What can businesses do to regain their equilibrium after the financial meltdown? The standard responses to tough times, such as reducing staff, pruning the product range and balancing budgets may cut costs but they do not stimulate the profit-generating activity needed for sustainable recovery. In fact, these actions often contribute to the downward spiral by degrading the very assets – the resources, projects and people – needed to grow revenues and profits. What else can be done?
A better alternative comes from the organizational principles that form the core of the Christian tradition and have been practiced, for example, by Benedictine monasteries. These principles are based on the idea that God is the Creator of all that is good. Profit is the end to which a good business is ordered, so the activity of any business will be improved if it can tap into a set of principles that open it up to this source. While the effectiveness of these principles can by explained in the context of Christian faith, one does not need to be a Christian or even have a faith in God to follow them and reap the benefits.
Turn to Creative Practices
The example of the Benedictine monastery is a good starting point for exploring how to restart growth in our businesses and world economy. St Benedict developed his Rule for monastic life in the 6th century AD and Benedictine monasteries have been flourishing over the centuries ever since. Some will be aware from their history lessons of the important role that Benedictine monks played in the preservation of culture and the intellectual life in the early middle-ages. The Rule of St Benedict required that monasteries were required to be financially self-sufficient. For this reason, the Benedictines turned their minds to trade and commerce as well as to prayer and the intellectual life. They were so successful at this that sometimes their assets were eyed with envy. Henry VIII of England dissolved them in order to seize and strip them of their assets. You might say that the Benedictine monastery is the longest existing and most successful business franchise in history.
What did the Benedictines do so well? While there is very little mentioned explicitly about trade in their rule; St Benedict suggested for example that wherever possible, the monasteries should aim to sell the goods they produce at slightly lower than market price so that there should be less temptation to greed and so that ‘in all things God can be glorified’. The monasteries were good at business because their activities were deeply infused with Christian principles and therefore focused on people and the relationships between them. Underlying these relationships is the creative principle of love – of God first, but also of neighbor and of all of God’s creation. By ordering their activity so that it was in harmony with the divine order, they sought to act in loving service to each other and all others with whom they related, both inside and outside the cloister.
Today we view this type of business model superficially as one of superior customer service or in management-consultant speak as ‘quality-based management’. But it involves something deeper — trade and commerce practiced in a loving, sustainable way. When all people who are impacted upon by the company are genuinely valued, including employees, customers, and suppliers or service providers, then the company is tapping into the creative and productive force that generates revenues and profitable growth. This principle in business was recently highlighted by a modern-day Benedict – Pope Benedict XVI – in his latest encyclical Love in Truth as one of ‘superabundance’. The result of this superabundance, he describes, is a sustainable profit that is naturally in harmony with the spiritual and material well-being of employees and their families, with society as a whole, and also with the environment. Put in another way, all parts of business are in harmony with the common good.
The Secret of Growth – Covenantal Relationships
For all that companies tell us how they care about their employees and customers, the nature of their business activity often says something else. If their business relationships are in fact governed only by the alignment of self-interest, then the message transmitted is just that – I am driven by self-interest – thus, the customer or employee feels treated as no more than a means to profit. If, on the other hand, the relationship is governed by the striving for mutual self-sacrifice, then the impact will be the opposite and people very often respond by pulling together and giving to the full. The former is termed contractual, the latter as a covenantal relationship. It is the covenantal relationship that is genuinely and fully productive. This is not to say that contracts are unnecessary. They are; however, they should be seen as defining the minimum requirements in an employee relationship, management contract, business partnership, or merger and acquisition.
Those companies that achieve sustainable growth are the ones that give more in their relationships. Often the things given are those that can be given freely — an attitude of care, courtesy and genuine concern for those with whom they deal expressed in a myriad of ways. It is most often seen working effectively in entrepreneurial start-ups and in family and private firms. When the covenantal element is present in organizational relationships, employees can be heard to say, “I feel part of something good,” “I love my job,” or “I love our customers.” They, in turn, give more, ask less, and work longer hours on projects, so as to make the overall organization successful – not because they are forced to, but because they want to. Similarly, customers can be heard to say that they buy from or work with the company because they feel valued and that they can trust them. The covenantal principle of giving beyond the minimum requirement was also referred by Pope Benedict in the same encyclical. He called it ‘gratuitousness’.
When the covenantal aspect is absent, we see the weakening of businesses, even when they have a viable business model (considered in purely economic terms). This results, for example, in the familiar pattern of CEOs and top executives siphoning-off excess pay and firing lower-paid workers thoughtlessly; in theft at all levels of corporate intellectual property, equipment and other assets; and even litigation.
Recovering a Sense of Order and Harmony
A covenantal model of business relationships encourages and promotes an atmosphere of creativity and productivity. It generates more ideas and better ideas and is better equipped to see those ideas implemented through to the generation of revenue. The source of this creativity and productivity is supernatural. It is the principle of love that is made present whenever a relationship is, at least in part, covenantal. Love is always fruitful. If God is Love, then where there is love, God is present also. We are used to seeing this fruitful love in the context of the family, where the love between the father and the mother gives us out of nothing, so to speak, the gift of children. Love, in the context of the business, is creative too, but is ordered to those things that a business should create. Entrepreneurs come together to turn their ideas into products and services directed towards profit.
Developing Covenantal Relationships
How do we develop these covenantal relationships? In any company, permeating through and sitting alongside the formal and necessary managerial reporting structure, is the naturally developing social network of business acquaintances and friendships. These are the productive relationships that are to be encouraged, and when they flourish, pay back financially at high multiples. This applies as much to small businesses as large ones. In fact the power of the Internet means that its accessibility and the multiples seen are greater than ever. The key to developing this supernatural productivity lies in identifying and developing these naturally occurring covenantal relationships. It can be done, but it must be done with care and sensitivity. It must be built up relationship by relationship, and in such a way that the integrity of the whole organization is not compromised. The ideal upon which this is based comes from consideration that God loves each person fully as a unique individual.
The Way of Beauty and Free Enterprise
When a business is built around the covenantal principle, its products and services will attract with the radiance of love. The common word for this radiance is beauty. Beauty can be seen as much in a gracefully offered service as in a well-designed piece of equipment.
The free market is the mechanism which best nurtures covenantal relationships and so best enables commerce to generate growth, profit and wealth while benefiting society. Freedom is the operative word here, as all that is given in this context must be given freely. Most would accept that the freedom of the market should be tempered, however, by moral considerations. These moral considerations are not really restrictions on freedom; rather, they point to the right exercise of freedom for the good of all. We say also that there is another set of useful guidelines: those of harmonious covenantal relationships – the principles of beauty. The moral and the beautiful do not restrict profit. On the contrary they increase it by directing us, when faced with an array of choices, to the source of sustainable profitability in harmony with creation.
This is the Way of Beauty, the via pulchritudinis, recently described by Pope Benedict XVI as a principle of harmony that points to God. In his address to artists in Rome last year, he described this as one of the ways, ‘perhaps the most attractive and fascinating’, to be able to find and love God. In the context of business, it is also the path of creativity and productivity. The reason that the Benedictines knew how to apply this principle was that beauty is a principle the apprehension of which can be taught. The study of the order, symmetry, and patterns in creation as reflections of the divine order was part the traditional liberal arts education of the Christian medieval world.
When we do something beautifully we are moving on that path to God that is in harmony with the natural order. A scientist does this when proposing a new theorem that is simple and symmetrical – and during their reviews, peers will often use the word ‘beautiful’ to describe the solution. The idea for the solution comes from their intuitive perception of natural beauty. Because beauty is apprehended intuitively, an education in beauty develops the intuitive faculty. It creates possibilities that previously didn’t exist for us. When we conduct business beautifully, we tap into the supernatural principle of abundance in harmony with the family, society as a whole and the environment (because God is the Creator who made these things too). Everyone gains.
This holistic way of thinking offers genuine hope for the future and it can be taught to anyone who wishes to learn it. It has begun to be used successfully by businessmen and businesswomen today to restart growth and sustainability in our businesses and world economy.
This article was written in conjunction with John G. Carlson, CEO of System Change, Inc, a management consulting firm. He has held executive positions at Tessera Technologies, General Instrument and other firms.