In this episode of Rule Breaker Investing, Motley Fool co-founder David Gardner shares a speech he gave at the Conscious Capitalism European Conference this year about how to do business and leadership better. Find out how The Motley Fool strives toward conscious capitalism ideals in its strategy and culture; what conscious leaders do differently, and better, than short-term ones; the importance of a clear and communicated purpose statement, and why you need to reevaluate that statement every few years; why the phrase "work/life balance" is flawed; how a bad culture can eat away at a great strategy's success; and more.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
This video was recorded on Oct. 16, 2019.
David Gardner: What would it mean to do business better? Maybe your business, or maybe a business you're thinking about investing in? What would it mean to do business better? Well, one thing it would mean, probably, is more prosperity. In the same way that The Motley Fool's purpose is to make the world smarter, happier, and richer, I predict business done better will do all three of those, and indeed, for all of the stakeholders of that business -- not just the shareholders, not just the customers or employees, the partners and suppliers, too, the environment, the community, all of the stakeholders of that business that you might be running or you might be thinking about investing in. So that's what it would mean for a business to do better.
But how? How would you do your business better? What are the things you should be looking at in the companies you're thinking about investing in? Well, Conscious Capitalism, on whose national board I sit, and a movement that I'm part of, maybe you are, too -- that's the subject of this week's podcast.
As I speak, I'm in Austin, Texas at the annual CEO Summit, four my favorite days every year. But I wanted to share with you a coaching talk that I gave on Conscious Capitalism at the European conference earlier this fall. So, Conscious Capitalism 101 on this week's Rule Breaker Investing.
Welcome back to Rule Breaker Investing! Well, it was a delight to share with you my nine Foolish truths I hold to be self-evident last week. That's a podcast I do once every two years. It's some of the most important material I can share with you. If you didn't already get to hear last week, I hope you will listen. But Foolish, self-evident truth No. 1 is Conscious Capitalism, so it makes a lot of sense for me to follow up last week's podcast with this week's focus on Conscious Capitalism.
As I mentioned at the top, I'm on the board. I've been part of the movement for 10-plus years. The Motley Fool is, in our own small but prominent way, a practitioner of Conscious Capitalism, certainly a purveyor of awareness about it. This fall, I've helped start the Conscious Capitalism Washington D.C. chapter. That's right, here in Greater D.C., we've opened up a chapter. If you haven't already, you can check us out on LinkedIn.
Conscious Capitalism, near and dear to my heart, not just as a businessman, though, certainly as an investor as well. Doing business well for the long term with structural integrity, rewarding everybody around you. That is the formula for success not just for us as businesspeople, but for most of the best stocks we'll ever pick.
Well, just some weeks ago, I had an opportunity to address a European audience. They were convened in Berlin, although people were Zooming in from different places around Europe. And I provided this overview of Conscious Capitalism, along with some coaching tips and thoughts for my audience. It makes a lot of sense for me to share the same material with you. So, as I mentioned last week, let's go. Conscious Capitalism Done Foolishly.
Gardner: Hello, Conscious Capitalism Europe! I'm David Gardner. I'm the co-founder of a company called The Motley Fool. I'll be explaining a little bit more about who I am and what I do in a minute. But first of all, I want to congratulate you on taking the time out of your busy life to join in with fellow Conscious Capitalists. I'm very excited, as somebody who's been part of this movement for 10-plus years now, and I'm on the board of Conscious Capitalism, the institute, here in the United States, I'm very excited to know of your interest in this topic and of your desire to do business better.
Capitalism is a beautiful construct. A lot of people say, "Couldn't something be better?" And perhaps we'll discover something better. But capitalism done well has caused our species to rise from the swamps naked, and all of a sudden, have an iPad these days, where we can Skype our child halfway across the world for free. And so where we started as a race and where we are today is in large part due to business. The trading that you and I do back and forth of ideas, of goods, over the centuries, and, indeed, over the millennia, explain how we've gotten to where we are today. I love business. I'm pretty sure that you love business. But I want to make sure that we recognize that this is such a long-term game that we're playing, both as entrepreneurs ourselves and people working within business over the course of our lives, but think outside of our own lives, and just think of the larger narrative of the human race and what's going on and how capitalism, in my experience, keeps getting better.
So that's what we're going to be talking about in large part today. And I know some of you are at the conference in Berlin. Others are watching this remotely, and may be watching it as much as a month later. So I'll try to be timeless and as relevant as I can in the precious time that we have together.
So let me first explain a little bit about The Motley Fool. The Motley Fool is a company that my brother Tom Gardner and I started 26 years ago. The year was 1993. We began to give investment advice to -- it wasn't our friends, because in our 20s, many of our friends didn't care or know much about the stock market. The people who were interested, it turns out, were our parents' friends. So we were writing a newsletter really for our parents' friends. They were the only ones who would pay us $48 a year back at that time, helping support this small, fledgling enterprise, The Motley Fool. Our name comes from Shakespeare. Shakespeare, of course, glorified the role of the court jester or the fool, if you will. I know this is in fact a timeless and human global phenomenon, there are in many different cultures the figure of the truth teller, the fool, who could tell the king or queen or emperor the truth, could say, "You have no clothes," and did so in part because he or she used humor. So, telling the truth about things, sharing the truth, and using some humor is what we've been doing at The Motley Fool for 26 years on the subject of money.
Now we do have, for example, fool.de. We do operate internationally. We have six or seven different places around the world where The Motley Fool publishes today. But we did start in the United States in the Washington D.C. area 26 years ago.
And we said our purpose back then was to educate, to amuse, and to enrich. As a student of literature, both my brother and I are English majors, we have no higher degree other than English, but we always loved the stock market and we knew the importance, as literature majors, of inspiring and amusing or to educate and to amuse. This is often one of the things that we learn as literature majors, is the purpose of literature. It's to educate us, but also to uplift us. But we thought, while we like those, educate and amuse, for The Motley Fool to do its job, we need to enrich as well. So we tried to add that third verb in to describe what we do here at The Motley Fool.
I'll talk a little bit about purpose coming up. And I'll share a little bit more about our purpose. But I want to say before we start the rest of the presentation that The Motley Fool has about 400 employees today. We are a very private company. We're not a public company. But we've been a very successful company. We have no debt. We have a lot of money in the bank. We have expansive possibilities, and a global dream for what we're doing at The Motley Fool. Maybe you've heard of us before. At least in the United States, we've been celebrated for the culture that we've created at our company. We do a lot of things differently. I'll talk some about that later. But, corporate America is not how The Motley Fool works. fool.de, in its own way, a smaller entity, but you would recognize that we're not trying to be the mainstream establishment. We're actually defining ourselves as the common man. My brother and I are investors, very successful investors, but we're self-taught. We want to make sure that everybody who comes to The Fool feels welcomed and knows that we're there to help them and they can learn whatever they need to make better financial decisions. So, at the heart of The Motley Fool, I hope you'll discover that, if you don't already know, we're accessible, we're friendly, and we're here to make an important subject understandable to as many people as possible. I don't know how it is in Germany, for example, but at least in the United States, there is very inconsistent teaching about finance, financial literacy. Many students graduate college as undergraduates, and they still don't really know much about the stock market, for example. We think that that's a real mistake. We think that the more people who can understand more about money, the better off they'll be, and the better off the world will be.
That's a little bit about The Motley Fool. I want to mention, I'm trying to reserve about 20 minutes for questions at the end. If you have more questions about The Motley Fool or anything that I'm presenting with you today, of course, I'll be there on the chat room side of things to answer questions at the end of this presentation.
Alright, well, let's take now a quick look at Conscious Capitalism. I'm going to organize my thoughts around this framework, these four bedrock foundations of Conscious Capitalism. And for each of them, I'm going to try to give you my three best thoughts about them. I have some anecdotes and some stories and some quotations. I want to try to spend equal time on each, and just give you my three best thoughts.
Let's start then first of all with higher purpose. My first and best thought about higher purpose comes from my friend Roy Spence. Roy Spence is a businessman in Texas. He runs a marketing and branding agency, a very successful one called GSD&M. It's four partners who came out of the University of Texas as undergraduates, and decades later, they're all still working together, very successfully, doing advertising and branding for some of America's best known brands -- companies like Walmart or Southwest Airlines. These are well-known and very successful big companies. Roy Spence and his firm have been very instrumental in helping them tell their stories. This quotation is my first thought for you about higher purpose. It comes from a book title. In fact, you should read this book. The name of the book is, It's Not What You Sell, It's What You Stand For by Roy Spence.
The reason that I wanted to lead off with this is because a lot of us don't have experience thinking about a purpose statement or higher purpose. As an undergraduate in the United States, I was not familiar with how to craft a good mission statement or how to do this well. Therefore, even just reading the first 40 pages of Roy's book, It's Not What You Sell, It's What You Stand For, I think will really help you articulate the higher purpose of your organization, if you don't already have one.
Or, if you have been operating off of a purpose or mission statement, maybe experiencing some of Roy's thoughts will challenge you to wonder, is that the right one for us today? In fact, I think it's good practice to reevaluate every six to 10 years what your mission or purpose statement is for your enterprise. I'm happy to say The Motley Fool, as I mentioned earlier, has been around 26 years. I think we're now on our third purpose statement. So, yes, every six to 10 years, we have changed ours. I'll talk a little bit more about that in a minute.
Like a lot of good business books, it's right there in the title. It's Not What You Sell, It's What You Stand For. You can see that Roy, who calls himself a purposeologist, a made up word in English, Roy recognizes the incredible importance of purpose, to drive us as individuals and leaders, and those around us, to have a lot more success in a way that is aligned. So, that's my thought No. 1 for you. It's not what you sell, it's what you stand for.
Thought No. 2. A little story. What's the purpose of your company? What's the purpose of my company? What's the purpose of our companies? Even though The Motley Fool has been in business for 26 years, and I mentioned to you, from the first day we started our enterprise, we said, "To educate, to amuse, and to enrich." And that worked pretty well for us the first eight to 10 years. But I didn't know Conscious Capitalism back then. It was just kind of a mission statement. It was almost like a tag line, like a branding tag line that we used everywhere in our communications, right from the front page of our website or in books that we'd publish; we'd say, "Educate, amuse, and enrich." But a lot of people would say, what do you guys actually do? What is your business? So, in time, we decided that we should redefine our purpose as a company. That coincided with me meeting John Mackey, one of the founders of Conscious Capitalism, the co-author of the book Conscious Capitalism. I know many of you may have seen or have maybe met John before. I hope you've read his book. We met him about 10 years ago. He came and visited our company, gave a talk to our employees. And as I listened to him, I thought, we don't have a proper purpose statement in the way that he's talking about purpose. We have something that sounds good, like a tag line, that kind of explains what we do. But if you had asked our roughly 200 employees at that time, "What is the purpose of our company?" I'm pretty sure you would have gotten probably 75 different answers. Again, just 200 people in our company. But there was no general agreed-upon, aligned understanding of what The Motley Fool was for. So, my awakening moment as a Conscious Capitalist was when John Mackey came and visited our offices, and my brother Tom and I challenged ourselves to ask, "Do we have the right statement in place? And even if we do, do our employees know it? Would they get it?" So we endeavored then to change our purpose. We made it, "To help the world invest better."
So, over the last roughly 10 years, The Motley Fool was rocking that purpose, to help the world invest better. A lot clearer for the external world to see that we're an investment company. That wasn't there in "educate, amuse, and enrich." But not only that, but our employees, once we stated that, and we did a good job communicating it, virtually every one of our employees would have said over those 10 years, if you'd met one of them, if you'd said, "What is the purpose of The Motley Fool?" They would have said, "To help the world invest better." So, there is a tremendous difference in the before and the after. Before we encountered Conscious Capitalism, understood the power of higher purpose, met people like Roy Spence, the before. And then after. After having read the book, after having gone to conferences, and learned and thought more as Conscious Capitalists how we do purpose today.
So, that's my second best thought for you, about higher purpose. What's the purpose of your company? Is it true? Is it aligned? Is it applicable to where you are today? Have things changed? And just as important, would any of your employees, would all of your employees, be able to say the very statement to anybody who asks them, 30 seconds on an elevator, "What's the purpose of your company?"
Alright, well, higher purpose thought No. 3. I just wanted to share with you, to close the loop on this story, I wanted to share with you the journey of our purpose statement. We changed it just one year ago. I mentioned to you, for us, for 10 years, we were helping the world invest better. But then we started noticing that we were doing more than just giving advice primarily about the stock market. That, for 20-plus years, is what The Motley Fool has done, and done well. And we have definitely buttered our bread off of our stock market advice, and grown a successful business. But we started to notice that we couldn't just give stock market advice. You can't just give somebody a good stock if they don't know how to build a portfolio. You can't help them build a portfolio if they're trying to also do one for their son or daughter. And all of a sudden, they're thinking about the next generation, or thinking about wills and estates. There are all kinds of contexts around stock market advice that need to be done well to make all this advice work. So we started to realize, we're a digital financial advice brand. So, we changed our purpose, just last year, "To make the world smarter, happier, and richer." And today, we have about 400 employees. And I'm pretty sure at least 85% of them, just some months later, would be able to say that exact phrase to you if you asked, "What is the purpose of The Motley Fool?"
I guess one or two pointers here before we move on to the next section. I think that having a phrase that is expansive, that allows you to grow into it a little bit, can be helpful as you think about your own purpose statement, whether you already have one or you're contemplating something new. Are you able to grow into it? In fact, Roy Spence in his book says, "Aim high. Come up with something that's aspirational." Your purpose isn't defining where you are right now, or what you did yesterday; it's talking about where you're going.
And then for us, I'm really happy to note that we were able to latch onto this phrase by thinking of our original purpose statement -- to educate, amuse, enrich. You'll notice the parallelism here. What happens to a world that is educated, amused, and enriched? Well, it's a world that's smarter, happier, and richer. And we always say here at The Motley Fool, always all three of them, never one without the other two, never two without the third. The most important word in The Motley Fool's purpose statement -- this might surprise you -- is the word 'and,' because we need to be doing all three at once. Just like a jester can juggle three balls in the air, sometimes four or seven balls in the air, we need to be juggling all three of those balls all at the same time if we're going to be truly The Motley Fool.
I hope it's now evident, as I close this section, that Fool is a good word. If you came in thinking that Fool was a bad word -- of course, many people use the word that way, like, if you make a bad decision, you're a fool; but we always say that's small-f fool, lowercase. We're talking about the other kind of Fool, the Fool who challenges conventional wisdom, who uses humor, and who creates success for the kings and queens to whom he gives advice. That's a capital-F Fool.
So, there are some of my best thoughts about higher purpose. Let's now go to the next section. The next section is stakeholder orientation.
And I want to begin this with a story because I believe that a lot of the world operates off of the wrong frameworks. We hear a phrase, and we have a mental picture in our mind about how we should think or behave. But if it's not the right picture, if it's the wrong infographic, then that can drive us toward suboptimal actions. I'm a big fan of frameworks, and thinking about systems of thought, and then picking the best one, and then actually using it in your life. That's why I want to share with you two here that I think are bad to start with.
First is the phrase "work/ life balance." Now, this is something you'll hear a lot of people talk about. In English, anyway, this is an idiomatic phrase. And perhaps in German, or all of the other European languages, maybe you would recognize a similar phrase. But a lot of people in the United States say, "I'm trying to maintain a work/ life balance." I always picture a seesaw or a teeter totter, where you're too high right now at work, so you're not spending enough time in life or at home, so you need to get that balance, but oh, my gosh, now you're a little bit anxious because you're spending too much time -- you took a long vacation, or you needed to deal with a parent's aging process, and you couldn't do as much work as you needed to, and you need to get back. I just think this concept creates anxiety, and makes people feel like they're never going to get it right. They're always off in their balance.
I don't think this is the right way of thinking of things. I think the right way of thinking of things is that you have four areas of your life that matter: you, your personal growth and personal success, you. That definitely matters. Another one is your family. We all define family in different ways, but your family, that next concentric circle outside of you is your family. And then the third area of your life that probably matters to you is your work and your professional life. I know that's a big focus for all of us here at this conference. But at least for me in my life, that takes third fiddle, even though it's deeply important to me. And then forth and finally, your community. Maybe civic associations, or your neighborhood, or your online community, however you want to define community. I submit to you that the most successful people will be those who figure out a way to create a win across all four of those areas of their life, not constantly balanced or overbalanced to one or the other, or get anxious that they're missing out. So, making creative decisions to create a win across all of those, something that wins for you, your family, your professional life, and your community. Asking the questions that lead to yeses as answers. That's a much more successful, I think, framework, than work/ life balance.
Similarly -- now getting back to Conscious Capitalism -- another wrong framework is maximizing shareholder value, which at least here in the U.S. was the way that capitalism was often referred to in the 20th century. Many successful CEOs of large companies throughout the 20th century said in their letters to shareholders, or were taught in business school, that the purpose of a corporation is to maximize shareholder value. Wrong framework, I think.
Let's go to thought No. 2. You know how I just talked about work/ life balance is the wrong model because you're trying to balance things or emphasize one thing and not think about the others? Well, it's the same for stakeholder groups, for every one of our enterprises. I would say for-profit and non-for-profit. Whether you're a public or private company, or whether you are a non-for-profit organization, you should be identifying -- I know many of you already get this, because you're here at the conference and maybe you've done it for years; but some of you are hearing this and thinking about it for the first time. You should be identifying, No. 1, who are your stakeholders? It's not necessarily the same group for every enterprise. Some obvious ones for me: your customer, or whoever you're serving, is a critical stakeholder. That's the reason business exists: customers who buy from us, who want what we have, products and services that make their lives better. That's an obvious one. Another obvious one would be your employees, the people that are making it possible for you to serve solutions to the world. Those are two generally accepted stakeholder groups in place at most enterprises. Another one might be partners, or suppliers, depending on what your enterprise is. Certainly another one for many of us might be our community, or the environment, depending on what type of business. These are all potential stakeholders. And there's one more I'll mention for corporations, and that's, by the way, shareholders. I mentioned them earlier briefly. They're also a stakeholder.
Now, what I find so important in terms of understanding this framework of stakeholder orientation, creating a win for all of your stakeholders, which is where we're headed, but think about some of the stakeholders we just talked about. What is their desire? Every customer wants to pay less. Every employee wants to be paid more. Every partner and supplier wants good pricing or to be right in the front window. Every shareholder would like you to double your value tomorrow. The community or the environment wants you to respect them, care about them, notice them and nurture them. So, different impulses, different instincts, often conflicting with each other, in the same way that you could have a conflict in your personal life vs. your family life, your professional life, or your community life.
Yes, there can be conflicts. That's why the best leaders in the most successful organizations are problem solvers. They solve the creative problem of how to get a win for all of their stakeholders, or success in all aspects of their life. They don't have a trade-off mentality. They're not thinking, "Well, I'm just going to take this one thing and try to create a win there and not pay attention to the others." In fact, some very bad companies had that mentality, often driven by trying to maximize shareholder value. Perhaps you've heard of Enron here in the United States of America. Very successful, large energy company that had aspirations to be a world-class company. Unfortunately, they were a fraud. They cooked the books. Their core values -- you can still find the page today of Enron's core values on the internet. They all ended up looking like a lie, and a fraud, and everybody lost all their money in Enron. This is an example of what happens when you try to maximize one stakeholder's benefit.
John Mackey, who I mentioned earlier, who today is on the board of directors of The Motley Fool, he's been an absolutely wonderful inspiration to all of us, and a great giver of advice for us at The Motley Fool -- John Mackey debated the prize-winning economist Milton Friedman a couple of decades ago. Sat on a stage in front of an audience and said, "Milton, I think you're wrong because you, even though you are a prize-winning economist, are telling people that the purpose of a corporation is to maximize shareholder value. I think that's wrong."
Well, I don't want to go too long on these points, so I'm going to keep moving, but I hope you agree that that's wrong. In fact, the most successful way to create shareholder value, ironically, is not to try to maximize it. It's to pay attention to all of your stakeholders, and create a win for everybody. The mental picture that I have when I think about an enterprise, your enterprise, is, it's in the middle, and the stakeholders are around it in a ring with their hands held together. And in the middle is this thing they're trying to lift up, and hope that it'll be successful for all of the stakeholders and for the world at large. Those are the best companies. Those are the stocks that I look to pick. And some of my best investments have done that very well, whether we're talking about companies like Amazon.com or Starbucks, which are global phenomenons unto themselves, companies that really understand creating wins for all stakeholders.
Quickly, my third and final thought then on stakeholder orientation is really just an announcement, which you may well have seen here in the United States just one month ago. The Business Roundtable, which is a lobbying organization of some of the largest CEOs in America, the largest companies in America, those CEOs all came together and changed what they say the purpose of their businesses is. They committed to, and you can see it right there, to lead their companies for the benefit of all stakeholders. So, to close this point, the wind is now at the backs of those of us who for 10-plus years have seen this and done this. I know in Germany, many of you are very long-term-minded. You understand culturally the importance of winning the long game. I'm really happy to see at this point, a lot of other forces are aligning now to recognize the importance of these points.
I could talk probably five or 10 minutes more just about stakeholder orientation, how important it is, but identifying who they are, and then creating a win for them, meeting with them, understanding their needs, creatively problem-solving, create a win for everybody -- that is at the heart of Conscious Capitalism and winning with your enterprise.
The third tenant, the third foundation of Conscious Capitalism, is conscious leadership. And my thought No. 1 about this is just, what does a great leader do? Well, a leader serves a purpose which is much greater than that leader itself. We as leaders should be thinking foremost about the purpose statement that we and our employees are all aligned around. I bet it's bigger than just me. I know mine is. It's way bigger than me. I hope yours is, too. At the heart of conscious leadership -- there's a phrase we use in English in the United States, we say servant leadership. This is an acknowledged construct. This is something that people have learned. There been some good books about servant leadership. This is, of course, a timeless and global phenomenon. But that phrase, servant leadership, at least in English, is something that a lot of us would recognize. And it means things like, the CEO doesn't necessarily get the best office, the best window view in the office. The CEO doesn't have a reserved parking spot that's the best parking spot. A lot of the things that look like perks, where you think, "I dream one day of being CEO so I can get all the best things," that's the wrong way of thinking about leadership. Again, the best leaders are serving the purpose that we're putting out there as our higher purpose, and it's going to be much greater than we are, and those around us would know that, and be able to see and say that you're a good leader, she's a good leader, because you can see that she's just there to serve the purpose. There's not a lot of ego, and she's here to serve.
So, that's thought No. 1. Pretty straightforward here. Probably all three of my points might be somewhat obvious about leadership. Leadership is one of those funny words that too much is said about it, too many books are written on it, and it's almost lost its meaning in some ways. A little later, I'll give you a couple of my ways that I think of defining leadership. But I know that there are infinite ways of defining leadership because the word almost means not anything anymore.
Anyway, let's go to conscious leadership thought No. 2. One of my favorite authors about personal productivity, perhaps some of you have come across his work, he wrote a wonderful book about 15 years ago called Getting Things Done. His name is David Allen. David has a very popular following online, on the internet. He has a million-plus followers on social media. At least here in the U.S., a lot of people know GTD, Getting Things Done. It's become an acronym, kind of a movement unto itself. David Allen is wonderful at helping you and me think about how to get things done, how to be productive. One of my favorite lines that he uses is, "The better you get, the better you'd better get." I hope that translates well in German or whatever language you use as your primary language. But at least in English, that sounds really good. There's a little bit of wordplay there, and eloquence baked into "the better you get, the better you'd better get." Why am I using that, and what do I mean by that? Well, I believe that the No. 1 factor that can hold an enterprise back from growing is if the leader of that enterprise, he or she isn't prepared consciously to take that organization to the next level. Often, in order for our enterprises to grow, we ourselves must grow. We must get better at the things that we're good at. We must start to tackle the things that we're bad at. Or, we must acknowledge our weaknesses and build accordingly. In fact, one of my favorite lines is, "There are no perfect people, only perfect teams." This is very important in business and in life. But in my experience, I challenge you, and I ask you as a fellow leader, are you ready? Is your organization ready because you are ready for the next phase of growth? And that often starts at a very personal level with your own personal growth. So, the better you get, the better you'd better get. And for some of us as founders, sometimes it makes sense to step aside and let somebody new come in and take leadership because they're ready for that next challenge.
Alright, and my final quick thought on leadership. What do great leaders do? Well, I said earlier I'm going to give you a couple of quick definitions about leadership and what a leader does. Here are mine. Here are two that I like. One is, leaders have willing followers. One of my best signs or thoughts about a good leader is when I see willing followers around that person. There are many leaders worldwide who have the opposite. They're called despots, tyrants, and it's existed throughout history. So, one of my best, first signs, when I look at you, or somebody else, and I say, "Is that a great leader?" I would say, "Do they have willing followers?"
And then one other thought about great leaders is, are these leaders solving more problems than they create? Great leaders solve problems. They solve more problems than they create. I am certainly aware of some very bad leaders that create far more problems than they solve. That's a very utilitarian definition of leadership. So, there are a couple of thoughts for you as a fellow conscious leader.
And finally, now let's go on to conscious culture. My first thought about culture, maybe you've seen this line before from the Management Guru, now deceased, but lived an amazing long life through much the 20th century and the 21st, Peter Drucker. Peter Drucker, perhaps you've heard this before, "culture eats strategy for breakfast." Great line. Very true.
One of the things we've done here at The Motley Fool is, we have done two things around culture. The first is, we've tried to create a great culture. I'm happy to say that a couple of times in the last decade, we have been recognized as the best small to medium-sized company to work for, not just in our local city of Washington, D.C., but, in fact, in the United States of America, we've been named the best company to work for of a small to medium size. Obviously, we're proud of that. We never think we're good enough. There are always ways to improve our culture. We're always changing and evolving our culture. Some years, we're better than others. But I'll tell you, we recognize the incredible importance of the culture that we are building. We know it is a defining element of our success, and it differentiates us against competitors. The Motley Fool looks and feels very different from Wall Street here in the U.S. even though we provide advice that is competitive with Wall Street. But a lot of people feel that they can relate to our culture more, especially our employees feel like they can cut our culture with a knife. And when somebody leaves, they often say, "I miss what it felt like to work when I worked at The Motley Fool."
So, yes, we love culture. We're culture builders as the co-founders and the management, but we're also investing for culture. My brother Tom and I both pick stocks. That's what we do. We recommend shares to our community. People pay us a subscription fee. That's our business model. And we specifically look for the cultures of the things that we're recommending. A lot of other people, when they look at stocks, they're looking at the stock graph. They're looking for patterns, or they're looking for the most recent earnings report -- which I care about too, but they don't even really understand or think about whether that company is innovative, whether it has a positive culture, whether the people who are running that company are creating a culture of love or hate at that enterprise. A lot of people are just numerically trying to figure out what stock will win. We have defined our approach to the markets based on looking at culture.
Culture eats strategy for breakfast. That's just a way of saying strategy matters -- it's not that it doesn't matter -- but culture is more important. I truly believe that. I'm glad Drucker said that.
OK, thought No. 2. Identify your edge. I would ask you, we're all different, we're all different leaders, we're all different enterprises and different sizes, different industries. But, what is your edge? Take that edge to the edge. That's some helpful advice I've gotten in the past. What is uniquely true of your enterprise that isn't true of your competitors. Whatever that thing is, I would encourage you to identify that. I hope it's more than one thing. Identify that, and then take it to the edge. Push it, make it big, go big with it. Communicate that. Your employees should know how they're different from companies that are in your space. The culture is different. You should be building around the culture.
I'll give you a quick example that we have here at The Motley Fool. One thing we've never done at The Motley Fool is say, "You need to come to work by 09:00 AM and stay until 05:00 PM." We've never said you have defined hours. We've also never said, "You have X number of vacation days. By the way, if you stay here for five years, you'll get four more vacation days." We do not count vacation days. We don't count hours here at The Motley Fool. For some of you, you might be like, "Well, sure, I understand that. That would be very conscious. I know Conscious Capitalism." But I think most people think that's crazy. Most people, whether they're working for government, private sector, anywhere in between, they are not used to a workplace that would think that way. So that's an edge that we have, and we've taken that to the edge. In fact, we even have something called The Fool's Errand, where, at our once-a-month, all-company meetings, we randomly draw from the hat one of our employees' names, and we say, "You must leave for two weeks. Go wherever you want, have a good time. Here's $1,000 to take with you." We call that The Fool's Errand, which is a pun and a phrase that you might recognize, fool's errand. That's us, right? It's uniquely us. It makes sense for The Motley Fool to do a Fool's Errand. And we have lots of other examples. Over 26 years of building culture, we have a lot of other examples where we've doubled down and invested in Foolishness and the word Fool. That's uniquely us.
What's uniquely you? Identify your edge, take it to the edge.
And then finally, No. 3. Conscious leaders are culture builders. What's really happening? What you're doing right now as a leader of an enterprise is, you're serving solutions to people that are paying you. It might look like you're selling products and you're making profits. I hope you are. But that's really above the water. That's the part of the iceberg that's above the water. Below the water, you're building culture. Culture is what outlives you and me. Culture is what outlives a product or a service or a competitive environment in the year 2019. Conscious leaders who understand the importance of building a culture, especially playing the game most people aren't playing, playing the long game -- long-term thinkers, long-term actors -- the most conscious leaders recognize that they're empire builders in the end, whether it's a small empire or a big empire, a European empire or an American empire, a global empire, a local empire, you are building an empire, each of us in our own small ways. What is left over from those empires, whether we're talking about Rome, Egypt, or a thousand others that I can't even name. Time immemorial, 100,000 years, a lot of prehistory, we don't even know some of those cultures. But, what was left for us from a lot of them are the artifacts that they left and the stories and the history -- ultimately the culture.
One quick final example. For us, at least, in the United States, I think universities do a really good job identifying their culture. A lot of people will say, "Harvard University has this culture, and the University of Notre Dame has this culture." And I think a lot of us who go to university recognize the unique differentiation that we feel within the tribe of our university. I often like to lean on and think about universities as good examples of how to do culture and do culture well.
Alright, enough from me for now. Let me just close by thanking you for suffering a Fool gladly. I hope that you've enjoyed this time. I've certainly enjoyed the opportunity to present to you. Fool on!
Gardner: Alright, that was then. This is now. Let's talk about the future and next week. Let me ask you, in preparation for my guest authors on the show next week, what if there was a company whose CEO said, "Let's pay all our people as much as possible?" What if that same company showed up to help communities in distress before FEMA and the Red Cross when there was a disaster? Or, what if your company treated your spouse, your children, even your pets as stakeholders, and made it a priority to ensure that you can be present for them? What if there was a company that not only reduced its environmental footprint to zero, but actually made a net positive contribution to its ecosystem? And what if these businesses who prioritize the welfare of all of their stakeholders, who help heal their employees, customers, and communities, what if they're more profitable and prosperous than their industry peers? Well, such businesses and many others like them do, in fact, exist. So, in an inspiring interview next week, I'll be welcoming the co-authors of the book, The Healing Organization. That's Raj Sisodia, who helped write Conscious Capitalism with John Mackey, joined by his co-author, Michael Gelb. We'll be talking about how business can bring healing in so many different forms to the world at large, and we're not just talking about healthcare companies. In preparation, this book is just out this fall, so if you'd like to read ahead a little bit, we won't call that cheating on this particular test.
Alright, have a great week! Fool on!
As always, people on this program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. Learn more about Rule Breaker Investing at rbi.fool.com.