FINDING THE SOUL OF SUCCESS

FINDING THE SOUL OF SUCCESS

From Chicken Soup for the Entrepreneur's Soul

Finding the Soul of Success

In 1970 my wife, Kate, and I started our company—Tom’s of Maine—with a $5,000 loan and the idea that environmentalism and consumerism didn’t have to be at odds. We wanted to use natural products—those without abrasives, dyes and artificial ingredients that might be harmful to humans and the environment—and we had a feeling there were other people who shared our desire. We set out to build a company on the belief that people and nature deserve respect.

Our initial successes were with natural soap and shampoo. Then, in 1974, we developed the first-ever natural toothpaste. It was a huge hit—eclipsing sales of our other products overnight—and over the next decade we attracted millions of consumers to Tom’s of Maine natural personal care products. Our instincts had been right: our “different” kind of company could work.

By the mid-1980s, however, what had started as a new kind of business was looking more like a typical big business. Tom’s of Maine had expanded to $5 million in sales. I had hired MBAs and packaged-goods professionals to help break into the mass market, and our products could be found not only in health food stores, but also in supermarkets and drugstore chains. We were growing an average of 25 percent per year. I was flying all over the country serving accounts. On the outside, everything looked great. But on the inside, I was miserable.

Though I called myself an entrepreneur, I hadn’t created a new product in five years; in our first ten years in business, Kate and I had created a dozen different products. The management team I’d put in place was focusing the company’s energy elsewhere—on tasks like financial planning, management reorganization and market development. In addition, we battled regularly over my commitment to natural ingredients, to our customers and employees and to the environment. They wanted to add artificial sweetener to our toothpastes to make them taste better. They felt employees should punch a time clock. They thought our packaging needed flashy “benefit statements” instead of our simple personal note to consumers. These young MBAs had helped me get what I wanted—a successful, growing company—but I had a feeling there was more to business than being big. Something was missing. Something felt wrong.

In the fall of 1986, I surprised myself when I confided to my friend Reverend Eckel and his wife, Connie, “I’m tired of making money.” I confessed how confused I felt about what I should be doing with the rest of my life. I was considering selling the company and retiring at age forty-three. Perhaps I’d like to study more about theology. “I’m not really understanding my mission in life,” I shared.

Connie interrupted to ask, “How do you know that Tom’s of Maine isn’t your ministry?”

Her question made me think: Perhaps my business was my mission in life.

After visiting the Harvard Divinity School for a Theological Day, I decided to apply. I became the first sitting CEO to earn a master’s degree at Harvard Divinity School, splitting my workweek between the campus and my company. As I began attending lectures, one overriding thought held my focus: Could I stick to my respect for humanity and nature and still further the growth of my company, or did I have to sell my soul for success?

One of my first answers came in my introductory ethics class. My professor, Richard Niebuhr, presented utilitarianism as the dominant ethical norm, where a course of action is calculated on the basis of what gives the most good to the most people. The term “utilitarianism” was new to me, but I recognized it as the value system that drove the business world, where “good” was equated to profits. But Professor Niebuhr went on to say that this was just one type of value system, and he introduced several others. I saw that Kate’s and my instinctive way of conducting our lives and our business seemed to follow “formalism”—that inner sense of obligation and human connection that people feel for their friends and neighbors. Our first customers had been family and friends. We respected our customers, and we were not in business to maximize profits by cheating them or skimping on quality. I was beginning to see a philosophical foundation for running a business with our hearts as well as our heads.

My next “aha” moments came when Professor Niebuhr introduced the writings of the twentieth-century philosopher Martin Buber and the eighteenth-century philosopher Jonathan Edwards. In each case, my immediate thought as I read their works was, Why hadn’t I been taught this before?

Buber wrote about an “I-Thou” versus “I-It” relationship with the world. The “I-It” relationship was the typical business approach: treating the world as an object for us to use. In contrast, the “I-Thou” relationship was about loving and honoring the world for its own sake. Buber believed that both relationships ought to be integrated in our lives. To be fully human, we should approach the world from the mind and the spirit. We can respect what we also use.

Edwards’s philosophy was that our sense of identity comes not only from being individuals, but also from a sense of relation to others. Following this logic, I should view my company not only as a private entity but also in relation to other entities: employees, financial partners, customers and suppliers, as well as the community and environment.

I began to see a new approach to a business plan. Tom’s of Maine was part of a web of social relationships that called for responsible action. That’s exactly how Kate and I had run the company that first decade, with a commitment to using natural ingredients and serving our customers and employees.

Studying theology turned out to be the best business decision I’d ever made. I rediscovered not only what kind of entrepreneur I was and wanted to be, but also the language with which to describe it. I reconfirmed that the intuitions we had started our company with had been on the mark. Before, I hadn’t the intellectual confidence to question the standard ways of doing business. I now knew that my way of doing business, as different as it was from the traditional approach, had a firm grounding in Western religious and moral thought. I could manage Tom’s of Maine for profit and the common good.

But how was I to get my management—actually, the whole company—on board with my way of thinking? How could I convince them to trust the kinds of intuitions and values that had accounted for our original success? I decided to bring a bit of theology school to Tom’s of Maine. I gave copies of Buber’s book I and Thou to our managers and members of our board, and then asked Professor Niebuhr to visit for an open dialog with the board of directors. I hoped to show them that some of the business practices they thought primitive or unprofessional—things like personal messages on our product boxes, no time clock for employees to punch and answering all our consumer mail—were worth keeping.

The strategy was a success. Many executives and board members felt exhilarated by the dialogue. We decided to have more sessions, and over time we developed a statement of beliefs and a mission statement to define the future of Tom’s of Maine. We identified core values such as being socially and environmentally responsible as well as financially successful, and core beliefs such as a person’s responsibility to his or her community and the inherent worth of people and nature.

Then we made the mission the master we would all work to fulfill. We made our values the starting point for all new initiatives and growth strategies. Not everyone on our staff could adopt and adjust to the new values; those who couldn’t ended up leaving. For those who remained, we had a long haul institutionalizing the new culture, training employees and integrating the new way of thinking into the daily practice of business.

By setting our operating standards within our values, business choices became very clear. There was no longer a clash between management and me. Our decisions were driven not by the market, but by what we believed in. For instance, even if our new baking soda toothpaste tasted a little odd, we couldn’t add artificial sweeteners. We had to trust that our customers wanted an all-natural product and would appreciate the cleaning power of baking soda. (They did, and the toothpaste was an instant success.) If we wanted our toothpaste to be approved by the American Dental Association, we’d have to find a way to satisfy the ADA’s fluoride testing criteria without compromising our policy of no animal testing. It cost us ten times as much to test on human subjects, but Tom’s of Maine became the first natural toothpaste to earn the ADA’s seal and the first company to receive FDA approval on fluoride toothpaste without animal testing.

As we applied this new value system over the years, something exciting became apparent: better values lead to better value. Tom’s of Maine wasn’t profitable “in spite of” being socially and environmentally responsible. Rather, our values actually brought the company tremendous success.

Tom’s of Maine has become the largest manufacturer of natural personal-care products, offering more than seventy products available in 35,000 stores nationwide. Our toothpaste is the seventh top-selling brand, and our company continues to experience double-digit growth. We are known for our great natural products and for our corporate values.

Back when we started, Kate and I sensed there were other people like us who would appreciate natural products. Today, we know 13 percent of the country considers natural products important to them. These people aren’t defined by age, sex or income but by values similar to ours. It turns out values-based business isn’t just the nice thing to do; it’s also the smart thing to do.

Tom Chappell
As told to Julie Long

EPILOGUE: Sticking to his instincts and putting values at the core of his actions has brought Tom Chappell success far beyond the balance sheet.

Much as he created the natural products industry, as cofounder and CEO, Tom has created a new model of commerce. Tom’s of Maine uses all manner of ecologically sound manufacturing practices, donates 10 percent of pretax profits to nonprofit organizations, encourages employees to spend 5 percent of their paid company time volunteering in their community, and institutes Common Good Partnerships like Dental Health for All and Rivers Awareness Program.

To help other businesses find success through social responsibility, Tom has authored two books, The Soul of a Business: Managing for Profit and the Common Good (Bantam Books, 1993) and Managing Upside Down: The Seven Intentions of Values-Centered Leadership (William Morrow and Company, Inc., 1999). He also founded the Saltwater Institute (www.saltwater.org), an educational foundation that teaches values-centered leadership.

Tom’s of Maine and the Chappells have earned numerous awards and recognitions over the years. Most recently, Tom and Kate received the Salvation Army’s “Others” Award for “an extraordinary spirit of service to others,” and were the first recipients of “Taking Action for Animals Corporate Ethic Award for Animal Advocacy” presented in 2005 by a collaborative of leading animal rights organizations.

To learn more about Tom’s of Maine and the Chappells, please visit www.tomsofmaine.com.

Julie Long

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