GoodWell Founding Member #195 covers GoodWell in Huffington Post

Our Founding Member #195 Francine LeFrak, the Founder of Same Sky mentions GoodWell in a wonderful article on Conscious Consumerism on the Huffington Post today:

http://www.huffingtonpost.com/entry/57d82b2fe4b047401d04675c?timestamp=1473788078715

Please take a moment to read her thoughtful piece and if you have not visited SameSky, take a look Francine is doing amazing work.  

 

Change the world - really? You've lost it...

Whenever I tell people about the mission of GoodWell they usually listen politely, maybe even ask a few questions and then say something to the effect of “good for you”.  In the back of their minds I know what most are thinking, “he has lost it”, and to be completely honest I think the same thing all the time.

Every time I stop to really, really contemplate the scope of the GoodWell mission along with the steps which would have to occur in order for us to fulfill that mission I am overrun with fear. I want to go climb into bed, pull the covers over my head and hide.  I want to stuff the idea back into my head where it languished for about 6 years before I worked up the courage to announce it to the world.  I want to go back to the blissful ignorance I lived in where these weighty issues were not on my mind all day long.  I want to go start something else, something easier, something I have done before, something where my background lends credibility to the effort - something to do with software.  

These fears are compounded daily by people telling me how difficult this will be, or by the rejection I feel every time someone says no to the idea of joining GoodWell as a Founding Member.  Furthermore, my ego takes a hit every time I see someone else “succeeding” in a traditional sense.  The monster starts up again saying - “you dip-shit, go out there and make it happen, stop this goodie two shoe nonsense and get back after it”.  All of these fears combined with my traditionally logical, objective mind mean I wake up nearly every day with an elephant on my chest crushing me, taunting me like a big brother waiting for me to cry uncle.  

Such is the life of any entrepreneur, or anyone trying to create change.  I am not special in this regard, we are all filled with self doubt and fear of failure.  We may look confident on the outside, but we all, and I mean all, have a massive fear of failure.  It takes the courage of a lion to go and put yourself out there in the world to be judged time and time again.  Told you are crazy, stupid, incapable of delivering.  Told your plan is terrible, your team is inadequate, you don’t have the resources, you are too early, or too late, the market is not big enough.  To get your ego crushed on a daily basis.  These are the trials and tribulations we must accept when we challenge the status quo and try to create something from nothing.  After 20 years of startups and four companies I know this as well as anyone, but it does not make life any easier.  

So am I crazy for trying to be a social entrepreneur after 20 years as a technology entrepreneur?  You're damn right I am - certifiable.  Do I really think I can change the world?  You’re damn right I do, because without that belief I would be crying uncle instead of waking up each morning, kicking that elephant off my chest with all my might, rolling up my sleeves and getting to work.  And my hat goes off to anyone, anywhere who is trying to do the same thing - you are my hero, my inspiration.  Individually most of us will fail, but collectively we will succeed in creating a better world.   

Ban on Slave Labor is Not Enough

Yesterday President Obama signed into law a ban on products produced using slave labor.  You may find it interesting that we have never had such a law in the US, but for the past 85 years a simple loophole in a tariff law allowed such products to be imported if "consumptive demand" existed.  Basically, if more demand existed for a product than could be responsibly produced then values be damned, slave labor is fine.  

While closing this loophole is a step in the right direction and will help prevent some products from being sold in the US, the sad reality is most slave produced products will still come into the US undetected.  The supply chain these products flow through is long and complicated and as a result companies will continue to invoke plausible deniability until we as consumers demand more from them.  Look no further than Rip Curl recently being exposed as having some products manufactured by slave labor in North Korea of all places.  The company's response "This was a case of a supplier diverting part of their production order to an unauthorised subcontractor, with the production done from an unauthorised factory, in an unauthorised country, without our knowledge or consent".  In essence they threw their hands up and said - we didn't know.  

At GoodWell we don't believe it is acceptable behavior for companies to benefit from long complex supply chains which seek out the lowest cost of labor possible, without taking responsibility for those supply chains from top to bottom.  So while a law banning imports which are knowingly produced with slave labor can be celebrated as bringing the US up from the dark ages, much more needs to be done and it starts with you and me.  We have to demand more from the companies we spend our dollars with.  The GoodWell certification standard provides a simple framework to eliminate these injustices, but it is the GoodWell consumers who must demand it.  We need to add your voice to ours if we are going to make a difference.  Please consider becoming a Founding Member today.  

Cobalt Kids - and Supply Chains

We are constantly looking for ways in which we can succinctly convey the importance of the mission of GoodWell.  Today we have a phenomenal example of how the simple changes proposed in the GoodWell Code of Conduct would have an unprecedented impact if globally adopted.  

The video below shows one simple example of how good companies can outsource their bad behavior so far down their supply chain they can legitimately hide behind plausible deniability/ignorance.  For example at minute 7:19 in this video there is a quote from Microsoft stating "we have not traced the cobalt used in Microsoft Products to the smelter level due to the complexity and resources required".  REALLY?  A company which had nearly $100 Billion in Revenue and $18 Billion in PROFIT in 2015 could not allocate the resources required to figure this out?

Right now it is far too easy for big companies and consumers hide behind our blissful ignorance and the complexity of our global economy.  It's time that changed.  

In order for a company to become GoodWell certified, they must also require their supply chain to become certified.  This causes a cascading reaction all the way through the supply chain which ends in the areas of the world which are highly susceptible to environmental and human rights abuses.  By design this gives the large companies mentioned in this video like Microsoft, Apple and Samsung a straightforward (and inexpensive) means of ensuring their supply chain is not corrupted with bad behavior.  Our goal is not to create a world of perfect companies, our goal to to have 100% of companies globally operating at a level of basic humanity.

Please take a couple minutes to watch this video, I think you will find it incredibly compelling.  And as always please consider adding your voice to ours by becoming a Founding Member


62 individuals own more than 3.6 Billion others

The wealthiest 62 people on the planet now own more than the poorest 3.6 billion according to a new report by Oxfam, and even worse, the richest 1% now own roughly the same as the remainder of the world combined.  Take a look at the chart below to see the convergence which has happened over the past 5 years.   

Source: Oxfam

Source: Oxfam

Even the most died in the wool capitalist can see the system is not working as intended.  Wealth is being pulled to the top at a rate which is unprecedented in history and the rest of the stack is moving backwards despite working longer hours and being more productive.  

We believe the system, capitalism, is the right answer, but is missing a critical component - accountability.  Over the past 50 years in particular the world has gone global.  This march towards bigger, faster, cheaper, more productive, more efficient, has created incredible innovation and a truly staggering system of global trade, however, it has not come without a cost.  

The Hidden Cost of a Global Economy

We, in our role as consumers, have lost our connection to the companies we spend our money with.  We no longer play our critical role in the free market of determining what is acceptable behavior from the companies we spend our money with.  We don't play this role because we don't know the companies anymore, and in fact can't know them, they are simply too large and complex.  Therefore, our only methods for determining if a company is worthy of our dollars are brand, price, quality and customer service.  This leaves the company's employees, suppliers, communities and the environment to fend for themselves, and in a world of ever concentrated power and control these sensitive stakeholders are not faring well.  For example take a look at the average CEO pay as compared to the average worker pay since 1978:

Source:  L. Mishel and A. Davis (2015) 

Source:  L. Mishel and A. Davis (2015) 

The average worker has seen their pay increase just 10.9% while the average CEO has seen a 997% increase.  The worker is clearly a stakeholder who is not well represented in this global economy.  You can see the same underrepresentation in the environment in the form of increased pollution, the loss of topsoil, degradation of our water supply, overfishing and more.  When we look at the treatment of the community in the form of charitable giving we can see another alarming trend.  Take a look at Corporate Profits as compared to Corporate Giving over the past 40 years.  As profit margins have increased the percentage of charitable giving has steadily decreased.

Source: Giving USA 2014

Source: Giving USA 2014

Source: US Bureau of Economic Analysis

Source: US Bureau of Economic Analysis

In the past consumers would hold companies accountable for bad behavior by not purchasing their products.  The businesses were members of the community, they played a role and were expected to act with basic humanity.  If they were bad actors consumers made a conscious choice to either look the other way or to withhold the lifeblood of any company - revenue.  This role of the consumer as a check and balance is absolutly critical to the free market system but has largely been lost because we no longer know the companies we deal with outside of their branding, products and customer service.  We must play this role, we must demand more from the companies we spend our dollars with.  This is not about government intervention/regulation, raising the minimum wage, or wealth redistribution, it is about the free market working in the way the free market was intended to work.  Consumers have an obligation to play their part and we are failing.  It is up to us to hold companies accountable, to determine what we will and will not stand for, we simply need a reliable means of doing so.  

If you agree with this perspective we need your support, we need you to become a Founding Member of GoodWell.  If we can get 1,000,000 to show their support for GoodWell, not by signing up for an email newsletter, or signing a petition, but by voting with their dollars and becoming a Founding Member, we will have a powerful voice for change.  Please consider taking a leap of faith and taking the first step towards playing your part as a conscious consumer by joining our mission.  

Paul Tudor Jones and JUST Capital

I had the privilege of speaking with the CEO of JUST Capital, Martin Whittaker, the other day.  JUST Capital is an organization founded by billionaire Paul Tudor Jones with a similar goal to GoodWell, to see businesses act more responsibly.   Their approach is to find publicly available data and use it to rank the largest US based public companies in terms of their "justness" and provide consumers with the rankings in the form of a Just Index.  There is a lot more to the company that will be coming out over the next few months, but I love their mission and GoodWell will fully support them in any way we can.  However, that is not the point of this post.  During the call Martin mentioned the TED talk Mr. Jones gave in 2015.  I had not seen the talk yet and decided to go and check it out.  What I found was a well thought out compelling argument as to why this movement is so important right now.  The amazing thing is this talk is coming from a billionaire businessman who believes (as we here at GoodWell do) deeply in the free market and its ability to do amazing things.  

It is 10 minutes long, but tells the story really well.  I hope you enjoy it.  If you do, please know that GoodWell is working hard every day to solve these and many other global issues.  I hope you will consider joining us as a Founding Member.

Consumers are the key to a better world — here’s how

Consumers are the key to a better world — here’s how

Don’t worry, this is not another dour piece on how consumers should stop buying a bunch of crap we don’t need and save the planet through purchasing abstinence. It’s a nice idea, but let’s be real, we are self interested animals who want what we want, when we want it. On the human hierarchy of needs our desire to gather, buy, display and protect our stuff falls somewhere between breathing and sex. It’s a powerful drug and motivator and I have no answers on how to curb it, so I will leave that to much smarter people. 

However, even though we consumers will continue to consume, I believe most of us deeply want to leave the world a better place than we found it. I believe given the chance we will choose good over bad even if it costs a little more. I believe we care about our fellow man and our planet and will help if we can. Unfortunately, most of us feel pretty helpless when it comes to the immense problems which face the world today. We are not power brokers who can change the world, not Bill Gates or Bono, not Obama or Putin. Most of us are ordinary people just trying to get through, do the right thing, give back where we can, and be the best people we can be. 

What we don’t realize is we have the most immense power in the world. Power which holds the key to solving some of the most important problems facing our world today, things like poverty, health care, the environment, income inequality, workplace safety, child labor and more. This power is in each and every one of us and we use it almost every single day, however we are generally unaware of how we are using it and as a result we are causing more harm than we know. What is this world changing power? Simple, it’s how we spend our money. Not what we spend our money on but who we buy from that determines how the world works. It’s a superpower with unlimited potential for good, and yet we don’t even know we have it. 

The consumer superpower

When we make a choice to spend money we tell the world what we value. Most of us spend more than 50% of our waking hours working to make money. When we spend that hard earned money it is a big deal and has massive consequences. Our choice of which company to spend our money with is like a vote, a vote that endorses not only their product, but their company and the way they behave. In this global economy, these votes have a ripple effect far greater than we can comprehend while we are standing in the aisle making a purchasing decision. 

Let’s say you are in a sporting goods store trying to decide on a down jacket. You are comparing an EcoDown (fictitious company) jacket with a Patagonia jacket. Now imagine you can see all the way down the EcoDown supply chain to where the material was sourced. You see the environmental damage being done by poor farming, the child labor being used to harvest the crop, the unhealthy/unsafe working environment in the sewing factory, the poverty level wages, lack of healthcare, and gender inequality that pervades the EcoDown supply chain. EcoDown itself talks about the good things they do in the community and their great corporate culture, but they don't enforce those standards through the supply chain, choosing instead to look the other way in the name of low cost and more importantly profit.

However, when you look down the Patagonia supply chain you find a company striving to do it right all the way through. You see sustainably managed farms producing organic cotton and down that meets the Responsible Down Standard. You see suppliers who treat their employees well and provide a living wage and safe working environments. You see the auditors hired by Patagonia to make sure their suppliers are adhering to these standards. You see the positive impacts enabled by Patagonia's commitment to give back 1% of REVENUE to environmental causes. You see a CEO who does not make more than 200 times the average worker wage. You see a company which refuses to sell out to a conglomerate, grow at an unreasonable pace or go public because they know it will corrupt their values. 

Given this complete clarity at the time of purchase, the choice to support a company like Patagonia over EcoDown becomes simple, and that is our superpower. The power to economically reward good behavior and punish bad. However, today this power remains untapped because we have no visibility into the behavior of the companies we vote for, let alone the companies that make up their supply chain. There is no label, no sign, no index that tells us if a company is good or bad. Think of going to the grocery store before 1990 when nutritional labels were mandated. You had no idea what was in the products you were eating. Now imagine if every product had a corporate citizen label we could use to determine the type of company we were buying from.

Unfortunately, this will never happen, the intricacies of producing such a label and the subjective nature of the scores does not lend itself well to a labeling system, but we can do better and that is why we are launching GoodWell. 

Announcing GoodWell

GoodWell, is more than a company, it’s a movement. A call to action for anyone and everyone who wants to make the world a better place. The company is focused exclusively on one thing — helping consumers make a simple vote for good each and every time they spend their money. 

GoodWell’s simple, yet audacious mission, is to change the world by giving consumers the information they need to support good, caring, conscious companies and avoid bad, greedy, self interested companies. This mission is massive and some would say quixotic and I would agree with them. However, I am so convinced that when given the chance to choose good over bad, most of us will choose good, and if enough of us do, we can change the world. 

Why would this change everything?

Just like us, companies are completely self interested. In fact most business schools and corporate boards still endorse this mindset put forth by Milton Friedman 45 years ago:

“There is one and only one social responsibility of business–to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud”

In other words the sole corporate mandate is to act in their own self interest (profit), regardless of the consequences, as long as they stay within the law. This has led to massive exploitation of the world's human and environmental resources, often in the most vulnerable places in, all in the name of reduced cost, growth and profit. 

I deeply hope businesses will follow the example of Patagonia and others who see a different path to corporate prosperity, but I am not convinced this will happen quickly enough. So I am proposing a different approach. A free market, consumer solution which rewards good behavior and punishes bad. A solution that makes being a good corporate citizen more profitable than being a bad one. 

Our ultimate goal is for the GoodWell logo to be a rock solid endorsement of a company and product adhering to reasonable common sense standards which are verified by independent third party auditors

Imagine a world where alongside the Prime checkbox on Amazon there was a GoodWell checkbox, so you could filter out any companies which were not adhering to the standards. A world where you could walk through Target and easily identify a responsibly produced pair of shoes because of the logo above proudly displayed on a box. This would give you confidence that buying those shoes will support good over bad, the environment over waste, safety over cost, fair wages over exploitation, community support over greed ALL THE WAY THROUGH THE SUPPLY CHAIN. 

Your vote for good over bad would impact wages in the USA and Uzbekistan, the environment in Europe and Ethiopia, workplace safety in Venezuela and Vietnam. Sound impossible? It’s not, our consumer spending is the source of all economies globally. It creates power, wealth, wars, politicians, policies, environmental damage, and so much more. 

Collectively we can be most powerful voice for change on the planet if we can only unlock our consumer superpower. GoodWell is on a mission to do just that, empower us all to do the right thing when we spend. 

Join GoodWell today as a Founding Member and help us to unlock the conscious consumer in all of us. 

 

Delivering on a 21 Year Old Promise to Myself

My Journal from 1994

My Journal from 1994

For the first 20+ years of my career I focused on building businesses with one goal in mind - to make money.  I was raised in the 70's by relatively conservative parents and grew up with a strong drive to "succeed", which by all definitions simply meant to make a bunch of money and become financially secure.  My personal definition was - be independently wealthy.  

I selected my college, Villanova University, because it had a great business school.  Selected my major, Accounting, because it gave me the opportunity to deeply understand how companies function in all areas - most importantly how the money flowed.

When I graduated in 1994 I took a job with Arthur Andersen for $24,000 per year and after about two years of auditing and operational consulting, six of us left Andersen to start our own consultancy - my first taste of entrepreneurship.  Did I leave because I really believed in what we were doing or because I had a passion for Activity Based Costing (the specialty of the firm)?  Nope, I left because I knew I could make a lot more money, and I did, in fact my pay went from $27,000 to $60,000 the day I quit.  We grew the company quickly and I basked in the glow of watching my bank account grow - ah sweet "success".  

A little over a year later I was approached by one of our clients who wanted me to consult directly for them.  It was an exciting offer which would allow me to leave my new partnership and strike out on my own.  I would own 100% of the new company instead of 5% of the existing one, I would be my own boss, but most importantly I would be making a bunch more money.  In fact they were willing to pay me $150,000 per year, AND I only had to work 3 days a week!  I was 26 years old, getting married and considering starting a family, so more money and time sounded like a great deal - more basking - more growing.  

Over the first twenty years of my career I was the founder or co-founder of three businesses; one consultancy and two software companies.  All were in different industries solving different problems, but they all had one thing in common, I started them because I thought they would make money, not because I was interested in the problem I was solving.  I never hit any huge home-runs with these businesses, never birthed a unicorn, but I have done well, provided for my family, created a bunch of jobs, solved a bunch of problems and have learned a ton along the way.  Many people would consider my career a success, but in my eyes I have failed.  I failed because I was not true to myself.  I failed to follow my heart, I traded my deep seeded desire to do something important for surface level financial rewards.

The picture at the top of this post is from a journal I filled during a six week trip to Europe when I was 22 years old just after graduation.  In the journal I wrote:

I will not be happy being a normal ho-hum man in the world.  I must do something to help my fellow man.  I have been so lucky in my life that it would not be fair to let that debt go unpaid.  I owe something to the world and if I don't pay it back somehow I feel that my life will be incomplete.....I hope that when I read this in the future I can look back and say I have accomplished my task.

Please forgive the use of the word ho-hum and the over the top idealistic / romantic notion of doing something to make the world a better place and give back,  I was 22 and in that "on the road" vibe.  Most people go through some phase in their lives where they have these romantic ideas.  It typically hits when we are young and then as time passes the feelings fade and we end up just following the script, job, family, 20-30  extra pounds, retirement.  However, this passage and that moment have stayed with me all my life, constantly pulling at me and reminding me I am supposed to be doing something else.  

Shortly after I returned from Europe I packed my car, headed west and started my job at Arthur Andersen.  By the time I started I convinced myself the way for me to give back and fulfill my promise was to make a lot of money so I could give a bunch of it to charity.  It was a nice lie that fit in well with my drive to "succeed".  By hiding behind the "do good later" lie I was able to work insanely hard on making money and succeeding without having to feel guilty about ignoring my desire to do something more important.  

This all caught up with me about 5 years ago while I was the CEO of Balihoo, the third business I founded.  I was 38 years old, the company had gone through some major up's and down's, but had survived 2008 (thanks to some amazing employees and investors) and was doing quite well at the time, yet the sheen on my tidy little lie was starting to fade.  I knew I was not following my heart, but I did not know what to do about it.  So I did what I always have done, I worked the problem.  

I started to read about purpose and corporate social responsibility.  I talked with other CEO's about how they felt and slowly over time I started to gain a better understanding of what I needed to do.  The two books which influenced me the most were Let my People Go Surfing - by Yvon Chouinard  the founder of Patagonia and Conscious Capitalism by John Mackey the founder of Whole Foods.  I needed to incorporate purpose into the business, I needed to start thinking more holistically about our role as a corporate citizen.  

I started to make changes immediately.  We started to measure our commitment to our customers - using NPS.  We started to give back to the community in a myriad of ways, we dramatically improved the benefits we gave to our employees and within a couple of years we were named one of the top places to work in the country by Outside Magazine - which remains one of my proudest accomplishments.  

My drive to find meaning and to give back led me to a path which I have been on for the past couple of years, and has brought me to the next chapter of my life.  In 2014 I stepped down as the CEO of Balihoo so I could fulfill a lifelong dream of traveling around the world with my family.  This was an incredible privilege and something I will always cherish.  It gave me the opportunity to be the father I desperately wanted to be (but wasn't while I was a CEO), to spend undiluted time as a family before the kids went to college, and to deeply examine my own personal purpose.  It was during this trip I saw first hand how the rest of the world lives and what it means to truly follow your heart.

On the trip we had the privilege of meeting and working alongside Koy and Reny Chhim who founded Cambodian Care, a non-profit dedicated to providing schooling to Cambodia's poorest children.  The work they do is beyond what I could possibly describe with my poor writing, but suffice it to say they are truly saints.  Koy left his good job (with another non-profit), with one month living expenses in the bank in order to care for these people because nobody else was.  They live with their four kids in a remote area of Phnom Penh struggling to get by financially, but so full of love and contentment they instantly draw you in.  They are following their hearts and doing the most important thing in the world to them - serving others.

As I write this I am nearly 44 years old.  By all measures I am just entering the prime earning years of my life.  If there was ever a time for me to reach for the brass ring it would be now.  I have skills which are in high demand and have been recruited for some amazing jobs which would take my earnings to another level.  This would be significant for me and my family because I never did attain my goal of financial independence.  I need to work, and need to make money, I AM NOT RETIRED, not even close.  However, instead of following the dollar, I am following my heart, and fulfilling the promise I made as a 22 year old.  I am using everything I have learned to start an organization to make a difference and that organization is GoodWell.

I have come to believe it is essential for companies to behave in a more holistic manner and for consumers to reward those companies with their support.  I believe it is not only good business, but good for humanity and good for the planet.  I believe that if all companies globally adopted standards of simple good behavior we would solve big systemic problems in the world.  As a result of these beliefs I intend to spend the next chapter of my life (which is hopefully about 45 to 50 more years) fighting for this cause so that as my last page turns I can go back and read that passage in my journal close my eyes and know that I made a difference.  

If you would like to be part of that journey, head over to GoodWell now and become a Founding Member.  If you are a CEO, founder or executive of a company and are interested in becoming GoodWell Certified, contact me directly at pete@goodwellworld.com