The Megatrend of Activism Capitalism
Okay, so what is Activism Capitalism? That’s the question I’m going to answer for you in today’s episode. I’m also going to reveal why Activism Capitalism is becoming a megatrend in your community, and already beginning to dominate your marketplace as a megatrend. And what’s a megatrend? Let’s start there.
Megatrends are driving forces of development that create scalable opportunities for businesses and the economy based on the impact they have on society. Every megatrend creates a series of subtrends that support the demand for the Megatrends. Whatever industry you are in, it’s important to know where these swells of economic growth are occurring because megatrends impact society so broadly, that your ideal community is likely to be involved. Here’s a cool example: The California gold rush was a megatrend in the mid-1800’s. There’s gold in them thar hills! And the possibility of claiming some of that gold, brought 300,000 people to California from around the world. The gold rush was a driving force of development, and the scaleable opportunities it created, helped a lot of people prosper.
Leaders of companies often have that pioneer spirit about them, so imagine you were one of these 300,000 people off to California to claim your stake. You’re going to need a good horse, proper permits, camping gear, and a plentiful food supply for the journey. Once you arrive in California, you just can’t wait to get out there and start digging! But wait, you’ll need rope, lumber, pickaxes, gold pans, dynamite, and a whole lot of other things. Oh and you wanted to bring your family, so you should probably get them settled first in one of the homesteads that have sprung up to accommodate the rising population…The prospectors who find gold, aren’t the only ones getting rich here. Lumber mills are prospering because new homesteads are popping up everywhere, and lumber is necessary for building mineshafts. Metal workers are prospering because they are meeting the demand for gold pans and pickaxes. Dynamite makers are prospering meeting the demand for blowing holes in the mountainsides. Many people who moved to California during the gold rush had zero interest in digging for gold! They went to build the towns, open the mercantiles, and run the saloons that supported this Megatrend. Megatrends always create a variety of subtrends that cause a boom in any industry that chooses to get involved.
Now let’s look at a more current example, and see if you can identify a way it might create a boom for your company. One of the top 6 megatrends for 2020 is zero emissions technology. We’re mainly talking electric mobility, solar paneling, and wind power. These technologies are already driving a high ROI for many different companies. So many different tech companies, businesses that manage infrastructure, and just about every form of electric mobility company from wheelchairs to air crafts, are experiencing an economic swell from the zero emissions megatrend. But these are all businesses who are directly involved with bringing the zero emissions initiative into action. You would expect a swell in these types of businesses. But a megatrend means that there is an impact on society for a reason! Yes, one could argue that the reason clean power is a megatrend, is because we should be taking care of the planet, but the reason it’s a megatrend now and not thirty years ago, is because there is a massive uprising of the people demanding that companies reduce their impact on the environment. People’s lives are being affected, and they are paying attention. These people are the people in your community. They are concerned for their health, they are concerned for wildlife, and they are concerned for their children’s futures. Now it’s personal.
Now check this out: A recent Gallup Poll revealed that 65% of Americans now believe that environmental protection should be given priority over economic growth. Over half of the entire population in the US, myself included! I personally contribute to at least ten initiatives worldwide that are dedicated to easing human suffering and recovering our planet’s most precious resources.
So out of that 65% of all Americans, do you think that might include some members of YOUR community? Yeah, of course it does. So here’s where things get so good. You’re going to love this.
Now you know that over half the country’s population wants to do right by the environment. Your company can help them do that right now! And according to this statistic, if you listen closely to what the people are saying, 65% of Americans are willing to pay MORE for a product or service when they know that some portion of their money is going toward helping to save the environment. Companies that are known specifically for doing their part to heal the planet are already making their way up the Fortune 500. In fact, according to the World Wildlife Foundation, within the last few years nearly half of the Fortune 500 companies have launched sustainability goals to cut back on carbon emissions and embrace renewable energy. And they’re not just doing this because it’s the right thing to do, they are doing this because it’s what society wants to see happening in the world. The people have spoken.
Having led 6 successful startups of my own to private acquisitions of over $120 million each, and provided explosive growth and lucrative $100M+ acquisitions for dozens more I have experienced the megatrend of Activism Capitalism first hand. Aligning your company values with the values of 65% of the country is a win for your company’s valuation growth, a win for the environment, and a win for society! Win, win, win. Now we are talking about Activism Capitalism, folks!
So now that we’re all clear about what a megatrend is, let’s jump right into the What, Who, When and Why of Activism Capitalism.
First we have, the What. What is Activism Capitalism?
Activism Capitalism is choosing to follow a business strategy, in which we prioritize benefiting both the company’s bottom line financial value, as well as the value to our community and the planet. It’s a “value-based” approach to growing your company. Many businesses out there are still stuck in that old cliche, of cold hard business sense; you work your fingers to the bone and you expect your employees to do the same. The only goal in mind becomes revenue. Increasing revenue. Driving revenue. And hey, as Activist Capitalists, we like money too. You better believe we do! But revenue at the cost of the health and well-being of others and of the environment? That way of doing business is dying and we are happy to put it out of its misery. Because what an Activist Capitalists knows that they other guys don’t, is that revenue based companies are sacrificing their own valuation growth in the process. Doing harm to mankind and the planet on which we live is literally not a sustainable business plan! And I know the hipsters these days are throwing the word literally around so much that it’s literally lost its meaning, but I’m no millennial. When I say literally, I mean it.
For an Activist Capitalist, money alone is not enough. Companies embracing Activism Capitalism follow strategies that support sustainability for the planet, seeks to improve the lives of the people in their communities, and creates scalable growth. In today’s marketplace, those things combined can drive value through the roof in every industry! There’s so much suffering in the world that has been caused by big bully businesses, and only Activism Capitalism can reverse the damage. The world needs you! And besides, it’s just good business! Literally!
Richard Branson said it best, “Doing good is good for business.”
It’s about listening to your community, and giving the people what they want. Activism Capitalism is good for your company’s growth, good for your community, good for the planet and good for your soul! Activism Capitalism is healing the world of business, and the world at large by contributing to a culture that values care, trust, and health over profit. And the profits just come rolling in on their own.
I have helped businesses – big and small – deal with and overcome problems: falling demand, changes in consumer buying habits, market fluctuations, cash flow issues, policy and taxation changes, technological transformations… The secret is to modify limiting mindsets and transform thought processes. Here are the seven powerful mindset shifts to bring about that mission critical transformation:
Next we have Who. Who is demonstrating the effectiveness of Activism Capitalism?
Let’s see, we have Costco, Whole Foods, Southwest Airlines, Unilever, Zappos, The Container Store, Toms Shoes, Patagonia, Adidas, Nike, Gucci, 3M, HP, inc., just to name a few. And that’s just in the United States. Companies all over the globe are picking up on the megatrend of Activism Capitalism.
Let’s focus in on just one for now. Whole Foods Market has set the bar high for sustainability practices for not only direct competitors but even for companies throughout other industries. The environment of Whole Foods is that of a company that cares, but what many in their loyal community might not even know, is that Whole Foods offers $8M in annual small interest loans to small batch organic farmers. They are the first grocery chain to prominently label GMO products, and ushered in a new standard of disclosure to consumers regarding what’s in our food. Whole Foods also uses wind energy, and their truck fleet runs on biodiesel fuels.
CEO and Co-Founder of Whole Foods, John Mackey opened the first Whole Foods Market in Austin Texas in 1978. In the first year, he was evicted from his apartment for storing inventory there, so he moved into the store and used a hose attached to the dishwasher for a shower. Five years later, they had expanded all the way to California. In 2017, Whole Foods was acquired by Amazon for $13.7 billion in cash. Mackey still stays on as CEO, but he owns so much valuable stock, that he’s elected to accept a $1 yearly salary and forgo any bonus or stock grants since 2007. Man! Talk about waste not, want not!
Next we have When. When did Activism Capitalism become a megatrend?
Well, if you look at the rapid growth valuation of Whole Foods, which was first launched in 1978 on a family loan of $48,000 and within 10 years, co-founder John Mackey found himself in Forbes magazine with $45 million in annual sales, it would seem that Activism Capitalism has always played a key role in growth valuation. Since when did the people not want a company to really care about their health, and the environment? Capitalism as it stands on it’s own has just reached its expiration point. Let’s take a look at some statistics to see where Capitalism as usual has taken us as a society, according to Oxfam International:
- 42 people hold the same wealth as 3.7 billion of the world’s poorest individuals, and
- 192 million people are unemployed or underemployed.
- According to Habitat for Humanity, there’s about 1.6 billion people who are homeless worldwide.
- According to The Federal Reserve, 63% of Americans have no emergency savings for a trip to the ER or a car repair.
- And According to water.org, one in nine people lack access to clean water.
Does that sound sustainable to you? The world is in crisis, and business as usual doesn’t work anymore. There is a handful of companies who have been doing it right from the get go, like Wholefoods, and Patagonia…Patagonia founder, Yvon Chouinard actually went on record calling his competitors “A bunch of weenies” for not following his lead and adopting Activism Capitalism. But it’s really just been within the past few years that a new wave of leaders and executives stood up and said enough is enough. Enough suffering, enough corruption, enough pollution. The buck stops here. And what they all got in return is a passionate, purpose-filled community and increased profits. The world has always needed Activism Capitalism, but the demand today is higher than ever before. The world has always needed your company, and your time is now.
As a milestone in the rise of Activism Capitalism, consider this: Since 1997, America’s most influential group of corporate leaders, The Business Roundtable, had agreed on one principle: “The paramount duty of management and of boards of directors is to the corporation’s stockholders.” That’s been the principal they operated on for the past two decades. But get this, recently 181 CEOs from The Business Roundtable agreed to a new definition which articulates that a company has a broader responsibility to society, and the purpose of a corporation is to Promote ‘An Economy That Serves All Americans. They refined the mission of serving the corporation’s stock holders to serving all stakeholders including customers, employees, suppliers, communities and shareholders.
Which leads me to the Why? Why does Activism Capitalism work so well?
I mean, to put it simply, it’s a win win win. But I think the main reason that has made Activism Capitalism a megatrend has a lot to do with the internet. We are connected to our customers and our community more intimately than ever before. As a society we are more aware of the suffering in humanity and the environment, and we can trace when that suffering leads back to the companies that are perpetuating it. As consumers we are able to peel back the veil and peer right into the heart of a company. And when that heart is nowhere to be found, we go looking somewhere else. People want to feel proud of the companies they associate themselves with. When people have the choice to purchase a good product and know that some of that money, THEIR money, is going to be used to improve people’s lives and make the world a better place, the purchase becomes an opportunity to feel good about themselves.
The spearhead behind TED Talks, Chris Anderson, once said “Your brand isn’t what you say it is, it’s what Google says it is.”
What the world is saying about a company is accessible and more important now to consumers than ever before in human history. People care about what companies they associate themselves with, and when a company is doing good in the world that means every customer has a hand in creating that goodness! Activism Capitalism companies are great places to work, too. The team members are the living proof that the company is living up to its promises and the leaders of these companies are the physical embodiments of the promises and values the company upholds.
So now you know exactly what Activism Capitalism is and why this new and better way of doing business is becoming a megatrend. So what are you waiting for? Are you ready to change the world with your community while creating massive growth valuation for your company? Take the first step to becoming a company that practices Activism Capitalism. Identify a demand to end suffering within your marketplace that your company can fulfill, and dedicate resources toward easing that suffering. Look at this as a vertical growth strategy. As the M&A guy I can tell you, doing good is a massive growth strategy.
Thank you all so much for joining me. Not only for this important episode but also joining me in the ranks of Activist Capitalists. There’s an old African proverb that states, “If you want to go fast, go alone. If you want to go far, go together.” And together, I believe our companies will save the world. I’ll leave you with this: We’ve identified a need for change in the marketplace. And as true leaders, once we’ve identified a need, we won’t stop until it’s been fulfilled. That’s the way of the Activist Capitalist.