Conscious Capitalism. John Mackey

their own lives by contributing to the valuable work of the company. To us, this represents the “shame of management,” in the same sense that Peter Drucker referred to the rise of the consumer movement as the shame of marketing.

      While engagement with paid work at for-profit businesses has remained abysmally low, involvement with volunteer and paid work at nonprofits has grown dramatically. In Blessed Unrest, Paul Hawken estimated that there were approximately two million nongovernmental organizations (NGOs) in the world and showed that their numbers are growing rapidly.¹⁸ People are devoting enormous amounts of time, effort, and money to causes that usually have nothing to do with their narrowly defined self-interest. The reason is that these activities nourish people in ways that working for most businesses simply does not.

      To tap this deep wellspring of human motivation, companies need to shift their emphasis from profit maximization to purpose maximization.¹⁹ By recognizing and responding to the hunger for meaning that is a quintessential human condition, companies can unlock vast sources of passion, commitment, creativity, and energy that lie largely dormant in their team members and other stakeholders.

      Purpose-driven motivation is intrinsic motivation and is far more effective and powerful than extrinsic financial incentives. Companies that primarily use financial incentives to motivate their team members soon discover that it is a double-edged sword. It can work reasonably well as long as the company’s financial performance is outstanding. But when financial performance lags, such companies inevitably experience a crisis of morale. For publicly traded companies, the stock price becomes a barometer of the morale of team members and executives. These firms have a hard time pulling out of slumps, whereas purpose-driven companies recover faster. They remain true to their purpose even when times are bad, and the best ones become even more committed to their core purpose.²⁰

      Matching Individual Passions with Business Purpose

      People are most fulfilled and happiest when their work is aligned with their own inner passions. Personal passion, corporate purpose, and business performance all go together. For a passionate foodie, working for Wegmans or Trader Joe’s or Whole Foods Market can be truly fulfilling. For outdoors enthusiasts, Patagonia, REI, and L.L.Bean are wonderful places to work. In such settings, work becomes so much more than a job. It even goes beyond having a satisfying career. It becomes a calling—something we were born to do.

      It is therefore critical for purpose-driven organizations to hire, at every level of the company, people who align strongly with the purpose of the enterprise. If the business hires people who think the purpose is silly or irrelevant, they will not align with it and will be—literally—at cross purposes. The good news is that when an organization has a strong purpose and communicates it clearly and consistently, the organization naturally attracts people who align with the purpose.

      Having a sense of purpose and deriving joy from their work help companies overcome obstacles in their path and the objections of naysayers. Biz Stone, the cofounder of Twitter, recalls, “When Twitter was just starting out, our biggest challenge was friends and colleagues telling us, ‘This is not useful.’ We overcame that challenge because we found joy in our work. When you love what you do, when you are what I call emotionally invested in your work, then you can overcome almost any challenge with ease.”²¹

      Companies also must take into account personal alignment with purpose when promoting anyone into a higher leadership position. Any enterprise that hires senior leaders from outside the company risks the subversion of its purpose by either indifference or hostility. Many companies in recent years have made the mistake of bringing in highly paid, high profile outside leaders who didn’t align with the purpose or the values of the enterprise. A great example is The Home Depot, which brought in a former top executive from General Electric (Bob Nardelli) who wasn’t aligned with its purpose or culture. Eventually, this led the cultural “immune system” of The Home Depot to reject his leadership style. The organization declined under his leadership until he was removed and replaced by someone who was better aligned with the company’s purpose and culture.

      In the next chapter, we look at how companies can discover and grow their unique purpose.

      CHAPTER 4

      Discovering and Growing Purpose

      Some companies are born with a sense of higher purpose. Others are created because their founders see a market opportunity they can profitably exploit. As such companies reach maturity, they often find themselves in a sort of existential crisis, much in the same way that many adults start asking questions about meaning and purpose when they reach midlife.

      Higher Purpose Discovered: A Heartwarming Story About Trash

      An example of a company whose founders saw a market opportunity to exploit is Waste Management, the leader in the mundane but essential business of disposing of our trash. Founded in 1968, the company had a growth strategy of “rolling up” the fragmented trash collection business by acquiring local trash haulers around the country. Until a few years ago, its tagline was utilitarian and uninspiring: “Helping the world dispose of its problems.” According to financial analysts, the company’s most valuable assets were its 271 landfills, enough to bury over forty years’ worth of trash at its current rate of growth.

      As the sustainability movement gained speed, it presented major challenges to the company. People and companies started throwing fewer things away. For example, Walmart made a commitment to eventually reduce the amount of trash it sends to landfills to zero, threatening a core revenue stream for Waste Management.

      Under CEO David Steiner, Waste Management has turned these challenges into opportunities and discovered a higher purpose for itself: as a company that looks for innovative ways to extract value (in the form of energy and materials) from the waste stream. It has set up a consulting division that helps companies like Alcoa and Caterpillar reduce their waste, in effect cannibalizing its own landfill business. It is moving capital investment away from landfills and into materials recovery facilities that use sophisticated technologies to separate comingled recyclable materials. It has invested in over a hundred waste-to-energy projects that already generate enough clean energy to supply 1.1 million homes (more than the entire U.S. solar industry). The company sees huge potential in treating waste as a valuable asset rather than a problem to be buried for future generations to deal with. It generates about $13 billion in revenues annually but estimates that the waste it handles contains about $10 billion of value, most of it not yet extracted. The company may soon start paying customers for certain kinds of waste (such as organic waste) even as its competitors charge them to haul it away. Steiner says the future of the company lies in joining and leading the sustainability movement.¹

      Not surprisingly, financial analysts firmly wedded to the traditional trash business model see all this as a distraction. A Credit Suisse First Boston analyst downgraded the stock in 2009, saying the company “does not want to be a trash company but instead a one-stop ‘green’ environmental services shop, and that transformation requires both a lot of patience and capital.”² The company’s new tagline is “Think Green,” and it now describes itself as “North America’s leading provider of integrated environmental solutions.” That’s a long way from just hauling your trash and putting it “out of sight, out of mind.” You can bet the company’s team members are now a lot more excited about going to work in the morning.

      Great Companies Have Great Purposes

      There is no “right” purpose for every business; there are as many potential purposes as there are enterprises or organizations. Each business must strive to find and fulfill the purpose that is embedded within its own collective DNA. Just as each individual person is unique and valuable, so too can every business be unique and valuable. But just as some individuals set great purposes for themselves and eventually achieve greatness, we believe that the best companies in the world have great purposes too. These great purposes are usually discovered or created by the founders and endure at the core of their business philosophy. Great purposes are transcendent, energizing, and inspiring for all the interdependent stakeholders.³