. The young man said this was no joke. 'You catch wild pigs by finding a suitable place in the woods and putting corn on the ground. The pigs find it and begin to come every day to eat the free corn. When they are used to coming every day, you put a fence down one side of the place where they are used to coming.When they get used to the fence, they begin to eat the corn again and you put up another side of the fence. They get used to that and start to eat again.
You continue until you have all four sides of the fence up with a gate in the last side. The pigs, who are used to the free corn, start to come through the gate to eat; you slam the gate on them and catch the whole herd.Suddenly the wild pigs have lost their freedom. They run around and around inside the fence, but they are caught.
Soon they go back to eating the free corn. They are so used to it that they have forgotten how to forage in the woods for themselves, so they accept their captivity.
The young man then told the professor that is exactly what he sees happening to America. The government keeps pushing us toward socialism and keeps spreading the free corn out in the form of programs such as supplemental income, tax credit for unearned income, tobacco subsidies, dairy subsidies, payments not to plant crops (CRP), welfare, medicine, drugs, etc. While we continually lose our freedoms -- just a little at a time.
I found this an extremely fascinating and interesting parable and one I can totally endorse. For we must guard carefully not to fall into the trap of being so dependent on the government that we lose our sense of responsibility for our live and even worse, the very spark of life.
Yet, this also brings me to the recognition that we are caught in a rather interesting dilemma are we not. While I agree with the “trap” of the wild pig and the problems that presents, we are also experiencing what happens when you let the pigs (pun intended) run wild (the effect of too much de-regulation for example) and the effects it has on our society overall. – Anyone enjoying the financial crisis we are in?So the real question, (and I believe the true answer) lies in how do we find the right balance.
The trouble we have in our political system is we keep running back and forth between taming the wild pigs and letting them run wild.Wildness is good for creativity, entrepreneurialism, and the like. You want the free flow of energy to stimulate new innovation. And yet when you have unbounded flow of energy you have chaos, which then has to correct itself. As we learn to work with the powerful flow of societal energies, I believe we can learn to modulate the unbounded flow of energy while not reaching the point of constraining it to where we are limiting its flow.
When are we ever going to get a leader that understands the need for balance and stop with the rhetoric of polar opposite making one side wrong and the other right (and I don’t care which side we are talking about).Is it not time for us to have true leadership in this country, and in our companies.Leadership that can connect deeply with the soul of the entity (be it our country or our companies) and guide the energy that flows from there in a balanced way so that we are contributing effectively to our society and our planet?
