Leadership and Consciousness: Trump, Strumf, Stritzke and Shah

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At the Conscious Business Palooza Event in Chicago last week, we discussed what conscious business is and what it means. We heard from REI, Context Media, Good City and Clean Slate about how they work on purpose and how their business and revenue models reflect their values.

Two common characteristics of these new and diverse models is how leaders have laid the foundation for treating stakeholders as partners and for sharing revenue with them.

Deloitte University Press describes how often the word “ecosystem,” is now regularly used by the likes of the Alibaba Group, REI and others to refer to their business mindset and consciousness. The term was originally coined by British botanist Arthur Tansley in 1935 to refer to the interdependence of nature. The Palooza speakers spoke about their companies' philosophies and operations with the same mindset.

REI’s Outdoor Program & Chicago Outreach Manager, Theresa Salus said that REI’s founders envisioned supporting people’s enjoyment of the outdoors – “without making money off their neighbors.”

Their business model is a co-op that shares success with members. Even today, $20 buys you a lifetime membership that entitles you to both receive discounts coupons when the business makes money and to participate in many free programs. CEO Jerry Stritzke invites REI’s 6 million members to participate in the annual meeting with their 12,000 employees to “envision their long-term (100 year) stewardship dream.”

ContextMedia co-founders Rishi Shah and Shradha Agarwal bootstrapped their start-up and after ten years in Chicago, in 2015, number of employees grew by over 100% and revenues by more than 250%, to $30 million.

Leading its industry, Context Media is #47 America's Most Promising Companies according to Forbes 2015. Shah and Agarwal decided to share their success with Chicago by creating a fund called “JumpStart Ventures” for early-stage startups. They also invest in venture funds Avia, Firestarter Fund and Chicago Ventures.

“We have a long-term commitment to the Chicago entrepreneurial ecosystem, and this is a way to put our money where our mouth is," Shah said. "We want to focus on community-building."

At the heart of these companies are leaders whose business models reveal their values -- that partnership, responsibility and revenues are shared throughout their marketplace ecosystems. They focus on activating and engaging partners that share their values and then they share the resulting success.

This is in stark contrast to an older model of leadership where one person at the top holds the authority, the revenue and the credit for success.

CEO Donald Trump, during the Presidential debate, said “My obligation right now is to do well for myself, my family, my employees and my companies.” He was questioned about the thousands of vendors, suppliers and employees that did not get paid for their work when he used Chapter 11 bankruptcy four times. Chapter 11 allowed his companies to “stay in business while shedding debt it owed to banks, employees and suppliers.” His response was that bankruptcy is a legal business tool and he uses it when needed.

When Wells Fargo fired 5,300 people for misconduct in the community banking unit, Carrie Tolstedt, head of that unit, received $60 million in bonuses. CEO John Stumpf received $161 million in bonuses and performance awards over the period of misconduct, 2011-15. (After Senate Hearings, Stumpf announced that he is giving back unvested stock awards worth about $41 million and stepped down as CEO yesterday. He leaves with $130 million. Tolstedt is leaving without giving back any of her pay, according to Fortune Magazine.)

By law, corporations are only responsible for shareholder enrichment – ala Trump and Strumpf’s model. It is only in the last decade that there has been a movement in business philosophy that started with embracing charity and now defines business success as engaging in a marketplace ecosystem– ala REI and Context Media’s model.

This is an evolution in consciousness.

Deloitt defines business ecosystem as “dynamic and coevolving communities of diverse actors who create and capture new values through both collaboration and competition… (where) participants—often including customers—are bonded by some combination of shared interests, purpose, and values which incents them to collectively nurture, sustain, and protect the ecosystem as shared ‘commons.’”

While that very long sentence may be challenging to digest, it reflects a new "way of being" in business.

Leaders' action reveal their values.

Leaders can lead from the old model that follows the letter of the law, and operates in a narrowly defined mindset of a bottom line that enriches themselves and their shareholders; or,

...they can choose a higher consciousness and context of enrichment, where engagement supports their entire interconnected ecosystem – yielding a larger and sustainable “return on investment” for everyone.

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