People Over Profit

Break The System. Live With Purpose. Be More Successful.

Thomas Nelson

Contents

THE BRIGHT COUNTERPART

I've seen the same physician in Southern California for more than a decade, but somehow this visit felt different. Walking into the waiting room, I was greeted by a sterile scent and silence. Knowing the drill, I wrote my name on a clipboard with a plastic pen stamped with the name of a cholesterol pill. The receptionist didn't look up to acknowledge my presence, so after a few awkward moments trying to catch her eye, I took a seat.

Like most doctors' offices, there wasn't much to occupy one's attention. I could either stare at the tacky wallpaper or thumb through germ-covered magazines from 2009.

Squeezed into a stained, cloth chair and confined by eighteen sniffling and snotty people, I opted for the latter.

Three outdated magazines later, I looked at my watch to realize that I was forty-five minutes past my scheduled appointment time. My foot tapped nervously, and I shifted in my seat. Finally, a nurse popped her head out of the door: "Mr. Partridge." I rose and followed her down the hallway where she recorded my weight and temperature before dropping me off in a bleak room.

I waited again. This time, without even the benefit of a Reader's Digest. Finally, at one hour and twelve minutes past my appointment time, the physician arrived.

"Hello, Mr. Partridge," he said without looking up from my chart. "What can I help you with?"

I wanted to say he could help me by making me feel like I actually mattered, but I chose instead to explain that I had a killer case of heartburn.

"Oh, okay," he replied. "I'll give you a prescription of [some word that I think started with an X]. The nurse will get you taken care of."

And—boom—he was gone. Three minutes tops.

Gathering my things and collecting my prescription, I exited through the waiting room past a herd of patients en route to the same experience. In the parking lot that day, I sat in my car stunned at what had just transpired. I considered going back in and shouting, "What the heck is going on here?" and demanding an explanation for the antiquated, dishonoring experience and complete disregard for my time. With my luck, I figured that would probably end in being tackled or tasered by a four-hundred-pound man with the flu. So I let it go.

FEELINGS OF BETRAYAL

In retrospect, the outrage I felt that day is strange because I'd been through this exact scenario dozens, maybe hundreds, of times. I had only noticed what had always been there. In a recent study, 34 physicians were taped while serving more than 300 visits with patients. Those doctors spent an average of 1.3 minutes conveying crucial information about the patient's condition and treatment, and most of it was too technical for patients to grasp. Worse still, those same physicians thought they had spent more than 8 minutes. And this isn't just the doctors' fault. A few years ago, publicly traded HMOs began restricting doctors to a seven-minute "encounter" with each patient to keep shareholders happy. The industry is actually mandating lower quality in order to maximize profits.

Unfortunately, these kinds of experiences aren't restricted to health care. The last couple of decades have been dominated by companies and organizations that value profit more than the people they serve. From fashion to food, banking to advertising, we're confronted with examples of how ugly capitalism can be.

• Our grocery store shelves are packed with products from agricultural biotechnology companies who attack the purity of our food to increase efficiency even if it harms consumers.

• Cell-phone and satellite-dish companies force multiyear contracts on their customers, trapping them in a prison of subpar service where they must pay an expensive cancellation fee to switch to a superior competitor. This is apparently preferable to providing better products and services.

• Fast-food companies have increased efficiency at the expense of quality, creating menu items loaded with chemicals, preservatives, and thousands of calories that contribute to the obesity epidemic in America.

• Banks choose not to notify their customers or block transactions when customers hit a zero balance. Instead, they allow customers to borrow the money in multiple negative transactions per day while charging unmerciful overdraft fees. In 2012, consumers nationally paid $32 billion in overdraft fees, a $400 million jump from 2011.

• Insurance companies reroute customers in predominantly English-speaking markets to an internationally outsourced customer support team where broken-English-speaking reps read from a rote script in hopes that a one-size-fits-all approach will somehow solve their individual problems.

• Credit-card companies shell out hundreds of millions of dollars per year on positive marketing campaigns showcasing the rewards of using their product, but bury oppressive terms and conditions in the fine print. To convince you of their integrity, they offer you a small cash reward to refer a friend to sign up too.

All around us, colossal brands that once stood for integrity and quality have begun to tiptoe across ethical eggshells—condoning growth strategies, marketing campaigns, and customer-satisfaction policies that are not only unacceptable but also downright disingenuous—hoping their customers won't notice.

Unfortunately for them, customers have noticed, turning a corporate trend into a consumer-trust epidemic that has toppled more than one industry titan. The marketplace has given many deceptive companies a stark choice: change or die.

HOPE IS RISING

Luckily, change is afoot, and not just among existing organizations. In the midst of this downward capitalistic spiral, a bright counterpart is emerging. It's a counterpart that is healthy and contract free, that will pay more for better quality and higher ethical standards, that cares not just about profit but also the well-being of their customers and the state of the world. This bright counterpart has been called "conscious capitalism" or the "social good movement." But whatever label you choose, the trend is gaining serious traction.

According to a 2012 global survey, 47 percent of consumers now say they buy at least one brand that supports a good cause every month. To put this in perspective, that's a 47 percent increase since 2010. Additionally, 72 percent of consumers say they would recommend a brand that supports a good cause, which is a 38 percent increase since 2010.2

Take Panera Bread Company, for example. The sandwich chain has opened a handful of restaurants in urban areas where patrons pay only what they can afford. These "Panera Cares" restaurants have proven to be profitable, and the revenue generated is used to train at-risk kids.

And Panera is not alone. Fortune 500 companies are hiring personnel and forming new departments dedicated to giving back and promoting social responsibility. Organizations like Nordstrom, Southwest Airlines, and Trader Joe's are finding ways to pair social impact with solid business. Companies like Ben and Jerry's, known for giving away a portion of its profits to charity, and Whole Foods, which has made strong commitments to local community support, are thriving. And in recent years, start-ups like TOMS Shoes and Warby Parker came roaring into the marketplace with their revolutionary "one-for-one" model. That is, for every pair of TOMS shoes or Warby Parker glasses that a customer purchases, a pair is given to a person in need.

A few years ago, I began to notice the collision of capitalism's darker, deceptive side with the bright counterpart of the social good movement. And that's when I decided to plant my flag in the conversation by creating my company, Sevenly.

SKIN IN THE GAME

In February 2011, I was discussing the emerging business models focused on social good with my friend Aaron. He was a trailblazer in social media marketing, and his Facebook page had more than two million fans. Could we create an organization with a double bottom line—one that measured profitability and social impact? The idea seemed like a good one, but we didn't know where to start.

First of all, Aaron and I weren't just passionate about one particular cause. We saw many problems in the world that were begging for solutions. Second, we knew we weren't called to the field—to Africa or India or China or an impoverished neighborhood in urban America. But we did feel called to the people who were called to the field.

We began researching and found that more than 1.6 million charities existed in the United States. Of those, over 700 were going out of business every day. The main reasons these charities were going under was lack of funding and lack of awareness. They had plenty of passion, but they needed help generating revenue and buzz. Off the top of our heads, Aaron and I could name only four charities each. When we asked our friends and families, they had the same problem.

What if we partnered with a different charity every week to help them raise funding and awareness? What if we created a social, good e-commerce company that partnered with a new charity every seven days? What if we created quality products—clothing and art and jewelry—and for every item sold, we gave seven dollars to the week's charity?

At that moment, Sevenly was born.

Our first campaign was with International Justice Mission, raising funding and awareness to fight human trafficking in Southeast Asia. We partnered with Reese's Rainbow, working for the adoption of children with Down syndrome in Russia. We collaborated with Generosity Water to build clean-water wells in Haiti. We teamed up with Autism Speaks to fund speech therapy and unlock the voices of nonverbal children. Today, Sevenly has an incredible team, has generated millions in revenue, and has donated more than $4 million in $7 donations to charities across the world.

I've learned a lot from my work with Sevenly and from observing the other players in this bright counterpart. I believe these new business models represent the future—one we want and need to realize. I believe we can buy better and lead better and be better through committing to certain beliefs and practices in the marketplace. Together we can create a world even more wonderful than we might imagine.

THE HONEST ERA

Captivated by Values

Imagine a company that is known for unbearably long checkout lines and poor customer service. They pay their workers low wages—so low, in fact, that many of them are forced to rely on Medicaid and food stamps to survive. Then picture this company with a CEO who makes more in an hour than most of his employees do all year. Imagine that this company has poorly run and understaffed stores filled with shelves stocked with goods produced overseas and often made by underpaid workers in inhumane conditions. And worse still, when they want to open a new store, they target rural communities, and once they've settled in, use predatory pricing to drive out small businesses. It is one of America's most hated companies.

Would you do business with such an organization?

No, of course not.

But the truth is, you and 245 million others do every single week.

But Walmart didn't start out this way.

Sam Walton was born in Kingfisher, Oklahoma, in 1918. He was the first son of a local banker, an Eagle Scout, avid hunter, and quarterback of his high school football team—the stereotypical "good ole' boy." Later he would serve as an army captain in World War II. In 1962, Walton birthed the first Walmart store in Rogers, Arkansas. His vision was to open as many large discount retail stores as possible in small, rural communities across the country. He was a strong leader and widely recognized as a man of integrity. Walton founded the organization on three basic beliefs: respect for the individual, service to customers, and striving for excellence. Undergirding it all was the commitment to "acting with integrity."

Sam was known for job creation and paying his staff above industry standard. He demanded five-star customer satisfaction and encouraged Walmart "associates" to greet shoppers with a smile and always look them in the eye. Those associates who worked the hardest to capture and keep customers happy could expect limitless opportunities for advancement.

The plan worked, and three decades later, Walmart's stock was valued at $45 billion, and Forbes named Sam Walton the richest man in America. Even in the economic downturn of the early 1990s, the company thrived, increasing sales by more than 40 percent.

As many of us have seen, Walmart's current practices have deviated from their founder's original vision. So there is a deeper lesson to be learned: no company starts out bad. Not even the ones we hate most. The question is, how did they get there?

WE ALL START CLEAN

When a company is first born, it is much like a human baby—pink-faced, innocent, existing almost exclusively for the benefit of others. Think about the start-up companies you know, and distill the common characteristics. Employees are excited. There's a clear mission and vision, usually focused around solving a problem or creating a better system or product. And, of course, every customer is considered critical.

No company starts out dirty, because they cannot afford to. They have to convince consumers they are worth their time and money. When you're an unknown entity, it's deadly to be recognized as unethical, impersonal, or misleading. As a result, your focus is the industrious pursuit of customer loyalty and your mission to create nothing short of an incredible and memorable experience.

The Honest Era is a time in a company's journey when mission, quality, and integrity live at the core of the organization. Their leaders are fanatically dedicated to improving not only the lives of their customers but their workforce too. They bring intense innovation to everything from marketing and customer support to their business model and even their supply chain. They are focused on the things that matter—employees, customers, and their brand. They fight for team buy-in at every level and celebrate even the smallest victories as a sign of progress toward a better world.

You see this in the recent boom of Internet-based companies launching from California's infamous Silicon Valley. Thousands of entrepreneurs are starting companies that redefine the definition of integrity in business, commerce, and capitalism as a whole.

Take, for instance, Airbnb.com, which has tipped the hotel industry on its head by offering customers the ability to host and rent homes across the country. To top it off, they offer 24-7 customer support where real humans answer the phone. Combine that with incredible employee perks, such as $2,000 per year per employee for travel, a bring-your-dog-to-work option, free organic lunches, and complimentary health and fitness classes available almost around the clock. They have had incredible success in the marketplace, generating what could soon be $1 billion in annual revenue and renting more than 12 to 15 million rooms a night after only a few years in existence.

The beautiful models of the Honest Era are naturally exceeding expectations and winning the hearts of both their customers and employees. History has proven that all lasting commerce is born from a dedication to high character, high quality, and high customer loyalty. This is why the Honest Era is a time of people over profit.

Because of their noble characteristics, companies naturally succeed. We all crave to do business with exceptional and energetic organizations that we can trust. And in return for our patronage, companies can expect to grow a more captivated and loyal following of their brand. When companies are in this era, everybody wins. The economy is strong, customers are happy, and companies are profitable.

But as history tells us, these organizations grow. And as they swell, their processes adjust, and the business changes. In Walmart's pursuit of growth, for example, something was lost. An organization that once desired to serve people in rural communities ended up harming the small businesses around them. Everywhere a new Walmart opened, longstanding local stores were forced to permanently close their doors. In order to keep prices low, Walmart purchased more goods manufactured overseas, which meant fewer regulations on ethical working conditions. And Walton, a man who was once known to be generous, opted for hiring as few employees as possible and never paying them more than he had to.

After Walton died in 1992, customers began wising up to the retail giant's modern practices, and public hostility began to grow. By the early 2000s, Walmart became one of the most hated companies in America.

As it turns out, low prices come at a high cost.

History demonstrates that as companies grow, they often begin making subtle changes and deviations to accommodate that growth. Their organizational gazes shift from honesty and quality to efficiency and quantity. They aren't Mr. Hyde yet, but they have started walking a path of transformation from noble beginnings to something they never intended to be.