Join us as we talk with Bryan Welch from Mindful Communications. We talked about what a Benefit Corporation is and why you might want to form one for your company. Brian helped us understand the new reality for what our Millennial and Gen Z customers and employees expect from the companies they work with as well as the companies they work for.
Today's workforce has different needs and wants. If you don't want to be left behind you need to understand the rules for a sustainable business have changed.
Bryan Welch is the Chief Executive Officer of Mindful Communications. He is a veteran executive, writer and entrepreneur with unique expertise in businesses that improve the world. He’s the former chief executive of Ogden Publications (Mother Earth News, Utne Reader), B The Change Media (B Magazine), and Foster Care Technologies.
Bryan’s award-winning book, Beautiful & Abundant: Building the World We Want, appeared in 2011.
Narrator: Welcome to Cracking the Cash Flow Code where you'll learn what it takes to create enough cash to fill the four buckets of profit. You'll learn what it takes to have enough cash for a great lifestyle, have enough cash for when emergency strikes, fully fund a growth program, and fund your retirement program. When you do this, you will have a sale‑ready company that will allow you to keep or sell your business. This allows you to do what you want with your business, when you want, in the way you want.
In Cracking the Cash Flow Code, we focus on the four areas of business that let you take your successful business and make it economically and personally sustainable. Your host, Josh Patrick, is going to help us through finding great thought leaders as well as providing insights he's learned through his 40 years of owning, running, planning, and thinking about what it takes to make a successful business sustainable and allow you to be free of cash flow worries.
Josh Patrick: Hey, how are you today? This is Josh Patrick. You're at Cracking the Cash Flow Code.
And, today, my guest today is Bryan Welch. Bryan is the CEO of mindful.org. He's also been the CEO of tons of other companies. And we'll find out a little bit more about that as we talk about this. And he's very active in the benefit corporation world and the B Lab Certification Program which tells you that you're actually doing the right stuff if you want to become a benefit corporation but it's confusing, so we're going to talk to Bryan a bit about that.
So, instead of me yammering on, let's bring Bryan on.
Hey, Bryan. How are you today?
Bryan Welch: Very well, Josh. Thank you. Nice to be here.
Josh: It's nice having you here.
So, this is my question. A benefit corporation, you just have to say I'm doing good social stuff and you can register your company as a benefit corporation, is that correct?
Bryan: Well, really, you just need to put a note in your formation papers - your legal formation papers saying that you have a social purpose. Then, you can form your company as a benefit corporation. And that can have any tax formation. It doesn't affect the tax status. It's really just a statement that moderates the importance of fiduciary responsibility.
So, the easiest way to explain what being a benefit of a corporation does is it means that, if you're the CEO and two or three different companies make bids to buy your company, you can theoretically take something other than the highest bid because social purpose is part of your formation intention. And so, you could choose a company more likely to carry on that social purpose.
Josh: I know in the ESOP world, many ESOPs have actually gone past becoming benefit corporations that are registered through B Labs. Can you explain the difference between B Labs and benefit corporations and we might circle back on why an ESOP has to be a benefit corporation if they want to exist as an ESOP for a long time?
Bryan: Yeah. Well, the answer to the first question is a B Corporation is certified by an independent nonprofit called B Lab for its actual practices. Is it being run in a socially and environmentally beneficial way? That's the test. And it's a pretty rigorous certification process. You're subjected to evaluations on several different fronts. It's quite a process. And I've certified three B corporations over the years so I can testify to the rigorousness and the amount of work it takes to get through that process. To be a benefit corporation only requires the paragraph in the formation papers that we were talking about earlier. So, a benefit corporation is in essence saying we have the intention of doing good. And being a B Corporation is a status that's certified by B Lab to say you are actually managing the business in such a way that it does good in the world.
Well, I was going to go on to the question about ESOPs.
Bryan: About employee stock ownership programs and companies that are employee‑owned. The assumption, I think, in your question is that the employees may have priorities other than shareholder value than pure shareholder financial value that govern the business. So, in order to maintain employee control, some signal needs to be sent to other investors that they have this social purpose. And the benefit corporation designation sends that message and gives the employees and the employee‑managers more latitude when it comes to the fiduciary management of the business.
Josh: You know, they became well aware of King Arthur Flour and their process going through the benefit corporation certification. And Steve Voigt, who was the CEO at the time, and I were having a conversation. And I said, “Okay. Steve, why are you doing this?” He said, “Well, it’s pretty simple. We're starting to get some unsolicited offers. And for us to say no to them, if we're a regular corporation, we really can't say no. But if we become a benefit corporation, we can. And we intend to do so because we have no interest in having an outsider, especially a private equity group, come in and buy us.”
So, I have been finding that Vermont's a big benefit corporation state which you're probably aware of. There's a bunch of ‘em up here.
Bryan: Yes. Oh, yes.
Josh: And every single one of ‘em who's gone through the B Lab certification has had a good business purpose for doing so. Does that make sense to you?
Bryan: Well, yes. I mean, it begs the question, of course, Josh, is it a good business purpose to have a priority other than shareholder financial value? I think, very much so. I think all businesses should be engaged in a social purpose. That's my peculiar perspective.
But, you know, when you talk about King Arthur Flour, their business purpose was to retain the control of the employee‑owners.
Bryan: Whether that's the highest business purpose is a subject for debate between those who believe that businesses should serve a social purpose and those who believe that businesses should be run strictly for the profit motive.
Josh: Well, the truth is, I've yet to find a business that's run strictly for the profit motive. I've seen a lot of executives of publicly‑traded corporations use that a really bad excuse for how they behave.
Josh: But I can give you tons of examples of public corporations or, you know-- well, I'll use public corporations, who have made moves that are definitely not in the interest of the shareholders but the interests of the employees or, more specifically, senior managers of the company.
Bryan: Oh, yeah. Sure.
Josh: So, anybody who tells me a business runs on strictly for profit. I'm sorry, but that's pure BS, you know?
Bryan: I agree with you strongly. And, you know, it's just there's not unanimous belief among business leadership around the world that social purpose is an augmentation to traditional business values. That's what I believed about it. Many of us do. I think more and more of us do, but it's not unanimous.
Josh: Yeah, I think it's pretty much unanimous in the private business world, if I actually sit down and talk to them. If I ask a business owner, out of the blue, “Are you socially responsible and socially conscious?” They'll often say, “Well, maybe. I don't know. It's not something I really think about a lot.” But then, I’d start going through the things that their business does, especially privately held businesses with, say, less than 200 employees. You know, these guys are active in their community. They care about their reputation in the community. They do stuff to foster the community. They do things for their employees that they don't have to do economically. They do it because they think it's the right thing to do.
Josh: And if you actually go through that and after the odd conversation, there's a pretty good chance they would say, “Yeah, I'm socially responsible.” But if their politics says social responsibility is a bad thing, they likely won't admit it even though they're doing it.
Bryan: Oh, that's a very good point. I think that's exactly right.
And I have the same experience you do. You know, virtually, every business owner that I've ever met, who really knew their employees and who managed their business in the community where they lived, had a very strong social conscience. They understood the impact that their businesses had on the communities where they were located, and on the employees, and they cared about it. And I agree with you, it’s virtually every one of ‘em. But how we articulate that is subject to the whims of public taste, I suppose.
Josh: Yeah. So, let's talk about some of the benefits of really publicly coming out and saying, “We're a socially responsible business.” You know, in Vermont, we have an organization called Vermont Business for Social Responsibility which I think is the largest trade association in the state. And, you know, when you come out and you say that you're for social responsibility, it changes the nature of your business when you do it explicitly and not implicitly. So, what might some of those changes be?
Bryan: I think, from my perspective, one of the most wonderful and immediate benefits is that your colleagues all start coming to work with that sense of conscientiousness. And so, you know, I've observed that you create a culture of conscientiousness, businesses just run better. They're more efficient. People show up when they're supposed to, and they stay, and they're dedicated, and they don't steal, you know. So the public statement of the intention, I think, has tremendous value in developing the kind of culture that you want to have.
And, you know, the business is the most powerful organizer of human energy that we've ever discovered. It's far more powerful than religion. Far more powerful than government. If you look at the number of people and the amount of energy they're putting into activities of all kinds, business dwarfs everything else. And so, when businesses are developed to improve the human condition, they have the potential to having far greater impact than anything else we've ever done to improve the human condition. I think that's the most substantial benefit of running businesses this way and stating it in public which, of course, opens up the opportunity for other people to conduct business in that way.
Josh: Yeah, I think-- I mean, what I have found is that if your customer base is primarily Gen Z and millennials and/or your employees are primarily Gen Zs or millennials, having a social purpose for your business isn't important. It's crucial. Otherwise, you'll never attract them as either employees or customers.
Bryan: Yeah. I suppose that's true. I'm afraid there's a lot of false marketing out there about that though. And I--
Josh: Can you expand on that a little bit?
Bryan: Well, one of the goals of B Lab and of the B Corporation Certification is to set a real objective standard for what it means to be socially responsible because there are companies all over the corporate spectrum that are making claims of social responsibility. Huge petroleum companies, huge oil companies have. Every one of them has multimillion‑dollar marketing campaign built around its environmental and social responsibility. So, as a result, if you're a small businessperson like me and you're out there competing in the in the general marketplace for people's attention, you derive some benefit from talking about your social responsibility, but you run the risk that your message is drowned out.
Josh: Well, that comes with walking your talk.
Bryan: And then, hopefully, one gains, yeah, credibility by walking the talk. Exactly.
Josh: I mean, the thing that I-- and I'm referring to having a B Lab certification and not just be a benefit corporation, by the way.
Bryan: Right, yeah.
Josh: I think that becoming-- I mean, I, frankly, am finding it disgusting that you can just say you're socially responsible and you become a benefit corporation. And all we've done is we've confused the world about who really does believe in social responsibility and takes the actions to back it up and those who just say they do.
Bryan: Yeah. It's interesting, you know, going back in history when the idea of better corporations and big corporations was first being hatched, being developed - incubated, if you will, the idea was that the benefit corporation designation was just a legal necessity. We needed to do something about the laws around fiduciary responsibility. A lot of people don't realize right now that a chief executive can be sued if they sell that company for anything less than the highest offer, in your example.
Bryan: If you're a benefit corporation, you have much better support for making a decision that has social purpose in it, even if that decision is to take the second highest offer.
When benefit corporations were first conceived, the idea was this is a legal necessity for B corporations. What I think was unexpected is that, very soon, there were many orders of magnitude, more benefit corporations than there were B corporations, more or less, for this purpose in order to give management more power and to project an image of social and environmental responsibility to the world. And so, I think this is kind of an unexpected outcome of that.
The benefit corporation, the laws, were only ever conceived of to ease the burden of fiduciary responsibility on management. And I think the popularity of using it as a marketing ploy has been a surprise to people who invented it.
Josh: Makes sense to me.
So, I would like to pivot for a few minutes, if we can, because we only have about seven or eight minutes left.
And you're the CEO of mindfulness.org. Can you talk a little bit about that group and what it does? And why would a blue‑collar business owner be interested in that at all?
Bryan: What's mindful.org? About half of our revenue stream is from corporate training - small and large companies, you know, ranging from a few thousand dollars a year to over a million dollars a year in our biggest client. And what we do is bring the skills that our Mindful Magazine and the mindful.org media website promote which are skills of meditation, thoughtfulness, empathy. We bring those skills to our corporate training program specifically to prevent burnout, to improve working relationships, to give our colleagues - in our client companies, skills that, you know, have self‑actuated mental health, but it's grounded in, you know, 2000‑year‑old meditation practices that help people build the resiliency and the empathy that the contemporary workplace demands.
And when it comes to, you know, “What is mindfulness?” Basically, we teach people to sit still with their own thoughts, to learn where their thoughts come from, to get to know themselves, and to get to a place where they can exercise love and compassion toward themselves and other people.
Josh: So, how does that help a business?
Bryan: Well, I think I can safely say that nearly anyone listening to this podcast, who runs a business, is having their productivity undermined by divisiveness within the workplace, by tension within the workplace. And one of the things our training does is it alleviates that tension. Plus, excellent research showing that turnover rates are decreased by over 30% in the first six months that our training is active in a company. And so, if turnover is a concern for you.
And then, you know, early in the conversation, Josh, you referred to, you know, direct, immediate benefits of conscientiousness. There's something very special about providing your employees with training that improves their peace of mind, their sense of well‑being immediately. And our training does that. And so, I think it's a very powerful statement about the employers concern for the employee and creates-- you know, it helps foster a new, more collaborative, mutually supportive culture within a company.
Josh: Now, I can imagine that when you folks walked in, the first time, to introduce mindfulness to especially a blue‑collar workforce, you might be met with a little bit of skepticism?
Bryan: You know what? There's always some skepticism unless the person in a leadership position has experienced-- has a meditation practice. You know, usually, when people engage us, people and leadership already understand the benefits of the practices we teach. And they are interviewing us to make sure that the way we teach this practice is grounded in science and that we have the highest standards for the quality of our training which I think we do.
So, there's certainly skepticism in the world about meditation and mindfulness but there are very few people who've ever engaged in it in a moderately serious way for a month or two, who haven't realized its benefits. Most of the time, those are the prospective clients that we're speaking to.
Josh: I mean, it would make a lot of sense that nobody's going to be bringing you in unless you believe in what you're doing in the first place. But I've also seen, even in my blue‑collar businesses I've had over the years, that what I believe and what my frontline employees believe about the world is often two different things.
Bryan: Oh, sure.
Josh: And for me to bring, you know, somebody like you in and say, “Okay. We're all going to start doing mindful meditation.”
Bryan: Right. The really important aspect of what we do, of course, is that we have personal coaches for our training clients. And so, they actually meet somebody. And they have a series of short conversations with a trainer, with a coach, and almost 100%--
Josh: Is that done on a one‑on‑one basis or is it done on a group basis?
Josh: Oh, interesting. Okay. That would take a lot of it away, I would think.
Bryan: Well, the trainer-- you know, our coaches know how to gently introduce people to the practice and meet them at their point of need. You know, every human being could benefit from a little reflection. All of us. No matter, you know, whether we've meditated or not meditated, every human being. And so, our coaches are a group of terrific people who are able to meet our clients where they are and offer them tools that address their own personal needs.
And the approval ratings from the clients, whether they're frontline blue‑collar workers or executive suite moguls, the approval ratings are very, very high. And in fact, you know, in this superheated environment, a lot of those production jobs, on the frontline, are very stressful. And those people feel like they're under tremendous pressure every day. And we can help them address that on an individual level. Usually, we receive with gratitude
Josh: Makes sense to me. You might want to approach our friends at Amazon because they have a problem with turnover.
Bryan: Indeed. Indeed, they do. And we would love to work with Amazon, given the opportunity.
Josh: You know, there's lots of backdoors into Amazon which is really an interesting thing. You know, if I was in your shoes, I might say, “Gee, maybe I can get into Zappo’s or maybe I can get into Whole Foods.” Because I've noticed that Amazon’s actually adopted Zappo’s “$5,000 to go away” offer to people.
Bryan: Yeah, I know. Boy, there's a quirky one, right? I don't know what to think about it.
Josh: But, at any rate, at first, when I saw Amazon gobbling up these, you know, relatively large, relatively socially conscious businesses, I thought, “Well, their time in the sun song has gone away.” And it's actually been the opposite. They've brought some of their stuff into Amazon more than Amazon's brought their stuff into them which I find really fascinating. As much as Bezos gets bad press, he should be lauded for letting that happen.
Bryan: Absolutely. I mean, when a company grows that big, that fast, it deserves all the criticism it gets. And it probably deserves a fair bit of praise for the things it got right. You know, I'm sure we've seen many examples of businesses that grows that big that fast is going to have impacts, both positive and negative, on a large scale.
Josh: Especially in Silicon Valley because the culture out there is toxic to start off with, so it's a challenge.
Bryan: Well, I would say, it is part of it. But another part of it is just the culture of venture capital.
Josh: Yeah, that’s--
Bryan: You know, when venture capitalists invest and they expect eight out of 10 of the companies or nine out of 10 of the companies they invest in to fail. And then, it's all made up by the 10th company. That's a model that has worked very well for the venture capital sector. But let's not forget that that leaves eight or nine of those entrepreneurs going through hell because the single‑pointed focus that their investors gave them ended up not being fruitful. And I think that's not a great system for entrepreneurs.
Josh: We could spend a whole episode on that. And unfortunately, we are out of time.
So, Bryan, I am sure that some of the people listening and not watching on YouTube or Facebook would love to find where you are. I'm going to highly recommend that our folks reach out to you who are listening because I've been doing meditation for years, and years, and years, and I can tell you it’s made a big difference in my life and it will make a big difference in your life. So, Bryan, how they find you?
Bryan: Bryan@mindful.org, B-R-Y-A-N@mindful.org. You can email me anytime.
And I have two things I would like you to do. First, I'd like you to go to wherever you're listening this podcast and give us an honest rating and review. That means honest. If you love us, say you love us. If you hate us, I hope you don't say that. But, if you do, you can say that too. And it's really important to leave a review because it helps people find this podcast. And folks who find it told me they kind of like it. And I like doing it. So, I would like to have more listeners. So, at any rate, please rate and review us.
The second thing is my second book is now out. It's a continuation of my first book where the Aardvark family is running into all sorts of problems and fun things along the way. This time, our friend, John Aardvark, is trying to figure out how he's going to transition out of his business, both economically and personally. And there's a bunch of challenges and a bunch of surprises in the book. I bet you’ll like it. It's another business fable which means it's a novel with a point.
And I would love to have you get it. It’s really easy to get. You just go to www.salereadycompany.com. That's www.saleready.com. You can buy the book for $7.95 which covers shipping and handling. The list price is $14.95. And we've got a whole bunch of bonuses that you can get that are free for you.
So, I hope you buy it. I hope you read it. I hope you review it. And I hope you send me an email telling me what you think.
So, this is Josh Patrick. We're with Bryan Welch. You're at Cracking the Cash Flow Code. Thanks a lot for stopping by. I hope to see you back here really soon.
Narrator: You've been listening to Cracking the Cash Flow Code where we ask the question, “What would it take for your business to still be around a hundred years from now?”
If you've liked what you've heard and want more information, please contact Josh Patrick at 802-846-1264 extension 102, or visit us on our website at www.sustainablebusiness.co, or you can send Josh an email at email@example.com.
Thanks for listening and we hope to see you at Cracking the Cash Flow Code in the near future.