This blog is dedicated to the millennial stakeholders of our businesses. Today they comprise 34% of our employees; by 2020 that percentage will rise to 46% (1). Our firms will have a harder time attracting and retaining them if we aren’t giving back meaningfully but, in fact, are interested only in “taking,” whether that be growing revenue, margin or market share.
In the same way that we may be conscious of our carbon footprint, have we considered our social capital footprint? Leaving a footprint in the world is unavoidable. What if we asked ourselves: does our footprint grow social capital or destroy it? This question is no longer a nice thing to ask, but an essential facet of your good business practices.
Large corporations sequester this issue under the rubric of corporate social responsibility. Middle market business owners often refer to this notion of giving back as paying it forward—doing good without expectation of an immediate ROI.
Growing social capital begins with small steps that can have powerful ripple effects over time.
Lest you think it’s too hard to make a difference, allow me to relate the story of two merchants who had a powerful social capital footprint from a seemingly small, but risky, decision.
These two merchants lived in a twelfth-century European village. Along with other peasants and merchants, they lived downstream from the wealthy—the lords and clergy. Downstream is not where you want to live! Talk about having to live with the negative externalities of your upstream landowner neighbors!
The merchants’ village had remained small—18,000 or so—for centuries. One merchant learned of the Proverb “The LORD abhors dishonest scales, but accurate weights are his delight.” (Proverbs 11:1). He decided he wanted to apply this social principle to his business. He would actually use honest weights and measures. Was this sustainability suicide—no one else practiced this irrational business practice?!
Nevertheless, this merchant tried it out. Integrity to his faith demanded it. But, knowing the external pressures to cheat, he didn’t trust himself to stay with his decision. So, he found another merchant to agree to do the same. They agreed to use accurate weights when selling their produce. They agreed that at any time either one could go visit the other and test to see if their weights were still true.
Now, suppose most merchants sold apples for a penny a pound; these merchants decided to charge 1.2 pennies per pound. At first, people who came to them couldn’t believe the greed and audacity of these merchants charging such a usurious price. Surely these guys must be working some scheme, the villagers said!
These two merchants took an enormous risk to embed their integrity (their values) in their price and their brand. They lived hand to mouth and couldn’t last long without sales. But, before long people realized why they set their prices so high: you would know that you were getting a true pound of apples but others could be cheating you. Their commitment to living out their values is what set them apart. Their honesty became known and business started flowing their way.
Other merchants were so impressed with the success of these two that they wanted to emulate the adoption of these spiritual values into their own businesses. In turn, these other merchants set up similar organizations for fishmongers, haberdashers and others.
The village? London!
The social capital footprint of these two courageous merchants grew. What became the famous Livery Companies were thus born in the 12th century. By in the 14th century, King Edward III granted charters to the first 12 Livery Companies. These companies were known for their honesty, integrity and high standards. (2)
Here’s a picture of the social capital footprint these two helped create. In about the year 1180 one writer said
London is happy in its clean air, in the Christian religion, in the strength of its fortifications, in its natural situation, in the honor of its citizens. The Cathedral is St Paul’s but there is also in London and its suburbs 13 large monasteries, beside 126 parish churches. On the east side lies the tower, very large and strong with 4 gates and turrets at intervals and runs around the northern side of the city. To the north lie fields and meadows with small rivers flowing through them, by these water mills are driven with a pleasant murmur. To this city come merchants from every nation under heaven rejoicing to bring merchandise in their ships. (3)
By the 15th century, these Livery Companies were so influential that sheriffs and mayors within London were elected from their ranks.
These merchants created an unanticipated social capital footprint. Their practices laid the foundation for a flourishing trade. The decision to uphold and propagate standards of honest weights, excellent service, and integrity had far-reaching consequences for themselves, their community and the world.
Business owners and Millennials, consider this: is your firm creating this kind of social capital or destroying it?
What unintended externalities from your business conduct are you propagating both within and outside your firm?
Millennials are hungry to find firms growing social capital. Your firm will have an easier time attracting and retaining the best talent of this generation if you intentionally grow your social capital!
You regularly analyze and manage tangible numbers like revenues, expenses and cash flow. If you were to measure social capital formation both within your firm and with vendors and clients, how would you measure it? What kind of social capital is your business ecosystem currently leaving behind? And, what kind of measurable social capital do you want to intentionally form?
2 Story from Ken Eldred’s speech given at CCBA in Denver, Sept. 17, 2014 and The Integrated Life, pp. 72-75
Originally posted 2014-10-08 09:57:58.