The following are the author’s remarks at the Financial Leader of the Year (FLY) awards dinner on October 4, 2017, sponsored by the McCracken Institute and Rollins College. This is Part 1 of 4.
Our prosperity is like oxygen.
Every moment, we breathe in and we breathe out. We never think about it. We simply take it for granted that each breath will allow us to keep living.
Yet, if we were to be deprived of it – oxygen, that is – oxygen would be all we could think about. We’d be gasping for our next breath.
Our prosperity is like that too. American prosperity, that is. We take it for granted. We expect that our infrastructure will support a healthy lifestyle, that our military and police will ensure our physical security, and that there will always be a way for us to earn a living.
Yet, if we were to be deprived of it – our prosperity, that is — earning that next dollar would be all we could think about. We – the United States – need to ensure our prosperity in order to ensure we can continue to live an American lifestyle.
By now you’ve heard that capitalism is under attack. If you’ve spent your career in business, you are unlikely to embrace the alternatives. So-called social democracy or pure socialism won’t provide the same level of overall prosperity we have come to enjoy.
Yet, there is some justification for the view that capitalism hasn’t served all sectors of society. Inner city problems that have been entrenched for decades — poverty, crime and drug abuse — have invaded our rural communities as well.
Now, if you’re concerned I am going to give an economics lecture or discuss politics, let me reassure you. That’s not why I am here.
I am here to propose a new way of thinking about your business, your leadership role in your business, and how you should run it. Some of what you’re going to hear tonight will be familiar to those who have become involved in the Conscious Capitalism movement or to those who have studied the recent work of Harvard’s Michael Porter on ‘Shared Value.’
Let’s start with Conscious Capitalism. The concept focuses on the needs of all stakeholders – customers, employees as well as shareholders – and encourages business leaders to develop a culture of transparency and accountability.
So, let’s talk about what that looks like.
I have a client – SunCommon of NY – who has placed a social objective at the core of their business plan. In case you can’t guess from the company’s name, SunCommon develops, builds, and installs solar energy. It can take the form of solar panels on your property or, in a new development, by enrolling in the company’s community solar option. SunCommon purchases land outside the metro area, builds a solar field and then contracts with homeowners to purchase solar energy. With no upfront cost, a homeowner’s long-term commitment will contribute solar energy to the electrical grid. In turn, those in the program earn credits to their bill from the local utility.
So, let’s think about that for a moment.
Think of all the factors that have to be in place – how the planets need to be aligned for this program to work.
First, it has to be technologically and economically feasible. It has taken many years – but it’s now possible to produce solar energy at a lower cost than natural gas. This profile varies according to where you live. However, it’s not just upstate New York where this is possible.
Next, the company – in this case, SunCommon – has to be able to execute and make money doing it. In an industry changing as rapidly alternative energy, this is no mean feat. The company operates like any construction sub-contractor – low margins, overly affected by weather, and uncertain topography.
More importantly, the regulatory structure at a state and local level must accommodate the business model. New York is among the few states that permit its residents to choose solar as an alternative.
The company today reflects their belief that what they do is right for society, right for their people, and right for their shareholders. They truly pursue what you’ve heard called the triple bottom line: people, profit, planet.