Product Description
Two fundamentally different business models of capitalism are operating in the business world today. One is self-destructive and increasingly corrupt. The other is emergent, flourishing, and inspirational. The author explains the differences between the two and reveals the extraordinary results of the more successful model. Profit for Life draws on nearly forty years of research on the empirical connections between stewardship and profitability…. More >>
Profit for Life: How Capitalism Excels
Investment strategy | Investing online | Stock market investing
Profit for Life shatters the old paradigm that success in business means sucking the life from people and natural resources by viewing both as dispensable commodities. By showing us how success in business–including big business–goes hand-in-hand with respect for human and natural communities, Bragdon frees us from the wrenching misconception that profit and citizenship represent a kind of zero-sum game.
Bragdon unites head and heart in one of the most uplifting books I have ever read. Profit for Life offers hope with a firm footing. I recommend Profit for Life to anyone with an interest in business management, strategic investment, or corporate citizenship.
Daniel D. Dutcher, J.D., Ph.D.
Project Director
The Clean Energy Group
Montpelier, Vermont
Rating: 5 / 5
Book Review for Profit for Life: How Capitalism Excels
by Ann McGee-Cooper
How do you measure the value of servant leadership in business? How can we know it works? These have been two of the most frequently asked questions in our consulting practice over the past 30 years.
In Profit for Life, Jay Bragdon provides us with some compelling answers. He does this by setting aside much of the linear cause-and-effect thinking that drives business these days, and adopts a more rounded, holistic approach that gives us deeper insight into the firm.
The book is based on the experiences of 60 companies – Bragdon’s “learning lab” – that broadly represent the industry/sector diversity of the world economy. Throughout the text he describes 16 of these pioneering companies, called the Focus Group. The distinguishing feature of all these firms is their effort to mimic living systems – in the ways they organize, manage and add value. This mental model is radically different from the traditional one that views the firm as a money making machine.
Although it may seem counter intuitive, the living system approach yields vastly superior results than the traditional one. For example, the average equity return of learning lab companies was nearly double the S&P 500 over the past decade; and their excess performance continues as this review is written. Bragdon expects such premium returns will diminish over time as the more effective methods of the living system model become copied and enter the mainstream. Nevertheless, these results are a strong affirmation of the milieu in which servant leadership normally operates.
Servant leadership, to Bragdon, is all about relationships. He says “relational equity” is the foundation on which companies build financial equity. When companies care about people and the things people care about, Employees become inspired and their inspiration cascades into everything they do, including their relationships with customers, suppliers and other key stakeholders.
The raison d’etre of these servant-led firms is value creation – value that permeates all relationships. Companies that excel at such value creation pursue a strategy Bragdon calls “living asset stewardship” (LAS). The fundamental premise of LAS is: Profit arises from life, and must therefore serve life if it is to be sustainable.
To understand the strategic value of living asset stewardship, Bragdon makes a critical distinction between living assets (people and Nature) and non-living capital assets (buildings, equipment and financial reserves). We see this in three contexts. First, people are closely bonded to Nature – genetically, physically and spiritually – in ways that capital assets are not. Second, living assets are the source of non-living capital assets. And third, because living assets are inherently creative and emergent, their value grows over time rather than depreciating as capital assets do.
The operating leverage in the learning lab and the 16 Focus Group companies resides in the human heart rather than in mechanistic financial gearing. This is supported by the fact that they generate consistently higher returns on equity while carrying substantially lower debt ratios.
Although traditionally managed companies have been adopting some stewardship practices in the past decade, Bragdon finds their approach differs fundamentally from those in his study. In the mechanistic view of these firms, stewardship is an add-on that is subservient to their drive for profit. By contrast, in companies that have adopted the living system model, LAS is deeply woven into the value creation process – reflecting the fact that they see themselves as “living” and therefore integral to, rather than separate from, Nature and society.
Profit for Life builds on the brilliant work of Arie deGeus, former coordinator of Group Planning at Royal Dutch/Shell, and Harvard biologist Edward O. Wilson. DeGeus’ classic, The Living Company, noted that long-lived companies had a collective consciousness, were sensitive to their environments, tried to work in harmony with the world around them, and strove to leave a legacy to future generations. Wilson tells us this collective consciousness is an expression of humanity’s deep affinity for life, which he calls “biophilia,” and that our biophilic instincts have evolved over thousands of generations of natural selection.
In my work as a teacher of servant leadership, I would highlight the paradigm shift Bragdon describes. The mission of leaders in LAS organizations is to serve and grow their people because that is the source of the firm’s liveliness and capacity for growth. As Robert K. Greenleaf said: “The first order of business is to build a group of people who, under the influence of the institution, grow taller and become healthier, stronger and more autonomous.” That seminal quote is used twice in the book to describe the power and generative capacity of LAS.
I highly recommend this book and will be using it regularly in our practice.
Ann McGee-Cooper, Ed.D., Business Consultant & Executive coach
in the field of Servant Leadership & growing Learning Organization.
Ann McGee-Cooper & Associates, Inc.
Rating: 5 / 5
I intend to recommend Profit for Life to all my current MBA students. Next fall I am team teaching an MBA core course that combines Operations Management and Managerial Accounting. I intend to make the case that your book should be required reading and part of the course.
I became familiar with the work of W. Edwards Deming in 1990 and attended one of his four day seminars a year later. I also began to follow Peter Senge’s work and later read Margaret Wheatley’s book, Leadership and the New Science. Tom Johnson’s book, Profit Beyond Measure, has been required reading in my Advanced Managerial Accounting elective at the MBA level.
Bragdon’s book has brought the ideas, theories, and concepts discussed by these individuals together for me in a way that I could not have imagined. More importantly, he has not only taken their ideas to the next level, but done it in a way that provides a tangible blue print for how to change our current style of command and control management with its focus on profit maximization to a LAS Theory of Management.
The use of the sixteen focus companies from the LAMP INDEX and the author’s ability ability to clearly show the distinctions in their style of management from the traditional management models that continue to be taught in almost all business schools, and the success these companies have achieved not just financially, gives those of us hoping to change management education and core business curriculums a new hope.
Thank you for such an outstanding book.
Joseph F. Castellano
Professor, Department of Accounting
University of Dayton Business School
Rating: 5 / 5
This is not one of those lightweight business books that repeats its Chapter 1 message over and over. It’s chock full of research-based information that anyone involved in the sustainability movement should have. The publisher is Peter Senge’s non-profit, so if you’re familiar with his excellent work over the years, this would make a great addition to your library. The author’s passion for his subject is obvious from page one.
Rating: 5 / 5