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Servant Capitalism: A Pathway to Enlightened InvestmentA hundred years ago, the notion of an ?investor? conjured images of stuffy British bankers in pin-striped suits, dropping coins into vaults and stock certificates into boxes. Today, we?re all investors. Whether you are a schoolteacher whose withholdinThe dilemma is this: if we continue to invest in a philosophy of business that places profit at the expense of all other values, we will compromise our future. Already, our casual disregard for human and environmental needs has done great harm. If we persist, even the wealthiest among us will not be immune. We will lose the ozone layer, the green skin of the planet, and possibly the viability of our water supplies. Thus the naïve adage of working and saving to ?create a better life for our children? may have already reached its logical end. If we understand that the blue Socially conscious investors can steer their portfolios around the products and services that are noxious to their morals. Proscriptive screening tools allow the refinement of investment targets: avoiding petrochemical firms, tobacco sales or arms dealers; weapons manufacturers or liquor producers. The marked growth of funds like Domini and Calvert are testaments to our interest in wiser investments. This is a valuable step, but a strategy of avoidance is not enough. Proscriptive approaches do not invest in, and cultivate actively, the products and services that will construct the kind of world we dream of. Some of the most valuable products and services in the world today are languishing as a casualty of investment motives: they are neither traditional charities petitioning for funding through well-marked grant pathways; nor are they necessarily scaleable businesses pitching venture capitalists. They are small businesses founded by entrepreneurs of limited means and extraordinary talent. They need and deserve a new kind of investor. The investors of the world ? big investors with billions, and little investors pooled into mutual funds ? are creating our future with the commitment of their dollars. What will we do with the funds that are ours? What future will we build for our children? Our hopes for more profits may come at the cost of oxygen, beauty, wilderness, and peace of mind. How do we foster a business sector less focused on this one valuable, but ultimately meaningless goal ? of more? Can we measure success differently? Of course we can. We invented the investment system, and we have it within our power to change the rules. We need to call out a new investor class, committed to cash-flow sustainable business models that provide needed social and cultural enrichment. I have termed this investment philosophy ?servant capitalism,? after the initial work by Robert Greenleaf in servant leadership. Greenleaf asserted that a servant leader is mindful of the needs of the whole, and organizes efforts toward what is best for the group, not what is most flattering to the leader. In that case, he was talking about a business, or an institution. I am talking about applying the ethos of service to the investor. This is a new process and new perspective on the very act of investing, so its forms and optimal expressions are as yet not well defined. However, instructive examples do exist. Linux, the famous operating system, evolved through the shared interests and knowledge of all participants. Mondragon, a cooperative in Spain, was launched by a young monk interested in relieving economic poverty by investing in the local small businesses. Today it is valued at approximately $5 billion. The most unique feature of Mondragon lies not in its structure, but in the investment ethos in which it has matured: small business owners were mentored in an environment of faith and support. Investment funds were never ?pulled;? rather, if a business practitioner was not thriving, a practice of inquiry and support was implemented to enable improvements. In its 50-year history, only one cooperative has failed. This kind of success rate - over 99% - is a giant leap higher than small business survival statistics, in the U.S. or elsewhere. Servant capitalism is conceived as the movement of funds through an ecosystem of businesses via a circulation model of capital flow, such that a related range of products and services are encouraged to grow. One relatively modest endowment could catalyze a whole array of small businesses dedicated to reinspiring our social fabric, businesses constructed to cooperate more intelligently with the wisdom of nature. Profits in more lucrative ventures are recycled to support newer, or less profitable undertakings. Financial returns of the portfolio are capped at a low rate, thereby thwarting temptations associated with excessive self-interest, while encouraging profitability. The businesses that are ripe for investment from a servant capitalism perspective are those that nourish and renew the human spirit. In another era, some other kinds of businesses may be needed; but now, when our capacity to build is great, but our attention to the quality of the content in our culture is poor, we need to recommit to the presence of inspiring cues in the culture. We need human experiences that offset the prior emphasis on structure, profit, and information. Let me offer a few examples: ? Thomas Dreiss, a developer in San Antonio, Texas, has found a way to craft environmentally sensitive land planning, blended with conservation and residential development, preserving the beauty and character of the landscape. Instead of ?maximizing profits,? he has found a business model that pleases him, his customers, and the golden-cheeked warblers whose habitat he saves. ? Daniel Mack, a former television producer, abandoned the bright lights of New York to create, instead, rustic furniture, one twig at a time. His sensitive relationship with the spirit of nature is infectious; he conducts seminars in such ?rustic? encounters that provide deeper psychological insights for his apprentices. In addition, he creates educational experiences for public school children, often deprived of art and nature. In his quiet way, he fosters a richness for others while supporting his family. ? Erik Mutén, a psychologist and stage director, spent seven years working with partners to develop methods of psychodrama that are rich in depth and insight, and yet tailored to mainstream corporate and trade audiences. He integrates insight, humor, entertainment, and creative problem-solving to help groups simulate solutions to their own systemic problems. These businesses are sustainable on a cash-flow basis; some of them are relatively profitable; but they fall under the radar of conventional investors or grantors because the ?upside? is limited. So why do they need investment? Because these entrepreneurs, and others like them, are the initiatives that seed a richer shared future. In each case, the entrepreneur has found a way to combine commerce, artistry, and a sensitivity to nature ? human or otherwise ? and forged a product line that is commercially viable, but not easily replicated. These products and services foster visual and psychological wealth, while operating as businesses. These businesses reflect the wealth of spirit contained in the founder, yet they cannot attract traditional private equity investors because the profitability is inadequate to appeal to a venal appetite. These gems are investments that heal both provider and receiver. These are investments whose impact could expand through patient leveraging; but whose integrity could be compromised by aggressive scaling. These are areas ripe for investment by a new kind of investor. In the astute management of capital, we could and should be mindful of which kinds of businesses are best suited to which kind of investment goals. While there are myriad funders for scaleable ventures and charitable causes, the ?pipeline? for investment in the very vitally needed areas ? with limited or uncertain upside and no easy means to scale, yet possessed of practical and needed qualities of inspiration, sensitivity and beauty ? is limited and virtually unknown. This is the area of opportunity for servant capitalism. Consider just one market/social sector, healthcare: the default managers of our healthcare system today are insurance providers, pharmaceutical representatives, and medical equipment producers. Which of these behemoths is interested in the soul of the patient, or their quality of life? Is profit an appropriate goal for all of these participants in the primary goal of healing? Medical care is so modern now that old-fashioned values of compassion and rest do not fit comfortably into the profit scheme. Meanwhile, Americans are seeking and paying more holistic healthcare providers than ever before in an attempt to feel whole. Who will invest in a desperately needed new experience of healthcare? Servant capitalism espouses the use of capital not only to grow profits, or to make gifts, but to generate business purpose around quality, authenticity and inherent beauty. A new kind of investor might ask, what business is really needed? What business model is appropriate to that undertaking? Now is the time for the philanthropic sector to consider an act of leadership in the very act of investment, paving the way toward new business models more appropriate to a shared future for all of us. Article Directory: http://www.articledashboard.com Kathryn Davison is a psychologist, writer, consultant and thought leader in the redefinition of success. Her clients seek more fulfilling, effective ways to transform global conditions while cultivating greater levels of personal meaning. Permalink: http://expert-talk.com/tips/858/servant-capitalism-a-pathway-to-enlightened-investment-7858.htm Related Tips and Advices | Related Tags            |
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