Blendedblog

Connecting in Community

Wed, 05 Jul 2006 11:47:20 +0000

We need to continue building our community of actors...
both professionally and personally...
if we are to really change the world.

But doing so remains a challenge...

What do YOU see?

Thu, 17 Nov 2005 17:05:12 +0000

I'm now going to post my shortest entry ever...

because i'm curious to hear what you all see as the "best new thing" you have heard about in the last two months...

I'm working on a new paper with Josh Spitzer on blended value investing and we are gathering examples of a number of funds and investment instruments that are being developed/rolled out around the world...these capital tools offer some level of financial return and performance together with strategic social impact and/or environmental value. The paper will be presented at Davos 2006 (I'll post it after the session), but working on it got me thinking about how many incredible things are currently taking place around the world not only in the capital arena, but in terms of

new types of organizations that are being created (for-profits with strong social mission, nonprofits seeking to leverage economic value),

new leaders who are drawing upon business acumen in order to create/lead new corporations to maximize their full, blended value potential,

new frameworks for tracking performance of both capital and organizations,

and the implications of all this activity in terms of public policy, the role of government, tax and regulatory structures and so forth...

The "trick" is that ALL the above are in transition, being modified and re-tooled in order to ensure they create and maximize the total value people seek to advance through their work and lives...

Over coming weeks, I will begin reporting in on current conversations I'm having and things I'm seeing in my various travels that hold what I think to be real promise in terms of this work and all our efforts, but I also wanted to tee this question up to those of you who are coming to and beginning to use this site:

What do YOU see as the most promising ideas, efforts or initiatives?

I don't care if they are your own or ones you've simply heard about, but what are some of the cooler things you've encountered in your journey?

Look forward to hearing from you!

Jed

It is a BLEND... NOT a blur!

Sat, 05 Nov 2005 05:20:00 +0000

It is 3AM and snowing outside and I'm supposed to go meet a friend to go elk hunting... In a future blog, we can explore why I eat meat and feel responsible for securing same as opposed to forcing some poor cow to get injections of various drugs, stand in some stinking feedlot to get beefed up (so to speak...) and then listen to the screams of its comrades as it marches to its death... but that is not a topic we will cover today, because something else is eating at me and I just need to say one thing: If i hear one more person talk about the blurring of the boundaries between nonprofit and for-profit, I fear i will toss my lunch... Over the past years, there has been a great deal of debate regarding whether nonprofit organizations should engage in revenue generation and corporations be held responsible for social performance. And there are those other discussions about whether a grant can be thought of as an investment and if the nonprofit sector has a capital market or just a charitable mess... The latest (and what set me off...) is that I just got an email from someone telling me another leading business magazine is doing a piece on this topic, which is probably (depending on how they handle it...) not a such a totally horrible thing... And, yes, I must confess that some of the folks I know and admire most in this "field" have referred to these issues as a question of "blurring" (see Sector Blue Report ). Hell, even my favorite academic, Greg Dees, (with whom I have co-edited two books and for whom I have incredible respect) has on several occasions used the concept of "blurring" in his writings, something i have heretofore had the good graces to overlook in our personal dialogs... However, the bottom-line is that to use the word "blur" has the connotation of something having gone astray, run amok, become involved in mission drift or a modest distortion of reality... And it is fundamentally the wrong way to think about what is in play, which is (at its core) value creation by organizations and those that provide capital (in whatever form or with whatever expectation of returns) to them... This is not a question of good or bad or what have you, but rather one of folks just looking at the world through their existing lens and not rising above the present framework to understand the emerging, deeper paradigm shift...(I'm sorry to have to resort to using the "p-word.") So, alas, this question of "blur" has now become one of my pet peeves... These inquiries would be amusing if it didn't take up so much of our time and other people's effort (I will, myself of course, make the singular effort to address this question in this brief blog and perhaps in the inaugural issue of a new magazine--called Value--that a group of us are working on and hope to publish early next year). But then, that is it, over, fini...no mas...get it? So, let's lay this baby to rest: Value is non-divisible. It is Whole. You cannot put social value with nonprofits and economic value with for-profits and pretend that somehow that makes sense. Please stop attempting to do so... you may hurt yourself and that would be a shame, since you know I care deeply about you, your intellectual growth and personal, physical well-being... I'm serious... stop it now before you hurt yourself. thank you. Now, back to our discussion: Here's why we have got to stop talking about what is happening as in any way a blurring, or somehow inappropriate: Nonprofits represent 7% of the GDP of the United States. This is big business, not some network of little mom and pop operations. That 7% is, potentially, economic power. Unfortunately, because so many nonprofits think of themselves simply as purveyors of public goods and not private gain, the nonprofit sector leaves huge chunks of economic value on the table, unleveraged in pursuit of their mission. Take for example, private foundations with endowments: Foundations make grants with 5% of the payout on their investments and 95% of their potential financial leverage is invested in mainstream companies and investment instruments with absolutely NO consideration as to whether those investments advance or work against the institutional mission that the corporation was created to pursue. Now...what business would you think of as being effectively managed where 5% of your assets are driving 100% of your mission and 95% of your assets are (at best...) neutral to that mission? You wouldn't--you would ask for your money back and run for the hills. But because we think of foundations as simply charitable grant makers and not investors in value creation, we think this is not only okay, but "good foundation asset management." If foundation grant making were a huge chunk of the nonprofit capital market, fine...but they represent less than 3% of the capital flows of the space (See "Money Matters"). All they can hope to offer is leverage of their financial and other assets--not just functioning as charitable ATMs kicking out $20 bills to whomever has the right PIN! We think this is okay, because we think we can separate economic leverage and impact from social leverage and impact--and we can not... Or, think about for-profits: Is it just me, or are these for-profit guys everywhere? I go out in my car (hell...I BOUGHT my car from a for-profit!) and i see them all over the place in town, along roadways...man, they are just everywhere. I pick up a paper, and BLAM, there it is: they even have their own newspaper section!! Seriously, these business people are everywhere and totally out of control... So, do you really think they only affect your life when you go to clip your investment coupons or look at the (hopefully...) increasing balance in your IRA? Of course not... Business potentially creates profound social value--they have social capital, they are a part of our community culture and society (for good and bad) and they effect how you LIVE, which is a profoundly social act, no? With all that in mind, the main point, then, is this: The question of whether nonprofits and for-profits are blurring the lines is a ridiculous question because they are fundamentally engaged in creation of both social and economic value, which are themselves wrapped in the environmental context in which those activities occur. Our problem is that we've simply created two legal forms (the nonprofit, 501-c-3 and the for-profit LLC or other corporate form) to accommodate our misplaced notion that the value created by organizations must be either social or economic; good or bad; up or down... when in point of fact, the value created by us in the course of our lives, loves and work is fundamentally non-divisible, whole and BLENDED. Value is like the light spectrum above... Al Gore, talks about how as Vice-President he received daily briefings from intelligence service folks that included not just pictures, but x-ray analysis, infra-red analysis and so on. Now, just because you could not see or place a definitive valuation on the presented imagery does not mean it did not exist. You understood it all as being a progressive blend, moving along a spectrum of light--which was whole and there and real. And which when taken together gave you the full picture of what was happening in terms of our nation's security... The same is true in this case. Value flows in form and kind along a spectrum where various shades of value color progressively blend from one to the other to an as yet still being defined third color. Value blends, as my colleague John Elkington has put it and as we discuss in an upcoming article in the next issue of the California Management Review. What we should be concerned with is not the transitional perception that within our current frameworks of nonprofit and for-profit this may appear as a blur. Rather we must step back and gain a vision of the full, total value spectrum and see what THAT fundamental insight means for how we understand concepts such as

value,
organization,
performance and valuation metrics,
capital allocation,
and--I hate to go there this early in the morning, but...our very lives, since you KNOW that the value of your life is not simply a function of your work or personal life, but rather it must be all assessed as a whole, with distinct parts that form the full, blended life you seek to maximize the worth and value of having lived!

Think about it: The personal is political is professional. Value is whole and flowing and like a tossed salad where each component part contributes to the total blend of flavor in our mouth and perceived by our brains... Value is Blended, so go forth and maximize all its parts! Happy Hunting!

Remembering Our Connections...

Fri, 04 Nov 2005 04:45:23 +0000

Thirty years ago, I went to Denmark for a year and lived with the Jorgensen family...and this past weekend, I returned to visit them and see some good friends... My family had changed, both through marriage, birth and death, but I was oddly surprised at how much we all remained the same. I mean it seems obvious that the core parts of who we were would remain, and yet I also felt a degree of relief that we could simply drop back in and enjoy eachother, and share our lives again... The town had also changed a bit, some new housing on the outskirts and all, but where we used to live above my Dad's hardware store was the same... and, thankfully... ...so was the neighborhood bar! My friends, Lisbeth and Niels, and their son, Jacob, hammed it up for me in front of the old drinking hole...(it was their daughter, Mille, who tracked me down on the Internet and reconnected us!)... and when we went inside I could easily remember the cold, rainy Danish nights we spent drinking and talking and smoking; living, basically, and connecting with eachother, our neighbors and through each of us, to the larger world beyond. It is not hugely deep nor insightful, but after spending a weekend re-connecting with my Danish family and good friends, I was really struck by the level of deep connection we each share--and how easy it is to move through one's life forgetting that very real fact. Rafting on the River In my mind, I thought of my Danish family and friends often and it seemed like they were there, just around the bend in the river, but i was floating on a different raft now, off in new currents--looking ahead. It is all too easy to forget that upriver, above our current rapids and behind our present swirls, we remain part of lives and communities we have touched as we move along and forward. We stay linked and a part of things that went before and still live just around the next turn of the river. When I watch the disaster in Pakistan or New Orleans or the Tsunami events of last year, it is very hard for me to imagine these people on TV as being strangers--they are too real and their lives too close to my own. Through the Internet, we can see and learn about their communities and lives. I can hop on a plane this morning and (allowing for some time changes!) step into a new world in the afternoon, meeting these same people should I choose to... One simply can't help but wonder at how incredible it is to be a part of the Whole. Do the Captains Know The River? Yet, when we listen to most CEOs and managers, when you hear the captains of industry, most would have us believe we can divide the world into employees and management; shareholders and "others"; us and them. And it's not just companies...when you assess the performance of capital, it is an FROI for a fund, but with little mention of externalities of value that stand just beyond--yet fully connected to--our metrics and measures of capital performance and return. We are seemingly able to divide our selves, our firms and our capital from eachother--But that is not the case. Our efforts to do so and seeming unflappable belief that it is correct to act as if we are separate from each other is just one more example of how, confronted with truths that are beyond our current capacities to think, act and manage, we parse and snip and eliminate in order to get reality down to something we can handle and understand--we speak more in terms of companies than communities and nations than world, and in doing so cut ourselves off from the ultimate "bigness" of our lives; We eliminate opportunity and promise in favor of the four bullets that can fit on a powerpoint slide and the few thoughts we can balance in our brain as we run from meeting to meeting and day to day---all too often ignoring the reality that it all adds up to not simply one (our individual) life, but rather our all having lived and been a part of the larger world and eacthother's life experiences. Now, i'm not doing a stupid, "We are the the World" group hug here or anything... and, again, I don't pretend this is in any way new or particulary deep... Yet, I think we should pause more often to remember people in our lives, and to reach out to re-connect with those who have passed on the shoreline... And we should try to remember our communities--while separated by culture and continents--are in the end, a single community. Returning to our lives and organizations, working in our own sphere, we will then be all the more effective and sound in the decisions we make for moving forward, since we will have re-affirmed the truth that when we decide for each of us as individuals, we are actually making decisions that affect us all.

The Ground Rules (are that there are no ground rules...)

Thu, 13 Oct 2005 17:26:00 +0000

The pups and I--actually, I think each of us...--are on an adventure. In some ways it is hard to know exactly when and where the adventure began... Was it when I started in youth work in junior high school, tutoring kids in Spanish Harlem, NYC? Maybe it was after I moved back to NYC to start my "career" following an extended period in the West... Or maybe when I left traditional social work to begin working for a new philanthropist interested in the pursuit of social value through business practice...Or (last one, I swear...) maybe it was when I found myself staring out of yet one more airplane window, looking down at the Rocky Mountains as I was winging my way back East to teach at Harvard Business School--to tell others how to think and act as social entrepreneurs, as investors, as venture philanthropists, as whatever!--only to realize that, "Hey...I should be down THERE--not up here...". Whatever it was or whenever the adventure began, I find myself now here: Five miles down the road from the West entrance of Rocky Mountain National Park; 8500ft above sea level; with fewer folks within a ten mile circle of my house than lived on my block in SF; in a log sided house, looking across an open meadow with elk wandering across in the mornings and moose in my back yard in the afternoon; PLOWING through scores of emails from folks across the world... Sitting on the phone, talking to asset managers, philanthropists, CEOs of big ass companies and social entrepreneurs managing new social ventures, and god knows who all else... And I just have to sit back and wonder: What are we all trying to do here? How can we do it better? And when we are each about to die, how can we know we have lived our lives to the fullest, done the most we can and created the greatest value through our having lived--economic value, social value, environmental value... How have each of us maximized the full, blended value of our having lived? My adventure has been a total and complete blast...as I hope yours has as well... But what i know for sure is that my adventure is not over and I have a ton to learn from how others have approached their challenges and issues and opportunities... So, I figured I would try this blog out as a way to both reflect on my own challenges and learn from others who have been grappling with the same issues in their own ways... I've set this up so other people can respond, comment and talk about what has been important to them--professionally, personally, spiritually and financially--since, quite frankly, it is all about one big, humongous glorious thing: Maximizing the full value of our having lived--and sharing that value with others, whether with fellow investors or fellow travelers... It's all the same...or is it? That is what I hope to explore on this site... how we may each live a life of full, blended value--and how we may each best celebrate the struggle of becoming what we are each called to be. More to come... Jed

A Question of Perspective?

Thu, 13 Oct 2005 16:45:00 +0000

This is the North Entrance to the Indian Peaks Wilderness. To the left is the Roaring Fork drainage and to the right is the Doe Creek trailhead. Dead ahead, up the trail about 2,000ft higher in elevation, is Crater Lake. This area is a short drive from my current house and the picture is taken from the dirt road that goes into where some day my new house is going to be. (Just so you know where you are...). These are trails I take the pups on pretty much every other day during either our shorter walks or longer day hikes. When you go out up here, you have the choice of either staying on the trail or cutting cross-country, and I often find myself standing somewhere in the woods or on a ridgeline, thinking about how odd it is for me, having spent decades in major urban areas, to find myself standing alone in the woods, just thinking, while the world out there beyond the ridge lines spins on... When you live in a city you know, you learn to anticipate things...You know that at the corner of 12th and Main is the drug store and as you turn the corner of 11th and Main, you can look up to see the sign and approaching storefront. When you walk trails you have walked before, you can kind of get into the same mindset--there's the rock outcropping, here comes the creek...But when you go off trail and cut cross-country, no matter how many times you do it, you find yourself continually shifting perspective, having a new take on things you "know" and experiencing things you weren't ready for. Last summer, I took the pups for a day hike up the Roaring Fork drainage. I like that trail since the first mile or so is pretty much straight up hill...it is pretty brutal and so most folks who don't know the area don't go there and settle for the easier trail around Monarch Lake or others nearby. As you get in there a ways, the trail splits off from the creek and heads up over a ridgeline, toward Stone Lake. I had seen some other hikers earlier and knew there were people somewhere on the trail ahead. (Okay...so when you live here, you get a little persnickety about wanting to have an area to yourself!!). Instead of staying on the trail, we continued to simply follow the creek...up and up...climbing over rocks and stepping through underbrush, getting higher and higher with each step and (very much...) labored breath. Several things happened to me on this hike that gave me pause: first off, we're running right along the creek which, while small, is still ripping along at a pretty good clip and making a, uh, roaring noise that is pretty loud (people who name things tend to be pretty straight forward...Roaring Fork Creek...Gravel Mountain...I like that kind of simplicity in naming things!), and so the pups and I step out of some brush into this opening next to the creek and I look up and BAM--there's a buck walking down toward us from somewhere up above. He is good sized with a compact, though impressive, rack...And so we just stop. But he keeps coming, kind of looking down as he's picking his way along, until he looks up and sees us. Pearl and Rasta are stopped next to me, sitting at my side, the buck is at this point less than 20 feet ahead of me, he stops short, turns his head and we lock eyes.... I'm not sure how long it was...couldn't have been more than a few seconds, but it felt like minutes... we just both stared at each other and waited for the other to move, which the other didn't... finally, he turned, took a few jumps and was off into the brush... Secondly, I'm cruising through the woods along the creek, the dogs bounding off to my right and left (I always keep them kind of close, in case we run into a moose or like the deer above...), and I'm cutting up a small hillside, looking down to make sure I don't stumble on a rock or something, and I am lifting my foot, just about to put it down and BAM--there's a ptarmigan roosting right there, just under my foot and I'm about to crush it! I jerk myself over to one side and almost fall over and yet, here's this bird sitting on its nest, protecting its eggs and not about to move for anyone. I took a few steps to the side and just looked at it, since I'd never seen one so close up before (they usually blow-up into the air in a big explosion of feathers and weird ptarmigan noises as soon as you get near...). It was totally camouflaged, speckled brown and white with flecks of black and totally unseen, sitting there on the open earth... Thirdly, I come up over this ledge, the creek now just a little dribble, and the space above the ledge opens into this high country meadow--wide open, lush and green, with wild flowers and big chunks of rock scattered about, warm from the sun and all of it just resting at the top of the world. I pull myself up a ridgeline that kind of runs around the meadow and turn around and there it is, BAM--the whole drainage, just laid out ahead of me, spreading out down below, no trail, no people, just expanse and openness, with this deep blue sky above, a breeze like a warm breath moving over my skin and the hard, warm rock beneath me. And I am just, you know, there...feeling still fully connected to the buck somewhere off below, the bird on her nest and the earth warming my butt as I sit propped on the rock, still... Perspective. I used to think that I was pretty well connected and had the "right" take on most issues of the day, that I had a good perspective on things. And I still think that I have a good set of values that screen my world and help me interpret what is righteous and what is not... But I wonder how many of our problems are created by the fact that we build worlds around us that help make it easier for us to exist (after all, one can't spend every second of every day contemplating the deeper meanings of each element that presents itself to you!). Yet, I also think we need to forcibly break out of our heads, break down our world views and attempt to regain a greater perspective of where we are, how we are connected to others and the planet and what this whole thing is about... But for the most part, I don't see that... I see people convinced of their own righteousness and world view and, having set a course for "projects" to be completed within "this" time frame, they plow right ahead, toward their goal. Even the so called "thought leaders" are locked in their own "progressive track" of attempting to out do each other and be viewed as more visionary and deeply insightful than others. You see entrepreneurs (both social and traditional) who begin with a vision and passion for some deeper truth or opportunity and then they end up creating a business or NGO with a budget and agenda and need to be fed regularly and they end up defending that beast against all others, so that they can barely celebrate the victories of others in their space, since to see others advance feels like they are being left behind, because, at the end of the day, they have lost perspective... And you see wealthy folks who were once "normal," who now have confused financial success with real life wisdom or deeper knowledge and seem to think that they are actually smarter or something than others and now that they have ended up surrounded by folks who schmooze them and want things have come to actually believe they ARE smarter, better looking and funnier than god knows they actually are... For the most part, all these people (each within their own space and world) are what I think of as "path people," meaning they stay on the trail and plug on, step after step, moving toward their goal, but missing the larger picture and experience of what all is actually around them. Now, don't YOU go get all judgmental on me... I'm not saying that MY perspective and current lifestyle is the ONE and these other folks aren't doing good things as well... but what I get continually surprised by is how many of these folks don't seem to be fully conscience of the fact that they are there--positioned on the trail--and remain largely unconnected to the space and time around them. I can't help feeling that somehow the value of whatever they are doing, the full value of their life time spent in pursuit of whatever it is they are doing, isn't somehow diminished as a part of their having such a narrow perspective on their position in the world... I was just at a meeting hosted by the World Economic Forum (http://www.weforum.org/) in Geneva, and met a new friend who is a great guy by the name of Hylton Appelbaum, from South Africa. He is a funny guy who, it strikes me, has the right perspective of humility in the face of true challenges. He works with the Nelson Mandela Children's Fund ( http://www.mandela-children.ca/) and in closing one of his emails to me he said that he looked forward to continuing our discussions and that, "perhaps, we might actually be able to do something to help the victims of our benevolence." That, it strikes me, is an example of the correct perspective to take to our work...a sense of vision and hope for creating positive change in the world, yet a knowledge that in our "good works" we may also carry the seeds of destruction... ...and that we must tread lightly, lest we miss seeing the buck, or risk crushing the roosting hen or, equally worse, lose sight of how all these smaller experiences are part of one larger world that is, at its core, whole and connected to all its parts, of which we are just one... So, what do you think? How does perspective shift? Can we force others to see things they do not want to see? How does the "right" perspective change over time and does that mean the perspective we had is less than the one we're evolving? Is there a way we can maintain what I would call the passion of full perspective that affirms the blend of our lives and at the same time can focus us enough to actually get something done in the course of a day? These are just some of the things I'm mulling over as I start my day... time to take the dogs for a walk in the woods... off the trail!! best to you, jed