The Experiment Has Worked!

Open Thread: What's on your mind?

2008-08-05T13:55:00.002-04:00

ere's the place to raise an issue, explain how it works in your situation, and relate an example from your experience. Click on the orange "Comment Here" link below and join in the conversation!

Chicken vs. Egg; Culture vs. Values

2008-06-25T10:43:00.008-04:00

aying an organization is a "Common Good Corporation" says something about its values and its culture. That's why our first post here listed RHD's values. The Common Good Corporation book tells stories and recounts some history, heroes, rituals and celebrations of RHD. It also talks a fair amount about managing money and about how The Common Good Corporation relates to money and uses money in some uncommon ways. The result is a portrait of the culture of an organization that is a different (and sometimes uncomfortable) experience for its stakeholders.

What is the connection between the culture and values? Does one create or cause the other? Are the culture and values fixed or should they be open to change? Do they change together or should change in one lead the other?

While it's a fairly easy thing to post a list of values for an organization (and they are framed and posted throughout RHD's offices), it's tougher to put "what is culture" into words.

Culture is the experience, perhaps "the reality" or the "manifestation", of the values. It is what members of the organization see and hear and feel. That experience should correspond to the values of the organization. If it doesn't, the values will seem hollow.

The grand experiment of The Common Good Corporation is about living up to explicitly stated values and growing a financially muscular corporation. The book's subtitle proclaims "The Experiment Has Worked!" The book reflects on almost four decades of conducting that "experiment" of valuing both profit making and a social agenda.

Is such an "experiment" rare? Does it require a particular value or set of values to work? What value or values are essential? Does it require a particular kind of culture to work? Where does "culture" come from? Was RHD just lucky to have worked? Chime in via comments with your ideas.

SQA Pharmacy: RHD's for-profit crossover

2008-05-20T15:24:00.001-04:00

oth the non-profit corporation and the for-profit corporation are remarkably powerful economic tools. While the former is tax-free and able to receive grants, the latter is designed to attract the capital needed for business activities. When both are used they can stimulate an infinite range of economic activities, and generate sufficient discretionary revenue to address business as well as social issues. Non-profit common good corporations can create one or more for-profit corporations and use them to attract the capital needed to invest in businesses that can address a social agenda.

RHD's for-profit crossover business, SQA Pharmacy, was featured in a Philadelphia Inquirer article recently. Executive director (and The Common Good Corporation author) Robert Fishman was asked "Why is RHD starting the for-profit SQA Pharmacy Services Inc.?" He answered,

RHD is facing a cutback in funds to take care of a number of needy populations. We are looking to be able to take care of those populations by entering into businesses, which can augment our ability to take care of the uninsured. We saw the closed-end pharmacy as one of a number of businesses that we could look at as an opportunity because we were giving that business to the private sector.

Double Bottom Line

These practices are not RHD’s alone. They are part of a larger socially responsible business effort to seek the “double bottom line” to balance profit making with a social agenda. As a corporate member of the Social Venture Network and Investor’s Circle RHD joins with other entrepreneurs across the nation who are making the link between profit and the common good:

Ben & Jerry’s Ice Cream
Stonyfield Yogurt
The Body Shop
The White Dog Café
UnTours

The last two listed (which are in Philadelphia) as well as many others balance profit-making with such important efforts as organic farming, local purchasing, worker ownership, and ecological awareness. In this movement, common good business people talk to others who think similarly. The support we get from each other is invaluable. For-profit common good corporations could establish joint ventures with at least one non-profit corporation. And, every for-profit could establish a separately incorporated patient capital fund, which can be capitalized with tax-deductible donations of stock or cash to enable a social agenda. Like Murex Investments, any for-profit common good corporation can can set the rules for ownership and the distribution of profits on business endeavors so that they meet particular interests.

Leadership

2008-04-23T12:16:00.001-04:00

ll our "leaders" are making assumptions about people - it's just that they don't disclose what those assumptions are. For example, are people lazy and not to be trusted most of the time? If your leader believes that, it isn't likely that power is going to be shared with anyone else but the leader and a few people. Everything is going to need central approval. It follows. Do you know what your "leader" believes.

What do you think?

Sex in the Office

2008-04-23T12:03:00.002-04:00

et's recognize that sexual attractions are always going on between people in organizations - it's just that it isn't talked about - until a problem arises. At RHD we've decided that SEX is a topic we need to talk about and manage in a professional way. You will be able to see how we handle sex in our book.

How is sex handled (or not handled) in your corporation?

Our Ship Has Come In!

2008-04-03T12:28:00.001-04:00

e've been impatiently waiting for the arrival of the slow boat from China... er... Hong Kong carrying our newly printed books. The books are here! You can order them from the common good store for $10 which includes shipping and taxes.

Please note the section on for-profit crossover on page 135 because we have just started a for-profit crossover group called crossoverbusiness.org (no website, yet!). If you are interested in a new socially-oriented business join us.

Three Key Assumptions

2008-03-30T11:31:00.001-04:00

hree key assumptions serve as an approach to human and corporate behavior in a common good corporation.

People are of equal human worth

People are essentially good

There is no single way to manage corporate issues well

The third assumption, there is no single way to manage corporate issues well, is an invitation to address flexibility, creativity, and risk-taking.
Creativity is messy. The biggest challenge for any organization manager is in the 'not knowing' as innovation is taking place all around them but not involving them. When errors result in even a modest loss, anxiety increases, and the easiest, quickest response is to tighten the reigns, centralize and exert more control. But centralization by its very nature builds more fear and reduces the creativity.

Most organizations operate on the assumption that only "important people" (managers) are qualified to do organization planning; however, opportunities for an organization's planning may well be missed by not checking in with the front line. An organization willing to adapt; to establish a constant feedback loop with people who recognize growth opportunities first hand takes a giant step toward promoting corporate health.

"We fundamentally reject centralized strategic planning because it is a contradiction to decentralized risk taking and exploration," says Robert Fishman, executive director of Resources for Human Development. "People in executive positions are there because they were successful at yesterday's game. But, the corporate landscape is constantly changing, and only playing yesterday's game places the corporation at a dramatic disadvantage."

Some History

2008-03-25T11:34:00.002-04:00

he power of the modern corporate business derives from its capacity to raise funds from unlimited numbers of people, thus generating enormous economic power. Looking back, it is possible to track how government shaped the corporation for that entrepreneurial need.

In 1856, for instance, England, followed by the United States in the latter half of the 19th century, passed laws that limited the liability of stockholders to the worth of their shares, thus protecting them from the risk of tremendous loss that would otherwise accompany the potential for tremendous gain. This governmental effort continued in America when, toward the end of the 19th century, the corporation was deemed to be a free and independent person with legal rights and duties. Intriguingly, the rights to “due process under the law” and “equal protection of the law” were originally incorporated into the Constitution to protect freed slaves. What was originally a values-based governmental effort protective of the common good was used to foster our modern values-blind economic endeavors.

There was, however, still one more impediment to corporate growth – the governmental oversight that was written into early corporate charters and was still in place. During the early years of the twentieth century state governments jettisoned those restrictions from their corporate laws. And now, with the powerhouse that is capitalism in full force, and the very notion of oversight forgotten, the modern corporate form has become a dominant business behemoth.

RHD Values

2008-03-20T11:40:00.002-04:00

esources for Human Development (RHD) was conceived as an experiment in values-led entrepreneurialism, and has been run that way through all its existence. Just about everything we have done has been consciously grounded in a specific set of common good values. These values are expressed in how we hire, fire, assign benefits, plan our finances, handle money, distribute power, make decisions, and more. We infuse our values into leadership, marketing, production, and the distribution of profit.

In pursuing these values, our staff has generated a surging revenue stream, with a growth rate averaging 28% per year during our thirty-seven years of existence (two of those years at 150-200% and most years at 15-25%). We are living, prospering proof that when all stakeholders are linked by common good values, the potential for financial success and sustainability is incalculable.

RHD is a values-driven organization. We do not merely encourage all members of the corporation to support and promote the organizational values; we require that they do so. Although there are a number of values that are important to the organization, certain values serve as its cornerstone.

Respect for the dignity and worth of each individual
Multi-level thinking
Empowerment of Groups
Decentralization of authority
Safe and open environment
Creativity
Honesty and trust
Diversity
Organizational integrity
Ongoing growth and development
Personal and professional enrichment
Quality service