Curious Times and Curious corporate bedfellows


Dear Jeff, Jamie and Warren

We haven’t met, but each of you express a candor that suggests you are open to informal input.

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Naturally, I was not alone in my surprise over  your companies- JPMorgan Chase, Berkshire Hathaway and Amazon announced plan to enter the healthcare marketplace.  The cover story I saw, explained your unified commitment to contain, if not reduce employee healthcare costs, without mentioning  any specifics.

My first thought was perhaps this was a prelude to a presidential bid.  The announcement’s bold leadership play has garnered great public enthusiasm.  My second thought recognized  the power vacuum that followed the failure of the national government to make change. Your united commitment, and unspoken appeal for other CEOs to join you could create further momentum for market driven change.

These thoughts still didn’t feel quite right. I remain optimistic and root loudly for other change agents to shift the tide.  As we all know, the challenge to deliver healthy outcomes and affordable healthcare for all are not one dimensional. The complicated systems presently in place fail to address the larger complex inter-relationships between community and individual health.

Have you read David Freedman’s recent assessment of US healthcare system conundrum?  It’s not that long, and should be a required read for every team  contemplating entering this space. He writes

“It’s easy to think of “health” as just another category of social-service spending. But a great deal of modern research suggests that it might be more accurate to think of it as the payoff of all the other services put together.

Are you Seizing advantage or opportunity?

I do hope this announcement, in spite of subsequent commentary suggesting otherwise, that your three musketeer esprit de corp adds up to more than a pure group purchase power play. Elizabeth Rosenthal commentary in the NYTimes explains

“Together, these three behemoth corporations will be able to wrest great deals and discounts in their negotiations from hospital systems, drug manufacturers, medical device makers and doctors’ groups.”

OK, it’s why I’m asking you to widen your goal. Don’t  settle for negotiating a better deal than what  present healthcare arrangements are able to wrangle.

To Jeff, I wondered why you sought out Jamie and Warren to play in an arena internally Amazon team’s have been working, and compromise your reputation and general industry slaying capacity? Amazon’s platform successfully  delivers efficiency and value to end users. Are you suddenly squeamish about squeezing healthcare providers and yes, your employees too?  Scott Galloway, the NYU Stern faculty describes in The Four  your outsized vision has long exceeded the pure e-commerce play that is Amazon today.  Galloway further empathizes your tireless advocacy for technology  touched by realism about automation’s impact and downstream effect on wages.

These last points makes Jamie a strange bedfellow, as the banking business depends on individuals’ with incomes.  But that’s a different letter and article.  Jamie, under your leadership JP Morgan Chase offers expertise in compliance, as well as payments and savings that can create some cost saving synergies in Healthcare.  More importantly, both industries service and needs are intensely local and subject to state regulations.  The consolidations in both banking and healthcare had to rethink bricks and mortar location and staffing. Increasingly, financial services delivery via un-staffed, self-standing kiosks/ATMs and/or rely on mobile enabled applications. Banks, relative to healthcare, historically leveraged technology savvy to fuel growth balance risk and reward effectively and efficiently.  Jamie your investments and innovation, though slow starting, and less evenly distributed across the investment, consumer and commercial bank–they do suggest you can leverage the to deliver greater opportunities and create value in  Healthcare.

Warren,  I’m also hoping these are a few of the elements of value you spotted too.  Again, several closer observers of your group planning reiterate that limiting your collective primary intention to lowering employee healthcare costs, reduces the life value of the proposal. That shortsighted objective is certainly not likely to deliver the return on investment necessary to make a dent.  I’m counting on you Warren, and your experiences creating larger and profitable opportunities from reorganization.

The flaws in a hasty solution

I’m equally certain you all noticed the dramatic rise of Net Income among healthcare insurers.  If you haven’t finished a deeper analysis, start with this one by the Leavitt group that reveals a more complex picture.  “[I]nsurers made money in the Medicare, Medicaid and group health insurance markets and lost money in the individual market, which is why some of them exited the individual market in many states.” 

As early as 2006, Michael Porter summarizes the strategic dynamics and cost challenges associated with creating quality healthcare outcomes in   Redefining Health Care: Creating Value-Based Competition on Results.  The environment he  describes of dysfunctional competition leads  players to “strive not to create value, but to capture more revenue, shift costs, and restrict services.” Porter felt that healthcare lacked discipline and a management and business focus.

Jeff, Jamie and Warren is that your take too?

I don’t know if it was conversations at Davos and chats with deeply knowledgeable wranglers of this problem that inspired you to act.

I’m inspired by data. As the Affordable Care Act continues to make available additional data, it’s possible to learn more about what works.

Since 2006, researchers in both social and medical science enable more models of service and extends understanding of human health at the individual and population level. Much of healthcare activities used population data to allocate resources. Efforts to reduce costs associated with an individual can now take into consideration individuals’ behaviors.  Continued use of aggregate process and success measures mask the affects of too many associated care conditions and reactive activities.

There’s a complex relationship among these issues, and how they are translated into interventions and dosage appear to prevent rather than deliver consistent beneficial outcomes. Hilary Hatch the CEO of Vital sign offered this explanation:

“Population health puts people into categories by conditions (diabetes, hypertension, depression), age, lab results and medical billing data. These categories presume their own importance. When in fact, psychosocial, behavioral and environmental factors determine individual health far more.  Patient goals, preferences and barriers to care tell us what stands between that patient and better health. Without this data, population health efforts are undermined.

The explosion of personal health monitoring devices correspond with more data that contribute to advancing understanding of the workings of the human body.  Another entrepreneur, Mario Schlosser recognized that “no entity in healthcare  has enough data visibility to help you[individuals] navigate the system.”

Is this your collective aspiration too?

Why not just partner with Success?

A few weeks ago, I attended a presentation at Chicago Booth’s Rustandy Center by the Chief Medical officer for Oak Street Health, Griffin Myers  This new medical group does not serve everyone, but the patient population they do serve have consistently better outcomes.  The business model that Oak Street Health adopted throws out the traditional fee for service model insurers favor. Instead they get paid when they deliver services that work, the successful outcomes embodied by Accountable Care Organizations as specified in the Affordable Care Act.   Oak Street established a value-based care delivery model exclusively serving  Medicare (and Medicaid dual-eligible) patients in low income areas. They presently operate 24 clinics across Illinois, Indiana, and Michigan.

This intereview with Griffin Myers on Tasty Trade gives a great overview

Another alternative model of care that should inspire the three of you is Oscar Health, whose estimated valuation of $2.7billion, and claims to be the first technology-based insurance company. Mario Schlosser, an immigrant from Germany realized before the birth of his first child an opportunity to put his own special skills as a data scientist to work.  His first hand experience navigating the complexity of  the healthcare system led him create Oscar Health in 2012. The company “uses data and product design to guide you through your health care and get you healthy.” As of Oct 2017, he has raised over $720 million and  delivers over 100,000 patients  concierge style team care in New York, New Jersey, San Francisco, Cleveland, Nashville, Austin, San Antonio, LA and Orange County.  Note, many of these cities feature innovative health care service providers but  boast a volume of technology talent too.

This interview with Mario on Techcrunch Disrupt in 2017 is a good overview.

 

Both these approaches recognize that healthcare requires high touch, and a constellation of services to produce the desired outcome.  Both of these innovative for profit companies are heavily invested in use of  data and  technology.

So Jeff, Jamie and Warren under your leadership, will you be equally committed to  facilitating connections between traditional care givers, services and systems or just cut out the human to human touch?

Whatever you do, it will be interesting and I’d be happy to help.

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Create value by sticking to principles and collaborating


I’ve been reading and writing a lot about creating value.  Value creation is what sustains our spirits as well as insuring us a livelihood. It preserves quality in our relationships as well as justifying our existence.

Does creating “shared value” accomplish the same thing?  creating value

A recent headline in the Financial Times challenged the premise of Michael Porter and Mark Kramer’s ideas on creating shared values caught my attention.  Corporate Shared Value, (CSV) conceptually seeks to align social impact and company success.  A very noble goal, akin to what John Mackey, the CEO of whole foods describes as Conscious Capitalism.  Andrew Crane’s Financial Times article merely wishes the CSV theory found its way into execution and not corporate report window dressing and lip service.

15 years ago, Frederick F. Reichheld  and Thomas Teal working for Bain Capital discovered that too few growth strategies successfully drove profits and explained competitive advantage. Since the traditional profit drivers failed to explain the discrepancy in performance, they turned to study costs.  Their research delved into a firm’s relationship between customer duration and its cash flow  and found the relationship also differentiated advantage. As they had eliminated one metric after another their discovery proved that value starts with building loyalty, growth follows and then profits result. Dual loyalty, they explained isn’t merely the reciprocal relationship between a firm’s leadership and its customers.  The duality extends to employees and includes relationships with investors.The Loyalty Effect: The Hidden Force Behind Growth, Profits, and Lasting Value published in 2001, detailed this research.  For businesses to focus and sustain this value creation process, the authors recognized would require fundamental changes in business practices including new ownership structures.

Porter and Kramer’s CSV theory in part recognizes a similar fundamental shift in business practices.  Their focus seeks to compensate for the historic failure of accounting balance sheets to report and record shared value as an asset.  Is it an output, or is Shared Value part of a  larger social movement?

Mark Cheng, Director of Ashoka UK and Ashoka’s senior advisor on social finance  explains the challenges in this article that appeared in Forbes, How Philanthropists And Investors Can Work Together To Create Social Change. He suggests, that trying to build a social innovation isn’t a company but a social movement and that’s why it requires very different investments.

To change consumer behavior whether you plan to build a new market or a social movement requires organizations to earn people’s loyalty to principles.  Reichhold and Teal explain these learnings as necessary to properly differentiate between creating measurable value and creating profits.  Porter and Kramer hope businesses will value social progress, but this alone won’t re-legitimize a business. A verbal commitment to value can’t create the cost-benefit advantages necessary to sustain the firm.

Social forces of loyalty can and often do bind customers, employees and investors. Indeed they serve as measures of  cash flow and indicate a company’s ability to deliver superior value. The interlocking set of a firm’s operating principles creates both a cause and effect which satisfies, inspires and engages all stakeholders to sustain the firm.

Alternatively, a collective solution and collaborative mindset that aligns around a broader set of principles or values clearly stated presents an opportunity to create shared value. Because the concept of shared value offers people the means to take part with the resources of a firm, these mechanisms also share in, and contribute to, the success of the wider social movement.

Cheng explains that different funders should rightly have different roles.  A social business partnership between a business enterprise and an NGO doesn’t have to compromise or tradeoff its economic goals for the benefit of social good.  Using philanthropic funds to cover start-up costs for the shared venture and utilizing the distribution prowess of the corporate entity is one way to make win-win social impact possible.

Social progress is difficult to achieve by a single player, however a shared operating model based on sound principles can be adopted and replicated to spread the changes more widely.  The goal for the business may be self-interest,  where self-preservation will be a result of its underlying value creation principles and relationships.

Getting to the future


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Everyone thinks about the future. The dreams of the Pilgrims  arriving in Massachusetts are no different from our individual aspirations for new possibilities and changing situations and circumstance. What new freedoms will be there,what will people be permitted to  think, wear, eat, live or DO?

My interests and passions to do what I can now to make things betters isn’t unusual.  The company I keep all agree in increasing possibilities and making changes that benefit more people, not just me and my family.  In the season of thanks giving, I’ve noticed the launch of a series of web sites  matching wishful doers with need serving organizations, and in the process create social impact.  The process used by these sites mimics many of the matching sites, whether its capital rich hedge funds seeking people needing to preserve and grow their capital, entrepreneurs on Kickstarter seeking funds to build their business or start their social impact match service. The technology itself minimizes the value of my personal network by making it possible for me to cast a wider net and build relationships that are not based on naturally limiting, real world contexts that form my identity, e.g. where I grew up or where I went to school, or my cultural, ethnic or religious ties. The stumble upon place or the sophisticated search to match my interests still rely upon individuals’ ability to influence others of the information’s value.  The  technology may be new but these resource matching problems are part of an ongoing cycle that doesn’t change, and the match solutions operate within the same system that create the resource gaps.

 

Where’s the change?

Snow appearing on the ground signals another recurring, predictable change, as does the falling price of the iPhone.  Outwardly, we show signs of adapting to this news.  Where you stand in the continuum of variation in response changes your understanding of the  most predictable of change’s magnitude.  It also explains why not everyone seeks to incorporate or welcome the change in their life.

When the obvious answer satisfies us, we ignore or suppress the possibilities that the change may be worth investigation. Changing temperatures or icy, snowy conditions difficult to miss and though we adapt and incorporate the obvious, we all adapt a little differently.  Our experience colors our understanding and response to the change.  Seekers go one step further.  They consider the choices others make and wonder if that too may be worthwhile for themselves.  They are curious about paths that open further possibilities or improve their status, conditions etc.

Seekers both experience and confirm their responses to transition moments by first learning and listening to others before sharing their own perceptions. Going beyond their  response to the change , they are conscious of the potential ripple effects.  Some look harder to find the likely path, similarly they may try to get out front and position themselves to catch the inevitable fall of the lined up dominoes. They don’t merely watch the event unfold, they try to connect what they see to a range of possible experiences and look for possible variations that happen beyond their immediate vicinity, situation or context.

Reporters,  when covering breaking news for example, share or retell what others experience in moments of change.  Often they are  hip or shoulder deep in the same experience as it unfolds, yet, they leverage and try to take advantage of their experience.  They try to reposition themselves for what will come next.  There’s an art to reporting.  It requires  piecing many different perspectives together to fill in what the participants, experts or contributors immersed in the experience overlook, misunderstand and maybe fail to identify.  Reporters are a special breed.  Their descriptive reporting shortens the distance between their audience’s detached experience and the actions and activity of their present surroundings.  Using their own senses to connect the meaning of other’s experiences they help their audience acquire a more complete, multifaceted view.

Multidimensional matters

Strategists and good consultants do this too. They leverage their experience while keeping one eye on the future.  They also help those stuck in the present to connect, hope and inspire an alternative set of prospects. Their job encourages explorations, cuts the distance between present circumstances, progress and a rosy future  for their client’s clients.  The lookout on the Mayflower merely let others know what was in sight before those on board could see it. No one would call these lookouts strategists, or leaders.  Lookouts can’t inspire people to acclimate, though they do warn them of what’s coming. Inspiration comes from a vision that transcends our fears and our expectations, not an easy task.

Today technology changes and innovations come at all of us faster than our ability to fully digest the last ones. Some of the effects cross connect, meaning that adoption of one makes it impossible to ignore the next.  Speed at which the connections happen make it simpler to stand by  and avoid participating.
No one is every fully ready for the future, but strategists can help in those moments of relentless change. their skills and experience naturally connect the dots, explore possibilities and overcome natural resistance.

Knowing your desires or dreaming about an idyllic world won’t get you to the future, though it is an interesting way to start. Regardless of what comfort level and satisfaction you feel with the changes as they occur in your midst, you need to take a wider view.  Challenge your experiences, raise your sensory awareness levels to uncover more possibilities.  Changing your perspective, point of view or the dimension in which you’ve come at the problem  guarantees your advantage as the future unfolds, and should increase the power of your risk assessment by virtue of your  wider stance.

 

Social Impact Strategies: Muscle, Teeth and Bone


In the advent of the sequester bringing the expiration of the continuing budget resolution on March 27, and theWashington DC

2013 budget battles raging in Washington, my concerns echo many others. This gridlock loses sight of opportunities and mechanisms to create demonstrable, sustainable solutions to larger societal issues.

OK, I realize that a $3.6 trillion Federal budget, makes it hard to understand

$85 billion mandatory across-the-board federal budget cuts. Reportedly, the cuts spare many aid programs serving the poorest and most vulnerable Americans.  Putting aside personal politics, little doubt exists that current needs outstrip the quantity and quality of dedicated resources to meet them. Particularly troubling, the March 1 cuts disproportionately affect low-income Americans  adding additional burdens on resource strained charities. The emotions released by the congressional battle further complicate objective program evaluation and consideration of where and what programs warrant

cutting vs. preserving.  It also avoids honest discussion of  historic questions.

What should and can be the net value, or efficacy, of federal funded grants and programs to meet these needs?

The complex interactions, mechanisms and incentives by which government, private enterprise and the third sector operate in the social arena make alternative scenarios and innovation difficult but not impossible.  Change may come based on a new budget requirement that I hope will unleash much-needed adjustments to the system at every level.  I’ll do my best to explain, and in return ask you to consider your own role in perpetuating the divide, and how your investments could be redirected and the benefits redistributed.

How effectively are you using your muscle, teeth and bone?

 The preview: Conscious Government Capital

Effective 2014, a May 2012 budget instruction the White House issued to the heads of executive departments and agencies, requires all Federal grant-making agencies increase the role of evidence in their grant-making formulas. The memo suggested three approaches:

  • Encouraging use of evidence in formula grants,
  • Evidence-based grants, and
  • Pay for Success.

These were in addition to a model developed by the Washington State Institute for Public Policy (WSIPP) that ranks programs based on evident  returns on investment.

 Wow! Competitive advantage and grants will flow to agencies whose programs demonstrate greater levels of evidence of their effectiveness.  Program providers who can prove their outcomes will get paid for their successes.  This slight change in policy does more to jumpstart accountability within a sector slow to measure itself.  It also energizes and attracts the interest of unusual bedfellows—players in the larger capital markets.

Debating organizational responsibility for the whole of society typically pits private vs. public players’ activities against one another. Each watches and fights the efforts and right of the other to create the future. In the process, advocates arguing for greater checks and balances exclude careful inspection of a third vital force. I’m describing the third leg’s impact, specifically, the  poorly understood effects and poorly coordinated activities supported by charitable donations, well-meaning grants and volunteer contributions.

Writing for The Daily Beast , Ken Stern eloquently shares his observations on the inefficiency of our current philosophy around charitable giving.  Puzzled by  the surety of faith and absence of critique on this third sector’s intermediary role in our lives, he writes:

“The public—and private—investment in the social sector is one of the critical elements of the American social compact, yet it is one of the oddities of public life that each year we renew this investment without ever pausing to ask the same questions that we ask of every other public and private investment: what are we getting in return, is the investment structured correctly, is the money going to the right places?”

The answers reflect different levels of engagement and interaction ranging– from passive to active. The vast charitable landscape and ease with which individuals establish personal private charities further dissipates impact on any single issue.  Consider where your donations flow relative to your top concerns.

Can additional accountability changes revitalize the third sector and elevate its stature sufficiently to offer a significant counterweight to break the deadlock in Washington?

New mechanisms open new opportunities.  How can performance partnership pilots (such as those embedded into Health care reform and now promoted by all Federal agencies) create new paths and alternative realities?  Can these channeled resources provide the necessary fuel and impact to reinvent  health care systems and access, guaranteed quality education,  preserve the environment, resolve energy issues etc?  Of course commitment levels vary and weaken foundations’ abilities to impact and sustain significant changes that contain or alleviate complications.

These problems and their complexity challenge everyone and explain the growing continuum of investment, participation and contributions in this space. Engagement ranges from  Muscle, using influence; Teeth, making your mark; and Bone, establishing a connective, resilient structure.  Which is right for you and your organization?

 Muscle

Historically, the heaviest lifting done to eradicate disease and increase economic livelihoods succeeded through comprehensive coordination.  In Colonial times, governments leveraged their authority to build necessary infrastructure and disproportionately benefit business and economic interests. These changes rippled improvements and improved the lives of the general populations too.

Today, spiraling entitlement program costs and accumulated  tax credits, tariffs and sector supports  produce exclusive benefits difficult to sustain, making everyone ill at ease.  Intricate problems don’t make them impossible to resolve.  Downstream economic benefits often justify providing credits and supports to resource consuming and output producing organizations. But, as Ken Stern observed, increasing social needs now exceed the capacity and political will of government to act alone to meet them.

Ken Stern is not alone in his assessment of what holds back resources, devoted to this sector from realizing greater impact.  In 2011, the Chronicle of Philanthropy reported that demand for aid from nonprofits increased at a faster pace than philanthropic giving by companies.

“Because of the small growth, many nonprofits aren’t getting the money they need to do their job…”

 The spirit of personal choice permeates the landscape of charitable giving. Gates and Buffet use their muscle, their influence, to secure significant commitments from fellow billionaires by encouraging that they too dedicate the majority of their wealth to philanthropy. The Giving Pledge lists the pledging individuals, but does not pool funds or support a particular set of causes or organizations. It only asks individuals to give the majority of their wealth to philanthropic causes or charitable organizations either before or after their death.

Are there clear  benefits using this approach?  It extends charitable activities supported by these donors and the charities reach by introducing much-needed attention and critical dialogue to the merit of these activities.  Stern points to the ever-increasing number of non-profits and specialized, if not duplicitous charities that result. Each carve out a niche and unintentionally work at cross-purposes.

So why did Warren Buffet, known for his prowess in picking great companies that anyone can run, turn over his charitable fortune to Gates to invest? Simply, he empathized with Gates’ action plans that address the absence of good measures of charitable efficacy.  Their charitable interests transcended seeing their  millions merely alleviate pain and suffering  in the manner of many religious charities, whose good work largely continues unquestioned.

Teeth

The concept of Social Impact or making measurable differences quickly captured Gates’ imagination and energy.  Recently, Gates wrote about the value of impact measurement for the WSJ and makes clear that if you aren’t monitoring progress than it’s pretty difficult to make any.

Strategic philanthropy can be defined by dedication personal resources to a singular focused charity, or channeling them to an agreed purpose or outcome that creates real opportunity and situational impact.  Defining the purpose clearly, defining the outcome and agreeing on the measure of success helps every donor make a mark, boost their efficacy and ultimately diminish the problem.

Hunger in America, provides an interesting case in point. Sadly, this problem re-emerged after national awareness generated by the media had it licked in an earlier era. The successful campaign attracted high level politicians’ attention and secured commitments to adapt pre-existing Federal support programs to meet these needs. The result was the Federal Food Stamp program administered by the Department of Agriculture  in  coordination with the farm support programs.  Today, multiple federal public assistance programs exist not from inefficiency but out of a growing understanding of the problem and efforts to target services to specific critical populations, e.g. low-income pregnant and breastfeeding women and new mothers and their infants; distribution of temporary hunger relief through food pantries and the school lunch program as well as households in poverty.

Feeding America, in their online FAQs, document how today, food assistance needs exceed the capability and capacity of  SNAP , Supplemental Nutritional Assistance Program and the other programs.

In spite of ample effort and dedicated coordination and volunteer efforts, the gap has not closed but grown with the economic downturn. The persistent number of households living with food insecurity lives daily with uncertainty not knowing where their next meal let alone access to basic nutrition will come.

Good news once again, activists have kicked up a media frenzy to draw both volunteers and the interest of politicians to rectify this situation. Learn more at TakePart and the film A place at the table. Will and should government assume leadership to resolve?

 Bone

The coordination and interconnections necessary to move beyond marked progress and end the problem requires much more than charitable resources.  It also reflects the long-term trend the Chronicle of Philanthropy reported in July 2011:

“[Increasingly,] companies are zeroing in on social issues that threaten their bottom lines, like people’s ill health, high transportation costs, or diminishing fresh water. They are also focusing on causes that help them tap into new markets, appeal to their customers, and use their employees’ skills.”

Case in point, CSX donated $1 million  to the Future Farmers of America, one of a few key national groups it supports. Tori Kaplan, assistant vice president for corporate social responsibility, explained their desire to attract young people with the skills and interests it needs were participating in FFA.

“We’re hoping to foster relationships with FFA where the students would look at transportation and its connection to agriculture as a viable career,” she says.

The numerous partnerships between Non-governmental organizations often supported by philanthropy, the business sector and the government provide the three legs that create a stable platform for society.  Each leg keeps the other in check and accountable.

These partnerships go beyond what Feeding in America highlights on their site. They depend on investments to rewire the mechanisms that created the problem and create value to attract capital to create more mutual sustainable system. That requires a deeper assessment of  problem inter-dependencies. Desperate people engage in desperate behavior to get their needs met. Reduce if not remove the reasons for their desperation and the resources used to combat them can be used more productively.  Instead of relying on redistributing waste, kindness and surpluses to satisfy unmet needs create greater efficiency, employment and opportunity for understanding and accomplishment.

Leveraging the efficiency and accountability of capital markets offers new hope to create sustainable solutions.  Social impact bonds, or pay for performance success instruments offer such a mechanism to make all parties publicly accountable. The example demonstrated how investing in social services for released offenders that successfully integrate into their communities and find meaningful work at a living wage, produced measurable benefits of increased safety and lower future incarceration costs.

The full circle encompasses economic measures of societal impact, and look beyond the benefits to the target population or social service recipients. It means everyone benefits from the success, not just the immediate clients.  In spite of several programs demonstrating this full complement of returns, it took recent calculation of the benefits and the costs to produce the necessary investment instruments to support their funding. In the UK they call them pay for performance or social impact bonds and now slowly appearing in the US.

 Next?

Regardless of how your corporate charitable activities uses its muscle to invest in community causes and provide valuable volunteers, have you looked for more tangible benefits beyond risk avoidance or raising the positive sign on your public profile.  Maybe it’s time to ratchet up your game. Chances are your employees already sit on boards of numerous non-profits and use their teeth to place their mark and  extending with charitable matches your firm’s resources to mutual benefit.

More interesting opportunities come  when going beyond the marginal resources at your disposal in  corporate foundations.  Why not leverage the full force of the economic assets at your discretion?  The Chronicle of Philanthropy noticed a shift evident in 2011 when corporations appeared to concentrate their support in favor of bigger, higher-profile gifts to fewer organizations.

“in part because of a long-term trend of companies zeroing in on social issues that threaten their bottom lines, like people’s ill health, high transportation costs, or diminishing fresh water. They are also focusing on causes that help them tap into new markets, appeal to their customers, and use their employees’ skills.”

Case in point, Walmart. Over the last several years, Walmart’s amount of charitable cash donations, over $342 million in 2011 topped the Chronicle of Philanthropy’s Corporate giving list .  In 2013, they joined the Partnership for a healthier America changing their own business practices  to align their efforts to make healthy food affordable for families.  This is the public private partnership that helped Walmart leverage its supply chain efficiencies and prowess while also gaining toe holds in communities who fought their incursion.  Key opportunities cited by the Washington Post following Michelle Obama’s recent Walmart visit included:

  •  Wal-Mart  opened 86 new stores in “food deserts,” areas where accessibility to affordable healthy foods is limited.
  • Launch of its “Great for You” icon, which will appear on more than 1,300 of its house brands of foods and beverages in U.S. stores, making it easier to identify nutritionally sound choices.
  • Cutting salt and sugar in its house brands and encouraging national brands to do the same.

Wal-Mart, the nation’s largest food retailer, holds at least one-fifth of the grocery market, according to trade magazine The Packer.

Lots of ideas here, but would love to hear what I may have missed, or other stories that show evidence of more creative innovative approaches to improve the overall system!

 

Employers getting Hip to Corporate Culture?


If you think the unemployment numbers are high, take a look at the compliment employee engagement, which by all accounts seems to be relatively low.

Blessing White , Leadership IQ and Kenexa Research Institute in Minneapolis all report low levels of motivation among US workers.    Approximately 60-70% are disengaged OR under engaged? These were the figures reported in the  GFK US employee benchmark 2011 survey of organizations with more 5,000 employees.  Kinexa  shows a slightly lower rate of 42% vs. the global average of 47% disengaged.  Of course there is variance by sector, age and  role as well as natural variation due to alternative definitions of engagement.

In a worsening economy, triggered by layoffs, naturally employees begin to despair or experience burnout as they raises or either non-existent or minimal in spite of  increases in their workloads.   Furthering the malaise, Hay group survey results, as recently reported in the WSJ, expect lower median pay increases  in 2012 , or about 3%, which is below the 3.5% annual rate of inflation.  The Labor department survey shows voluntary resignations have dropped to 1.4%, lower than in April 2007 pre-recession levels of 2.2%.  Executive pay however, has increased more sharply due to bonuses and other performance-based pay.

As the seeds of greater income disparities continue to grow, and the economy sputters, without a motivated, fully engaged workforce how will executive management deliver  healthier and consistent corporate performance?

More powerful than the prospect of gain is the fear of loss.  As long as employees continue to fear that the grass isn’t greener elsewhere, many of these survey companies predict that voluntary turnover will  remain low.  Then again, it has always been true that compensation is not the only variable that affects employee attitude, motivation or performance.

High performance companies tend to also been a culture of high performing, and presumably engaged employees.  The  June 2011 report by Kenexa found that firms that rank in the top 25 percent in employee engagement achieve earnings per share almost 2.5 times higher than average.  The variation in engagement definitions even among such leaders as Gallup who seek to align the attributes of behavior and company performance, likely correlate with other strategy initiatives or internal operating factors.

Social Capital and Social Media

Michael Porter has has been aggressively advocating  Shared Value, a new business model that emphasizes long-term sustainable strategy. This work encourages firms to pursue a different agenda, focus on the  need to find common goals and shared values as a basis of  meaningful social change. By focusing on a wider coordination and cooperation of resources, to look  beyond the near term profits, firms can deliver  sustainable returns.  The growth of Corporate Social Responsibility initiatives in many organizations, and the emerging role of outside voluntary compliance metrics are providing new opportunities for firms to distinguish themselves in the minds of a variety of stakeholders in spite of accelerating pressure from existing and new competitors.

Investing in Social Capital improvements , or encouraging the development of ties, networks, norms and trust across an organization not only delivers  higher employee engagement , but can be a winning performance strategy too.  Robert Putnam’s pioneering work on civic communities,  emphasized how the creation of norms around generalized reciprocity delivers higher economic and institutional performance.  Particularly true when the ties facilitate coordination and communication which amplify trust in each other.    Ron Alsop, in Workforce Management current editorial mentions the  pay off and importance of cultural and value alignment that has helped transform Cleveland Clinic and re-positioned Starbuck’s.

The Gallup organization is not alone in its creation of a feedback system for employers that identifies and measures elements of worker engagement most associated to key indicators that result in financial performance –things such as sales growth, productivity and customer loyalty.

If Values define culture and Culture drives values, then the shared value that comes from facilitated coordination and communication across your organization will be a powerful positive force.

Any stories you wish to share about the links between culture and performance in your organization? We’d love to hear about your experiences.

Connecting the dots to measure value

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Last week, IBM celebrated 100 years of business and coincidentally posted  annual sales of $100 billion.  Recently, several profiles and news stories acknowledged  this milestone; and IBM itself has hosted many “parties”  to celebrate. The roster of American companies and … Continue reading