In Compassionate Capitalism, Salesforce.com’s CEO Marc Benioff and veteran journalist Karen Southwick describe a new model of philanthropy that is so ingrained into every fiber of a company’s existence that it becomes integral to the company’s culture and a part of what holds the corporation together. Employees must be convinced that senior management is truly dedicated to the notion of philanthropy and will not somehow penalize those who don’t spend every waking hour either working or thinking about the company’s products and marketing. Philanthropy can play a vital role in a company’s effort to stay viable by attracting the types of employees and customers and other stakeholders who value a whole company and a full life. In the first, philanthropy never really becomes part of the culture, but is based on the CEO’s whim and can be turned off or on depending on his or her devotion to Leadership From the Top How does a firm establish a culture of philanthropy? As with any company cultural issue, leadership must come from the top. Start Small Smaller companies have to get real about what they can do in terms of philanthropy. Maintain Philanthropy Through Tough Times The real measure of a corporation’s commitment to philanthropy happens when the company runs into trouble: Profits are falling or nonexistent, revenues may be shrinking, layoffs are occurring, employees are demoralized, and management is scrambling to meet financial targets. Philanthropy may be even more important to a corporation during these kinds of times, as a signal to employees, customers, partners and other stakeholders that things will get better, and the company is taking a long-term view of the world that includes community service. Gerstner shifted IBM from a “Products” company to a “Solutions” company, focusing on making things work together for its customers. At companies for whom philanthropy is a core value, performance of service within the community only enhances performance at the corporation. Look at the Whole World Companies must look at the whole world as their potential community, and then thoughtfully select areas where their philanthropy is most needed and can have the greatest impact, based on their mission and program focus areas. Soundview Executive Book Summaries Compassionate Capitalism – SUMMARY Strategic Philanthropy How much should a company exploit the public relations benefits of doing good? Some companies prefer to do what they call “Pure philanthropy,” which they consider philanthropy that does not have a marketing component built in. “Collaboration is a powerful model,” says Jeff Swartz, president of the Timberland Co. “We invite our suppliers to serve with us. We invite other companies. I believe small companies can be big companies by applying this model of leverage and engagement. It’s an opportunity to access joy.” 2.
The Free-Market Fantasy
Since 1980 his heart has led him to create and run Whole Foods Market – “a store that sells healthy food to people and provides good jobs.” More recently, Mackey has embarked on a grander mission: “To liberate the extraordinary power of business and capitalism to create a world in which all people live lives full of prosperity, love, and creativity – a world of compassion, freedom, and prosperity.” Sure, companies have been misbehaving recently, but before we throw the baby out with the bathwater, Mackey implores us to remember that most of the wonderful things we have in the world, like cars, computers, antibiotics, and the Internet, are a product of free markets, not “Government edict.” The “Wondrous technologies that have shrunk time and distance” and freed us from “Mindless drudgery” have become possible only because of free market capitalism – “Unquestionably the greatest system for innovation and social cooperation that has ever existed.” Departing from the dominant idea that states have retreated from the market over the past three decades, Mackey argues states have become more interventionist than ever, and that in the process they have “Fostered a mutant form of capitalism called crony capitalism” that is to blame for many of the problems societies face today. As economic historian Karl Polanyi argued decades ago, capitalist markets are a product of state engineering, not nature. The history of industrial development in the United States, often considered the epicenter of free markets, demonstrates the political nature of markets. The history of market formation in the United States reveals an industrial structure supplied by goods and capital extracted from slave labor and facilitated through a state-sponsored, genocidal land grab. Far-reaching government legislation protected domestic markets and infant industries from external competition, and federal and state governments played a central role in the development of physical infrastructure and the creation of huge bodies of agricultural and industrial knowledge – all essential elements in the genesis of American industrial capitalism. At the same time, society’s greatest inventions and innovations of the past two hundred years – rockets to the moon, penicillin, computers, the Internet – were not bestowed upon us by lone entrepreneurs and firms operating in free markets under conditions of healthy competition. Companies produce influential innovations, but so do other institutions that operate outside the confines of the profit motive, competitive markets, and the bottom line. Designating the market as natural and the state as unnatural is a convenient fiction for those wedded to the status quo. Free markets don’t exist and other institutions like states clearly matter. Free markets don’t exist, but maybe corporations are still the best, most sensible, way to heal the planet.