Connection, Trust, and Love The Difference Between Espoused Values and Deep Emotion
Connection, Trust, and Love in the New Economy1: The aim of a business venture is to maximize financial gain for its owners. On the other hand, the aim of a nonprofit organization is to advance a social interest without financial gain. Hence a nonprofit venture sounds like an oxymoron. The nonprofit venture is a form of enterprise that will grow to meet the needs of business and society, since they are intricately intertwined and interdependent.
Venture creation in the new economy is much more about ultimate purpose and what the organization aims to achieve, rather than the organizational structure in a strictly legal sense. Entrepreneurs are known to be innovators, and that innovative spirit is as much about process as product.
Right now, many big business leaders claim that their real purpose is to serve society and to make the world a better place. For instance, Unilever’s Corporate Purpose states that to succeed requires, “the highest standards of corporate behavior towards everyone we work with, the communities we touch, and the environment on which we have an impact.” Corporations may make such public statements, and do with increasing regularity, but the pressures on quoted companies from the markets mean that such behaviors are often difficult to manifest.
Nonprofits have their own particular financial pressures also. Surviving solely upon grants and donations to meet their goals is really tough, even though Giving USA reported charitable giving up nearly 3 per cent in 2016. So nonprofits have been increasingly seeking other ways to create revenue. They use methods of cost recovery (through special events, conference fees, paid training, and fee-for-service) and earned income (membership dues, sales of publications and products, and consulting services), though they have to be careful not to exceed Unrelated Business Income (income from activities unrelated to the tax exempt function), which could lose them their 501c3 status with the IRS.
The middle ground between profit and nonprofit organizations has been has long been occupied by social enterprise. There are many definitions of what constitutes a social enterprise, since they can include ventures of nonprofits, civic-minded individuals, as well as for-profit businesses that can yield both financial and social returns. There is no legal definition of a social enterprise.
Entrepreneurs wanting to work in a commercial way, but taking account of, or dedicated to benefitting society, have demonstrated great ingenuity in creating structural arrangements to encompass their purpose. One of my two favorite examples concerns Ted Barber and Amber Chand who established Prosperity Candle as a social enterprise, and a nonprofit (Prosperity Catalyst) working in harmony to create entrepreneurial opportunities for women in areas of conflict and distress across the world. As Ted says, “The idea is that candles are often given to brighten someone’s day or life, and they’re utilitarian, but also symbolic.”
Another ‘new economy’ venture is Ramblers Way set up by Tom and Kate Chappell (founders of Tom’s of Maine), making and selling sustainable wool clothes. Founded in 2009, their family owned company lives sustainability through stewarding human and natural resources, creating local jobs and breathing life into the country’s textile industry. Commenting on how entrepreneurs are changing the world, Tom wryly said to me, “the entrepreneur is today’s Senator of America.”
A former student of mine (on the Marlboro MBA in Managing for Sustainability) is a senior manager at Greyston Bakery (nearly $16 million in sales in 2016), owned by the Greyston Foundation that supports low-income individuals and families as they forge a path to self-sufficiency and community transformation. Better World Books (BWB) uses the power of business to change the world by collecting and selling books online to donate books and fund literacy initiatives worldwide. BWB is a self-sustaining, triple-bottom-line company that creates social, economic and environmental value for all their stakeholders.
An example of an organization with a mission similar to BWB, but organized as a nonprofit is Room to Read, that seeks to transform the lives of children in low-income countries by focusing on literacy and gender equality in education, and having a “private sector brain, nonprofit heart.”. Founded by John Wood, a former senior manager at Microsoft, Room to Read claims it uses “corporate sense, nonprofit sensibility” in pursuit of its goals. These two organizations with different corporate structures show how form follows function. They each achieve great success through differing processes.
In addition, new forms of enterprise are being created to meet the demand for organizations that want to change the world through business. Sometimes they are described as hybrid companies. A low-profit limited liability company (L3C) is one new type of company designed to attract private investments and philanthropic capital in ventures designed to provide a social benefit. The Benefit Corporation is a type of for-profit corporate entity, that includes positive impact on society, workers, the community and the environment in addition to profit as legally defined goals.
In these times of changing corporate structures, there are examples of nonprofits converting themselves into for-profit companies. In such cases, the nonprofit distributes its assets to charity or to the state, in accordance with its certificate if incorporation and nonprofit law. Then it will be treated as being dissolved, and a new company would be established. Couchsurfing.com, for example, was originally a nonprofit and is now a for-profit, earning its revenue from the website, while still being free to members.
Espoused Values vs. Deep Emotion
The examples of businesses I have given here all display deep emotion—instinctive or intuitive feelings as distinguished from reasoning or knowledge. Espoused values often displayed by companies are adoptions of the ideas or beliefs of others and not coming from the hearts and minds of people in those enterprises.
You are not likely to find the words the words connection, trust, and love in the published corporate values of many organizations. At the same time there are a growing number of ventures that express connection, trust, and love in their operations.
“When people talk about corporate culture, they’re typically referring to cognitive culture: the shared intellectual values, norms, artifacts, and assumptions that serve as a guide for the group to thrive.”2 On the other hand, I observe that more and more new ventures not only take that idea as given, but also demonstrate shared emotional commitment to the way life should be lived. The ones that are really successful are those who can manage a resonance between the so-called hard (cognitive) and soft (emotional) skills.
The soft skills that I refer to often can be incorporated into branding using hard skills. Having products that are emotive and meet customers’ emotional needs amy sound a bit weird, but do you not prefer to deal with people you instinctively like? I don’t know if it is particular to my local franchise of Valvoline Instant Oil Change, but the experience of dealing with them leads to me complimenting them at every visit. The corporate website says, “we love what we do,” which is not an easy claim to manifest.
The founder of a new venture needs soft skills, like empathy, if she wants to move fast. Moving fast without empathy will trip an entrepreneur, the moment she walks into the loan officer’s office seeking a bank loan. So personal branding will tend to be an unexpressed behavior characteristic of the successful entrepreneur.
The successful entrepreneurs of the new economy are demonstrating through their business behavior that the negative connotations of the word ‘entrepreneur’, that prevailed when I started work in the 1960s, are gone. Today’s entrepreneurs are indeed changing the world for the better, one venture at a time.
1This phrase comes to me from an entrepreneur friend, Rachel Maxwell.
2Sigal Barsade and Olivia A. O’Neill, HBR, Jan-Feb 2016