2.0 / The Companization – background
It cannot, and will not, be possible to maintain maximum profit as a single reason for a company to exist. Environmental, social and also political reasons will prevent that to continue. But also, maybe most important of all: consumers and employees will put an end to it. Corporations not taking the international trend of values and ethics serious will at the end be swept off the market.
Every company, at every period of time, always had to maintain a good reputation; this is not new at all. The consequence of a bad reputation is not new either – at the end you loose your market shares, step by step and then you are gone.
The new thing is what is perceived as being “good” today and the power with which a bad reputation travels. That is what is new.
“Well then”, someone says, what’s the problem then? “The market will regulate itself, as it always has. The bad guys go, the good guys win”. Yes maybe that is true, but we do not know it and we do not have the time to wait and see. We have to act now, we have to act with all the knowledge and wisdom we can find and we have to decide what we believe needs to be done.
PLANTAGON thinks we need better, wiser leadership in the future with a whole new attitude towards the role of a corporation in society. That is why we develop educational programs, management tools and take part in different projects in this direction. But we also believe that we have to be faster than that.
That is why we present the Companization – an idea aiming at being franchised at no cost to modern entrepreneurs but also used as a model and inspiration for traditional corporations, NGO’s and other non-profit organisations.
3.0 / The Companization on Plantagon® in brief.
The Companization is two different judicial parts in one organization: One profit driven / commercial organisation (company) and one non-profit (association) organisation. The word Companization is put together by the words “Company” and “Association” and symbolizes the two driving forces within the organization as a whole – profit and values.
- 3.1 / Over all idea:
To combine commercial and value based driving forces in one organization, finding a solution on how to make money while doing good and using the power to achieve benefits for society in general, more than economic progress.
- 3.2 / Purpose:
To combine economical power and power of public opinion in one organization using this power to help create a “value change for survival” and a market “with a human face”.
- 3.3 / Judicial ground (fig. 5.1):
Profit (company – limited or unlimited) + Non Profit Organization (association – open for all). Both organizations founded by the same physical or judicial individuals / entrepreneurs.
- 3.4 / Constitution for Company (fig. 5.1).
Regulates obligatory purpose and objectives for board and management:
A) To maximize economical profit and growth of value.
B) To maximize shareholders influence over society.
C) To support the principles of the Earth Charter while performing
A) and B).
- 3.5 / Constitution for Association (fig. 5.1).
Regulates obligatory purpose and objectives for board and management:
A) To support economical strength and growth of the association.
B) To maximize members influence over society.
C) To support the principles of the Earth Charter while performing
A) and B).
- 3.6 / Mission:
Will be chosen by founders. Has to support constitution.
Example: “Value Change for Survival”.
- 3.7 / Vision:
Will be chosen by founders. Has to support constitution.
Example: “A Green Market With a Human Face”.
- 3.8 / Concept:
Functional and ecological food directly to western consumers or starving citizens of the third world.
- 3.9/ Action:
With a strategy built on “Action speak louder than words” Plantagon® shows the possibilities of responsible business. Plantagon® works down-to-earth to support positive thinking regarding the possibilities for corporations to make a difference in developing society.
- 3.10 / Advisory board:
Plantagon® will recruit international top level advisors offering support to all future franchise takers.
- 3.11 / Owners (fig. 5.2):
Founders and investors own 90% of company.
Association own 10% of company.
- 3.12 / Board (fig. 5.2):
Even numbers of members in company board, even numbers of members in association board. One individual cannot represent both boards.
- 3.13 / Election of board members (fig. 5.2):
Company board is elected by yearly shareholder meeting where association owns the right to elect 50% of board. This means the 10% stock owned by the association constitutes the right to elect half the company board. The reason for this is to share not only economical progress within the company, but also sharing power. One important role of the association is to look out for deviations from company constitution in corporate behaviour. This gives power to do so and therefore management, founders and investors have to keep a good relation to this special shareholder. On the other hand, the association also has to keep a good relation to the other owners, as they control only 10% of the votes concerning all others matters during yearly share holder meeting. The purpose is to create a balance between the “need for profit” and “sound values”. Important to stress is that this does not allow company management less responsibility, leaving it to “others” (the association) while focusing on the core business. Both as individuals and group they still have to work according to the constitution of the company. The big difference compared to a traditional corporation is that the founders of a Companization share power over the company, giving away control and creating a kind of internal “ethical institute” used to help the commercial end to stay on the right track. Naturally, this can be a source for deep conflicts with bad consequences for both company and association if the cooperation between the two parties does not work. Mutual respect is therefore essential to gain mutual benefits.
- 3.14 / Chairman of the Board (fig. 5.2):
If company or association board cannot agree on who is to become Chairman, this is decided by the founders. The Chairman has to be elected within the already elected members of the board.
- 3.15 / Election of Management (fig. 5.2):
Normal election by the company board.
- 3.16 / Recruiting staff:
An ongoing relation between the company and the association will create a large number of individuals possible for recruitment by the company. This is of very high value for the company, and also for the members of the association.
- 3.17 / Recruiting management:
As in 3.16, an ongoing relation between the company and the association will create a large number of individuals possible for recruitment by the company. This is of very high value for the company, and also for the members of the association.
- 3.18 / Innovations:
As in 3.16 and 3.17, an ongoing relation between the company and the association will create a large number of ideas possible for recruitment by the company. This is of very high value for the company, for the members of the association and for the association itself.
4.0 / The Companization – general principles for entrepreneurs using the model
- 4.1 / Principle 1) You have to be prepared to share.
The power is really in the hands of the entrepreneurs (new company) or the owners. These persons decides mission, vision and values for the corporation. You might want to become “like ENRON, Shell or Microsoft” or you might want to become “like Body Shop, IKEA or Ben&Jerrys”. There is no reason whatsoever you could not choose from the beginning. Except one: If you think sharing means less money for you, and if you equal less money as less personal satisfaction.
- 4.2 / Principle 2) You have to understand the hard life of doing business.
The Companization-model is designed to be a better company than the already existing models. There would be no reason to take this model to the market if we did not believe this model will also be more economical successful than others. A market is limited; going on the market is war. The competition is so hard that only the best survives, no matter how good the reasons are for being less sharp, for caring about human kind, for wanting to contribute to a better world. If we do not know how to make business, if we do not know how to win… we will loose. The Companization is in this way an ordinary idea to find a strategy towards market shares.
- 4.3 / Principle 3) You have to earn money.
The Companization is still a company, even though it is a new generation of companies. Until we see changes in the rules of capitalism and market economy the Companization has to earn money, as much as possible. The difference is we cannot do it any way we find legitimate according to business concept or stake holders. We have to be more responsible than that. No one can fire our CEO only because he claims he / she made less profit than possible, not if he / she made this decision according to the constitution of the company
- 4.4 / Principle 4) You have to make a stand.
To be able to formulate your own mission and to be able to understand the possibilities and risks of communicating a brand containing a clear message, as all Companizations will, you have to make a choice whether or not you are willing to risk the criticism and negative publicity this can create. On the other hand this is probably the most powerful tool for creating a strong brand name by brand values. How much money did Red Cross spend on marketing? Greenpeace? Shell? Coca Cola? Body Shop..? You cannot cheat here; you cannot make any short cuts. You have to promise to stick to the constitution, find your own way of working out exactly how you best do it and then do your very best achieving that. You will be very transparent, but if there is good things to see you will also be very successful. If you did not forget Principle 2) that is.
- 4.5 / Principle 5) You have to understand the consequence of a promise.
If you do this right, all your employees, your clients, your subcontractors, your shareholders and many others will be your allies. The productivity you will be able to measure will be enormous and even in bad times you will get support. If you do it wrong, if you use the trust you were given, the whole world will be full of enemies… Do not promise too much, do not communicate things you do not try to achieve and do not try to become less transparent you will be fine.
- 4.6 / Principle 6) You have to learn how to handle power.
The Companization is designed for people that see no reason to choose between money and doing good. It is also designed to outrun its competitors. If you succeed you will have power: The power of money, the power of representing all your stake holders, the power of influencing public opinion. The Companization includes share holders, board members, management, board of association, members of association, employees in company, employees in association – your network in society where you choose to establish will be very extensive. You will handle great influence and therefore you must understand the responsibility it gives you. Therefore you will need wisdom to continue to do good and keep your personal balance when you meet the most corrupting thing there is – power. Still, you need it.
- 4.7 / Principle 7) You cannot love money.
There is no way you can combine greed with sharing. All your decisions have to be made from a strategic point of view, and the strategy is formulated on the basis of the company’s constitution, mission, vision and values. Neither one of these documents can support greed and the love for money as a subject. You can like money, you can love the power it gives to achieve good things, but you cannot love the money itself.