Chapter OneStories from Three Continents Boldness in business is the first, second, and third thing. H. G. Bohn
Over the years I have had the good fortune to work with some extraordinary business leaders, helping them discover and pursue a variety of paths to growing Responsible Businesses. Each of the following stories introduces some remarkable people and demonstrates how a business, when it takes responsibility for the health and evolution of the whole, actually increases the equity of stakeholders. Each story illustrates the effect of being responsible on one of the five key stakeholders: customers, co-creators (employees, contractors, suppliers, and so on), local communities, the planet Earth, and investors. In later chapters, these stories will be filled in and elaborated on to show how a Responsible Business works to integrate all of its stakeholders.
Each story focuses on a particular business, although one ended up affecting an entire Fortune 500 corporation when the leader eventually went on to become CEO, president, and chairman of the board. Some of the businesses are large, some small; some public, others private; some local, others global.
Herban Feast: Caring for Customers
BJ Duft, founder of Seattle catering company Herban Feast, is widely celebrated by his customers and community for his environmental ethic, his commitment to small local farmers and businesses, and his dedicated and creative staff. His award-winning green business stands out in a city known for green businesses. But it wasn't always that way.
BJ started Herban Feast as a young entrepreneur with a conflicted sense of how to manage a company. He came out of the hotel industry, and all his reading and training emphasized the need to focus on managing costs and reducing waste. During the company's early years, BJ and his chefs managed for better costs and efficiencies first. They believed that only once this vital bottom line was addressed could they become creative and unique.
BJ is by nature social, engaging, and funny—the kind of perfect host who really ought to succeed in the catering business. He is interested in people's unique qualities and life stories. He peppers his own conversation with personal stories and seeks to bring his authentic self to his relationships. But the traits that make him so likable have also made it dispiriting for him to restrict his time and energy to efficiency issues. The cost-saving requirements of the catering industry have seemed to deny the expression of his creative and gregarious nature. Furthermore, they also put severe limits on his ability to be successful.
In general, the catering industry is dominated by two types of players. At one end of the spectrum are large hospitality companies, especially hotels, that offer package deals that include accommodations, meeting space, food, and other amenities. At the other end are individual homemakers or chefs who rent a kitchen and find work by word of mouth. Caught between are midsized operations like Herban Feast.
Catering is competitive and caterers can easily end up competing against each other to keep prices low. Even in the relatively high-end market of weddings, catering and food tend to be an afterthought organized by wedding planners or the hosting facility. Tradition holds that the distinctiveness of a wedding comes from the bride's dress, the decorations on the table, the site, and the party. Food contributes little more than a major line-item expense to be managed.
Operating within this context, Herban Feast was a modest success: a good, solid, but unexceptional caterer competing on price and good service with hundreds of other caterers in the Seattle region. BJ's clients were attracted to his warmth, but beyond that he was hard pressed to offer anything especially distinctive.
As the company grew, BJ became increasingly uncomfortable. Similar to other caterers, he had problems with turnover and staff discipline, which made it difficult to field people experienced enough to handle large events. He came to fear growth because he wasn't sure that by himself he could keep up with his business as it and the events it catered grew larger and became more complex.
BJ also wasn't getting media attention because nothing made him stand out from anyone else. He couldn't figure out how to create a public identity strong enough to make people want to tear out the story in the magazine or newspaper. It dawned on him that a company that isn't doing something creative won't get invited to do events where creativity is called for.
In one of our early conversations, BJ and I talked about the essence of his company. We discovered that his original inspiration to create Herban Feast was the idea of authenticity, in food and in relationships, and the desire to provide people with eating experiences that would nourish their bodies and lives. He made a decision to stop focusing his energies on minimizing waste and maximizing efficiency—an uninspiring vision for any company—and instead to dedicate himself to creating truly memorable and meaningful events. Each wedding, meeting, and party was to become an authentic source of joy for his clients and for his entire team.
BJ reconnected to the idea that his customers provided the meaning and reason for his business. Through deepening his relationship with them, he realized what he most wanted his business to be: creative, expressive, and a source of beautiful food and unique service. He understood that his customers, especially those who came for special events such as weddings and retreats, were looking to him to create meaningful experiences. They wanted stories that they could remember forever, ones that reflected images of their best selves. His company was being called on to write, cast, and perform plays that celebrated its clients' lives.
This insight about the company's relationship to its customers also transformed BJ's relationship with his staff. He had struggled with people's failures to follow through on instructions and their apparent inability to think for themselves. None of his staff seemed to love their work, and that was evident in their lack of energy and spirit. BJ couldn't see that these diverse problems had a single source. His company had its eye on the wrong thing. By shifting focus away from standards and controls and toward the lives of his customers and staff, BJ brought Herban Feast to life.
BJ and I collaboratively engaged with the staff in an exhilarating conversation about the lives of their customers. Soon after, one caterer had a concrete experience of the transformation that can come only from seeing through the customer's eyes. She was working with a particularly difficult wedding party who were making exceptional demands. They wanted special snacks and drinks while getting ready and seemed to forget that the folks in the building were caterers, not personal attendants. The caterer reported feeling at her wit's end about how to get her list of things done before the dinner started in the next room.
As she carried in a glass of juice (not her job) she heard the bridesmaids in the hall being chastised by another member of the wedding party for their impatience with the bride. Then she heard something that changed everything. One bridesmaid asked the others, "Well, how would you feel if you lost your mother just four months before the wedding you had been planning with her for a year?"
This moment made a huge impact on the caterer, who couldn't imagine simultaneously planning her own wedding and losing her mother. As she told her colleagues later in the debrief, "Everyone has a life we don't know about." The bride had not included this telling detail in her interview, but the incident educated the caterer who overheard it. She became a champion for listening for what is left unsaid. "Work with a caring ear," she advised her colleagues.
BJ's employees no longer represented a continual source of risk. They became improvisational collaborators. They were no longer food servers; they were storytellers. Herban Feast became the best improvisational theatre group in the region. Preparing for each event, one or more of the staff would learn about and open up to the clients, inviting them to share their dreams, their stories, and who they were trying to become. This intimacy enabled the Herban Feast crew to empathize and adjust their "performance" to create a perfect fit. Everyone participated—from kitchen help to waitstaff to parking valets—all aiming to create a whole, authentic, and meaningful experience for everyone involved in the event.
As a result, Herban Feast has become the most visible and sought-after caterer in the region. BJ is regularly featured in magazines and television interviews, and his company's excellence, authenticity, and innovation inspire audiences. Herban Feast's "green" weddings and events have made it the caterer of choice for a growing clientele who wish to live their values without compromising the quality of their celebrations. And BJ has evolved in his role. His team shares his vision, and he remains connected to them in their work.
Kingsford: Creating Collaboratively
In 1985, I began working with Will Lynn, president and general manager of Kingsford, on a major effort to transform the company. Kingsford, a business within Clorox, makes charcoal and related products for backyard barbeques.
When we began our work, Kingsford was facing the enviable problem of rapid growth, which had created some real challenges. The company had outstripped the capacity of its manufacturing facilities. It was hiring new people, trying to bring them up to speed quickly, but this created serious safety problems. In the process, it had lost control of standards and quality as it tried to catch up with demand. It relied heavily on outside technical and management expertise.
Kingsford represented one-third of the people at Clorox, but by almost all measures it delivered a poor return compared to others in the industry and the rest of the company. Two years later that situation was reversed. Kingsford had halved its workforce while doubling its revenues. Even more remarkable, it had closed half of its plants without disrupting the lives of its workers and their communities. The company ensured that every laid-off worker was able to move on to an equivalent or superior job.
Seen from the outside, this transformation appeared miraculous. Kingsford's corporate headquarters were in Oakland, California, and its manufacturing was based in Louisville, Kentucky. But most of its plants were sited in backwater communities, in poor regions such as Appalachia and the rural South. Many workers lacked high school educations and some couldn't even read. Their work was labor intensive and dirty. Both management and workers called the chemical process of making charcoal "black magic."
The parent company behaved as though this poorly educated workforce could never learn to manage the business. The leadership of Clorox regarded Kingsford as if it were an ugly and embarrassing stepchild, useful around the house but certainly not invited to attend the ball. Its managers were thought to be ordinary, not worthy of promotion or investment. This was in contrast to the "extraordinary" managers at Clorox.
But Will Lynn refused to accept the stereotypes about his workforce. His connection to people was legendary. Will could tell you about everyone he ever worked with, employees and contractors—where they were now and what they were doing. For him, this was easy; he loved and was amazed by watching people grow. He saw the job of mentoring an employee as a lifelong commitment, whether or not a person still worked for him.
Will was dedicated to discovering and developing the wisdom hidden in every member of the Kingsford workforce. He repudiated the idea of imposing generic standards and worked instead to bring out each employee's unique contribution. He led by raising aspirations rather than by telling people what to do. He believed Kingsford had no problem with willingness on the part of its people. The issue was capability.
Hiring consultants to tell workers what to do was no way to create real change. He had observed that when Kingsford hired outside consultants to address its problems, the improvements went away when the consultants went away. The company had unintentionally cultivated its own dependency: change processes had no staying power without a consultant to lead them.
Will knew that he needed to grow people's ability to think like business owners. He felt that every employee should be able to stand in the president's shoes, understand the business as a whole, and make whole decisions based on defined products and profitand-loss reports.
One day he had a conversation with Rod Lorimer, vice president of manufacturing for Clorox. Earlier in his career, Rod had been connected to the pioneering program at P&G's Lima, Ohio, division. This influential program had redefined the role of people in manufacturing, seeing them as sources of creativity rather than as self-operating extensions of machines.
Will suspected that maybe there were lessons from P&G that could be applied at Kingsford. Rod cautioned him: "It takes a pretty courageous leader to take on what they did in the detergent business. Most managers haven't got it in them. But it will make more difference than anything else you've ever done!"
Rod insisted that Will ask himself some challenging and unorthodox questions: Did he believe every person in his organization could grow and contribute significantly beyond their current level? Could developing his own and everyone else's critical thinking skills really make a difference? Was personal development something that belonged in the workplace as part of making a better business?
Will didn't disagree with the premises behind the questions, but he could see that what Rod was describing was different from any undertaking he had led before. He worried about whether he could pull off a change of this magnitude with a poorly educated workforce. He wondered whether the culture of his company would tolerate it.
Will understood that if he started changing the culture at Kingsford he couldn't stop. The process would build so much momentum and so much inspiration that stopping would leave his organization in a worse place than if he had never begun. Still, he knew from his conversation with Rod that those who had been willing to take this approach had generated an enduring legacy by creating some of the most innovative work systems in business.
Almost immediately the positive changes began to show up. Managers who had been little more than administrators suddenly started to reconceptualize the business they were in—from making charcoal to enabling great backyard barbeques. Within months they were exploring potential relationships with "picnic partners" such as Frito-Lay and Kansas City Masterpiece, and within a year they were talking to grill manufacturers about how to deliver a better barbeque experience. They learned to make swift and accurate assessments of which ideas were going to work, reducing product ideation testing from a two-year to a six-month process. They became experts in acquisitions and divestitures as they clarified what really fit with their new strategies. They discovered that running a business could be fun, creative, and improvisational.
The agility they were developing allowed them to try out multiple moves to find the ones that would work. Egos and conflicts that had previously slowed them down seemed to evaporate. Within six months Kingsford had introduced dozens of new ways of working into all parts of the business, and they found that people were hungry to join in.
Within a couple of years, a transformation had occurred throughout the entire workforce and in many of the supplier operations as well. It was becoming increasingly difficult to distinguish factory managers from their workers. Factories looked more like jazz orchestras, with every player helping compose the music as they performed it. Workers were initiating product development from the factory floor and recruiting research and development (R & D) to help them rather than the other way around. Operators and salespeople redesigned deliveries so that they could be customized to meet the specific needs of a given retailer. Workers organized themselves to promote their own development — everything from literacy programs to learning the science and technology needed to run the business.