11
Sweat equity versus blood equity
CARING FOR YOURSELF

We know from parents, school, and a lifetime of societal messages that we need to contribute, sacrifice, and drive hard in order to achieve success. We have been taught all along that we will have to invest in our own success.

In the business world, when dollars are invested in the starting of a business, it’s called equity. Another type of equity is called sweat equity. Sweat equity accrues when someone puts in time and effort for no immediate compensation but is a contributor to the success of a business and will be rewarded for this sweat with a share in the success of the business when the equity is sold or pays dividends. Many times this equity goes unrewarded because many businesses fail. The investment of sweat equity is an understood risk for the possibility of a high return.

But what if your contribution to the enterprise goes beyond sweat equity? What if the effort goes beyond a reasonable investment of time? What if the exertion of effort is more than sweat? What if the toll of this unusually high contribution on your part starts to impact your health? What if this begins to negatively impact your relationship with your spouse and children?

We call this blood equity. It’s what you give when you have no more sweat equity to give. You are in danger of having life’s blood sapped out of you. You are at risk of contributing until 158you have nothing left to contribute. It is precisely because social enterprise is rewarding in so many ways beyond financial that we need to be on guard about allowing that to happen. As you do your very needed work, you must be diligent not to allow all of the pressures of completing your mission and running a successful business to drive you to contribute more than sweat.

Symptoms of blood equity include lack of time at home, lack of being fully present when you are at home, and constant attention to your BlackBerry when you’re out. It shows up as constant multitasking; curtailment of hobbies and social life; sleep deprivation; increased use of drugs, alcohol, and food; or decreased interest in sex.

■ UNLOCKING THE TENTH PARADOX
Accept the sweat, but draw the line at your blood and your family’s tears.

Of course your work is going to stay on your mind. You’re going to be thinking of how to position that next initiative or fill that rush order or make that key hire. All are very valid concerns. But when they start to negatively impact your relationship with your partner and children you must ask if that is acceptable.

You are a shepherd of a large and important calling. But your life is also a calling. To respond to both callings you will need to pay attention. You will either be lifted up or torn down. We’ve seen it go both ways.

The Right Stuff

You will need to take proactive steps to be able to successfully, and with grace and joy, handle all that will come at you because you have chosen to operate a social enterprise. Do you have what it takes? According to the Schwab Foundation 159for Social Entrepreneurship, the common traits of great social entrepreneurs include

• An unwavering belief in the innate capacity of all people to contribute meaningfully to economic and social development.
• A driving passion to make that happen.
• A practical but innovative stance to a social problem, often using market principles and forces, coupled with dogged determination, that allows them to break away from constraints imposed by ideology or field of discipline, and pushes them to take risks that others wouldn’t dare.
• A zeal to measure and monitor their impact. Entrepreneurs have high standards, particularly in relation to their own organization’s efforts and in response to the communities with which they engage. Data, both quantitative and qualitative, are their key tools, guiding continuous feedback and improvement.
• A healthy impatience. Social entrepreneurs don’t do well in bureaucracies. They cannot sit back and wait for change to happen—they are the change drivers.¹

If you’re already in it with both feet, it may seem a bit too late to ask yourself if you have the right stuff. You probably wouldn’t have made it this far if you don’t. But note especially well the fourth point on the Schwab list—the one about monitoring your impact and seeking continuous improvement—and apply this principle to your own leadership. Measure yourself against the best in the field to continuously get better.

In this spirit, we offer you a collection of advice on maintaining joy, becoming continuously better, and ensuring the survival of the mission. This body of advice was repeated in 160one form or another by nearly every practitioner who lent wisdom to this volume. Therefore, it is important enough to warrant an entire baker’s dozen of practitioner’s tips.

Thirteen Tips for Taking Care of Yourself

Be conscious about the opportunity cost of doing something or not doing something. Just as every enterprise decision is a balance between mission and margin, your entire life as a leader requires that you make a conscious decision about what price you are willing to pay for your particular enterprise’s success. Reduce the sweat-equity-versus-blood-equity dilemma to a specific, case-by-case decision-making process and keep track of it in written, quantitative terms if you have to: “If I do A, I can’t do B. What is the impact on the business of not doing A? What is the impact on my family of not doing B? If I don’t do A, how can I offset the impact of that on the business? If I don’t do B, when and how can I restore the impact of that to the family?”

You measure your enterprise’s financial well-being and social impact. Why not also measure its impact on your life?

■ PRACTITIONER’S TIP
Constantly measure and evaluate your balance point.

How much time will you spend daily, weekly, or monthly operating your enterprise? What time limits have you set for the business? Will you bring work home on some nights, every night, for special projects only, or never? Will you take business calls at night at home? Will you use personal resources, beyond any personal equity committed, to reach success? Will you mix vacation time and business trips? Only you can set these boundaries and then hold yourself to them. But do it before you are in the throes of crisis. That is not where we do our best thinking.

■ PRACTITIONER’S TIP
Set boundaries.

No matter how smart you think you are, how great a product or service you offer, or how compelling your social impact, you will experience times when things are not going well. You must plan for these times in advance.

Consider the following scenario. Before leaving your office for an important sales call, you learn you do not have enough money in your bank account to cover payroll. How do you prepare yourself to arrive not simply in a satisfactory emotional state but with an upbeat attitude that will translate into a confident presentation to that prospective customer? This is when you will have to fall back on your passion for the work. This is when you will need to be resilient. This is when, in the words of Kevin McDonald, you’ll need to “bounce back from when they knock you on your ass.”²

What is it that you need to pick yourself up when you’re feeling low? This is something you will need to learn about yourself. Find out what works for you. Is it listening to a song that lifts you? Praying, if you are a praying person? Getting some exercise or getting into nature?

Know where you are going to go for a lift when those tough times come upon you.

■ PRACTITIONER’S TIP
You will have setbacks. Plan for them.

All of us should be in constant learning mode, but this is even more critical for social enterprise leaders. Your margin of error is thinner; quick recovery from a mistake may be the difference between a train wreck and a mere bump in the road. Launching that undesired product may cost money, 162but staying with it will sink the company. Hiring that untrustworthy manager may bring down morale, but not firing him or her will bring down the company. You will make mistakes. Searching for them and recovering from them will turn them into opportunities.

Don’t get paralyzed by your mistakes. Most are neither as bad nor as long impacting as they feel in the moment. You can recover. Recognize the issue, develop options, and then make adjustments. Keep moving. Don’t get stuck. Above all, avoid the blame game. Right there in the moment is not the time to figure out who is to blame. What matters now is moving the company forward. You will have ample time to reflect on what happened later. Assign responsibility for improving the company rather than assigning blame.

■ PRACTITIONER’S TIP
Learn from mistakes.

Be stingy with blame and generous with your own accountability. Learn from your mistakes and allow others to learn from them as well. You must first admit that you make mistakes. As Jeff Hollender puts it, “You need a hunger for your own growth and a humbleness that does not let what you know get in the way of what you do not know.”³

If you are capable of admitting you are wrong, you give your people the gift and the freedom to admit when they have done something wrong. This cleanses their souls and promotes their emotional health. It allows for correction rather than cover-up. It leads to growth rather than stymied progress due to a lack of awareness of repeated mistakes and missteps. Mistakes are guideposts along the way to success. If you and your team can read them—and a requirement of reading them 163is becoming aware of them—you can take corrective action as you navigate the path to success.

■ PRACTITIONER’S TIP
Allow others to learn from your mistakes.

In the words of the inimitable Kevin McDonald: “Hey, sometimes things are not going to go like you think. So be able to switch gears, maybe go in another direction. It might be a little out of the way, but do that. Be innovative, man!”⁴

While business plans are necessary, they do not run your business. They are useful tools that provide benchmarks so that you can know when you are on track or off track. If you get off track, quickly assess why. Is the business making and delivering its product well? Is the market message on point? Is the market simply saying it doesn’t want that service or product? Is your staff productive? Are you leading effectively?

You, as the entrepreneur, must read these tea leaves and respond. You must display a proper level of firmness so that any blowing wind does not move you and your organization. Your staff needs a firm focus and direction to be effective. But you also must not be so rigid that you bang your organization’s head against the wall when the tea leaves have said no. Your judgment in this area will be one of the major keys to your organization’s success. Hold firm to your vision and dream, but be flexible on its form.

■ PRACTITIONER’S TIP
Stretch out. Be flexible.

A very common breed of entrepreneurs and other leaders, particularly in this social-mission world, are the caretakers of 164all but themselves. This is a different conversation than the one about balancing work and family. Here we’re talking about balancing “all”—including the business, the family, the community, the political activism, perhaps an aging parent or two—on one side of the scale against little old “you” on the other.

Be certain to schedule time away from everything and everyone to reflect on your personal health, which includes your spiritual well-being, your emotional health, your intellectual growth, and your physical condition. “Time away” means just that. Disconnect yourself from all the multiple ways in which you can be reached. At one hotel in the Midwest, you can check your cell phone and BlackBerry at the front desk to ensure you get a sane dinner and a good night’s sleep. For the good of your health you must take time out to recuperate. You’re not a good leader if your team can’t get along without you, and you’re not a good partner or parent if your family can’t do the same.

■ PRACTITIONER’S TIP
Care for yourself.

Ask nothing of your staff that you wouldn’t demand of yourself, including the demand for self-care. If you don’t love the wonderful people with whom you are creating the common good enough to insist on their self-care, then you need to take a good look at your motivations. Maybe you really don’t belong in this job.

■ PRACTITIONER’S TIP
Make sure your staff are taking care of themselves.

Find a simple, compelling way to articulate to yourself and demonstrate, through your actions, exactly what you stand for 165as a leader. For example, stand for the “Three Cs”: clarity, consistency, and compassion.

Clarity of purpose allows you to focus on that single aim. You may have to complete many tasks to accomplish that aim, but knowing that single aim will drive you through many obstacles. Clarity of purpose will allow others to not just complete their tasks but participate with you in using the cumulative impact of all those tasks to create the common good.

Consistency brings credibility. The lack of it breeds contempt. People are watching your purpose-driven business to see if your values are consistent with your behaviors. You may be hiring a certain population and be applauded for that, but people will watch to see if you recycle. You may be a global supplier of wind energy, but people will want to know how you treat the community in which your business resides. You may do all these things, but your employees will want to know if you regard them as your most important asset and treat them in that manner.

Compassion is the humane quality of understanding the suffering of others and wanting to do something about it. Almost by definition, you cannot be in this business without this quality. If you lack it, that will show up. People will come to know you as doing this just for a buck.

■ PRACTITIONER’S TIP
Have a personal management philosophy.

It is your responsibility to set the tone and seed the creation of the culture of your organization. As the leader of a social enterprise, you want your culture driven by mission. Do not allow your organization’s culture and mission to be in any way misaligned with how you live your own life, or you will not be able to fulfill your mission. For example, Lynch is a 166recovering addict and alcoholic, with fourteen years of sobriety under his belt, leading an organization with a recovery mission. If he took even one drink, he could no longer be credible as Rebuild’s leader. He would have to go.

Fail to model the culture and your employees will question your commitment to the cause and find it impossible to stay committed as well. At any given time, any given employee ought to be able to stand up for, market, or defend the company. You want that employee to have an unwavering view of the company’s commitment to its mission and the cause. Model the culture yourself and that employee will be able to boldly state your mission, defend the institution, or challenge others who do not—without hesitation.

■ PRACTITIONER’S TIP
Model the culture.

Get input from wherever you can: from employees, customers, your management team, your board, and anyone you can talk into giving you an opinion. We say “talk into” because seeking out input is not as easy as it sounds. Most customers would prefer to vote with their feet (by walking away) than tell you they’re unhappy. Those who do complain are doing you a great favor.

Similarly, many employees will not necessarily provide this feedback in the format you would prefer, such as standing up in your monthly meetings and saying what is on their minds. Provide them other opportunities to communicate their views, such as suggestion boxes or slips of paper prior to meetings to write anonymous questions and comments. And pay attention to nonformal communication such as the chatter in the lunchroom, the production numbers, staff turnover, and body language as you walk through the facility.

Pay particular attention to creating a safe way for your management team members to say what’s on their minds. Consider using a “360-degree” review process, including all stakeholders, to provide feedback on the effectiveness of your leadership and management styles.

But in all of this, make one very important distinction. Ask for feedback, but never cede your obligation to be the place where the buck stops. Listen to everyone, discern, and then in the lonely solitude that you have the privilege and the responsibility to share only with yourself, make the best decisions you possibly can.

■ PRACTITIONER’S TIP
Seek feedback.

There’s a funny thing about creating or running a social enterprise: it will change you more than you will change it. That’s what happens when the common good gets in your blood.

It’s what happened to Judy Wicks, of the White Dog Cafe fame. She would be the first to admit that she had no real grand vision. She started out as just a little muffin and coffee take-out shop. She got into the restaurant business as a waitress and had become the general manager of a place up the street and then a partner in it, but she was forced out by her partner because she was beginning to see it as a vehicle for progressive social change and he didn’t. She started the White Dog on the first floor of her house because she wanted to express her own values and her own ideas about what business should be. But, she’s quick to point out,

Judy’s comment was echoed by virtually everyone we interviewed in the writing of this book and certainly by the authors ourselves. Walls is fond of pointing new hires to the first line of Greyston’s mission statement, which states, “Greyston Bakery is a force for personal transformation.” It’s a line that is as true for a brand-new employee as it is for Walls himself. The same sense of self-transformation is part of what Rebuild calls its Twelve Values, which speak of gaining greater self-worth, developing self-understanding and a sense of reality, achieving balance, and building strength and trust.

We are not the same individuals who arrived at Rebuild and Greyston five and twelve years ago, respectively. We believe, and hope that others have noticed as well, that we have continued to evolve into more spiritual, compassionate, intelligent, and less judgmental human beings.

Your role at the head of a social enterprise will almost certainly be a force for personal transformation, as it was for us, and as goes the story that is repeated over and over again by our fellow practitioners. Depending on your starting point, it will also undoubtedly round out your professional bag of tricks. By the time all is said and done you’ll achieve familiarity with, if not downright mastery of, a whole host of previously unfamiliar skills.

Your journey will not be unlike our journeys have been. We’ve learned to add human relations and work skills where we were once able to get things done by sheer force of personality. We’ve advanced our financial skills and become comfortable at a more sophisticated level of management. We’ve worked on our weak spots and become even better at our strong suits. We’ve developed strong teams of managers who have increased the intellectual capacity of the organization way beyond our own. They’ve pushed us to advance our own skill sets to a more visionary and strategic perspective. Where once we were concerned about what was happening hour to hour, we’ve been able to shift our perspectives to day to day, then month to month, and when we’re at the top of our games, to year to year.

We hope to keep changing, and we hope you’ll do the same.

■ PRACTITIONER’S TIP
Coevolve.

It is a great privilege to lead a social enterprise. There is no other job to which you could aspire where you are given a goal as monumental as creating the common good and a tool as powerful as business for achieving that goal.

Respond to this privilege with awe, with wonder, and with gratitude. Approach it with the knowledge that it will take every ounce of skill, energy, and character you possess to lead it effectively. Even so, remember that if your enterprise succeeds, it will be because of others, and if it fails, it’s not all about you.

To successfully lead your enterprise, you will be required to put every God-given talent you possess at the service of the common good, and you will discover capacities you never even knew you had been given. But never, ever fall into the trap of 170believing your own press. Never fail to consider the source of your giftedness.

■ PRACTITIONER’S TIP
Practice humility.

Take care of yourself. Then let go of self. And let the enterprise fly!