CFO Book Review: It’s About Excellence: Building Ethically Healthy Organizations by David Gill

The author has several objectives in writing this book. His first objective is to provide tools and resources for the entrepreneur and business developers to build ethical and excellent companies that do what’s right and do well financially. The author notes that while there are many good ethical companies, there are too many companies whose leadership has failed morally and ethically. So he writes this book with the intention of calling the leaders in the business world to a new level of ethical leadership. The last objective of this book is for corporations to consider ethics first and foremost as a matter of excellence. Ethics needs to be more than a stop-gap measure to contain the damage after something has gone wrong. Ethics means being proactive in operating a business with excellence.

The author starts his case by trying to define ethics in a way that recognizes the widely diverse world that we live in. He identifies six criteria to consider when determining if a corporation or an individual is acting ethically or not. First is an acknowledgement that our laws are based on an ethics of right and wrong. Second, industry or company codes of ethics are important to follow. Third, almost all humans have a general sense of right and wrong, or a moral compass, and this should be followed. Fourth, obey the Golden Rule: Do unto others what you would have them do to you. Fifth, if you don’t want the public to see what you are doing, don’t do it. Sixth, do no harm to others that would be considered irresponsible.

The author then goes on to acknowledge that even if someone knows what is ethical, he/she does not always want to do the right thing. Many times corporations or other entities of authority must implement incentives for people to choose the right action. These incentives can be either a fear of negative consequences or the desire to experience a positive consequence. This then can create an environment for the right thing to be done on a more consistent basis. However, not all scenarios can be anticipated in advance, and so a company needs to have a thought out strategy of how to deal with an ethics crisis before it happens.

The author goes on to describe four additional proactive measures a company can implement to build ethics and values into an organization. When a company has an inspired and shared mission and vision that its employees can get passionate about there is a much greater likelihood that they also will willing follow a set code of ethics. This passion about the mission of the organization also feeds into creating a healthy culture within the company. Having a code of ethics and expecting a certain style of operations leads to an atmosphere that is values-oriented. The expected style of operation comes out of identifying what principle-guided practices are important in the day to day operations of the company. When a company’s mission and vision aligns with the culture or environment of the organization as well as the expected practices and principles, ethics becomes a positive outcome of operations and not a negative restraint or list of what not to dos. Ultimately, these measures will be ineffective if the leadership and governance of the organization is not leading by example. Good ethical leadership is essential for a company to implement an environment of good ethics.

Each of these measures must be supported by a continual process of education for the stakeholders in the organization. A company must clearly articulate and continue to remind people what is important in accomplish the vision and mission of the company. The company must be proactive in implementing the values, principles and processes that are important. Finally, a company must continue to evaluate how it is doing in accomplishing carrying out the values and ethics identified. Leadership needs to identify strengths and weaknesses and develop ways to improve processes. When the ethics of the company are violated an in-depth review should identify where the process failed, and how to keep it from failing in the future.

The value of a book like Excellence, is to provide leaders and employees a way to evaluate how their own company matches up with the ideal work environment. If each business leader decided to make a concerted effort to evaluate how he/she provides ethical leadership and begin to implement changes based on the measures outlined in this book, significant changes would be realized in the business world. The challenge is to break the herd mentality that says the company will be put in a competitive disadvantage if it operates in a completely ethical and transparent way.

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How Much Cash Reserve is Enough?

”Cash is King” is the mantra of many small business owners. It is true that cash is the fuel that makes a business run. It is needed to pay salaries, fund marketing programs, acquire and retain new customers, invest in equipment and facilities, pay rent, supplies and the many day-to-day activities of a small business. But how much is enough? When does is make sense for the small business owner to share the wealth with key employees or take a distribution from the business? This blog will give some insights into figuring out how much cash to have in reserve.

Most financial experts recommend three to six months of operating expenses, but using this for every business in every situation is misleading. Regulating cash flow isn’t just about quantity. It’s about having enough cash at the right times. Having enough cash in Week Four doesn’t help when you don’t have enough cash to cover payroll in Week Three. Consider the following three key areas to help determine how much cash you need.

1. How Much Cash Have You Been Using?
Run monthly cash flow report from your accounting software. This report will provide an historical and seasonal perspective. Note the cash received from sales and the cash spent. Most cash flow reports will show you your net income for the given period and adjust the numbers based on how much cash you received from customers and how much cash you spent on operations; in essence removing Accounts Receivable and Accounts Payable from the equation. The net of these two is often referred to as the “net burn rate.”
Your “gross burn rate” only takes cash expenditures into account and is the more conservative analysis, since it does not assume any sales are made. Historical spending patterns are a good starting point in considering future spending plans.

2. How Much Cash Do You Plan to Use?
Look at the monthly cash flow projection covering the next 12 to 15 months. You should be able to find this information in your monthly budget, or if don’t have a budget, from a financial forecast created for this purpose. As you did with actual cash expenditures in the preceding paragraph look at the sales (cash in) and expenditures (cash out) separately.
Be conservative in your forecast as actual results often differ from what’s stated in your business plan. And keep in mind that expenses are usually more predictable than revenue because many are relatively fixed, such as payroll and rent.
For a small business, the past is not necessarily the best predictor of future needs. You need to consider the stage of your business in your forecasts.

3. What Is the Stage of Your Business?
Are you in start-up, first year of operation, maintaining an ongoing business that stays fairly consistent each month and year, or do you have plans to grow or make large purchases. Each of these will impact the cash forecast discussed above. While an established business may have good benchmarks, a start-up has few benchmarks and the most uncertainty, and thus should be more conservative when setting cash flow needs.
In growing businesses, accounts receivables, and maybe inventory, expand to support the increased sales. But it is often overlooked that you need cash to fuel this growth—you must spend money to generate the sale before the customer remits cash.

How Long It Will Take to Get More Cash?

Now you know your cash needs for the next 12-15 months. The next consideration is how long it will take to get more cash if and when it is needed. If you’re funding the business from your own resources, the time is short. Getting the needed funds likely means writing a check from a bank account or selling a security from an investment account—you might only need three to five days for the cash to be available to use.
However, if you need a bank loan to get cash, it might take two months or longer—one month to find a bank willing to make the loan and one or more months to do the paperwork. This option assumes you have a business plan in almost-ready condition and have maintained good relations with your bank if you have an established business or on your personal account if you’re in start-up mode.

Raising funds from angel investors extends the time considerably. If you go this route, count on six to nine months to prepare the business plan/investor pitch, make presentations to several angel groups to find one that is interested and a good fit, and wait while the angel group conducts its due diligence.

Once you know how much cash you’ve been using, how much you plan to use, and how long it will take to get it, you can determine how much cash you need to keep in the business. For example, if you plan to use a bank loan to fund your cash needs and you plan to spend $50,000 a month then you should probably keep a minimum of $100,000 in your bank account—if you have certain sales revenue occurring in these two months you can reduce the needed cash in the bank by a like amount. However, if you plan on using angel funding then you might want to have $300,000 in your bank account.
Before approaching a bank or angel group, consider some other funding sources

Are There Other Cash Sources?

There are many other sources of cash. For purchases, ask the vendor for credit terms or a longer period in which to pay. For sales, ask customers to pay you in shorter timeframe and offer a discount as an incentive to pay earlier. Other cash sources include increasing your credit card balances, taking out a home equity loan, borrowing from family and friends, tapping into savings and retirement accounts, leasing rather and purchasing equipment—the list goes on. It’s also good practice to have a bank line of credit as a safety net—one that can be dipped into when needed.

When Is the Best Time to Seek More Cash?

A common axiom is that the best time to obtain funds is when you don’t need them. Sounds counterintuitive, but during these times you aren’t desperate to take the only offer made. You have time to shop for the best source, with the best terms, and you can negotiate from a position of strength.

Too Much or Too Little Cash

There are many lists of common reasons for business failures. The two items frequently near the top are undercapitalization (not enough cash) and overcapitalization (too much cash). The first reason is pretty easy to understand. But companies can also get into trouble when they have too much cash, as they often undertake projects, hire staff, buy equipment, move to larger offices, and other such expensive actions, which incur ongoing implications like fixed costs.

Often these decisions are not made with the same planning rigor when cash was tighter. If your company is fortunate to have “excess” cash beyond the forecasted needs, then make a distribution to the owners or a bonus to your employees rather than make a decision that may have far-reaching effects.

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CFO Book Review: Saving the Corporate Soul by David Batstone

823875The image of corporate America has been rapidly eroding over the past years as scandal, greed and layoffs are highlighted on the evening news. In this book the author explores what it takes for a corporation to act and engage in business in a way that aligns with the values of its workers. The author proposes eight principles for a corporation to incorporate into their operations that will create an environment that not only will help it operate in a values-based way, but in most cases help it excel financially over the long haul. The author also addresses the common challenge in how to measure the results of doing “good”. Most senior managers have a desire to operate corporations with integrity and fairness, but have a difficult time justifying fairness and integrity decisions based on a measurable outcome. The author holds forth that a principled company will maintain and enhance its reputation which creates an environment much more conducive to gaining new customers. In addition, a principled company will reduce its liability exposure when it comes to lawsuits, both from a product perspective as well as from an employment perspective. Lastly a principled company will better manage the networks that it is involved in.

Each of the principles that are mentioned, are followed with examples of companies that are following and implementing the principles mentioned. The first principle is for the executive leadership to align their personal interests with the interest of all the stakeholders. Leadership matters in setting the direction of a corporation, but it is also critical that the top leaders also set the example from an integrity and ethical perspective. The second principle is for a company to be transparent about its operations. Each decision that is made should be able to stand up to public scrutiny. There will always be detractors, but with adequate explanation a decision should be able to make sense to the average worker of the company. The third principle is for the company to consider itself an active part of the community. As a company looks at the community as more than just an economic market, as well as being an active citizen that is interested in the wellbeing of the community, good things happen. The fourth principle is for the company to represent their products honestly and be proactive in caring for their customer. This customer care goes beyond just delivering a product and collecting a check. The fifth principle is to value and treat employees as a partner and team member in the success of the business. The sixth principle is to treat the environment as a stakeholder. The seventh principle is to strive for a diverse and balanced employee, customer and vendor base. The eighth principle is for companies that pursue international trade to be aware and sensitive to worker’s rights and justice issues in other countries.

This book was written to encourage the corporate worker to consider how he/she can use the position, talents and influence that he/she has to create an environment that allows for a sense of significance. The author puts forth antidotal evidence that a worker doesn’t have to be the CEO to affect change in a company. The author wants the reader to consider how he/she doesn’t have to feel trapped in an environment that puts his/her integrity at risk. If a worker operates within his/her own sphere with integrity and encourages the leadership of the company to follow the eight principles that were laid out then change can happen. These principles also provide a measurement tool for the worker to determine if the company he/she is working for is making progress in implementing these principles into the operations of the company. Ultimately, if the company isn’t operating with integrity in these areas, and doesn’t appear to be working toward change, then this can provide cause for the worker to begin to search for the company that is operating under these principles.

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CFO Book Review: Leading Change

Leading Change
by John P. Kotter
Harvard Business School Press (1996)

Leading Change was written as a follow up to an article the author wrote for the Harvard Business Review entitled “Leading Change: Why Transformation Efforts Fail”. This article received such an overwhelmingly positive response that John Kotter wanted to provide greater detail and more examples of how companies have been successful in leading change.

Many business managers read about the common mistakes listed by the author for the reason companies fail in implementing change and realized they were mistakes they have seen and experienced. Ultimately, the book has resonated with many in the business world because of the way the author has provided a framework for breaking down a transformative change process into identifiable pieces that are realistic to follow.

The author first outlines eight common errors that leaders in organizations follow into when they try to implement change within their companies. The consequences of falling into these errors are that new strategies aren’t implemented and many of the hopes and plans for creating synergy and energy in a company fall flat. The author doesn’t spend much time talking about the errors that are made. It is likely that most readers can identify quite quickly with the errors and are looking instead for solutions. So the author takes the majority of the book to outline eight stages that he has identified as critical to success in implementing transformational change in an organization.

1. The first stage is to establish a sense of urgency. In many cases a crisis of some sort is happening that creates the urgency to implement change.

2. The second stage is to create a guiding coalition. Here the idea is that in order for change to happen, there needs to be more than just the CEO or one person to suggest and lead the change process.

3. The third process is to develop a vision and strategy. If people are unable to see how this change will create a better future there will be too much resistance.

4. The fourth stage is communicating the change. This needs to be a simple and clear message that is repeated often. The area of communication is such an important piece of leading change and yet it often times is the weakest link. The message is either too complicated or not repeated often enough.

5. The fifth process is to empower broad-based action by employees to remove obstacles to change. This may include taking risks and trying nontraditional ways of doing things. Here employees need to be willing to move out of their comfort zone and not do things just because that’s the way it has always been done.
6. The sixth process is generating short term wins. People can become tired and overwhelmed with change and lose their focus in accomplish long-term goals.

7. The seventh process is consolidating gains and producing more change. This is similar to generating short-term wins, but it goes beyond this by taking these wins and building on them to implement change in an even better more productive way. The final process is to anchor the new approaches into the existing corporate culture. This is a key process to achieve lasting change. If employees don’t see that the changes implemented match up with the current values and culture the new processes will slowly disappear and eventually the organization will do things the way it always has.

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Whatever Happened to Corporate Stewardship – Rick Wartzman

In November 1956, Time magazine explored a phenomenon that went by various names: “capitalism with a conscience,” “enlightened conservatism,” “people’s capitalism,” and, most popularly, “The New Conservatism.”
No matter which label one preferred, the basic concept was clear: Business leaders were demonstrating an ever increasing willingness, in the words of the story, to “shoulder a host of new responsibilities” and “judge their actions, not only from the standpoint of profit and loss” in their financial results “but of profit and loss to the community.”
I decided to dig out this piece and reread it after news broke this week that Burger King is buying the Canadian coffee-and-doughnut chain Tim Hortons for about $11 billion. Once the acquisition is complete, Burger King plans to move its headquarters north of the border, where the statutory tax rate is lower than in the United States, in a maneuver known as an inversion.
The company has denied that it would get much, if any, tax relief from the deal and insists that it is acquiring Tim Hortons for a legitimate strategic reason—namely, to accelerate expansion in a super-competitive industry.
In this case, the Home of the Whopper may well be telling the truth. Yet whatever Burger King’s actual motivation, it’s not surprising that some people have reacted strongly, condemning the company as a “traitor” and urging a boycott of its restaurants. What they’re really responding to, deep down, is a growing sense that most American corporations care (to use Time’s phrasing from 1956) only about the profit and loss on their income statement, but not about profit and loss to the community.
Back when Time published that essay, big companies prided themselves on taking care of a full range of constituents: their shareholders, yes, but also their customers, their suppliers and their workers. Indeed, most large employers, as well as many smaller ones, began in the 1950s to forge a social contract with their employees that would solidify over the next decade or two: rising wages, guaranteed pensions, good healthcare benefits and stable jobs.
Like their 21st century successors, top executives of the ’50s weren’t typically fans of Washington playing too large a role in the economy. Implicit in the corporate social contract, in fact, was the view that most working people would find the security they were looking for as participants in the private sector, not as wards of the public sector. Companies practicing what was once called “welfare capitalism”—not the welfare state—would meet the bulk of their needs.
Nevertheless, Time asserted, “the majority” of businessmen in the Eisenhower era had come to realize that government “welfare programs help store up purchasing power in the hands of the consumer.”
“Unemployment compensation is desirable,” the magazine quoted Gaylord A. Freeman Jr., vice president of the First National Bank of Chicago, as saying. “Social legislation can add to the totality of freedom, increase the dignity of the individual.”
Few if any businesses—then or now—would willingly shell out more to Uncle Sam. General Electric, for instance, crusaded 60 years ago against what its president, Ralph Cordiner, termed “excessively high taxes.” But the company, which famously touted trying to serve the “balanced best interests” of all its stakeholders, also made a point of paying what it owed “with no bargains asked,” as GE vice president Lemuel Boulware put it. This, he said, was part of being “a good corporate citizen.”
Make no mistake: GE, where Ronald Reagan shaped much of his Washington-is-the-problem ideology as a corporate pitchman for eight years beginning in 1954, wanted smaller government. Still, it wouldn’t have dreamed of not paying its share.
Today, by contrast, GE does all it can to escape taxation, in large part through “innovative accounting that enables it to concentrate its profits offshore,” as the New York Times characterized it. And it is hardly alone. The Senate Permanent Subcommittee on Investigations has exposed how Microsoft, Hewlett-Packard, Apple, and Caterpillar, among others, have all used various tax-avoidance strategies.
Of course, the social contract between employer and employee began to fray in the 1970s, and it has since been totally ripped apart. Myriad culprits are to blame, including rapidly advancing technology, heightened global competition, the weakening of unions and, perhaps more than anything, a horribly misplaced mindset that has elevated stockowners above all other groups.

“For some time now,” says David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution, “the ‘shareholder uber alles’ mantra has been crowding out the old-fashioned stakeholder notion.”
What sometimes gets lost in the discussion, though, is that this shift hits employees and communities not only directly but indirectly. The very same forces that have shredded the corporate social contract—once a robust private safety net—have also driven companies to deploy every possible tax shelter, thereby cutting their contributions to the public safety net. In all, the Tax Policy Center cites estimates that “nearly $1 trillion is held by U.S. corporations abroad, accumulated over time from booking income in low-tax countries.”
It is easy to overly romanticize 1950s corporate America. People of color faced terrible workplace discrimination at that time, as did women. Late in the decade, many big companies hardened their stance against organized labor, hastening its steep decline. Business culture could be rigid and stifling—the world of The Organization Man. Fear of communism and socialism, as much as altruism, was often at the root of corporate generosity.
But for all the faults of that period, an ethos has been lost. The University of Michigan’s Mark Mizruchi, in his book The Fracturing of the American Corporate Elite, describes it as “concern for the well-being of the broader society.” Notably, Mizruchi points to the 1956 Time article as a good representative of the ideas that then “dominated in the corporate discourse.”
“The majority of Americans support private enterprise, not as a God-given right but as the best practical means of conducting business in a free society,” pulp and paper executive J. D. Zellerbach told the magazine. “They regard business management as a stewardship, and they expect it to operate the economy as a public trust for the benefit of all the people.”
I think Zellerbach’s observation about what the American people expect of business remains essentially true in 2014. What has changed is the way that so many companies have turned so far away from this philosophy. That change makes Time’s portrayal seem like it’s not just from another age but from another planet.
Rick Wartzman is the executive director of the Drucker Institute at Claremont Graduate University and anonline columnist for Time

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CFO Book Review: The Steward Leader


The Steward Leader

Stewardship of people within an organization has taken on a whole new level of meaning for me after reading Peter Block’s book Stewardship: Choosing Service Over Self-Interest. Block approaches the issue of leadership, in the face of the changing business environment, from a stewardship perspective. His primary thesis? Focusing on individual leaders as the key agents for meeting the challenges of the new marketplace is misplaced.

In contrast, he believes, “It is this pervasive and almost religious belief in (individual) leaders that slows the process of genuine reform.”1 Empowerment is the answer to many of the difficult questions of business. He believes strength lies within each person working for an organization. In this environment, stewardship gives away power to make decisions to those who may have the least ‘important’ positions in a company.

Block drives to the heart of the issue by saying:

Stewardship begins with the willingness to be accountable for some larger body than ourselves – an organization, a community. Stewardship springs from a set of beliefs about reforming organizations that affirms our choice for service over the pursuit of self-interest. When we choose service over self-interest we say we are willing to be deeply accountable without choosing to control the world around us.2

Block notes that much of his advice on leadership within an organization runs completely counter to the way most business leaders have been trained. The idea that they should willingly put themselves in a position that requires them to be held accountable for actions or decisions completely outside of their control challenges convention. And yet, I see this as a critical part of creating an environment for personal transformation.

Trusting and believing that every person is meant to make decisions and will make decisions, if given the opportunity, that benefit the community or organization over self, lays the foundation for a transformational environment. No matter how counter-intuitive the concept may be, it changes employees–who might otherwise only do the minimum required–into active participants who feel a vested in seeing your business succeed.

1 Block, 6.
2 Ibid. + page number.

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Planning for Success Workshop – The Art of Forecasting and Budgeting Effectively

At every scale of business size—large corporation to solopreneuer, learning to forecast and budget accurately is essential to success. This free Lunch N Learn workshop is designed to ensure your grasp of the fundamentals. When you walk away, you will understand more than the basics of creating sales forecasts, budgets cashflow projections. By the end of 1-1/2 hours, you will understand how they all work together.

Here are the basic details.

Date: Friday, September 9, 2016.
Time: 11:30 am to 1:00 pm
Where: Snoqualmie City Hall, 38624 SE River St, Snoqualmie, WA 98065
Cost: Free
Registration: Sign up here.


We encourage you to pre-register. You’ll receive an Excel template to personalize and work with as the workshop progresses. You’ll also secure your seat.

Why Take a Forecasting and Budgeting Workshop?

Budgeting is foundational to planning your day-to-day actions. Here are just a few reasons why:

  • Planning the budget requires you to consider multiple factors–positive and negative–that could impact your cash flow.
  • Forecasting helps you consider all the factors that could hurt your business and plan for worst-case scenarios.
  • Developing the budget helps you focus on coordinating all the activities within your organization, including cross-department relationships.
  • Reviewing the budget improves control over priorities and evaluation of performance.


You will learn:

  • What drives a successful budget
  • How to develop a reliable budget process
  • How to use your budget to enhance performance
  • How to avoid common budgeting issues
  • What questions you should ask after you’ve set your budget
  • How to build flexibility into your budget for better results
  • How to tailor operating and capital budgets to meet targets

Sales Forecasting

We’ll also cover the 4 principles of sales forecasting, because this plays a primary role in the budget process.

  • Good sales strategies
  • Buyer behaviors
  • Milestone-driven pipelines
  • Continual improvement

Key Takeaways

Throughout, the workshop focuses on making the budget and forecasting process a powerful tool for your business. We’ll show you how to transform your business through budgeting and forecasting.

When you’ve completed the program, you’ll know how to choose the best focus for making budget decisions. Instead of asking, “How much are we allowed to spend?” you’ll be prioritizing your spend by asking, “What do we need to accomplish our goals?”


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Joy at Work – A Book Worth Reading

joy_at_work_coverIn Joy at Work, Dennis Bakke lays out a philosophy of what the workplace environment should be like. His book challenges entrenched management norms established in the 18th century and still firmly practiced across America. His philosophy proposes a 21st century approach to success.

Fun and Fulfilling Work Environments

His main proposition is that the workplace should be fun and fulfilling. To prove this is practical and profitable, Bakke shares how he and a partner developed a humane and enlightened workplace at AES, an energy company. The concept and principles resonated with me as soon as I read the book. Many of these principles of management were similar to what I had been thinking about for many years, but unable to actually experience.

One of his main points focuses on the criteria for evaluating organizational performance and success. Primary factors are no longer limited to financial goals, but rather embrace a workplace that is filled with joy for the ordinary worker and measures the worker’s quality of life.

Throughout the book, Bakke expresses his beliefs:

  • The average worker all around the world finds feelings of fulfillment and joy when his or her ability to make important and critical business decisions is recognized.
  •  The worker whose job is most impacted by a decision should be the one making the decision. A critical component of this decision needs to include input from coworkers and supervisors. If input is received and relied on, it doesn’t matter if the decision turned out to be good or bad.
  • Everyone will make mistakes occasionally. These are critical learning times for employees, which only strengthen the ability of each worker to make a better decisions.

Accountable Work Environments

A key aspect to the Joy at Work model is to build in score-keeping, accountability and rewards into the system. When decisions are made, employees are held accountable for the outcome.  They must admit when they err, ask forgiveness and commit to avoiding same mistake again.  Also, rewards and compensation must be fair and tied to performance.

Bakke goes on to describe managers and executives as servants. He proposed that the most important character traits of a leader are humility, the willingness to give up power, courage, integrity, love and passion for people. Leaders love people and need to spend time with the people for whom they are responsible. Bakke sums up his management philosophy by  proposing that the primary reason leaders experience joy at work is not prestige or status. It is the control they have and the decision-making authority that gives them a chance to make organizations succeed.


Today’s workplace environment has seen very little change in the past 250 years. The Industrial Revolution had such a tremendous impact on businesses and organizations that leaders are unwilling to risk tampering with past success. Bureaucratic behavior remains the heart and soul of most work environments, and managers have a tendency to treat workers like children unable to make good decisions and think for themselves. The assumption is that the higher the level of management the better the decisions will be.

This is perhaps the biggest challenge you will face after reading this book—how to actually experience a Joy at Work environment when you have very little control or say regarding the culture and environment of your workplace. If upper management or the owners of a company aren’t willing to implement or support these concepts, then it is very hard to actually live them out. So, while this book may resonate with many employees, the ability to actually implement the principles into the work environment is likely very limited. I found that to be the case in one of my previous jobs. I tried to introduce the owner to the concepts, but he had no interest in actually pursuing a path to implement them. I attempted in my own small department to manage with a Joy at Work attitude and was successful to a degree.

When I first read this book several years ago, little did I know that I was actually going to be able to work for an organization Bakke helped start and taught and tried to follow the Joy at Work principles. It was a positive experience, yet I learned even working for an organization that advocates a Joy at Work environment doesn’t make it always easy to remember and implement these concepts. It must be a constant pursuit, an ongoing improvement process of creating the environment.

The rewards are exponential. I encourage you to get your own copy of Joy at Work and read it.

You may find it at Amazon by clicking HERE.

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Should Your Business Organize as a Benefit Corporation?

Making decisions at a Benefit CorporationThe Washington state legislature passed HB 2239 establishing Social Purpose Corporations on March 6, 2012. It became effective on June 7, 2012.

If you care about being a steward of profits, people, partners and places, then this Washington version of the Benefit Corporate structure is the best business structure to assist you with your goals. While the Federal Government hasn’t yet recognized this structure, adoption has gone from just two states (Vermont, and then Maryland) in 2010 to 31 in 2016. Seven additional states are currently working through the details.

As you can see, Benefit Corporations are a fairly new type of corporate structure. What makes them different from previous for-profit corporations is the emphasis upon pursuing a planned social and environment mission within society. Instead of primarily focusing on maximizing financial gain, a benefit corporation is mission driven, with a legal framework that protects the mission even in a takeover or change of control.

Key Advantages of Being a Benefit Corporation

1. It allows you to choose and protect your mission.

Wherever your business is on the size scale—startup all the way up to large public company—this tax structure works. The metrics scale up so effectively, there is every reason to embrace this corporate model if you have a concern that shareholder demands for profits will force you to make decisions that hurt the other stakeholders who depend upon your business—employees, suppliers and your community. You can still measure ROI, however it is not the emphasis.

Your corporate charter outlines the mission, meaning stockholders and potential buyers are legally obligated to support it. Once a public benefit is defined in your articles of incorporation, it becomes a part of your business’ operating model. That’s a structure of accountability.

2. It ensures you reduce your liability.

Benefit Corporations do more than provide the usual protection to directors. They also protect your right “to balance your financial and non-financial interests when making decisions.”1

3. It attracts a different type of shareholder or investor.

This tax structure for public businesses puts shareholders on notice that achieving the highest ROI is not the goal of your business. You attract only shareholders who support an investment in all stakeholders – such as employees and the community the business is based in.

You also are less attractive to hostile takeovers. Washington state requires a two-thirds vote of all the entitled voters before the corporation can amend the articles of incorporation. Also, during a merger, it takes a two-thirds vote before your business fails to be the surviving corporation. reports that private investment capital may be easier to find because the requirement to release an annual report measuring actual activities against the corporate commitment makes it easier for investors to perform their due diligence. It also suggests that the same consciousness which has “fueled organics, fair trade, and ‘buy local’ movements” draws retail investors.1

4. It attracts talent.

A Deloitte Millennial Survey found that 77% of millennials are looking for employment with companies with a purpose aligned with their values. Considering that 75% of the workforce will be millennials in 2025, your choice to become a socially responsible company could be a major step toward attracting highly motivated and productive individuals.

5. It requires accountability and transparency.

You must publish an annual Benefit Report based upon recognized third-party standards. There are companies that help with reporting and metrics, though you aren’t required to use them. Reports may be prepared in-house as long as you use the third-party guidelines to measure your activities.


I agree with when they predict that the Benefit Corporation shows “investors and entrepreneurs from every industry what the future Fortune 500 looks and acts like.”1 Would you like to discuss the process for moving your business to this corporate structure? It can be done. We can also explore how metrics answer the question, “Am I performing well?”


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You in Your Community

When American Express’ OPEN Forum encouraged shoppers to participate in a new holiday? Small Business Saturday?back in 2010, they emphasized several facts still valid today.

  • For every $100 you spend at local, independent stores, $68 returns to your community. Only $43 stays if you spend it at a national chain.
  • Independent retailers offer a unique mix of products, while national chains lean toward a guaranteed mix of popular products.
  • Independent local businesses support neighborhood schools and community events with their advertising dollars, while national chains rarely step in unless there’s state-wide or national exposure for their ad spend.1

As a business in the Greater Seattle area, do these facts represent your relationship to our community? Are you partnering with local businesses to meet your needs for products and services? Are you involved in building our local economy?

Embrace Cooperation.

I agree with Kevin Leahy of Oregon’s Small Business Development Center when he says, “Small businesses need to work together in order to compete with their larger counterparts. It’s only by joining forces that small businesses can achieve economies of scale and have a voice loud enough to compete with larger corporations. There is power in the collective, and businesses can harness the power of togetherness to move forward in unity and accomplish so much more than they could alone.”2

What does this type of cooperation look like?

  1. You stop looking at others who provide similar services as competitors. Instead, you recognize the benefits of getting to know each other’s strengths. You look for opportunities to collaborate, support and develop connections that are profitable and rewarding.
  2. You develop strategic partnerships where you are working toward mutual gains such as improved customer service or better products.
  3. You recognize that supporting other local businesses strengthens your community by building relationships. This is true whether you are serving a metropolitan population or a small rural community.
  4. You realize that the small increase in ’cost’ for buying from a local business instead of the big box store or online is offset by the benefits.


Get Active.

Are you one of the businesses Ernst & Young and the Fidelity Charitable Gift Fund talks about when they report that 89% of the entrepreneurs they surveyed in 2011 donated money personally and/or through their companies? Are you one of the 62% who believes “giving back makes their companies more successful in the long run?”3

Beyond keeping more dollars in our community, there are additional reasons giving back benefits your business.
When you and your employees spend time supporting community projects, it creates feelings of well-being that flow back into the workplace.

  • When skills are tested and nurtured in volunteer settings, they rebound to benefit the business as well.
  • When employees participate in community activities, it develops more than teamwork. It may nudge hidden talents into play that you would never have discovered otherwise.
  • When you are seen in the community doing something that doesn’t produce profit, people find it easier to believe you are truly in business to benefit them.4

Getting active in your community doesn’t have to be difficult.

  • Contact a non-profit you want to support. Ask if they would be interested in you placing a donation collection box in the office or in your store. Would they be interested in you adding a ’advertisement’ to your website at no cost to them?
  • Hold a fund drive or food drive.
  • Sponsor a local athletic team.
  • Organize an employee volunteer day. Habitat for Humanity, a soup kitchen or a homeless shelter are just a few ideas.
  • Accept a volunteer position on the board of a local nonprofit.
  • Do like a local community bank that serves Seattle Metro, and give your employees paid time off so they can ’volunteer’ at the nonprofit of their choice.
  • Spearhead an event if you see an unmet need within your community.

Start with a sustainable idea and remain open to increasing your activity within your community. In the process, you’ll discover more than the rewards of being part of your local place, you’ll enjoy the community being part of your life and business.


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