Is Small the New Big?

Cancer has slowed down my CAP2.0 posts, but my spirit for a rebirth of capitalism in America is still alive and well!

My buddy Daniel and partner in CAP2.0 day dreaming sent me to a blogbost that tells me that we aren't very far away from young and new companies that will be launched with an opportunity to redefine how the bottom line is calculated.

Also, my dad who worked at a Fortune 50 company for 36 years continues to explain to me how new, young and agile companies are going to quickly emerge and compete with large corporations.

The barriers to entry in starting a business are lowering very rapidly. The young minds of today have a huge opportunity (and I would add responsibility) to shift the way we do business.

I want to be part of this movement that is about to MOVE!

Be the change you want to see in the world and let's not way for politicians to implement the change they talk about during election time every 4 years. WE can do this America!

Concious Capitalism...could it be the birth of CAP2.0?

Few weeks ago we highlighted some fascinating quotes from John Mackey, CEO of the 8 Billion Dollar Retailer Whole Foods. Fast Company just published another article online. A fascinating take on his idea of what he calls "Conscious Capitalism"... Be sure to click on the link below and read the full article.

Just to be clear, John Mackey isn't Moses. "It's not like you go up to the mountaintop and God talks to you: Here is your purpose -- execute," he says.

"It is something you discover and also create." Mackey, founder and CEO of Whole Foods Market, is riffing on the gospel of what he calls Conscious Capitalism. It has been a brutal couple of months for Mackey, who simultaneously became both the punching bag of the progressives and the poster boy of the right wing late last summer, after writing an op-ed in The Wall Street Journal that railed against a government health-care option. Liberal Whole Foods customers organized nationwide boycotts, while self-described "radical conservative" Tea Party types rallied around Mackey, calling for Whole Foods "buycotts." Now, sitting in a soulless beige conference room in Whole Foods' Austin headquarters, with Mount Bonnell looming beyond the window and two protective publicists at his side, Mackey finally starts to relax.

"You see, Conscious Capitalism is a fairly new idea, but it's going to have a huge impact," he begins, describing the philosophy he developed as he built his tiny natural-foods store into an $8 billion retail beast. "I do believe it will become the dominant paradigm of business in the 21st century." Conscious Capitalism, Mackey insists, moves corporations to refocus on purpose instead of profit. In theory, it underscores the importance of all of a company's interdependent "stakeholders": employees, customers, shareholders, suppliers, community, and the environment. When all of those constituencies' interests are factored into the company's decisions and aligned, his thinking goes, all -- including, not incidentally, the bottom line -- will flourish. Read the full article on the Fast Company Website.

Tie everyone to the bottom line

It hit me today why CAP 1.0 company’s underperform. There is no incentive to work harder than the status quo unless you are in sales. Why is it that sales is the only commission based position in a company, excluding high paid execs who get huge bonuses if they “hit their numbers” which is probably more a juggling of the books than anything.

Take me for example. I come in every day to work and then leave. What I do between those two points will determine only one thing, whether I keep my job or not. Yes, there is a possible salary increase, but typically it is only significant when you are promoted (i.e. you receive a new job title) which at my company is probably every five years.

So why does sales get to have all fun? If a company wants to be customer-centric, should not everyone be compensated every time a deal is closed?

I think it a CAP2.0 company you need to find a way to tie everyone to the bottom line. As mentioned in previous posts, the bottom line is something different in CAP2.0, but you still need to incentivize folks to grow the bottom line. Even in my current role at a CAP1.0 company I think I would be more excited about helping work on a new proposal if I was going to get a $1000 bonus if the deal closes. On the flip side, I think I would be more willing to focus hard on a customer issue if I knew I would lose $1000 if the customer ended up not renewing their account this year.

It's Happening....sort of

Over a year ago I added Tom's Shoes to the CAP2.0 blogsite as a representation of a solid CAP2.0 company. Just a year later Tom's shoes is nationally known thanks to a national commercial provided by a CAP1.0 company. My closest friend Daniel just got his first pair of Tom's shoes and I don't consider him a trend-setter in terms of fashion. This is just the beginning....

Even today as I logon to my hotmail account I see an add by Brita that is titled "FilterForGood." I don't know if I should be excited about this new found love for doing good by CAP1.0 companies or not because the fundamental economics that are driving these companies are the ability to grow the bottom line. The bottom line being calculated in numbers. It kind of reminds me of the frat boys at U of M. Once they get to college they rush the fraternities as they trade their pocket protectors for the latest from Abercrombie and Banana Republic. They literally redo their image over night. But is that a bad thing...?

Let's wait and see. I am leery, but it may just because I wasn't a frat boy and I despised the like because they were more about getting the cheap hookup, then any sort of lasting relationship. But some frat guys mean good. They are truly seeking community and male companionship. So maybe these companies are truly having a change of heart. Although, I will be the first to pull off the sheep's clothing to find the big bad wolf.

One thing we can say objectively is that the CAP2.0 movement is under way and this couldn't be a better time for us to upgrade the way we do business. America is scoffed at for her consumeristic and egocentric ways. This is a time for lady wisdom to take the ear of american business. Are we listening, do we see the writing on the wall with the current way of business? Are we willing to risk what has "worked" in hope to create something new?

Let's upgrade the way we do business and never turn back. This would make great-grandma proud...no doubt.

The Heart and Blood of CAP2.0

The current state of CAP1.0 is fueled by money and motived by greed. Investments in future growth evaluate the risk to the bottom line, not the health of the individual, community or environment. That's just plain fact these days.

Where CAP2.0 companies will differ.

The blood of CAP2.0 companies will solely be empathy, moved to do good for another. It will not be acceptable to harm another, a brother, a competitor in hopes to increase organic profits by 8% annually. CAP2.0 companies don't measure success by simply numbers in a corporate balance sheet or financial statement. Rather, CAP2.0 companies look to bring out the best in the world. Actually, CAP2.0 companies look to empower others to find the best in themselves. Empathy. Empathy. Empathy.

Capitalism 1.0 looks to find value in attempt to monetize those assets. It's quite simple. You put a dollar in and you hope to get a $1.10 back. The math used to define a good return in CAP2.0 companies happens to be much more complex to measure. You put a dollar in and you hope to get a smile in return. The greatest satisfaction is that with just one dollar you were able to raise hope and joy in another. If that joy can be passed on to two others and then 4 and then 8 and then 16 and then 32....you see, the investment is so much more and the return can not be beat by any high tech stock that gets bought out by Oracle or Google.

Empathy. Empathy. Empathy. According to Wikipedia: Empathy is the capability to share your feelings and understand another's emotion and feelings. It is often characterized as the ability to "put oneself into another's shoes," or in some way experience what the other person is feeling.

Empathy. Empathy. Empathy.

Greenfield Village Anyone?

I am sick and tired of being sick and tired. What do you think the percentage of adults wake up every day to dread their job. Probably a large majority. That deserves a good old: What the CRAP?!?!?

We're leveraged my friend, leveraged. It's kind of like the american dream has us gripped by the balls. We aren't happy. Let's be real, we are NOT happy. Happy is definitely a yuppy word, but I think even Ocean (my now 3 year old) can distinguish between times when he his happy and times when he is not. So why the crap dude, what's our problem?

Here's my current theory. Community has been turned up side down thanks to the spread of the American Dream. Someone got smart and decided to print a lot of paper money and issue debt to people like it was water. What that allowed was for more random Joe's to go to that big college and buy that big house and have a couple of big cars. What Joe didn't know was that to live that sort of life he has to have a big paying corporate job. So most of the guys I hang around with fall into that category.

What is it that we gain a home and lose our soul? For those out there with homes, what were the top three things you and your real-estate advisor focused on while looking at homes? Number of bedrooms, floor plan, style, cost...etc? Do we find it odd that we don't at all consider our neighbors? I know we do from a socio-economical perspective because there is a concern for resale. How many people do you know moved next door to a friend and living next to that friend was more important than whether it had an attached garage or not?

So college, to career, to home, to kids, to dead end....or at least a lot of daily grind which seems far from the abundant life we all want to experience. I hate to harp on a poor condition, but I think understanding the root cause of this suffering will open our eyes to a renewed way of life that is right around the corner. The thing that is right around the corner is called community. We all want it, but few are finding it these days. We are more transient than ever and the place we called home is quickly being erased from our memory bank.

So where to brown cow? Back to the farm? Maybe to a different planet? I suggest we give up what we thought was the dream and invest it in what we know to be the dream...community. I am not talking socialism, I am talking good old fashion doing life together. I think churches are understanding the power of gathering, but naming your place of gathering "Insert Tree Name" Community Church doesn't assume you got it figured out. Your building may hold 5,000 and your budget may be larger than the state of Texas, but are people communing? Are they simply doing life together?

I like MLK, have a dream. My dream is to see the dreams of those around me realized. I think this will not happen until we get back to doing life together. We need to learn to be a village people again. We need to regain the soul of community. We need to give up our lots to enter into the promise land. My house is listed on the market right now and I am eager to take a step in the direction of doing life together with others. None of this say hi on Sunday after church and once a week in a small group session for an hour. None of this fake relationship building over the internet that helps up grow in knowledge of one another, but miss out on working the fields together.

Is anyone else sick and tired of being sick and tired?

That’s not what companies are about!

Near the end of the following clip the news anchor quote “That’s not what companies are about!” illustrates a fundamental difference between CAP1.0 vs. CAP2.0. Please Note: I borrowed the term "fundamental difference" after hearing it in every other sentence during the presidential debates....lo siento.

http://www.youtube.com/watch?v=EncwVVJ4-GU&NR=1

Correct; companies are not about the benefit of it's employees today, but its founders would say otherwise. Today, they are about greed (i.e. maximizing shareholder value which means the stock price going up) and that is not working and will not work if we want to grow in terms of sustainability. Americans, I plead you, do not allow this greed mentality grow in your hearts and minds. Companies are institutions that should provide for its members. Think about it this way, would you send your kids to a school that ONLY cared about your daughter’s score on her math test and her ability to find the verb in a sentence? Or how about joining a church, temple or any other religious institution that is only concerned with making sure that the religious law is enforced and followed by every member?

Please Americans, let this spirit of greed pass you buy, do not get sucked in, pray against it. Henry Ford laid it out like this: “There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible.” Ford was about generating wealth in America through wage distribution, not through a rising stock price. As the company prospered, so did the workers. And if the workers prospered, the company was successful. The current attitude is that prosperity is determined by a stock price, not wage increases. What if major news outlets started reporting annually the average pay increase within each company and that was an indicator of the health and current prosperity of each company. What would that look like?

CAP2.0 Companies will rule the world. Why am I so confident?...Well, it’s because people make up the equity in a company. They are the ones creating, handling and delivering the goods. My theory is that once a CAP2.0 company joins the market it will suck up all the good talent because it treats its people well; leaving the others to suffer or plea for government bailout. It lives out the principles that make up a CAP2.0 company and will deliver on nothing less. Pepsi took 40% of the soda market from Coke when they joined the market just by offering more volume of soda for the same price. How simple. CAP2.0 companies will look to profit “its people” and the environment and community it lives in along with those who are less fortunate around the globe. The goal will NOT be to grow the stock price on 666 Wall Street, because I am not even sure if a CAP2.0 company would want to buy real-estate on such a corrupted (in terms of greed) block as wall street.

Growing the bottom-line is a CAP2.0 will look different. The purpose of growing profits will be to pour more resources into the ultimate mission of the organization which will be rooted in love, hope and peace. For example, I envision a CAP2.0 water bottling company investing 10% of all revenue (not profit) in building wells in Africa so families there can have easy access to clean drinking water. CAP2.0 companies aren’t satisfied with the status quo and until we have prosperity for all, CAP 2.0 will keep burning the midnight oil to accomplish its mission.

Like this post or not – Start sharing your thoughts!!!! Dialogue is the key to confession, redemption, healing and moving on! Let's continue to dream dreams and share them with another. From there we can start living them out.