The Adam Smith Award

Honesty Cafes

2009-06-16T06:38:00.000-07:00

While some of us are thinking about a better world, it's nice to see real action taken on a small but impressive scale - especially when that action is focused on changing the behavior and values of the young.

This article is a must-read:

Making Honesty a Policy in Indonesia Cafes

“What’s important is that it’s had a positive effect on the students,” said Suardi, the principal. “Judging from the reports I’ve received from the teachers, cheating in class has decreased.”

http://www.nytimes.com/2009/06/16/world/asia/16indo.html?_r=1

Must Capitalism Be Moral?

2009-05-31T15:46:00.000-07:00

The following is from Rushworth Kidder's recent Commentary in Ethics Newsline:

Have Americans, by separating these two books [by Adam Smith], also confused history with philosophy? Maybe, in our minds, we’ve merged the twin events of 1776, seeing The Wealth of Nations as synonymous with the American Revolutionary War. Maybe it was a misreading of that book that led us, at the end of the twentieth century, to launch a bizarre and tragic experiment: to see whether we could deliberately create a form of capitalism absent any moral content.

That experiment has run its course. We now know that it indeed can be done, but only at grave risk to the economy and to free enterprise itself. The real danger of the ethics recession is not the current economic collapse. It is that unless we restore the moral underpinnings of capitalism, the very freedom that makes capitalism possible may be swept away on waves of public moral outrage. Reinserting ethics into business, then, is no mere luxury. It’s essential to our survival as a wealth-creating nation. But then, Adam Smith could have told us that.

For the entire article: http://www.globalethics.org/newsline/2009/05/04/must-capitalism-be-moral/

Oath of Ethics at Harvard B-School

2009-05-31T15:13:00.000-07:00

The following is excerpted The New York Times May 29, 2009

A Promise to Be Ethical in an Era of Immorality

By Leslie Wayne

When a new crop of future business leaders graduates from the Harvard Business School next week, many of them will be taking a new oath that says, in effect, greed is not good.

Nearly 20 percent of the graduating class have signed “The M.B.A. Oath,” a voluntary student-led pledge that the goal of a business manager is to “serve the greater good.” It promises that Harvard M.B.A.’s will act responsibly, ethically and refrain from advancing their “own narrow ambitions” at the expense of others.

What happened to making money?

That, of course, is still at the heart of the Harvard curriculum. But at Harvard and other top business schools, there has been an explosion of interest in ethics courses and in student activities — clubs, lectures, conferences — about personal and corporate responsibility and on how to view business as more than a money-making enterprise, but part of a large social community.

For the rest of the article:
http://www.nytimes.com/2009/05/30/business/30oath.html?em

Fisher of Ideas

2009-04-30T06:46:00.001-07:00

I'd like to recommend the blog of my friend, mentor, and Naples Institute colleague James Fisher, Ph.D.:

www.fisherofideas.com.

Let me warn you now: you're unlikely to agree with Dr. Fisher's views much of the time. He is bound to infuriate you. He will also challenge you, and edify you as few thinkers can.

About The Adam Smith Award

2009-03-13T09:03:00.000-07:00

The Naples Institute is a think tank dedicated to fighting for social justice.

The purpose of a think tank is to produce and disseminate original thought to further humanity in a given sphere of interest, be that political, economic, military, or social. Some renowned think tanks include the Aspen Institute, Brookings Institution, Pew Research Center, RAND Corporation, American Enterprise Institute, Economic Policy Institute, and the Cato Institute.

The scope of The Naples Institute’s work is intended in each case to be international. Its method involves creating programs relevant to social justice which its members first test on a local or regional level. Once proven, these programs can be expanded by The Institute itself, or can be replicated by other organizations in other communities.

Most members of The Institute elect to focus their efforts on one program. The Steering Committee provides support and guidance to these programs, and oversight as appropriate. The Steering Committee also approves of programs at their inception, assigning program leaders.

In the future, The Institute will have paid Fellows heading up various programs. At present, all work is conducted by volunteers.

The Adam Smith Award for Socially Conscious Businesses
A Program of The Naples Institute

Socially responsible corporate management is a social justice issue. Companies do not exist in a moral vacuum. Whether management appreciates it or not, each company is a participant in its community’s well-being. As it relates to its employees, vendors, customers, stockholders, government, nonprofit community, and environment, each company has impact, either positive or negative.

The Naples Institute thinks it vitally important to publically recognize those for-profit companies that have the most positive impact on their community. These companies should stand as an example to other companies that may be inclined to be responsible community citizens, but uncertain how to proceed. With hope, the responsible companies will raise the bar for their competition, so that even those firms less eager to act responsibly will do so as a strategic decision.

Behavior, not intention, matters most at The Institute.

The ultimate goal of the Adam Smith Award, then, is to increase the net level of corporate giving, of company-sponsored volunteerism, of positive business practices and environmental stewardship; of general good-citizenship.

Criteria for the Adam Smith Award

The Adam Smith Committee spent months wrestling over the criteria the judges would use in selecting the single company in Southwest Florida that best exemplifies socially conscious business.

In the end, the decision was made to select an independent panel of community leaders who would use their best judgment to weigh what will certainly be a matter of apples and oranges. Instead of strict criteria, The Institute has issued guidelines for nominees.

Guidelines for nominating a company

1. The company must be for-profit.
2. It can be either privately or publically held.
3. It can be of any size, from 1 employee to 5,000 or more.
4. It must be headquartered in the 5 counties of Southwest Florida.
5. Company management can self-nominate, or firms can be nominated by employees or third parties.
6. The company should show exemplary performance in one or more of the following: charitable giving; employee volunteerism; employee, vendor, customer, or stockholder relations; environmental responsibility.
7. It cannot produce a negative result in any of the above categories. For instance, a firm that donates generously but pollutes egregiously will not qualify for consideration.
8. Winners cannot win the Adam Smith Award more than once in five years.
9. Nominations for 2009 close August 31, 2009.

Certified Socially Conscious Businesses

Only one company each year will win the Adam Smith Award. The winner is allowed to use the Adam Smith logo in its marketing and other literature for the following five years.

However, all nominees will be considered for certification by The Naples Institute as a Socially Conscious Business. Winners will be allowed to use this certification in all marketing material for the following year.

The purpose of this certification is to establish an independent and objective standard for consumers, employees, and investors to evaluate the companies they do business with.

Currently, there is no way for these stakeholders to determine the relative merit of a company’s social responsibility beyond its own marketing information.

Why Adam Smith?

Adam Smith’s The Wealth of Nations (1776) catapulted him to iconic status for free-market capitalists the world over; most first-year business students are at least passably familiar with his articulation of “the invisible hand of the market.” Unfortunately, few so-called capitalists have read or mastered Smith’s works.

Thirteen years before the publication of Wealth, Smith wrote another economic treatise, The Theory of Moral Sentiments, in which he explained that one cannot be a true capitalist without behaving in a morally responsible manner toward those less fortunate in society. It is a theme he repeats in Wealth, and a guiding principle of Smith’s own career: he donated generously to charity throughout his life.

In searching for an appropriate representative for socially conscious business leadership, The Naples Institute decided upon Adam Smith as the ultimate symbol of thriving capitalism on the one hand, and responsible practices on the other. Or, to be more precise, in Smith, The Institute found the person who best drives home the point that there is no true capitalism without moral responsibility.

An award unlike any other

Thorough research has led The Institute to the conclusion that there is no award for socially conscious business in the United States or most likely in the entire world.

A city unlike any other

Like Adam Smith, the very name of Naples, Florida carries with it powerful symbolism. There are purported to be more CEOs – currently serving or retired – in the Naples area than anywhere else in the world. Naples is also one of the most affluent small cities in the country, usually ranked ahead even of Palm Beach on Florida’s east coast. Unsurprisingly, then, there is an unrivalled wealth of intellectual talent, entrepreneurial energy, and philanthropic generosity.

…And there has to be, because Naples is “forty minutes and four billion dollars” west of Immokalee, one of the poorest towns in the country. Sadly, there is no lack of poverty closer to the coast, either, with pockets of abject poverty throughout the county and the region; some even within a short walk of the most fabulous mansions of Port Royal and Old Naples.

Naples itself is a social justice work in progress. Finding an appropriate name for The Institute that captured both its talent and its need was not hard to do.

Another Nominee

2009-03-03T13:06:00.000-08:00

Congratulations to Chico's, our newest nominee for the Adam Smith Award.

www.chicos.com
www.chicosfas.com

Updated Nominee List

2009-02-23T07:01:00.000-08:00

To date, the following companies have been nominated for the Adam Smith Award for Socially Conscious Businesses:

Arthrex
The Bayshore Coffee Company
The Naples Beach Hotel & Golf Club
Wilson Miller
Tithe & More
Sunshine Pharmacy
TMI
Robert of Philadelphia
Planet Smoothie Naples Center (franchise)
Chick Fil-A Naples Center (franchise)

Whole Foods has also been nominated, as a corporation rather than just locally. As they are headquartered in Austin, Texas, they do not qualify for this award, which is regional in 2009. However, they will be honored at our upcoming award ceremony.

A few of the nominees have had to bow out of consideration for 2009. There is absolutely no dishonor in any of their situations. In each case, we look forward to reconsidering them in 2010 or 2011.

You will notice that all of our current nominees are based in Collier County, which after all is where The Naples Institute is based and where most of its members reside. For that reason, we are seeking reputable partners to help us spread the word and collect nominees among the other four counties in our region.

Guest Commentary in News

2009-02-01T08:23:00.000-08:00

For the record, I am not the author of this piece. I submitted it as from the entire think tank.

Still, it's nice to see our concept taking hold.

http://www.naplesnews.com/news/2009/jan/31/guest-commentary-we-need-recognition-socially-cons/

Two more nominees

2009-01-08T15:14:00.000-08:00

The Naples Institute met today. In our discussion, we decided to limit range for the Adam Smith Award to five counties, rather than six. While we appreciate Sarasota County, it is a bit of a stretch, the group decided, to include them in the region of Southwest Florida - at least for the purposes of our award.

Also, the Adam Smith Nominating Committee has two more companies to consider:

* The Bayshore Coffee Company http://www.bayshorecoffee.com/

* The Naples Beach Hotel & Golf Club www.NaplesBeachHotel.com

More on both later.

Nominees to Date

2008-12-21T15:20:00.000-08:00

To date, the following companies have been nominated for the Adam Smith Award for Socially Conscious Businesses:

* Bonita Bay Group
* Wilson Miller
* Tithe & More
* Sunshine Pharmacy
* TMI
* Robert of Philadelphia
* “B”
* Whole Foods
* Planet Smoothie Naples Center (franchise)
* Chick Fil-A Naples Center (franchise)

Bonita Bay Group is a large, privately-owned development company that has a high public profile for its charitable giving, its enthusiastic employee volunteerism, and its good business practices: they seem a natural for certification as a Socially Conscious Business. http://www.bonitabaygroup.com/

Wilson Miller is also a large company, based in Naples but operating throughout the state. Their good corporate citizenship, employee relations, and environmental focus recommend them for our award. http://www.wilsonmiller.com/

I have written about Tithe & More, the real estate brokerage, before on this blog. They are one of my favorite companies ever. http://www.titheandmore.com/

Sunshine Pharmacy has garnered excellent press for its helping the less-fortunate to fill their prescriptions. http://www.mysunshinepharmacy.com/

TMI is a remarkable firm, a business incubator in Immokalee started by two retired IBM executives, both members of Greater Naples Leadership, who are dedicated to making a difference in the economy of that less-fortunate town to our east. I am dying to get them a website! I’ll write more about TMI soon.

Robert of Philadelphia is an upscale hair salon that has a tremendous reputation for giving. To date, Robert has more nominations than any other business. One activity of note is their involvement in locks of love (http://www.locksoflove.org/) http://ropsalons.com

“B” is the still-hush-hush technology start-up I am helping launch. Written right into B’s corporate charter is a dedication to give 10% of its profit to charity. B will also employ disabled veterans – but I’ve already said too much. (For more of this type of “too much,” poke around the earliest entries of my business blog: www.savvycapitalist.blogspot.com).

As a firm based out of our region, Whole Foods is ineligible for the Adam Smith Award this year. However, I will be blogging about this remarkable company more in the future; you’ll see soon why we are going to recognize them with an honorable mention if nothing else, for the impactful work accomplished thus far by the team – and especially the team leader, Damien Garcia – at their North Naples store. http://www.wholefoodsmarket.com/

Rounding out the list so far are two franchises. I am friends with both franchisees – no surprise there, as I’m attracted to giving people and, I'm grateful to say, usually vice-verse.

Jason Swinford, owner of our local Planet Smoothie of Naples Center, gave away well in excess of ten thousand dollars for fundraisers in his first year of business, before his shop was even profitable; now in his second year, he hasn’t let up that admirable pace. That commitment to the community has won him the good will of Naples. Ask Jason if doing the right thing pays.

Chick Fil-A of Naples Center, is similarly committed to giving back. Owner PJ Rodriguez is more engaged in giving than most companies I have observed, and his employee relations are admirable as well.

What is a Certified Socially Conscious Business?

2008-12-13T14:00:00.000-08:00

Broadly speaking, there are three types of for-profit companies in the world today.

The first is the traditional, no-frills, no-second-agenda, profit-driven company. These are run according to the maxim, “Maximize short-term profits.” This is Primitive Capitalism incarnate.

There’s nothing wrong with profits for their own sake. Profits are vitally important to any endeavor interested in longevity. Just to be clear: I am a huge fan of profit. Imagine a world without it.

The second type of for-profit business isn’t actually out to make a profit at all – they’re just lumped in the for-profit realm by tax law. This is the For-Benefit Corporation. Newman’s Own is probably most iconic and possibly also the purest of this category of business. The company produces and sells salad dressing, salsa, coffee, and a whole host of other foodstuffs. The IRS considers it a for-profit, and they pay taxes accordingly. But every dollar of profit Newman’s Own has made since its founding in 1981 has been donated to charity.

Newman’s Own was started by wealthy partners who were no longer interested in earning money for themselves; instead, they liked to share their food and they had an overpowering drive to help others, especially sick children.

The Adam Smith Award was not established to recognize for-benefit corporations. We at The Naples Institute hold for-benefits in especially high esteem. We do not consider for-benefits for our award for two reasons, though. First, they deserve their own very separate award – we feel that they operate on a completely separate plane from most businesses, with a completely different set of standards by which they judge their own efficacy.

Second, the companies we intend to recognize with the Adam Smith Award are regular, everyday competitors that are concerned with a profit motive, that do have to answer to owners or stockholders. Fulfilling their social mission is one important aspect of their overall performance, not the totality of it.

Socially Conscious Businesses (SCBs), then, are neither primitive enterprises nor for-benefits. Rather, SCBs occupy their own step between the two – an important step, but one that every primitive company can choose to take.

The Adam Smith Award is reserved purely for for-profit companies whose management, and whose corporate culture, sees the value of socially-responsible behavior as an integral part of the company mission – not the only aspect of the mission, and not an aspect that detracts from profitability, but a vital component of that company’s essence nonetheless.

Smith’s concept of enlightened self-interest holds that to do the right thing benefits the doer, be that an individual, company, or government. The Adam Smith Award is designed to recognize the one company in Southwest Florida that best exemplifies this ethic in practice.

If you know of a company of any size based in the six counties of Southwest Florida, nomination is just a mouse-click away. Please contact me with the name of the company and a short description of why they deserve consideration for the Adam Smith Award for Socially Conscious Businesses. ted@naplessocialaction.org.

Please note: nominees that qualify will be Certified Socially Conscious Businesses for one year, whether or not they win the Adam Smith Award.

Nau and Tithe & More

2008-12-09T05:32:00.000-08:00

I read an article in the November/December issue of Good Business Magazine (www.good.is/business) about Nau, an innovative apparel company whose original charter committed it to giving five percent of its net to charity. One thought among its founders was that, rather than spend 10% on marketing, they’d spend half of that on good will, and let buzz grow organically. The company had a tremendous, unrelated upheaval. Under its new leadership, they are giving away three percent instead. Not bad. (http://www.nau.com/ )

How much do other companies give? If Nau is at 3%, Starbucks 1.7% and Lenovo 1%, where are some of the other most socially-conscious brands? Is there a big discrepancy between publicly- and privately-held firms? …Between large companies and small ones? …Among different industries? I don’t have an answer for you yet, but stay tuned. This is my new self-imposed “project.”

Yesterday I mentioned a new local company that has captivated my imagination: Tithe & More, a boutique real estate firm in Naples and Bonita Springs (www.titheandmore.com).

The founder, Bill Ventress, is a retired Proctor & Gamble executive and founder of Lenscrafters. Bill felt a calling to open a real estate firm in this area as an engine of giving. The agents each give ten percent of their commission to a cause chosen by the firm – that’s the “Tithe” part of the name. Ventress double-matches their contributions by paying at least twenty percent of his broker’s fee: that’s the “and more.” To date, they've donated more than $100,000.

Not bad, huh?

I first learned about Tithe & More last summer, when they donated $25,000 to one of my charities, One Laptop South Florida. With that money and more from the county’s Summer Migrant Program and a bit more from the Immokalee Foundation (www.immokaleefoundation.org), we were able to give free laptop computers and ten weeks of classes to 38 migrant children in Immokalee, the poorest of America’s poor.

Here is where Adam Smith’s concept of enlightened self-interest comes into play. First of all, here’s yet more free press for Ventress’ company. Second, Knowing about its dedication to good works, Jane and I are now much more likely to buy our next home from a Tithe & More agent – and aren’t you, too?

Enlightened: that’s helping people the way you should. Self-interest: that’s growing your company way better than your competitors because of the good will you’ve sown.

As any savvy capitalist knows, you can’t separate self-interest from enlightened behavior.

Do you know of a savvy firm? Nominate it for the Adam Smith Award by contacting me: ted@naplessocialaction.org.

Starbucks & Lenovo: making a difference

2008-12-08T06:08:00.000-08:00

Welcome to part two of a series on my favorite topic, Bleeding Heart Capitalism.

For years now, I have been studying corporate giving. It fascinates me: how companies do it, what causes they support, and more than anything, how much of the pie they share with those who could really use the help.

For instance, it’s probably no surprise to anyone, but I’m a huge fan of Starbucks. I wrote at least half of my first book in their stores, most notably the one in Canton, Massachusetts. Quite recently, I’ve been using various Starbucks around Naples for meetings and to access the Internet when out of the office. I am most often found in the location on 41 and Central Avenue or 5th Avenue South.

I like the coffee, of course, but what keeps me coming back to Starbucks is the touchy-feely component: the spirit of do-gooderism is genuine, at least among a large number of front-line employees and managers. Jane’s mommy job* is at another of their locations, so I’ve benefited from an inside look at this firm for several years now.

According to the company, Starbucks gave 4% of its pre-tax profits to charity in 2006. They gave 1.7% in 2007.

“Pre-tax:” that’s good. If you’re disappointed that their percentage dropped by more than half, remember that they are in a world of hurt at present, due to the confluence of over-rapid growth and this unfortunate economy we’re in now. They’re still growing, though, so buy their stock. As the economy recovers, you’ll be glad you did.

Another firm I’m crazy about is Lenovo, makers of the ThinkPad notebook computer. According to their own advertising,

“Lenovo dedicates 1% of its corporate income to help entrepreneurs in distressed communities around the world put their ideas to work. This home-grown development approach has resulted in thousands of new businesses, helping people transform their lives and communities.”

That’s cool. If my next computer isn’t a Mac, it just may be a Lenovo.

Only one percent, though, huh? I find that interesting. Lenovo is able to brag about giving one penny per dollar of its “corporate income” to help others. For this marketing gimmick to work, it means that most companies don’t even give one percent. One percent is clearly very, very special. (Either that, or the marketing types at Lenovo are very, very brazen.)

I need to research what they mean by “corporate income.” Is that gross revenue or net? Pre-tax or post? That make a whole lot of difference. I promise to get back to you on this.

In my next entry, I’ll share more about corporate giving, including one local firm that’ll knock your socks off: Tithe & More.

http://www.starbucks.com/sharedplanet/index.aspx
http://www.lenovo.com/social_responsibility/us/en/social_investments.html

*Is “mommy job” a patronizing term? I hope you don’t think so. Jane used to be a top manager with an esteemed firm up in the Boston area. Then she founded a very successful company with me, and then she wrote a book on business excellence. But somewhere in there, we realized that if she didn’t get out of the house and home office for at least a few hours each week, she might end up killing me. Jane chose to be a barista at Starbucks because she liked the company as a customer, and also to take advantage of the part-timer health insurance (another very, very good sign that this company is the real deal).

So what makes it a “mommy job,” and not just a “job?” I think it’s all about intention. Jane has resisted promotion at every opportunity. Dealing with the public, making drinks, working alongside teenagers, Jane is in heaven. No pressure, no ambition, just something to let you have a life. This is the definition of a “mommy job” – or a “grandpa job” if you’re retired, or a “daddy job” if you were born with a trust fund, I suppose.

Adam Smith, un-misunderstood

2008-12-07T16:12:00.000-08:00

I’m an ardent capitalist. I hope that goes without saying, as one of my three blogs is "The Savvy Capitalist" (www.savvycapitalist.blogspot.com) but you never know. Among my friends around Naples, I’ve been labeled liberal so often that I’m beginning to believe it myself. (In Boston, by comparison, I was often called a conservative or even a libertarian).

I suppose you can be a liberal and a capitalist at the same time. Go figure.

Regardless, I’m not sure it’s completely accurate to call me a liberal when it comes to matters of fiscal policy. Here’s my take:

1. Government should stay out of our lives – and our wallets – when at all possible. “The Government is best which governs least” …I think there’s at least something to that.

2. Government intervention is almost by definition coercive.

3. The private- and citizen- (“nonprofit”) sectors are more efficient than government.

4. However, it isn’t always possible for government to stay small.

5. It isn't always possible, because companies and individuals often don’t pull their weight. As a result, the government is morally obligated to step in.

Take health care as an example. Health insurance has been the purview of the private sector for decades. State and Federal agencies fill in some around the edges. Citizen organizations try their best to augment this.

Yet 40 million Americans have no health insurance.

The present system is, in a word, inadequate. The result is that the federal government is about to step in and rewrite the rules.

A lot of people will snipe about this, but I think it’s fair for the rest of us to ignore their criticism. Conservatives have had their chance to insure our entire citizenry for decades in whatever creative way they saw fit. They failed to do it. Now, if their taxes go up and their government gets bigger as a result… hey, fair warning.

***

If you’re still with me, you’re likely convinced that I am, indeed, a tax-and-government-loving liberal.

Far from it.

In the 1760s and 1770s, economist Adam Smith wrote that the wealthy have a moral obligation to care for those who are less fortunate.

No one ever called Adam Smith a liberal.

The Father of Capitalism didn’t say that the wealthy should consider caring for the less fortunate, or that they should do so a little, if it’s convenient.

His position was that a true, savvy capitalist understands the economic imperative to care for those worse-off than he.

Adam Smith’s take on government was that if you want to keep it small, fund charity work from the private sector. Otherwise, you’ll deserve a large, meddling government. Yes, “deserve.” As in, “this is what you asked for.”

Funny how few self-described capitalists understand this essential component of capitalism. It’s as if, for over two hundred years now, we’ve been picking what we like of this economic system and discarding the rest.

Let me state this quite clearly: You can’t have pure, true capitalism without a very active citizen sector, funded by the private sector.

What we have in the United States today is not pure capitalism; it is watered down on one side by inadequate private giving. It is watered down on the other side by the result, robust governmental activism.

***

We at The Naples Institute (www.institutenaples.org) devised the Adam Smith Award for Socially Conscious Businesses not just to reward good corporate behavior – no, far from it! We have established this prize to expand the conversation. …To educate the region, the country, and the world on what true capitalism actually means. …And yes, absolutely, to change behavior on a very profound scale.

In future entries on this blog, you will read about specific companies doing some very laudatory things. Their leaders may not even know it, but they are followers of Adam Smith; they are some of the few, our culture’s bona fide capitalists.