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History Table of Contents
1992 Summer Conference
 
Summer Conference 1992
Competitiveness and Social Justice: How Can Canada Have Both?

Panel: Competitiveness Through Compassion

MARGOT FRANSSEN, President & Owner, The Body Shop
JULIE WHITE, National Manager for Public Affairs, Levi Strauss & Co.

The session was moderated by Bobbi Speck, founding officer, the Annex Village Campus, with panelists Margot Franssen, President and Owner, The Body Shop, and Julie White, National Manager for Public Affairs, Levi Strauss & Co.

Prefacing a video presentation, Margot Franssen began by declaring that you could share your prosperity with your employees, that you could empower them, that you could rewrite the book in the way a company interacted with the community, in terms of third-world trade and global responsibility and the role of educating the customer, the shareholder and the employees – and still play the game according to the City! You could placate the bank and still have shareholders who got a wonderful return on their investment.

"Our experiment was founded on principles," she claimed," and if we ever became like those giant corporations our experiment would fail."

The video followed, with trendy music and heart-warming images. It was a training video for staff, who were trained for values not for sales. At the beginning appeared the founder of The Body Shop, Anita Roddick.

Now, hem!, some people on hearing the name The Body Shop thought, "clever, manipulating and fake." Others thought, "green, natural and naive."

The Body Shop saw itself as sincere, social and sometimes psychotic, as many times mistaken and hardly ever at peace with itself. It believed that there was more to business than watching the bottom line. Business was an adjunct to life and could not be kept within a nine-to-five framework. They were driven at The Body Shop not by the pursuit of profit or to make more money, but by their values. They wanted to have a reputation for doing the right thing even when nobody was looking.

Having a business that was a machine that ground down people to grind out profits was not the way The Body Shop saw themselves becoming stronger and better as a company. Conventional economics, rather than being a help to the community, seemed to be in conflict with social and ecological needs, with fairness and justice, with religious and spiritual values, and with plain common sense.

(And Franssen, hoping that she was challenging the Dismal Science itself, added, "Take that, Kenneth Galbraith!" But the economist had left Couchiching the morning after his address.)

"We believe, quite simply, that business should do more than make money. Companies should actually help save major social problem s," she said. Business was for her just another form of human enterprise. So why should employees expect less from her than they did from themselves or from neighbours?

Obviously, hers was not a company managed by its accountants. She did not see business as part sport or part war, or that it could be played like a game without serious consequences, nor was it a bloody war to be won at all costs. The company did not exist in a vacuum; it was not apart from society, on Bay Street. It had to take account of more than shareholders and managers, of employees and suppliers and customers, in fact, of society itself. Being a caring and sensitive, financially healthy company was also part of the plan.

Their forward thrust happened to be their corporate culture. It evolved over time. You worked at ethics, you realized your dream and it was not always easy. The Body Shop was housed in an industry that for the most part exploited women, tortured animals, polluted the environment and promoted itself entirely upon exaggerated claims. It was all the more dramatic when the enterprise proved that you could operate a cosmetic business – which normally had the moral fibre of a Cheerio – as a socially responsible company with spectacular earnings.

The Body Shop believed in profits with principles. Raw materials were not taken from endangered species or spaces. The company traded with developing countries wherever it could. If you bought your raw ingredients in countries that needed the money the most you found you had the power to change people’s lives for the better. We found some children in southern India who could make wooden foot massagers. So we set up a workshop. We managed to pull three whole villages out of poverty. In Nepal we had fabulous paper made out of banana-fibres and water-hyacinths that were choking the waterways. This paper was used in The Body Shop as gift bags and gift paper. The village got 25 per cent of the profits. On the advice of two staff anthropologists, the Caypo Indians in Brazil were harvesting Brazil nuts from the forest from which oil was pressed to make hair conditioner.

In a desolate area of Scotland The Body Shop set up a soap factory where last year 60 million bars of soap were made.

The Body Shop ran a charitable foundation to help students or women in need of money. Staff were sent to Romania to help renovate orphanages. Six of them were there at the moment. They earned their own money to go, but the company paid their wages. Those returning were totally changed human beings. Every franchise owner was paid to send staff to work in the community every month.

Many corporations agonized over ways of motivating workers. What motivated staff was extremely simple. They wanted work that would make a difference. They wanted to know they could leave their mark on the world. Poets and artists worked not for the money but out of their need to leave their mark and enhance our condition here on earth. Those who did not have the talent still had the need. It was up to employers to offer their workers a chance to have a meaningful job, not only to support themselves and their families but to support their soul and spirit.

At The Body Shop workers were completely aware of the principle of synergy. They were not just selling a moisture cream, not just packing and sending out boxes. They were enhancing someone else’s life.

Most economists disregarded altruism, believing that everyone was moved by self-interest. But people had strong opinions about ethical, social and environmental matters. Loyalty and love played a key role in holding companies together The enterprise was creating a global community, and employees understood and deeply empathized with it. Campaigns, store windows, fund-raising, community work, all created a banner of values. "We educate our employees by their passions," Franssen insisted. People bonded to your company when you did that. Business on this level was exciting, rewarding and extremely human. You could be successful and still have your soul.

By contrast the normal ways of doing business were boring and inhuman.

We should always remember these words:
If it is to be
It’s up to me.

With this uplifting thought, the purveyor of celestial unguents made way for the provider of heavenly trousers, Julie White of Levi Strauss.

In 1982 Levi Strauss had rung the corporate bell about AIDS. Many thought it was business suicide to ally oneself with such a controversial disease.

Thinking about competitiveness and compassion, it was natural for White to think about her own company, the largest and most profitable apparel manufacturer in the world. What had made this company take on so difficult and provocative an issue as AIDS, to educate employees about it and not to discriminate against victims? To provide medical and support services and public education, to support appropriate public policy?

Levi Strauss faced the same competitive struggle as other global corporations, the same climate of change. The old corporate forms, dependent on hierarchy and defensive practices, no longer worked. Not now. Today, as Margot had illustrated so successfully, success depended on understanding the interdependent nature of our economic and social systems. Albert Einstein argued that our compassion should be widened to include every living thing. We were used to thinking of compassion as an emotional state, based on our concern for one another. In the corporate setting this often meant doing good through corporate contributions – a marginal part of the business at best. But as Einstein said, compassion was also grounded in a level of awareness. As people saw more of the systems within which they operated, as we understood more clearly the pressures influencing one another, we naturally developed more compassion and empathy. Perhaps this was where the juncture of compassion and productivity occurred.

Organizations that fostered a compassionate climate enabled a sense of connectedness. That sense was critical to the development of vision, and vision was the key to organizational as well as national success. Peter Sanguay, the renowned systems thinker, would call this a reinforcing cycle. Compassion fostered a sense of connectedness, which encouraged vision, which inspired collaboration, which supported compassion, and on and on. Tom Peters, in Thriving on Chaos called this dynamic "the core paradox," the need to foster internal stability in order to encourage the pursuit of constant change. Was it possible to have internal stability without a common vision? Could there be a common vision without trust? Or trust without ethics? Or ethics without compassion?

Without this sense of connectedness how could we foster a climate that encouraged reflection and inquiry? How did we develop the ability to embrace new ideas, to operate with honesty, to work in an integrated fashion? And what did any of this have to do with AIDS?

What was the impact on Levi Strauss of putting its stake in the ground about AIDS, over a decade ago?

White now showed a two-minute clip from a training film about AIDS. It carried essential facts along with sensible advice on how to deal with AIDS and those who suffered from it.

Levi Strauss believed that commitment to their employees and society had increased the sense of connectedness of their employees, and had modelled an approach to complexity and collaboration. If a person or an organization could be measured by what they held sacred, what Levi Strauss held sacred was life. That was a strong benchmark for ethical behaviour. That was what trust was about. And courage, which the company had greatly needed, after discontinuing funding to the Boy Scouts of America because their policy discriminated on the basis of sexual orientation. This decision was also, White believed, a study in long-term thinking, to protect the ultimate integrity of the organization, instead of the easier route of short-term risk avoidance.

On a pragmatic level, though, despite studies showing that one in four Americans did not want to work next to an AIDS victim, Levi Strauss had had no employees walk off the job, had avoided the cost of union grievances and discrimination law-suits, enabled employees to maintain their health and prolonged their productivity. The firm also had received widespread acclaim through the media.

But AIDS was only one of the many initiatives White could use to illustrate the relation between compassion and productivity, between social justice and competitiveness, initiatives towards systemic change in the status of women, in such areas as child-care, training and access to credit. Or work in the area of valuing diversity, or developing the local economies of communities. But since education and training had been such an important topic this weekend, White would say something about Levi Strauss’ English-in-the-workplace program.

In the mid-1980’s, with increasing numbers of refugee and immigrant workers, the company started English classes in the plant. Was this compassion? Well, yes – everyone agreed that it was unconscionable for a woman to sit at a machine all day and not be able to communicate with the person sitting next to her. But was it good business? Absolutely. Even aside from such important considerations as safety, the inability of employees to communicate freely was the biggest barrier to teamwork, a key competitive strategy going into the ‘90s

Hundreds of employees had gone through the 40-week program. Levi Strauss had been the first company in the apparel industry to make a successful transition from piece-work to self-managed teamwork. In the past few years turnover had dropped from over 50 per cent to four per cent, absenteeism from eight to three per cent.

The English classes were an integral part of a productivity strategy and came directly from the plant manager’s budget. The company’s Canadian plants were now so productive that they were offshore producers for the American market. As Georgina had said, quality, flexibility and turn-around time are as important considerations in the manufacturing mix as baseline salaries. Canadian companies could be competitive, but it took a commitment. A commitment to investment in capital, in technology, in training and, as Margot said so beautifully, in the soul and spirit of our employees.

White showed another clip; an item from Global television about the company’s English classes. The commentator noted that the program was just part of the company’s philosophy on social responsibility.

The speaker concluded with a brief peroration asserting the need to avoid bureaucracy and all kinds of discrimination in the workplace. Synergy, partnership and innovation were the ways to a sustainable, competitive economy, and to public well-being.

Bobbi Speck noted the emergence of something that could be called corporate conscience. Questions from the floor followed a coffee break.

Georgina Wyman wanted to know if the panelists had much trouble in working with "traditional males". Franssen said her company was predominantly female and liked to refer to their males as honorary women! (There was hilarity over this policy of neutering.) But most men loved working for The Body Shop principles.

White said Levi was more traditional, but was in transition. But the company put resources into following its values.

Alan Pearson thought he’d been as impressed as anyone else in the room with the warm fuzzies the panelists had been giving us. He was interested in how the companies handled conflict resolution? For example, what would be done when employees disagreed with what management wanted? Or again, when an autonomous work-group did something management did not like?

Julie White answered with an anecdote. There had been a time when she had reported to a president with whom she did not get along. The solution had been to bring in a third party as mediator – in effect, marriage counselling.

Franssen said there were rookies running parts of her company, and sometimes they did things she did not agree with. But mostly it was best to let them do it their way. As for conflict, you tried to head it off before it appeared. There was an advisory board for franchisees. Once she had had to fire a very senior person with whom the staff could not work. Initially this had been against her judgment, but later she found the employees had been right. Later on she said, in answer to another question, "We just fired somebody in our company who made $200,000 a year. And what we did to compensate the people who were abused by that person was to divide the salary amongst them."

Janet from McGill College noted that cosmetic and clothing companies ran advertisements that were sexually exploitative. Did less exploitative advertising make a company less competitive? And how did Julie feel about certain Levi ads with subliminal messages, for example when you saw a woman with a naked back?

White commented that it was widely believed you could build secret messages into ads. This said more about the persons who believed it than about advertisers. Where sex sold jeans, it was because, obviously, people used jeans to enhance sexuality. Where did you draw the line between recognizing that sex was part of life and using it to exploit women? Levi was pretty careful about walking that line. Discussion and debate went on all the time.

Franssen said The Body Shop did not advertise the product, only the message. The company used no cosmetic jargon, such as "beauty", or "anti-aging", or "nourishing". Later she said she was not selling cosmetics, just earning money to do good things with it. She believed she could be selling tires, and that she could make the principles work in most companies.

Sponsorship had limited use, but was not the way to go. An honest question about how workers responded to the company videos we had seen – which appeared to be propaganda – was dismissed with an ad hominem response. "God, you’re so cynical!" Franssen said. "It’s amazing! It’s hard to be cynical and successful at the same time." She said that workers were given time to discuss the videos, and yes, a few people thought them manipulative.

White referred to the Levi Strauss AIDS video. She said there would always be people who were cynical. But the video was used to teach workers what they needed to know. Senior executives had staffed the information booth when it was shown. It was important to model the behaviour you believed in, not just to show videos and leave it at that.