Chuck Maniscalco's resignation as CEO of Seventh Generation in September, followed by Jeffrey Hollender's departure from Seventh Generation in October pushed me to think about leadership in a company committed to sustainable business practice and what that implies.
In the mix of my thinking, I recalled reading that Seventh Generation has $30M in investment lined up to expand and grow the company. So I began to wonder what does this imply or mean to all the stakeholders and its implication to leadership responsibility.
Seventh Generation is currently a privately held company, after a period of being a public company from 1993-2000. During its public status, its stock was never worth more than $5.00 per share. I cannot find any information on status of that $30M and its implication to the investment strategy or company incorporation.
In 2000, Jeffrey Hollender and others perceived that they had lost control of the company; and Hollender and 11 other investors bought back the shares for a premium to investors and took control of the company. At that time of transaction the stock was valued at $.87 and private investors bought out public shareholders for $1.30.
I believe that the way Seventh Generation - the board, stakeholders and current leadership prepare to measure Seventh Generation as an investment public or private for the future will be the critical to how a CEO is hired to replace Hollender and Maniscalco? The kind of CEO needed to answer to investors for a public traded company is very different than than a CEO preparing the company for IPO or a CEO hired by all stakeholders to lead solely focused on sustaining the company and guiding the adaption of the company strategy for the marketplace and regard to competition e.g. Clorox, Procter and Gamble or S E Johnson and Company?
Yet a $30M investment can also be an opportunity for a company to think of itself as an economy, create jobs and integrate a complete sustainability framework of continuous learning with regard for all stakeholder needs, where the needs of investors do not take priority over the needs of other stakeholders.
How do people think about "leadership?"
Leadership has become a buzz word like CSR and Sustainability.....yet in todays' world we are always looking for a leader to idolize or blame. We are quick to talk about leadership failure and the media has a constant our pouring of philosophical views on what it means to be a leader or what a leader did or did not do.
What we do not often talk about is what is a leader leading and for what reason in a context that goes beyond the idea that a leader heads something or sits over a group of people or is responsible for delivering on a promise.
Over the past decade leaders have come under microscopic view re: their behavior, value and ethics.
Rarely have I seen any leader judged or reviewed for his impact on an economy. Tyler Elm, past Senior Director, Corpoate Strategy and Finance, Wal Mart Stores, Inc. wrote in his foreward to Chris Laszlo's, Sustainable Value
I recall a colleague presenting me with the following statistic a few years ago: "Of the world's 100 largest economies, 42 are now corporations, not countries."....walmart Stores, ranked first on the Fortune 500 and approaching $350B in annual sales by 2007.
For 2010, the top 10 Fortune 500 companies again ranking Walmart as first followed by Exxon Mobil, Chevron, General Electric, Bank of America, ConocoPhillips, AT&T, Ford Motor, JP Morgan Chase and HP.
All these companies have the great impact on jobs and the economies local to their operations. These companies impact the health, well being, economic stability of the people they employ and all other stakeholders. Collusion, ignorance or an informed decision by any corporations of this size can impact millions of people that may have no direct involvement with a company in the way the BP Oil Spill impacted the Gulf Region of the US.
Yet in most instances corporations, their stakeholders and others do not think of a corporate system as a living economy. Living economies are geographical regions of dense populations of people who reside by each, who can experience direct and indirect harm due to economic decisions made by political, business or community leaders.
Residents within these economies can experience harm due to how economic decision makers carry out their jobs for people they perceive as their most immediate stakeholders without factoring in how a decision can create harm to health, the environment and a region, e.g. the BP Oil Spill. These decision makers make decisions from the view of benefit for their most immediate value chain of people, e.g. shareholders, investors, or customers.
What happens when leaders think of a company as an economy?
Two companies on the list of the top 10 Fortune 500 began a few years back at the leadership level began to think about the implications of company strategy and what that meants if the company stakeholders viewed a corporate strategy as a "economy." These two companies are Walmart and General Electric.
The Wikipedia about Walmart offers a thorough summary of how Walmart changed after embedding sustainability into the company culture. Walmart's CEO Lee Scott passed the baton to Michael Duke, after Duke was elected at the 2009 annual shareholders meeting. Scott has been serving as Duke's and will continue to as Chairman thru 2011. With Duke's appointment Walmart has expanded its application of sustainability in the company and throughout the global supply chain.
Walmart's format of success planning and strategy I believe is less relevant to Seventh Generation's needs today. I find the change that General Electric has gone through guided by Jeffrey Immelt much more relevant. GE like Walmart appointed a leader from within the company, unlike Walmart, this leader has been the one to embed sustainability into GE's business strategy and led a company through a culture of change that has included job creation, investment in new ventures and an outreach to its supply chain that is serving as a model for others.
GE has also developed and funded a non profit foundation with an educational focus. The GE Foundation foucs is on funding programs that supports US students to achieve a strong foundation in math and science. Skill in science, technology and math (STEM) are now viewed the most critical skills to learn as early as kindergarten, in order to join the new emerging sustainable workforce. Through GE's management education program, STEM skilled workers are supported to develop the emotional intelligence and holistic overview critical to working in a company that has integrated a sustainbility into its culture.
Jeffrey Immelt, Chairman and CEO followed decades of empowering a performance driven culture as led by Jack Welch. Welch was Chairman and CEO of General Electric from 1981 to 2001. During Jack's reign, the company culture was described as "the Welch Way.". There are many books and stories about how Jack led GE and what his values and leadership implied to others.
While Jack Welch fostered a system of professional development and management education in General Electric that is globally respected, the Welch Way has been replaced by an integrated sustainability strategy that fosters people as corporate citizens who define their work from a perspective of CSR through a new lens of what it means to integrate sustainability into a culture of change. Jeffrey Immelt began fostering GE's culture with this view when he followed Welch became CEO and Chairman of GE in 2002. Jeffrey, like Michael Duke of Walmart had a long career internal to the company where he was promoted to Chair and CEO. Immelt's personal choice was to lead his company to embed sustainability into its culture.
By 2008, Immelt began describing himself as a banker with "deep pockets, who also invested in people. Immelt differentiates himself from an investment firm because he devised and put into practice a sustainability framework that defined how General Electric could lead the world into the building of a sustainable economy describing practices within the company, plans for how to work with the supply chain. Outside of GE, Immelt announced and carried through on plans to invest in new ventures that are not entirely owned by GE. In some cases these small enterprises are competitors to GE divisions and businesses; creating a social network of coopetition as part of the GE Culture.
Immelt outlined this framework, September 2008 to students at University of Berkley, Hass School of Business. I have since listened to this video personally over 10 times as a source of influence for my own thinking on Sustainable Strategy, Leadership and Change. Immelts presentation to me has served to be one of the most practical guides for how I define, coach and think about leadership for any company. I view this as a manifesto of change for the 21st century.
While Immelt and GE's executive team were outperforming the stock which from 2004-2006 traded at about $35.00 a share; Immelt showed his belief in a company that under Welch grew into a performance driven culture. It is now 2010 and GE's stock value is at a low of $16.22 and considered a good stock pick with a outstanding portfolio of new innovative businesses in wind and bioscience and more. For all appearances, it appears that GE has become a culture of innovation and transformed from a culture of performance. Yet doesn't innovation imply performance?
In someways, Immelt and his teams' performance and leadership approach remind me Procter and Gamble as led by both John Pepper and Al Laffley. Laffley will step down in July and be replace by Bob MacDonald. What all these men share in common are their passion for developing people, investing in them, and supporting foundation activity that impacts the healthy and education of future generations.
What have I learned from Jeffrey Immelt, P&G and others I view as Sustainability Leaders?
1. They think! Each person presents when they speak publically provides a thought leadership and frameworkof learning and practice; they do not impose their will on others. These leaders offer their thought leadership as something for personal translation and relevance.
2. They ask questions! These leaders don't come on stage presenting their way of doing business as "the way." These men speak in plain english with out jargon in a form of authenticity that opens the door of possibility for another person to learn from and adapt for their own personal model of guidance.
3. They value others! They invest in people. Immelt made this clear in his presentation at UC Berkeley Hass. I have watched John Pepper as a long time observer of his work at P&G and Disney do this over and over again. Pepper pays attention to people by observation and reflection. without speaking and invited people into conversation without regard for hierachy. I have watched both Immelt and Pepper recognize value in network rather than hierachy.
4. These leaders invest in education and professional development for the people they work with. When these leaders ask for proposals, they view that proposals imply an investment in time, learning and resource allocation. Learning implies embracing failure and they insure that in any company they work in there is a professional development and education system that supports people to apply their learning on the job.
5. These leaders proactively respond to marketplace change. The video provided here shows how Immelt has responded to the demand of change re: energy, environment and health. At P&G, Pepper was the first leader to acknowledge the need to reward brand managers for retiring products out of date and innovating new products; Lafley took on the integenerational and cultural changes of his consumers working with his team to conduct research on the appeal of products and formulas for age and country. Bob MacDonald is now facing a frugal market that is not as brand loyal to Tide, Gillette or Olay and showing price points matter as much as brand.
6. These leaders have a strong value for sustainability. . I believe that Immelt, Pepper, Lafley and MacDonald not only embrace the company mission but line up the company strategy, organization and practices to take on the challenge of the times. GE and P&G have a history and score card of leaders of specific business units that shaped their jobs and response to the challenge their CEO embraced.
7. Each of these leaders is involved in mentoring the next generation by funding and building programs that invest in youth education, health and job creation.
These CEO's also know how to stand by people they work with, who worked hard to learn from failure. They continually let others lead with their own personal autonomy and don't perceive the job of a CEO is about taking credit for what others do. Recent reports from GE re: Ecoimagination and Healthymagination offer these stories. There are many stories in the business literature about P&G and some of their leaders who had the gumption to act on intuition and gut and create exceptional results.
What does this Manifesto imply to Seventh Generation?
While giving consistent reflective thought to the current situation at Seventh Generation, I asked again can anyone replace Jeffrey Hollender? Peter Graham, Chairman, except for this one announcement continues to be silent.
Jeffrey was Seventh Generation's spokesperson. There is no replacement for Jeffrey's voice.I don't know Peter, I don't know if he is a leader or simply an investor who has inherited a lead position with a community now seeking leadership. At the, I wonder if Seventh Generation in its transition will rely on "a leadership voice" or inspire many voices offering different perspectives for a variety of topics e.g. stock value,chemicals and more.
What can Seventh Generation learn from Procter and Gamble and General Electric where it contributes to images of a generation of healthy workers, who work wisely to live well and contributes to what WorkEcology's Contributing Editor, Dave Wann would call the New Normal.
For now, I am looking to Seventh Generation to learn how the board responds to filling its leadership gap; and how the board begins repair of a failed succession plan. To me the real preparation re: succession is not in finding "a replacement leader;" it is how the people who worked for the most recent leader are prepared to respond to change and do their jobs with or without the appointment of a new leader.
I asked myself, "What I would do if I was Peter Graham or actually working at Seventh Generation?" My approach would be similar to the answer to the question John Pepper asked me years ago. When John Pepper asked me what I wanted to do at P&G at a time P&G was preparing for change, my answer was this:
1. I would meet with every employee in any business unit I was assigned where I could have impact to find out how they want to give their best performance;
2. I would synthesize this into a report into a learning report and present the report to everyone influenced by these employees (all stakeholders) or seved by these employees and convene a meeting to launch a learning community with representation from the investors.
In addition, I would place this list of intention on a wall above my desk with guidelines for my own behavior:
1. Make no assumptions about what I want to do.
2. Find out what others want to do and where they have not been heard and provide people a framework to request what they needed to give their best performance?
3. Compare all the requests and see where there are replications and ask people who replicated each other to meet in small groups and unite in a new proposal framework?
4. Map out a base of operation that cannot change that keeps the company stable with the leaders of all operational aspects of the company.
5. Select a person on the transition team as acting CEO, with the understanding that the CEO job description will be written at the end of one year and there will be a recruitment process created at that time to select a CEO based on insuring a CEO who is respected by investors and representation from all stakeholder groups.
6. Ask everyone to map out how they Seventh Generation can define itself as an economy, similar to GE and Walmart or if it can? Guide a cultural shift in view beyond how people's jobs are defined; and imagine how Seventh Generation can create an exemplary performance in the contet of the Earth Charter's Precautionary Prinicple.
7. Run an election for all stakeholder participation to recommend people to participate in a transition leadership team. Bring to this team a specific list of legitimate competencies and skill requirements that are needed now for the company to perform in a stable form?
8. Survey all stakeholders to submit a list of values, ethics and principles that matter to the all stakeholders in how Seventh Generation operates in the world?
9. Finally, create a review and final summary for the transition team to review and approve. Begin to see who within the transition team is demonstrating leadership and taking responsibility and let them author formal job descriptions reflecting this and prepare their own metrics for performance review.
At the end of 1 year have a meeting with the investors to review performance and get their feedback. Take the investor feedback and begin a new stage of work
Then for begin a new stage of work as follows:
1. Select a group of people who do not ordinarily work together to begin to identify views, perspectives that have not previously been discussed in the company that others would like to learn more about.
2. Begin to build out a method for a community to form a continuous learning group that identifies activities of learning important for the future of the company for which the company does not have resources or people in place to evaluate the implications of what is identified as a learning ladder for the company to sustain and operate with stability.
3. Based on these intentions and principles of behavior and practice, begin bi-weekly meetings of everyone on the transition team to continually review and audit the process and improve on the process based on the outcomes harvested and the observations of the transition team and well defined methods of review with representation of all stakeholders.
Why value this approach?
In my experience many companies formed out of an entreprenuerial vision become about the founding heroes or an idea of how to protect the original intent and product line of a company. I believe one of the most challanging transitions to any company today, is to create an activity drawning on input and participation from all stakeholders to examine how a company brings life to the economy it contributes to or creates.
Anyone who takes a look at the story of Walmart, GE and Disney through 2000, will see that that company story is about what the leaders want and do. Today Walmart, GE and Disney that have taken their portfolio of assets, knowledge and talent and shaped those assets into something of value in many different forms for millions of people.
My belief is that this is the most critical leadership framework any company can create for itself and through observation I can now see that if the CEO's or Chair's of each of these companies mention were unable to perform their job, there are many other people who can continue with inspiring and acting on what really matters and is reflected in the purpose each of these companies has integrated into their strategies, decisions, products and services that delivers on a brand of with a reputation for influencing society today to work toward sustainable change and inject life into our global economy for people, planet and environment.
My own work now is to test this manifesto within communities of people I engage with out of my own passion to empower companies to create a societal scale means of healthy living for people of all generations.
Seventh Generation like many companies I know is at the threshold of contributing to building a great capacity of health and wellness for generations to come. I hope that the company can muster their capacity to do this at a global scale and make that difference. This is why I have always believed in Seventh Generation as a potential investment and a company deserving of my attention as a sustainability leader and consumer.
Will Seventh Generation, grow, become public or stay private, sustain the same culture, use a $30M investment? I have lots of questions to watch for answers. At the same time, based on my Lavinia Homegrown Manifesto, what can I predict? I can't predict anything at this time.
My approach to learning is to simply join a conversation if the door is open for that or to simply observe. From a distance, my instincts tell me not to predict or place bets and to identify the people who roll up their sleeves like I do to do the hard work of change and to see how they work as a community to build the company future.
Key to this approach is a recognition that Seventh Generation is a living social network of economy where it is up to the leaders to sustain this economy for eco-growth and safe chemical practices.