Conscious Capitalism flexes in Portland
The Conscious Capitalism movement held its second conference in Portland March 4, this time rebranding it the Elevate Business 2020 Conference
This was to accommodate eleven like-minded groups of caring capitalists, including Benefit Corporations for Good and B Local PDX.
The language used by the speakers was more couples therapy than straight-up MBA speak. Time and again, people spoke of doing business with an "open heart." Drs. Dean and Linda Anderson, 40 years married, led a talk called Breakthrough to Conscious Business. In the beginning, they informed the room that more than finishing each other's sentences, they cede the floor to each other in the manner of implied consent. The MC Corey Blake gave a talk called Vulnerability and Your Bottom Line, which involved the audience talking openly about the last time they had felt shame, and how they felt about opening up to strangers.
To begin with, however, John Montgomery, CEO of Lex Ultima, introduced himself as "a recovering corporate lawyer" and gave a history of the B Corp movement.
He attended the first conscious capitalism CEO Summit in Austin, Texas, in 2008. "That conference changed my life, and I had been a part of this movement ever since," he said. "We hope this conference will change your life too."
He reassured the room that conscious capitalism could be more profitable than traditional cutthroat capitalism, according to certain stock indices.
Montgomery said, "A corporation is an interconnected ecosystem of stakeholders, including employees, vendors and suppliers, the community in which the company does business and the environment. And of course, stockholders. The CEO of this model becomes the steward of the ecosystem."
Businesses that adopted this multiple stakeholder approach provided eight times greater rate of return to investors in the S&P 500 as measured over 10 years. In the Silicon Valley, he co-chaired a group of lawyers to draft California Benefit Corporation law in 2012 and inspired 30 other states and several foreign countries to adopt similar legislation.
Montgomery added, "You're in the right state because Oregon is only one of five states to have not only authorized benefit corporations but also benefit LLCs."
Society is now "crossing the chasm," the point at which enough pioneers and early adopters have signed on and proven the efficacy of the methods so that the rest can safely join the movement.
"This global movement is a response to a profound spiritual crisis facing humanity, in which the survival of our civilization is threatened by global warming and the uneven distribution of wealth."
The crisis has come from the conflict between two common rules: The Golden Rule (do unto others) and the Rule of Gold (maximize profit for shareholders).
He praised Portland for its B Corps infrastructure: Portland State's green MBA program, Lewis and Clark's environmental law program, and the Center for a Sustainable Society at Pacific University.
"If a heart-based, multiple stakeholder sustainable approach to doing business can increase employee engagement, cut employee turnover, and significantly increased shareholder returns, why isn't everybody doing business this way? I was convinced that this way of doing business would be Silicon Valley's next disruptive technology. I imagined that this way of business would go viral and become the global standard with the personal computer, the browser and the cell phone. The only people who seem interested in these ideas, however, were the enthusiastic pioneers I met at conscious capitalism and B Corp events."
Fear of making less money
What's slowing it down is a lack of awareness. "The first benefit corporation law was passed in 2010. And there still are only about 8,000 benefit entities in the US. Even though it has become law and 35 states, most people still haven't heard of it."
He added, "Sometimes I tell people I'm in the fear management business because directors of traditional corporations are terrified of becoming benefit corporations. The most common fears are fear of making less money. Fear of increased liability exposure, fear of making a mistake. Fear of doing something new and fear of looking foolish."
As corporate counsel for corporations converting to benefit corporations, he has to "assuage these fears and make the directors feel safe."
He cited Ray Anderson, the founder and CEO of Interface, an office carpet manufacturer who read Paul Hawken's book, "The Ecology of Commerce," and had a "spear in the chest moment," when he realized environmental problems were products of an industry system, which his company was an integral part. Anderson embarked on a path to sustainability.
Working the room
Audience member Kimberly Allchurch Flick runs Mighty Epiphyte Consulting, named for the symbiotic relationship between plants. She helps companies become B Corps. What had she learned?
"John Montgomery talked about steward leadership and leading with an open heart and an open will, which I thought was very compelling. Also, Northwest Natural was very interesting about how a very large corporation can make an impression," she said of a talk about NW Natural's post-fossil fuel mindset.
Allchurch Flick assesses companies, interviewing workers and answering the 150 or so questions a B Corp must satisfy. She also connects them to new and different stakeholders to make a more significant impact on the community and or the environment.
"You don't just get it and then put a certificate on your wall. It's a constant growth process."
She also helps the market themselves as a B Corp. because it's a positive with many customers and it attracts young talent.
Allchurch Flick was a biology major then a hospital nurse, EMT and respiratory therapist, then did pharmaceutical sales and was a sales trainer and sales manager.
She was laid off, went to Portland State University for her international masters and discovered their Certificate of Social Innovation. "It really spoke to me because I'd always been thinking that way." She learned to do assessments there and loved it, and now works with everyone from solopreneurs to companies with 50 or so people. A lot of it is about finding the right documents to prove the business' credentials. For example, B Corps must weigh their trash to show how much they recycle. It can take eight months to certify a company, but that is 80 hours spread out at $100 an hour.
Tom Hering is the co-founder of Benefit Corporations for Good, which is one of four third-party standards for certifying Oregon benefit companies. It's the only one that is state-based.
"We certify businesses to show that they believe in and practice the triple bottom line. The most rigorous is the B Corps certification, and that is through a nonprofit called B Lab, which is based out of Philadelphia. We call Benefit Corporations B Corp-lite. We enable smaller businesses that don't have the time and money to go through that rigorous certification. Yet we still have some rigor in our own 48 questions."
He says always gets inspired at these events.
"It continues to validate to me, and to my business partner, that this is this movement is strong, it's real, it's growing. Businesses are making the time and effort to pursue a stakeholder route versus a shareholders approach to business."
Does this movement do better in a booming economy like now, or would a recession affect people's urge to do good?
"I have not really been in the recession period yet, so I don't know. All I'm seeing is that there's interest growing interest in this in smaller communities right now as well." He and his partner are working to certify a staffing agency in Sweet Home, Oregon. They have done others in Medford, Bend and Hood River, so it is spreading beyond Portland metro.
"I think these businesses realize that whether it's a good economy or a bad economy, this is going to be a credibility piece. Not only for attracting the best employees, but also attracting consumers and particularly millennials and Generation Z, who want to see a business do something more than just make a profit."
Oregon Senator Ron Wyden sent in a video greeting, but Mayoral candidate Ozzie Gonzalez was there in person. He said he was not just campaigning but there as an architect with a climate science background. These were his people.
"As a business owner of P3 Consulting, I have long advocated for conscious capitalism. I'm thrilled that this is happening here in Portland. And now that I'm entering into politics, I want to make sure our emerging community of conscious capitalists are seeing that relationship for connecting to government through my candidacy." He is also director of diversity and social sustainability at construction company Howard S. Wright.
Gonzalez said he helped Intel Corporation develop a waste reduction plan and helped form the first industrial facilities user group that went across industries to help address reduction of waste. He also helped form the zero-waste program in the apparel industry to remove toxic chemicals from their supply chain.
"Those are all examples of what the private sector has been doing for years. And what we need to do better with our small businesses." He said he could be a leader that is able to "navigate the relationship between the growing business community, the equity community in the environmental community."
Also in the crowd was carpenter Gregory Liascos who has designed a steel and wood dining table to hide under in an earthquake that is strong enough to hold 50,000 LB of weight. He was interested in networking ahead of starting production, but he was also there because he cooks soup for the homeless in his kitchen and distributes it in Director Park near the Fox Tower. His nonprofit is called Beautiful Portland and supplies others from Free Hot Soup, who distribute food and clothing to the unhoused, regardless of local laws.
Mostly he remodels homes.
Liascos was invited to the conference by a friend. "I didn't know this community existed," he said. "I need more friends. I need a bigger community and we need to make things that work."
Delivering soup, he sees a lot of old people who have retired into poverty, and people whom he thinks should be in the state mental hospital but for the lack of beds.
Regular industries are conscious-curious now, as evidenced by Brett Matthews of the group Lean PDX which promotes Toyota-style lean manufacturing. His day job is at Sun Gro Horticulture, which makes growing media or soil for plants. It sells to farmers as well as homeowners.
"Sun Gro treats people really well but there's always room for improvement," Matthews told the Business Tribune. "So, I'm always looking for better ways to treat the vendors, treat the customers, treat the fellow workers, associates, just to make the whole business better."
He thinks business is changing.
"Business is becoming more holistic. How do we impact our environment? How do we impact others, our customers, our neighborhoods, our communities? This (conference) is a place where people get together and look at all the different facets instead of just 'How good is it for making money?'"
"People think of business as hard, cold capitalism. But I don't think it has to be that way. In Portland, we have a unique environment with all the small businesses and all the very personable people. It calls for different kinds of conversation, a more personal, more feel-good kind of conversation."
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