BY BARRY SCHWARTZ
Not long ago, I was contacted by an entrepreneur and former lawyer named David Kenyon who has led several successful companies that make “green” building materials. He wrote me because I had previously written and spoken about the role of practical wisdom and other virtues in enabling people to do work that serves others and also serves themselves. Kenyon wanted me to know that his companies provide an example of just what I have written about.
Kenyon founded a company called Habitata Building Products in 2008. They acquired a heat reflective window shade business called Halcyon Shades from a large, bankrupt conglomerate in 2009. At the time of acquisition, Halcyon had placed its operations in central Mexico, believing the that the lower wage rates would create positive cash flow. It had proven to be a disaster.
Kenyon moved the business to St. Louis, Missouri in 2009, and immediately began to implement what he calls the “Seven Virtues Culture.” Its premise is that effectiveness and efficiency are best created when employees have defined and met the conditions of deep personal fulfillment at work, in their communities, and at home. Kenyon has found that it is possible to create conditions at work for an employee that enables them to formulate an identity based on virtue that then permeates all three of the essential human environments simultaneously. The operative rule in Kenyon’s company is that if any of the seven virtues are missing in any part of an employee’s life because of something that he or she is asked to do by the company, the employees had the right—even the obligation— to decline to do it.
Over the course of the past four years, Kenyon has noticed a remarkable matrix of positive phenomena. First, his company has virtually no absenteeism. Second, there are virtually no interpersonal disputes among employees. Most impressive, however, has been the productivity. When the Halcyon operation was in Mexico it took 12 employees to produce 10,000 shades annually (these were principally sold to Lowe’s and Home Depot stores). Since the implementation of the Seven Virtues Culture, we make the same volume with five workers. Furthermore, our employees volunteer to represent the product at trade shows and public exhibitions.
Kenyon believes that companies that are efficient economically but harm society, its workers, or the environment are ultimately inefficient. They simply shift the cost of the inefficiency onto the community or their employees. The idea behind the Seven Virtues Culture is to have the company take responsibility for its comprehensive impact on itself and others, and then turn this responsibility into a driver of high motivation productivity. Kenyon thinks that many virtues, when assumed as operating practices and taken to the level of personal identity, have the power to unlock economic productivity by reducing the inefficiencies of things like interpersonal conflict. When you examine them closely, you see that things like practical wisdom and ethics create the context for profit as well as wellbeing. Most of all, however, such a culture can give any employee a sense of deep fulfillment, relatedness and worth.
Kenyon distinguishes Seven Virtues Culture from the sort of company mission statements that have become fashionable these days. He says, “I have to admit that I do not think much of mission statements in that most are generated by the marketing people and are a steaming load of bull. That’s why we skipped past that. We are not trying to define our company with our virtue document. We are offering a way for the people who make up the company to define themselves.”
So what are the “Seven Virtues?:” Not what you might imagine. They are “usefulness,” “mindfulness,” “compassion,” “skilfullness,” “grace,” “fairness,” and “resoluteness.” I can not do justice to the meaning behind these single words in this brief post, but a detailed explication can be found in Kenyon’s Business, Money And Ethical Living: The Book Of Seven Virtues, which is available at http://www.lotusblossombook.com/WordPress/business-money-and-ethical-living-the-book-of-seven/
Kenyon says of these virtues that “we do not talk about the company being useful, mindful, compassionate, skillful etc. We suggest that these virtues be worn like identities by the people themselves. It is a roadmap to how we should know ourselves. We don’t want to burden our people with rules, but rather seven virtues that they can use to check and see if their behavior is appropriate. It is self-regulatory and sets benchmarks for behavior. If employees can find the seven virtues in their choices and actions, then the odds are they are on the right track and it is also likely that their actions and choices are good for the business.”
“Notice that the first virtue is ‘usefulness.’ There are lots of ways to define this, but everyone has a pretty good idea of what it is with very little training. For beginners, it is better known for what it is not. In other words, everyone is clear about what is not useful. Usefulness, however, becomes highly nuanced over time as employees explore and chew on the concept. In fact, we dispense with language such as ‘right’ and ‘wrong’ that imply blame and focus on ‘useful’ versus ‘not useful.’”
Living with the virtue of ‘’usefulness,” employees over time start to look for it in their mundane daily decisions. To do so, they have to be mentally flexible rather than following rules and procedures by rote. Kenyon is not interested in tuning people into machines. He is interested in exploiting human beings as cognitive, problem-solving organisms. The company’s processes and procedures have been greatly shaped by employee suggestion. Employees have access to any manager on any subject at any time. They are known by the company, their peers and themselves as being what they call sources. In other words, any employee can be the source of any kind of innovation if they are willing to champion the idea and they can make the case for it.
Kenyon implemented the “Seven Virtues Culture” because he thought it was the right way to treat human beings and their work. He discovered that this boosted productivity through the ceiling. When he took over the Halcyon operation in 2009, he inherited a 7% manufacturing error rate that went up to 11% when he started with new, untrained American workers after the move from Mexico. Today that error rate is less than 2%. His workers constantly catch mistakes made by others and because they have the obligation to be useful and mindful they bring these errors to the attention of those in a position to correct them. The company has institutionalized real-time thinking on the job. He says, “it is the amazing the level of problem solving that goes on. Our basic factory workers have enormous input into process and procedure. They come up with product ideas and process enhancements. To help this along, we let the production teams hire their own members. The decisions have to be unanimous. The deal is that they get who they want, but they become responsible for training them and indoctrinating them into the family. This control over the work environment and the people in it creates a very profound sense of ‘ownership.’ The factory guys take this very seriously and are probably harder on a newbie than managers would be. The benefit is, however, that we get deep contribution from teammates to new employees and the management burden shifts as training is taken on by peers. This adds considerably to the sense of fulfillment, and this is a very big word at Habitata, that every employee is encouraged to build for him or herself.”
It is hard to imagine an approach to work more different from the mainstream than this. Nurture integrity, flexibility, compassion, and fairness and assume that quality and efficiency will take care of themselves. Treat employees as multi-dimensional human beings, not as cogs in a machine. The kind of cynicism that you often see in employees when they are confronted with company “mission statements” is nowhere present in Kenyon’s company, because the “Seven Virtues” are actually embodied in all the day-to-day activities of all the employees, from top to bottom. This is not a PR stunt dreamed up by marketers; it’s a way of life.
Can this virtue-based management philosophy be scaled up? That remains to be seen. My own view is that it requires implementation at levels of the organization where there is face-to-face contact and personal accountability. But this is present, or could be present, in most organizations. And does it matter what the organization actually does? Commitment to usefulness, mindfulness, and fairness may be a relatively easy sell when you are making things that contribute to reducing global warming. It may be a harder sell when you are making foods that contribute to obesity and diabetes, or financial products that extract obscenely high fees from unsuspecting clients. But most of us do work that is, or at least could be useful—that could improve the lives of our customers and clients. If usefulness became the touchstone of organizations, it is reasonable to believe, based on Kenyon’s story, that profitability would come along for the ride. Just think of how great it must feel to be able to be the same good person at work that you are with your family and friends. Virtues-based management is certainly an experiment worth doing.
Making Virtue Pay
Professor of Psychology at Swarthmore College
Enna A. Bachelor