Category: leadership

Social Enterprise

jmmcclelland

As CEO of Goodwill in central Indiana, I frequently described our overall objective in general terms as “maximizing mission-related impact while maintaining a financial position that’s good for the organization’s long term viability.”

Taking this approach has required us to define “impact” as well as possible. This has always been a work-in-progress, with improvements in definition and performance over time. Placing substantial importance on mission-related as well as financial metrics is a key feature of a social enterprise. And while “social enterprise” is a relatively recent term, Goodwill has always been one.

From its inception, Goodwill has used a commercial means (selling used goods in a competitive marketplace) to accomplish a social mission. The scope of that mission, originally to provide work for people with limited options, has broadened and now often encompasses other ways of enabling individuals and families to increase their economic self-sufficiency. Still, since its founding, Goodwill has earned and continues to earn the vast majority of its revenue from the sale of products and services. This is unusual for a community-based not-for-profit, and I have always viewed the way and the extent to which the organization blends business and mission as one of Goodwill’s most unique characteristics.

Until recently, it was often difficult for for-profit corporations to include social goals as primary objectives – especially if there was a desire to emphasize the social goals much as the financial goals. Now, however, new corporate options such as the benefit corporation make it possible to do so. Benefit corporations must balance financial and non-financial objectives when making decisions – much as Goodwill always has. Companies that want to go a step further can apply to become Certified B Corps, thus adding more rigor to measuring their social and environmental performance, as well as to monitoring their adherence to high standards in several other areas as well.

Along with the rise in benefit corporations is the notion of “impact investing.” Impact investors make investments in companies that are designed not only to make a profit, but also to achieve a well-defined, measurable social good. Some, though not all, impact investors are willing to take less than a market rate of return in order to help accomplish what they view as important social goals.

These and other innovations are attractive to a lot of millennials who, while interested in having successful careers, are also interested in helping make the world a better place. I’ve met quite a number of them on college campuses where, increasingly, students can take courses – often taught in business schools – on social entrepreneurship. I’ve also served as a judge in a major social venture competition and seen some of the ideas of some very bright young social entrepreneurs. They give me hope!

Benefit corporations, Certified B Corps, impact investing – all of these are new tools for addressing social problems. None represents the solution anymore than does the not-for-profit sector as presently constituted. But in the U.S., the inability of the not-for-profit and public sectors to substantially reduce a lot of major social problems in recent decades makes the addition of some new tools particularly welcome. Perhaps we can all learn from each other and, who knows, even leverage our respective assets and capabilities and come up with some new approaches that will be more effective in improving lives and strengthening communities.

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How and why I went to work for Goodwill Industries

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In the last piece I wrote for this blog, I offered some reflections upon retiring from a 45-year career as a Goodwill Industries executive. In this piece, I will write about how that career began.

I joined Goodwill four years after I graduated from Georgia Tech with a degree in Industrial Engineering. However, if anyone had told me then that I would spend all but a few of the next 50 years working for Goodwill Industries, I would have considered them delusional. Yet, I cannot imagine a career that would have been a better fit for someone who’s wired the way I am.

Most successful careers are not planned. Peter Drucker put it this way: Most successful careers are a result of understanding what your values are, what you’re good at, what you’re not good at, what kinds of situations you work well in and what kinds of situations you don’t work so well in. Then you try to find a fit with all of that. That’s not necessarily easy to do and sometimes it comes only after a succession of not-so-good experiences.

But a good fit can also come from being open to possibilities you never really thought about before – perhaps as a result of a part-time job, a volunteer experience, or just by getting to know people with backgrounds and experiences different from yours. And then, when you do find a fit that seems promising, you continue to learn as much as you can through whatever means you can. The results can be tremendously rewarding in a number of ways. At least, that’s been the case with me for over four decades.

My career path started with a volunteer experience. Two years after I graduated from college, I was living in Washington D.C. while completing my military commitment. I was single, had a lot of free time, and attended a church that was heavily involved in community service. Every Saturday morning, they had a two-hour program for children with disabilities. Nearly all of the kids lived in low income households, and they relied on the church for transportation. I volunteered, and every Saturday morning I went to the homes of some of the children, picked them up, took them to the church, then took them back home again. They were great kids, and I got a lot of satisfaction from doing that.

The church also offered a tutoring program on Thursday evenings for teenagers who lived in low income neighborhoods. I volunteered and for more than a year I tutored two boys 13-14 years old, one-on-one. I had never done anything like that before, and I got so much satisfaction from the experience I started wondering if I could find a place where I could use my industrial engineering skills, get a similar kind of satisfaction, and get paid for it. I called several not-for-profit organizations that were headquartered in the Washington area, described my background, and asked them if they had any jobs for someone like me. Goodwill Industries was one of those organizations.

That initial conversation turned into a six-month process that included numerous meetings with national Goodwill staff and several Goodwill CEOs, interspersed with visits to two local Goodwills and a Goodwill convention. After much procrastination, I eventually decided to enter an executive training program offered by what is now Goodwill Industries International. It meant taking a 25% pay cut, accepting the lowest of three job offers I had at the time, and making a four-year commitment to work in a field that was totally foreign to me and that certainly carried no prestige with it – at least not in those days. I was 26 years old at the time.

The decision to go to work for Goodwill was the hardest decision I’ve ever made in my life and was, at its core, a faith-based decision. Simply put, I believed this was what I was supposed to do. Over the past forty-five years, that belief has been confirmed in ways I never would have imagined.

Some thoughts upon retiring from a long career

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The “farewell” tour I’ve made during the months leading up to my retirement has been one of the highlights of my entire career. Listening to the stories and hearing the comments of hundreds of employees and students, I’ve never felt better about the organization – our people, our culture, and what we are doing.

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There’s no doubt that the impact Goodwill is having is far greater than ever. The way we are linking services internally and with other organizations in a holistic, multi-generational approach is, I’m confident, going to have lasting impact and help begin to reduce some major social problems. And yet, there’s so much more that needs to be done.

My career has been a constant learning and growing process, but the learning really began accelerating in 2004 when we became directly involved in public education by opening the Indianapolis Metropolitan High School.

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Since then, Goodwill has evolved at a rapid rate that has further accelerated the learning throughout the organization. And while we don’t claim to have all the answers, based on our experiences as well as what we’ve learned from others during the past decade, I’m convinced that if we are ever going to substantially reduce a lot of the social problems that are plaguing U.S. society today, we must:

  • Continue working vigorously to raise education attainment levels, and we must ensure that at every step along the way we’re preparing students well for what comes next.
  • Greatly increase the number of affordable, accessible, high quality early childhood development opportunities for children in low income households. Because of the way the brain develops, the years 0-3 are even more important than ages 3-5. The earlier we start, the better.

In addition, to break a cycle of poverty, we need to take a long-term, holistic, multi-generational approach that leverages the resources and capabilities of multiple organizations within and across the sectors in focused ways designed to prevent problems, help kids develop, strengthen families, and make much more effective use of existing resources.

Goodwill in central Indiana is taking such an approach with a growing number of families and organizations, and that approach is attracting a growing amount of national attention. But while others can learn from our experiences, we must also continue to learn from others.

And while Goodwill’s board of directors and new CEO, Kent Kramer, will determine the organization’s direction going forward, there’s a strong base of knowledge and experience to build on and a lot of resources that can be deployed to further increase impact.

I don’t know what the organization we’ve built will look like ten years from now, but I know it will be different. Goodwill must continue trying new ways to grow its businesses and accomplish its mission; it must continue to learn; and it must continue to adapt as the world around it changes. Yet while I can’t predict what the organization will look like a decade from now, I do hope to be around watching from the sidelines, and I fully expect to be amazed!

Reflections from a “farewell tour”

jmmcclelland1 Comment

32-greenfieldWith my retirement date rapidly approaching, I have been spending a good bit of time on a “farewell tour” of our stores, schools, and commercial services sites to thank our people for helping make the organization what it is today and to wish them well. I’m now two-thirds of the way through that tour, and listening to the stories and comments from many of our employees and students has been incredibly uplifting.

Many people have told me how thankful they are to Goodwill for having given them a second chance they never thought they would have. Countless employees and students have told me that Goodwill has changed their lives. A few examples:

  • A young man who dropped out of school to help support his siblings after their father died told me that without a high school diploma or even any high school credits, he had no future. He enrolled in one of our Excel Centers and is now about to graduate. He said, “I now have a future.”
  • A young woman in one of The Excel Centers told me she has severe autism and this spring will become the first person in her family to graduate from high school.
  • A mother of five convinced her daughter to enroll in an Excel Center. Shortly thereafter, two of her sons enrolled, and then the mom, who had dropped out of school in the 9th grade, and another family member enrolled. Three of the five have already graduated, and the mom and youngest son will graduate in May. She told me that at The Excel Center, “Everyone strives to treat everyone with respect – no matter who you are. We are pushed to become the best we can possibly be and to continuously look for ways to grow.”
  • A Goodwill retail store employee who is an alcoholic told me he had lost everything and no one would hire him – no one, that is, except Goodwill. We’ve employed him for five years, and he does a great job. He said, “Goodwill gave me a chance for a new life.” And he’s made the most of the opportunity.
  • Another employee told me that when she was hired by Goodwill she had no place to live, no car, no money, and no future. She is now an assistant store manager and is nearing completion of requirements for a bachelor’s degree in business. She definitely has a future.
  • An employee who has been with us one year had been a medical professional before he developed a disability that rendered him “unable to do what I had done before.” One of our store managers gave him a chance, and he told me he loves working for Goodwill. “Everyone is so nice and treats everyone else with respect.”

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The dedication of management personnel to our mission and the way they embody our culture has been evident in a variety of ways everywhere I’ve gone:

  • A store manager, when asked by her supervisor what she needed for her store, replied, “I don’t need anything for the store. What I want is something for our employees – a financial literacy course on site. Our employees need it, and they want it.”
  • A regional director took a personal interest in a store employee after she suffered a devastating personal experience. He saw to it that she got the help and support she needed to put her life back together, and she has since been promoted.

Finally, many of the staff in The Excel Centers, stores, and distribution centers have told me Goodwill is the best place they’ve ever worked.

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Organizational culture can be fragile. From my observations, ours is deep and ingrained at every level. It exemplifies what Goodwill is all about as we strive to provide opportunities, maximize positive impact in the lives of people and the communities where we operate, and still maintain a financial position that enhances our long term viability. That’s not easy to do, but our people seem to always find a way.

Our Corporate Social Responsibility as an Employer

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The organization I lead now has over 3,200 employees, two-thirds of whom have limited options because of a disability, criminal history, low education level, or other significant barrier. And while there are a lot of part time employees among those 3,200, nearly half of them are the primary source of income in their households. That places an enormous responsibility on those of us in leadership positions to run the organization really well so we can continue to provide a livelihood for all those people who are counting on us. And we don’t take that responsibility lightly.

What we do matters. If we’re not paying attention to what’s going on around us and we allow ourselves to be blindsided, it matters. If we become myopic, complacent, or arrogant; if we fail to take care of our customers; if we fail to recognize what our competition is doing or fail to see new competitors or new forms of competition that are emerging, it matters. If we don’t successfully adapt to changes in our environment – changes in technology, demographics, the legal or regulatory landscape, or the larger economy, it matters. Even worse, if we cut corners, act unethically or illegally, take actions that might benefit us in the short run, but that will eventually result in long term damage, it matters tremendously. How we go about our work matters just as much as the work itself. And all of these things matter to a lot of people who are likely to lose their jobs if those of us running the organization aren’t doing our jobs as well as we possibly can. And if we let that happen, we should and probably will lose our jobs, too.

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On the other hand, if we are paying attention to what’s going on around us; if we’re recognizing opportunities, trying new ways to grow our businesses and accomplish our mission; if we are operating according to high ethical standards; if we’re continuing to learn and adapt; if we’re being good stewards of our resources; and if we’re treating everyone with respect and providing the kind of workplace and culture that enables our people to grow, we’re likely to see our organization grow, evolve, and employ more people. Fortunately, that’s been our recent experience, as we’ve added over 1,000 jobs in central Indiana and increased our revenue by 55% in the last five years.

Of course, our experiences haven’t always been that positive, and no employer can guarantee that any job will last forever. Changes in our external environment are occurring at an incredible rate and require near constant adaptation. Along the way, some jobs disappear while others are created. Some people learn and adapt to changing circumstances and requirements, others don’t.

Our approach is to do the best job we can to grow the organization in a financially responsible manner while simultaneously increasing our mission-related impact. In addition, while recognizing that each of us is primarily responsible for continuing to learn all our lives, as an employer, we are often in a position to help our people learn and grow, improve their education, and earn credentials that enhance their future employment prospects. Then, if circumstances beyond the control of an individual result in the loss of a job, at least the person affected is likely to be better prepared for his/her next step than might have been the case otherwise.

In my opinion, when a company is operating in a manner that enhances the prospects it will be able to continue providing a livelihood for its employees, and when that company is doing all it can to help its employees learn and grow, it is exercising what might be considered its most important corporate social responsibility.