Video Transcript

Ayanna Washington:

Thank you all for coming today. Very excited to have this conversation about conscious capitalism. I do see some faces that I haven’t seen before, so I’ll go ahead and just briefly introduce myself, go over some housekeeping rules, not rules, but just housekeeping. And then we’ll kick it over to our special guests today.

Ayanna Washington:

So I’m Ayanna Washington. I am Project Coordinator here at Motley Fool Ventures. I’ve actually been with the Fool for eight years, and been with ventures for just over a year. I’m also a founder of a small beauty startup. So just a few quick announcements. We do have our founder community channel. Sorry about that. We do have our founder community channel, which is on Slack. So if you haven’t had a chance to go to the founder community Slack channel I’ll put the details of the link in the chat below. And I’ll also put in my email address in case anyone has any problems getting to it.

Ayanna Washington:

Also, if you have anyone in your leadership community that you’d like to invite please reach out to me and we’ll get them added to the community. Also, as far as questions we’ll have a Q&A portion, so after our guest speak, we’ll have a chance for you to ask questions. You can post them in the chat, or, I mean, it’s pretty informal. Some of you who’ve been here know that. So if you want to just kind of open it up and just ask the questions outright, you can do that as well.

Ayanna Washington:

So today’s event… Oh, and the last thing, if you did not get chocolate, there is a chocolate tasting as a part of this event. So if you did not get chocolate, let me know and I’ll reach out to the wonderful people at River-Sea to get you chocolates. I haven’t tasted it yet, but I’m excited because I heard it’s really good and who doesn’t love chocolate? So today’s event will be all about conscious capitalism, which is defined as a socially responsible economic and political philosophy that believes that businesses should operate ethically by serving the interest of all stakeholders, which is a beautiful mission.

Ayanna Washington:

We’ve got two special guests today that are going to lead us in conversation about conscious capitalism. First, our very own David Gardner, who is, as we know, co-founder of the Motley Fool also described as chief rule breaker, in one of our very first LPs, or the very first LP and Motley Fool Ventures. He’s also a long time advocate of conscious capitalism so much so that he’s on the board of directors and also founder of Conscious Capitalism, D.C. And so David will lead us into a discussion about how he became involved with conscious capitalism and how conscious capitalism inspires the work we do at the Fool and how it can inspire you.

Ayanna Washington:

So that’ll be the first part of our conversation. And then after that we’ll have Mariano D’Aguiar, I hope I said it right, Mariano. Please correct me again if I’m wrong, of River-Sea Chocolate. River-Sea Chocolates is a conscious capitalism inspired company. We actually met River-Sea Chocolates through Conscious Capitalism, D.C and the Fool liked them so much that we started sending these chocolates to employees for their birthday. So hopefully I get one this year, because I didn’t get one last year.

Ayanna Washington:

Mariano is going to share his story about how he got started and how his company aligns with conscious capitalism. And for those of you all who got chocolate, you’ll get to taste the lovely chocolate, I’ve been fighting the urge for whole week. So without further ado, I will kick it over to you, David.

David Gardner:

Thank Ayanna. And I’m full of gratitude for many reasons and I’m just going to, in 60 seconds, hit as many of them as I can really fast. Ayanna, thank you very much for organizing us in this event and for Robert, and Ed, and Olin Douglas and the team to think that we would want to talk about this and share this just makes me really happy. Thank you for organizing this special meeting. I’m really grateful to a lot of the faces that I see around. I recognize most of them, not all of them, which is the way I want it. We’re a growing entity, but thank you very much teammates who’ve been with us for 10 plus years, John Keeling, et cetera, and friends and fellow entrepreneurs who’ve been at it five plus years.

David Gardner:

Emmet, Ursula, certainly Adam, I mean thank you very much. Dan, great to see you again. So I feel like I’m really among friends and in a lot of ways I feel as if many of you may already know what I’m about to say. So I’m going to try to not talk too long about the stuff that you could have looked up or Googled before this. And yet I do feel some compulsion to speak to the four tenants, the four foundational pillars of conscious capitalism, which I will do very shortly. Then I will have to share screen exhibits, exhibit A and exhibit B. And I hope somewhere around 16 past the hour, we will open it up for discussion and questions.

David Gardner:

Please do use the chat just to type in questions, and really frankly interrupt me anytime if you like. I’m going to try to move through this fast, but if I’m not clear, raise your hand and let’s just talk it out. We’re going to get the heart out at 3:30 so we can have some chocolate. And Mariano, it’s great to see you again. Thank you for all you’re doing. Fellow D.C proud business. Love it. All right. So here we go. Step one. How did I find out about conscious capitalism?

David Gardner:

The answer is we had, and always have had a speaker series here at the Motley Fool. It’s informal, it’s for our employees and anybody. And Adam, thank you. Anybody who wants to come in and speak to our employees is invited to do so. And some of our employees actually show up and we will once again, when we have an office that we go to once again, but we’ve enjoyed a lot of this virtually too. And here we are today.

David Gardner:

And John Mackey, the founder of Whole Foods came through in 2009 and spoke to our employees about something I hadn’t heard about at the time. The phrase conscious capitalism sounded a little funky to me, probably, I don’t know my east coast. I don’t know, rearing this crazy man from Texas, from Austin, Texas, saying conscious around business. I was like, “What is that?” And then I realized as he was speaking more, that that’s how I was picking stocks in a lot of ways. That some of the foundational elements that we’re about to cover very shortly, were almost embedded assumptions in how I picked stocks for years and beaten the market.

David Gardner:

And since the Motley Fool was about 15 years old at the point that he stepped into our offices for the first time, I think that’s how we were doing business in a lot of ways, but not necessarily as consciously as he was about to make us, with intent to be an exemplar of conscious capitalism. And boy, has that strengthened our company over the last 12 years. So I’m deeply grateful and we’re connected to people like Adam, because of that in part and a number of you. And so thank you for that.

David Gardner:

And now if you don’t know what the heck this thing is I’m talking about, let me go over the four pillars real quick. There are four foundational elements to conscious capitalism. The first is purpose over profits, serving a higher purpose. I hope that Rob, Olin and team, as they first get to know you, or like, “What is the purpose of this thing that you’ve created?” And by the way, I wouldn’t have wanted them to ask me that question. Nobody really did, when we started the Motley Fool.

David Gardner:

It was just our parents’ friends saying, “What is this newsletter? Why are you charging me $48 a year? Okay, I’ll subscribe.” That’s kind of how we started. We didn’t have to have real intention and there wasn’t the pressure on us at the time. But the world keeps leveling up and I think it is a good question for you to ask yourself, I’m sure you have already, “What are we about?” And the great irony of this is that those entities that hold purpose over profits make the most profit.

David Gardner:

And it’s not just about the bottom line, although it is about the bottom line. It’s about throwing off value in many different ways all of which I equate with profit. Sometimes profit that doesn’t even accrue directly to you as an entrepreneur, but you’ve created it for your community in whatever context that makes sense. So, I mean, stating a purpose and having that, was so profoundly important for us. I want to say before I move to number two, that if you had asked when Ursula was walking the halls at Fool HQ, if you had asked at random, if you picked off Ursula and then about, let’s say the 200 other employees we had at the time and said, “Hey, what is the purpose of the Motley Fool? What’s our mission?”

David Gardner:

You would have gotten probably a few dozen different answers and they would have been smart. They would have been, in many cases experienced and, or full of heart and head. And yet you would have gotten a lot of different answers. There wasn’t that much alignment. It wasn’t until we said, “To make the world smarter, happier, and richer,” or one earlier iteration, “To help the world invest better.” And these days with 600 employees, I pretty sure virtually every employee at our company, when you ask them, “What is the purpose of the Motley Fool?” They’re going to say, “To make the world smarter, happier, and richer.” And I always add, “And is the most important word in that purpose statement.” Always all three, never one without the other two. So the aligning aspect of that has been really helpful and powerful for us.

David Gardner:

All right. Number two. Number two is, stakeholder orientation. A lot of us know this by different phases, different guises these days. Some people say stakeholder capitalism, sounds great to me. The whole idea is that you are reversing what Milton Friedman had touched off decades ago, which is the notion that business is there to maximize shareholder value. What is the purpose, corporation to make as much profit as it can. And kind of if you try to be happy, you’re often not going to be happy. It’s when you try for something else, like to serve others, that all of a sudden you get joy.

David Gardner:

When you work, not just for the benefit of the one shareholder, but for all of your stakeholders, ironically, once again, you’re going to maximize in my experience, your profit and the value of your enterprise. And so in a world that used to say, “All right, well, you got your employees, you got your…” I’m making this up, “Your customers, your partners, suppliers, you’ve got your community maybe. Maybe the environment,” depending on what type of business we’re talking about, these are all things.

David Gardner:

But you know what, of all those groups you just mentioned, we’re just going to take one group, the shareholders, and we’re going to max it out for them, everybody else, we are just here to max it out for that group of people. That is not a very stable foundation to build from, to build an entity of real value and enterprise that’s going to do great things in the world and grow for a long time. It’s going to be when everybody feels like they’re winning as a consequence of your organization. And so my mental picture is always each of your stakeholders, and by the way, we all have different businesses. So some of you might say, the community or the environment. And others might say, that’s actually not one of my stakeholders, or it doesn’t make sense for us, whoever you are.

David Gardner:

But picture each of your roughly four or five or six stakeholder groups, the big ones. And they’ve got their hands held together and they’re in a circle and right in the middle, raising it up, is that thing that you have found and that thing that you love that you are growing and everybody wants it to survive. Not just survive to thrive, everybody wants it to win. Win for me as the local community person where you happen to have started your business. And Mariano is a great example of that. I’m really that River-Sea Chocolates is in Washington D.C. That makes my life a lot richer as a community member and a sometime customer now.

David Gardner:

So it’s winning for everybody. It’s simple as that. And if you don’t do that, you got to check in your armor. And a lot of people, their chunk is, they’re employees, they are not actually really engaging their employees and in many cases they didn’t do step one, which was serve a higher purpose and state that and get alignment around that. And so all of a sudden, it’s hard to really run an awesome business when a big part… one of your big stakeholders isn’t engaged, or isn’t on board with what you’re doing.

David Gardner:

So let me move on really quickly in a sec to three and four, which I can do faster than one or two. But I want to conclude number two by saying that, you know this, but let’s say it again, every one of your employees would like to be paid more. Every one of your customers would like to pay less. Every one of your partners and suppliers would like to be in the front window, or on the end cap, or on the cover. And every one of your shareholders would like you to double their money tomorrow. And maybe there’s something about your local community and expectations there.

David Gardner:

And so the mentality that I have really taken on and embraced, especially since meeting John Mackey, I might’ve had some of this implicit in me before, but boy is this an explicit thing that I like to speak to now, and it transitions right into number three, conscious leadership. And that is the win, win, win mentality. Everybody needs to be winning, if you’re going to build something great. You can have these people feel like they’re getting short changed, so these other people can get this with that thing.

David Gardner:

There’s a beautiful called Integrity by Henry Cloud. And one of the things that Henry says in that book is, “Integrity is not like honesty,” no, not that kind of integrity. The integrity we were talking about here is structural integrity. Like the hall of your company, how you face the world and the stability that you’ve created, and you are going to have integrity if you have everybody winning, okay, that’s the win, win, win mentality. That number three is so often demonstrated and worked toward by conscious leaders, conscious leadership.

David Gardner:

Some of you do that better than I, I know that. Because I don’t necessarily think I’m that great at this, but I’ll say this, John Mackey’s book last fall, called Conscious Leadership is an awfully good starting point if you’re curious what somebody who’s built an amazing enterprise and it sits on our board today, full disclosure, and has had it a lot of value as a shareholder. And by the way, has also made some money as a shareholder. John will tell you, very happy to say that, that he really, really gets it. And it’s a wonderful book looking at it from all angles.

David Gardner:

And John has faults, you can look back at his past and he said some crazy things and occasionally upset people. And he is almost blunt to a fault as a person, for those who know him. But I also really appreciate that about him, because there are few people I can think of who are more authentic to what they truly believe and they’ll say it in the face of anything, even if it seems completely incorrect to do so, if he believes that and he also will change his opinion, and that’s one sign of conscious leadership.

David Gardner:

Anyway, conscious leadership takes as many different forms as there are personalities and we’re all different. But I have found that a wonderful book, if you’re looking for some guide posts or some thoughts to challenge you as a leader. And boy, as a stock picker, do I know how important my leaders are? And boy, as Motley Fool Venture funds don’t don’t we know because at the root level you’re working with a person who has an idea. But to me that’s just the same picking public stocks, It’s just at bigger scale.

David Gardner:

And our company is private, but we’re somewhere in between a startup and a big public company, which we may never be, but I know how important it is for us. And so it’s just, it’ll never change. And one other quick pointer on this is I’ve heard it said this way, an organization cannot outgrow its leader’s consciousness. In other words, the best way to grow your enterprise is to grow yourself. Ask yourself, are there blind spots or have others show you blind spots that may be holding your organization back because you yourself are held back?

David Gardner:

So conscious leadership is basically a lifelong quest to keep knowing thyself, peel away the layers, realize everything’s changing, you’re changing too, and make sure that you don’t have a glass ceiling that is based on your level of consciousness for your organization. That can mean different things to different people, different contexts. Okay. I have kind of a little bit over my time. I think I fell in love with some of my points, sorry.

David Gardner:

Number four, conscious culture. And for us at the Motley Fool, I think we are an incredible demonstrator of this. And a lot of you know and or work in our culture or have and I’m not saying we’re world-class, we’re a small company. I mean, I think it’s, I’m so impressed by Facebook, which even though some people hate Facebook, you ask the employees at volume and we’re talking about hundred thousand kind of people, not 600 employees, they love working there. They’re highly engaged. That is unbelievable to do that at that kind of a scale.

David Gardner:

But for us, we have always measured engagement and if we have 10 employees taking our series around, that’s a different thing that if we have 50 employees, 600, 6,000, 60,000, how much time you spend measuring engagement, it makes more and more sense as we grow. But these days at the Fool boy, if we don’t care deeply about the engagement level of our employees and we pull for it twice a year. And the first thing my wonderful brother, our CEO, Tom Gardner does, is he reads every employee comment in those surveys.

David Gardner:

And he purposes three to five of the insights that we get every six months. And the reason I fill out the survey each time, and a lot of Fools do too, is because we fix things we improve, or evolve, and adapt as a consequence of what we hear in our engagement surveys. And so there’s a trust level that you build with your employees when you say, “Conscious culture, how can we be more conscious? Do I have a blind spot? What aren’t we doing well at?” And these days, some of our surveys are able to at scale, identify that while people seem to be happy, a certain group, or demographic, or background within our employee base. And it might not even be obvious ones, obvious ones would be gender or race, and those count for a lot.

David Gardner:

But how about less obvious ones like new moms, or people who’ve been in our organization seven to 12 years, right? You can slice and dice the data and whatever makes sense for your context and get deeper insights. And when you have a leader, like my brother, Tom, who then out of love, heart and head goes right at that and fixes it, or at least makes it better. In six months, you are driving a culture of consciousness, which really can drive your entity for a long time.

David Gardner:

All right. So I have admittedly gone a little long and I have two exhibits to show. I’m still going to show them, but they’re quick. I hope share screen is enabled and here we go. All right. So this one just out my friends, yep. This is published nine hours ago. And Google it, it’s from Axios, businesses under more pressure to save society. So the Edelman Trust Barometer, which has been a consistent survey done for now more than 20 years, which basically asks, “Who do you trust globally, business, NGOs, government media?” And they’d added my employer, most recently.

David Gardner:

And this is an international study. Again, this is a revered one from one of the world’s biggest PR firms, and here it is about nine hours ago. And my employer is who I want to save my world. That’s the one I trust today, more than business, which by the way, I trust more than anything else. And so this shows the power to me, not just of capitalism, but of conscious capitalism. And part of this is pandemic driven, when all of sudden we realized, “Actually we’re going to need the private sector probably to not just come up with the vaccines, but distribute them.” And do a lot of other things besides like Zoom, which was not a government entity that gave us the ability to communicate through the last 18 months, private sector, public company, actually a heck of a stock recommendation for the Motley Fool.

David Gardner:

So in your heart, maybe you already knew this, but here are the numbers and these are live. This is real. And I love this, frankly, because I think you should want your employer. I think the company that you’re engaged with them working certainly as entrepreneurs, the one you’re running, this is great news. It also puts some pressure on you and me. And the headline is, businesses under more pressure. But I think that’s the right place for it to be, and I’m delighted that my employer ranks 15 percentage points higher than just business, which by the way, is still a pretty good number because some years ago they weren’t like this.

David Gardner:

You can read the article, it’s a short article, it’s a summary. But one of the other insights, which we’ll kind of skip is just that the more you’re from a kind of Western advanced democracy slash business world, the more you trust business in your employer, the less you trust your government. And the more that you are from India, Mexico, Brazil, South Africa in the UAE, the more you trust government and don’t trust the private sector. Well, we’re all to my knowledge, working in the United States of America. And so this is the world that we live in, and I want you to know that.

David Gardner:

And I’m kind of excited by these numbers personally. I’m so glad thar business is number one, and my employer is even higher than that. All right. So that was one exhibit and my other exhibit, and this is at this point, this is just bragging. So I apologize for this, but I picked stocks and this is something that I’ve done for a long time and I’m actually stepping away from, to spend time on other pursuits, but I love it. I’ve done it for a long time. And one of the things I do on my podcast every 10 weeks is I pick stocks for free and I picked five stocks to a theme.

David Gardner:

So for example, “Here’s five stocks that spark joy.” So if you’re a Mar-Con fan, or if you know about cleaning up your house and things to spark joy, that’s what I did. But I said, what about stocks, like products. Adam, I think you’ve done this with businesses that you’re running, that we’ve invested in and you get this. And so I think I want your businesses to spark joy. Mariano, you spark joy, right? So what are five stocks that spark joy? I just so happened to pick that on January 22nd, 2020, it’s been amazing. They’re up 161%, the market’s up 25%. So this was a heck of a basket, if you’re curious, that’s where they are and how they got there.

David Gardner:

And so Walt Disney is actually losing in the market, but man, if we’re not crushing it with some of this. By the way, this is just my take. This are the things that sparked joy for me, but I also think they sparked joy for the world. Well, why am I bothering to waste your time and share screen and brag? Because I picked five stocks for conscious capitalism, our topic today on November 13th, 2019. And yeah, this has been to me, this is kind of emblematic of what I’ve been trying to convey to you in approximately 20 minutes or so, which is that this is how I pick stocks. And this is how I try to run my business.

David Gardner:

And Warren Buffett said, “I’m a better investor because I’m a businessman and a better businessman because I’m an investor.” And so I think these things are tied. I think that you’re an entrepreneur and you’re also an investor, we’re investors in you. And I kind of love that I’m putting it out there, right? If this group of stocks bombs, this doesn’t make conscious capitalism look good, it would be my fault. Conscious capitalism should look good, but I’m really happy to say, “I’ve made conscious capitalism look good,” and thank you very much Etsy and Old Dominion Freight Line.

David Gardner:

A trucking company without any unions, because nobody’s ever wanted to rise up against the man because they’ve treated their employees so well for three family generations and also crushed the market. To me, one of the untold stories of conscious capitalism. Anyway, those are just five companies and you might not even agree that all of those are conscious companies. I think that they are, but just wanted to brag a little bit. Because I love picking stocks and I’d like you to see the real world results of taking this approach to business in life. All right, I’m embarrassed to say we have all three minutes for questions. Anyone want to raise, say something really quick? And I’ll say something quick back.

Ayanna Washington:

No one?

David Gardner:

And if not, I’m totally good with that. I hope I didn’t kill questions. I hope your mind must be swimming in the deep insights that you’ve just received. You’re just trying to process it all.

Mariano D’Aguiar:

From the Axios article, I think it’s just a self evident case for what a free market society is, where the highest level of trust in well developed and in democratic societies are in businesses and their employers. And as kind of the antithesis of it, or the more intervention in societies like Brazil, which I came from. And the difficulty to open up a business, a simple business, it will take you up to 120 days just to get to the local SEC. And then you have to go through stamps on one side and phone calls. And I mean, that was just like music to my ears, just to see that and see the self evident truth of a free market society and a market economy, is it fairs so much better in levels of trust.

Mariano D’Aguiar:

And I can definitely talk a lot more about throughout the presentation and what I have to say and my experience with chocolate and supply chain in the global supply chain, importing one good from different countries into us, in our markets to serve our community. So just a really insightful, it’s really just… I got goosebumps [inaudible 00:26:15], the societies that trust government more are the ones that mostly [inaudible 00:26:19], that’s a no brainer. It’s just how it is guys. I recommend you guys read the article, because I found out the article right now and just dig it through even more. And just to show these guys.

Mariano D’Aguiar:

I mean, people who sometimes have philosophical differences and they just show that as self-evident truth of the prosperity lines up with trust in individuals. I mean, business are individuals at the end of the day. So it just comes to that level of entities, [inaudible 00:26:51], getting orders from high above to the rest of society.

David Gardner:

Thank you, Mariano. And I love, of course, I was forgetting that you are from Brazil. But wow, what a perfect timing for me to throw that down, I was not even piecing that together, but that’s perfect. And it’s also a pretty good transition. If it’s 29 past the hour, if I have one more minute, let me really quickly speak to two quick questions and then pass the ball. So golden role share why, thank you, Ayanna for this, share why it’s an important topic for coming to embrace it, how it’s changed us for the better.

David Gardner:

So we have a golden rule orientation at the Motley Fool, and we’ve tried to think about that for each of our stakeholder groups. So we have a little booklet and we have talented employees like Kate Herman, who’ve memorized it, who know that the golden rule, as I’m sure many of us know is that you would treat others as you would like to be treated yourself. And so we’ve tried to ask that and articulate that for each of our stakeholder groups. And then we have people who think about that. I’m not going to say full time, but at least part time about each of our groups and doing that and being that, being golden rule with them.

David Gardner:

And we hold ourselves accountable as leaders right in front of the company there. And we’re not perfect. And so we make mistakes too, but putting it out there so that you are held accountable by your stakeholders towards something like that, use the golden rule, or some people use the platinum rule, which is arguably a level up over the golden rule. But anyway, whatever seems to drive you, sharing that with stakeholders and being held accountable is great. Mark, thank you for this. You’ve seen us embrace conscious capitalism clear focus on investing. Yeah, that is very true.

David Gardner:

I’m of course so proud of our Motley Fool Ventures team. I hope you are too, because we’re invested in you, but they are really… part of it is being in the D.C area, I think the DMV is a very diverse cosmopolitan area. People from all walks of life, all places in the world. And I think we get that, and I think the leadership of Rob and Olin and our whole team knows that. And I think there’s a real secret there. Because when I pick a stock of a public company with a female CEO, I think about all the things that she needed to do probably to get to the point of being the CEO of that company in a male dominated world, where she came from.

David Gardner:

And I usually favor the stock at that point because I’m like, “Wow, that’s probably a really amazing person.” And I would say that for other forms of minorities, that the secret is it’s actually probably a winning strategy because of the amazing hurdles that often you had to get over to get to that place. Anyway, I’m going to cut myself off there because I’ve now taken two minutes away from chocolate. I’m going to go mute. I’m still here. I’m running to get my chocolates and thank you, Ayanna and all Fools. By the way, [email protected]. Drop me an email, questions, thoughts, I’m here. Thanks.