Achieving Business Excellence with John Spence

Entitled Self-Interest ???

I would like to share a VERY big idea with you, one that I believe is critical to changing the future of America.

This morning I had breakfast with one of my favorite people on the face of the earth, David Whitney. For two and a half hours we shot the breeze, played idea ping-pong and talked about how to solve all the world’s problems. I told David that there had been an idea bouncing around in my head for nearly 3 years and although I was not quite sure where the idea was leading me, I still felt that it was vitally important. My idea is that I believe our top business leaders need to fully embrace the idea of: Enlightened Self-Interest. I believe that to those who have been given great power… also comes great responsibility and that “doing well by doing good” should be the mantra of top corporate CEOs and successful business owners across our nation.

David looked at me with one of his great, kind, loving smiles and said, “That sounds very nice John, but the problem is that many people in America believe in Entitled Self-Interest not enlightened self-interest. They are more focused on what they “deserve” not on what they can give. I deserve a big house. I deserve a fancy car. I deserve a big income. I deserve, I deserve, I deserve…”

Unfortunately, I think David makes a valid point, but I’m desperately convinced that we must turn that around and change the way we think about how businesses interact with and impact society.

Let Me Give You An Example:

These are a few a pictures of how Detroit looks today, April, 27th 2011…

                                                                                                                                                                                                                       Here is what one reporter had to say about the Motor City:

“The city of Detroit has become the poster child for everything that is wrong with the U.S. economy – and for good reason.  It literally looks like it is in the middle of a war zone or like a hurricane has hit it.  The truth is that the city of Detroit is dying and it is simply not going to recover.”

A few facts about the Detroit of today:

  • The Mayor of Detroit has admitted that while the “official” unemployment rate in Detroit is 27%, the “real” unemployment rate in his city is somewhere around 50%.
  • House prices of under $1,000 are quite common in Detroit now, and there are some houses in the city that you can actually buy for just one dollar.
  • Emergency financial manager Robert Bobb has announced a plan to close 44 Detroit schools.
  • According to one estimate, the city of Detroit has 33,500 empty houses and 91,000 vacant residential lots.

And now for one more extremely important fact:

         In 1994 the combined PROFITS of Ford, General Motors and Chrysler = $13.9 billion.

Imagine if  just 17 years ago the leaders of these organizations had deeply embraced the idea of enlightened self-interest and understood that because they had such massive profits, they could afford to take a portion of those profits and invest them in the future of the community where their businesses operated. Not a forced investment, not a government directed investment – but an enlightened self-interest investment in the people and the town that formed their corporate community. Imagine further that each of these leaders decided to take $1 billion of their profits and invest them in the school system, in entrepreneurship and innovation programs, in the arts, public transportation and the green spaces of Detroit. THREE billion dollars in a single year. And imagine still further that they did that every year when their profits exceeded a certain level. What Detroit would be today, instead of a war zone, is the single most impressive city on the face of the earth. Detroit would have the best schools, the best arts, the best public transportation and some of the most beautiful parks and green spaces in the world. And the people of Detroit would be some of the most talented and intellectually inspired citizens in the world. And the three car companies headquartered there would then have access to a huge, loyal and grateful population of extremely bright and talented people who were eager to work for one of the companies that had helped to make their life and their hometown so vibrant and special. Talk about your virtuous cycles!

Now I know this is just a dream, and there are lots of other factors that would play out in the real world… but I have to believe that if the leaders of the big three automakers had exercised even a modicum of long-term thinking and truly enlightened self-interest, they would’ve taken some of the billions and billions of dollars in profits and invested them in their communities, not just R&D for their cars. And yes, I do understand that these three companies are very philanthropically generous, they each give money to the arts and education and health care… but I am talking about something on a completely different scale. I am actually suggesting that they forgo some shareholder value today, in order to increase America’s overall value in the marketplace a decade from now. I know it’s a bit of a crazy idea, yet deep down inside I feel this must be one of the key strategies we implement for helping America to regain its prominence as the world leader in business, education and quality of life… to help us rebuild the American dream.

Let’s face it folks, America needs to get its business swagger back. We need to do the hard work necessary and invest the money required to put us back on the path to global economic dominance. And I am not pointing my finger only at the big corporations, it is my firm belief that every successful business and every successful business leader should stop and give some serious thought to how they can take the great wealth they have generated… and voluntarily invest a significant portion of it into the programs that they firmly believe will make the biggest positive impact on the future of our country.

I know it is a BIG idea… but I do believe it is an idea who’s time has come.

      The Future of America Depends On Enlightened Self-Interest

I very much look forward to your comments and feedback and hope we can have a robust discussion around this particular blog post. Thanks so much – have a super day – John Spence

Comments

  1. John – You are not alone. And hind sight is 20/20. But it’s true that big people and corporations need to do BIG things in order to turn around the city of Detroit.

    GM bought the Renaissance Center, which is good. Chrysler made the Imported from Detroit commercial with Eminem. Ford is doing good things for the area (I am sure). So what’s next?

    I look at Dan Gilbert (Quicken Loans) and the Tech Corridor he is building along Woodward. That is cool. We all need to do big things. Come on up to Michigan and give us a talk John. I miss you and Sheila and your big ideas. And next time you write about Detroit – it can be w/ some good news, eh? Derek

  2. John, always enjoy reading your articles – This is yet another commentary on what we can do to turn our future around for the better, not just in Detroit but around the nation and perhaps around the Globe~

    And like you noted, “to those who have been given great power… also comes great responsibility and that “doing well by doing good” should be the mantra of the CEO’s of powerful corporations and large business houses, as well, to each and every one of us according to our capabilities as an ideology to make a change for the better.

    It is indeed wonderful to see some action with regard to turning Detroit around, and I hope the momentum continues. When we look back and see how the downfall could have been prevented it is heartbreaking – but we cant change the past – let us begin now, to change the future..

    I also hope the approach you so poignantly noted, ‘ enlightened self interest’ can b shared with a larger audience to provide ideas and encouragement so there can be actions accordingly to begin now, in more places!

    Wish you much success with spreading such powerful messages – hope to see you in New York sometime?
    Jaya

  3. John, Your collective thoughts and shared wisdom resonates with me on so many levels about enlightened self interest. As an entreprenuer who also volunteers as a planning commissioner in my home town north of Detroit one can’t emphasize enough the important ingredient required to get our American swagger back. Fearless leadership. As Derek points out, there are those demonstrating it however, it will take fearless small business owners to keep the momentum going for Detroit with sizeable investments so community identity is re-established as is currently happening with-in Farmer’s Market and Mexican Town. Steve

  4. David Whitney says:

    John,
    As usual, you make the complex….awesomely simple. My second most favorite part of this morning’s breakfast – the first being when you picked up the check – was when you said that it’s time for America to unleash a wave of innovation and growth. When we do so, America regains its – I loved the term you used – “swagger.” And then you said, “When America swaggers, the world flourishes.”
    Listen to this man, America!
    Whit

  5. John-

    As always, thank you for stepping out and uncovering the possibilities. I absolutely agree that each and every business can — and should — make a difference at a local level. At the same time, we need Enlightened Leadership at a National Level to inspire our citizens to realize the things that will have the greatest positive impact on America and create meaningful opportunities for our children, their children and generations to follow. What if Education, Energy Independence and National Defense became the three pillars of strength upon which we build our collective futures? It seems to me that might just unleash the ultimate expression of Enlightened Self-Interest.

    All the best,
    Bill

  6. Terie Scerbo says:

    I had to study this concept in my last semester of college, in a class on the diplomatic history of the United States. Benjamen Franklin’s autobiography discussed this concept at length. He may even have been the originator. It was his key philosophy in negotiating with the “great powers” of the day: France and England. Given that he negotiated the French into supporting the American cause (to the point of bankruptcy, contributing to the later French revolution) and the most favorable “divorce” treaty every negotiated between a colony and its mother country, he must have been on to something.

    It would be nice to see this concept used more among power brokers of this world.

  7. Angela Pate says:

    Ah yes…. Benevolent Capitalism

    As found on http://www.bcorporation.net/declaration I love going to this site and reading the latest..

    Declaration of Interdependence
    We envision a new sector of the economy
    which harnesses the power of private enterprise to create public benefit.
    This sector is comprised of a new type of corporation the B Corporation
    which is purpose-driven and creates benefit for all stakeholders, not just shareholders.
    As members of this emerging sector and as entrepreneurs and investors in B Corporations,
    We hold these truths to be self-evident:

    – That we must be the change we seek in the world.
    – That all business ought to be conducted as if people and place mattered.
    – That, through their products, practices, and profits, businesses should aspire to do no harm and benefit all.
    – To do so requires that we act with the understanding that we are each dependent upon another
    and thus responsible for each other and future generations.

  8. How true it is. Right on John, Right on.
    Dertroit is just the begining. This is more than a BIG idea.
    This is a BIG reality.

  9. John,
    This is an excellent topic. While these powerful corporate leaders could show more Enlightened Self-Interest, I think they hesitate to invest because they know that a majority of that money gets inappropriately redirected to crooked politicians, which could also show more Enlightened Self-Interest (not with their pocket books, but with their policies). Without making this statement political, notice how both sides continually demonize each other, all the while knowing that one cannot exist without the other. I would love to see both sides (not just Detroit, but across the country) come together at the same table to start working together to fix these problems. Corporations and business leaders bring their profits, and elected officials bring good sound policies that work to empower individuals to work hard. We are not all CEO’s of big corporations, but we are CEO’s of our own lives, so we could all show more Enlightened Self-Interest for the good of America. We will all need to work together to bring the “business swagger” back. Take Care — Alex.

  10. Thank you all for such absolutely fantastic feedback – I’m so pleased to see a good conversation here on the comments section. I very much hope you will send the link to this blog to a large number of people in your contact list so that we can bring even more people into this conversation.

    By the way, I am in no means singling out Detroit on purpose – unfortunately, as the reporter above stated it, Detroit is the “poster child” of everything that’s going wrong in our economy/country right now. Truth be told, I likely could have found a dozen other cities with similar issues and problems, but that should not be comforting to anyone in Detroit or any of the rest of us.

    I am glad to see that many of you agree or at least understand my view. I know that I haven’t given any specific answers here – and that even though I love simplicity this is an extremely, extremely complex issue… but still those words keep coming back to me over and over again, “enlightened self-interest.” I just feel in my soul that this has to be ONE of the ways that we can work together to get ourselves out of this mess.

    Again, thank you so very much for your wonderful comments and I sincerely hope that you will send the link on to anyone you feel might enjoy reading this blog and adding their thoughts and ideas to this important conversation. My best to you – John Spence

  11. Good thoughts on getting back the swagger. It seems to me that for the last 20 years, big business has stopped being the place to find admirable leaders. Today, it seems all the imaginative, progressive and socially responsible thought comes from the tech industry, non-profit organizations and entrepreneurial small business. Until big business, with their big potential, can start attracting that kind of talent, it’s going to be ruled by mediocrity and driven purely by numbers and profit.

    One additional thought — globalization has led to many of our best minds solving problems in other parts of the world. Admirable, yes. Look at the good work Americans are doing to fight disease, poverty and genocide around the world. Maybe a good question is: “Why aren’t these great minds interested in solving problems right here in our own country?”

    Thanks for provoking thought this morning, John.

  12. John,

    I hate to be the one to rain on the love parade you’re getting for your post, but I think there are three points that need to be made here.

    First, enlightened self-interest is not new (remember Adam Smith, anyone?). Should corporations invest a significant amount in those programs they firmly believe will make the biggest positive impact? Absolutely, but those programs are not going to be found in charity–they will be found in ways to make the corporation more productive and profitable so that they can keep and add jobs that will then sustain the community.

    When corporations do what’s in their own long-term best interests they have a better chance of maintaining their market leadership and thus preserving jobs. If Detroit automakers had plowed that money back into more R&D and quality and process improvements, they might not have lost market share and they might have been able to keep the jobs in Detroit.

    You also have to consider unintended consequences. Pumping money into the community, while it’s admirable and makes people feel good about themselves, runs the risk of creating another pool of people who now feel a sense of entitlement, so that when the profits are not there to support high contributions, the corporations are then demonized for “taking away” something people feel they deserve.

    Finally, swagger isn’t the real issue. The problem is that Detroit had too much swagger, so that they would not learn from others who were quietly and without swagger killing them in the marketplace.

  13. Jack, I knew you would not be able to resist!

    To your first two points: I believe that investing in the people in the community where your organization is situated – is a long-term investment that will show a significant ROI – in my opinion on the same scale, or possibly a higher than R&D and quality process improvements. Because basically you’re investing in R&D and quality process improvements in… People. And you and I both know that the number one factor in determining the long-term success of any organization is the quality of the people they can find, attract and keep in their organization. What better way to get great people then to: grow your own! Why not invest in creating a huge talent pipeline of people perfectly trained and enthusiastic about working for your organization? Surely that would have a strong positive impact on long-term profitability and market share.

    To your next point, I agree completely that you do run the risk of creating an even larger group of people that have an entitlement mentality. This is where I said that it was a complex and difficult idea and that there would be many, many factors that would impacted it in the “real world.” I absolutely admit that it would be challenging to ensure that the money was invested (not charity – an investment) in a way that had structured measurements, milestones, hurdle-rates and clear expectations of performance in the real world – never, never just a handout. And yes, if the profits of the organization began to fall and they were no longer able to invest in the community – they would run the chance of being demonized for taking away something that people felt they “deserve” – which is yet another reason that this is a complex issue… yet I feel that investing in the future of local top talent would be one of the best ways to ensure long-term profitability.

    Finally, I am totally with you that “swagger” is not the real issue – especially in Detroit — a city that in the past had way too much swagger, ego, indifference and an unwillingness to deal with reality as the American car market was falling apart – so perhaps it would have been better to have called it “optimism” – or maybe “quiet confidence” – but the message I’m trying to send here is: we need to start doing things to get back on top of our game. And from where I’m sitting, the government and the politicians are not going to be able to do all of this for us – we are going to have to make some sacrifices and take some risks – maybe some big risks. But the biggest risk of all would be to do nothing and watch things get terribly, terribly worse. To me, our back is up against the wall – time has run out – this is an issue that is going to have to be dealt with in the next 10 to 20 years – in other words – in our business lifetime. We will not be able to pass this on to the next generation – the problems are too big and we have always been a country that tried to make sure that our kids had it better than we did. Unless we get our collective asses in gear, we are going to leave a financial, environmental and political mess so big that there would be no chance for our children to dig out of it. I hate… HATE… to say that – but I think there are few people that would argue against that reality. Our country is facing a lot of massive challenges and opportunities – and I believe it is up to us – our generation – to take them on.

    Jack, as always I love your comments – you always seem to be able to play devil’s advocate and find a counterpoint to my points. I deeply respect your opinions and your well-thought feedback. Thanks so much for being an active part of this blog – and one of my best friends in the world!!!

  14. Hi John,

    I’ve been thinking about your post and the comment string for a couple of days and had a few thoughts to add to the discussion.

    I guess one big question – at least for me, John – is whether the problem we’re talking about is with America in general or Big Business in particular?

    Not only has America lost its prominence in the world, but Big Business lost its prominence in America. While working with/for Fortune 500 companies is still a pretty big deal, I’m going to go out on a limb and say it’s not as big of deal as it was twenty years ago (echoing T.J.’s comments above).

    Right now, Big Business in America is still in the “what the heck just happened?” mode. The loss of ego is good; arrogance is a dangerous thing. But with the loss of arrogance went a loss of confidence, I think, which may be the “business swagger” you’re referring to.

    —Example of “Enlightened Self-Interest” or maybe just a rant—
    In my parish (or county, for non-Louisianians), there are just two telecoms: nation-wide Cox Communications and parish-wide EATEL. I read a few months ago about a monument Cox is sponsoring in Washington, D.C. While that’s good, I still have a very low opinion of Cox, especially compared to EATEL.

    No, EATEL won’t be sponsoring national monuments anytime soon – but when I call, I’m speaking to a real person within 60 seconds who always, ALWAYS takes care of my problem herself (for some reason, it’s always a woman).

    Instead of a national monument, I would suggest Cox invest in hiring more local people, training them better, and better equipping their local operation centers. It wouldn’t earn them as much national press – but it would earn them better customer service ratings, more business, and more community loyalty – mostly just by hiring more local people and using more local vendors and resources.

    In the bigger picture, I don’t think many companies would have to allocate significant portions of their profits to engage in enlightened self-interest pursuits. Perhaps much of it could simply be redirected marketing dollars. Right now, mass-marketing is offering diminishing returns – why not connect with people in truly novel ways, while serving the company’s own interests at the same time?

    I may be way off base, but these were my thoughts after chewing on everyone else’s. Hope they somehow help.

  15. Peter Lars Johnson says:

    John,
    “Enlightened self interest” is alive (even in Detroit) and naturally occurring virtually everywhere, we just don’t have enough enlightened citizens. The fundamental problem you have identified, in my opinion, is the result of our culture’s focus on specialization. Our greatest minds have been encouraged and reinforced for their entire lives to be really exceptional in a particular field of endeavor. For example, Gainesville, Florida (where we both chose to live) is a large university community made up of some spectacularly talented people in almost every field of endeavor from medicine, technology, business, arts, engineering, and others. The leaders in those fields spend incredible amounts of time and energy to keep their position in the forefront of their particular field of expertise. They are trying to dream up new business or research ideas and keep up with developments of others in their own particular specialization. The competitive demands of whatever specialization they have chosen has the effect of focusing almost all of their attention on what they are very proficient at. Very few of our brightest people are fortunate enough to have the time and sufficient resources to afford to think about the challenges our community faces and take time to become involved with issues they feel are best left to other “specialists”. Consequently, our ability to influence the direction and leadership in areas such as public education, parks, zoning, public transportation, recreation are left to other specialists who have often been slow to respond to the changes in technology and the marketplace. Our public education system is a classic example of a system that has now captured the attention of business leaders whose “enlightened self-interest” is facilitating some significant reforms led by politicians from both major parties. Education specialists, such as Geoffrey Canada and others are gaining attention and support for their reforms and methods as more of us become enlightened.
    Enlightening is the key, John, thanks for posting your thoughts and encouraging others to share theirs as well. Our collective efforts to learn and achieve successful outcomes in our lives, families, communities, and ultimately, our world will help guide the “enlightened self-interest” many of us desire.

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