The Enlightened Capitalists: Cautionary Tales of Business Pioneers Who Tried to Do Well by Doing Good

by James O'Toole

Overview

An expert on ethical leadership analyzes the complicated history of business people who tried to marry the pursuit of profits with virtuous organizational practices—from British industrialist Robert Owen to American retailer John Cash Penney and jeans maker Levi Strauss to such modern-day entrepreneurs Anita Roddick and Tom Chappell.

Today’s business leaders are increasingly pressured by citizens, consumers, and government officials to address urgent social and environmental issues. Although some corporate executives remain deaf to such calls, over the last two centuries, a handful of business leaders in America and Britain have attempted to create business organizations that were both profitable and socially responsible.

In The Enlightened Capitalists, James O’Toole tells the largely forgotten stories of men and women who adopted forward-thinking business practices designed to serve the needs of their employees, customers, communities, and the natural environment. They wanted to prove that executives didn’t have to make trade-offs between profit and virtue.

Combining a wealth of research and vivid storytelling, O’Toole brings life to historical figures like William Lever, the inventor of bar soap who created the most profitable company in Britain and used his money to greatly improve the lives of his workers and their families. Eventually, he lost control of the company to creditors who promptly terminated the enlightened practices he had initiated—the fate of many idealistic capitalists.

As a new generation attempts to address social problems through enlightened organizational leadership, O’Toole explores a major question being posed today in Britain and America: Are virtuous corporate practices compatible with shareholder capitalism?

Product Details

ISBN-13:	9780062880246
Publisher:	HarperCollins Publishers
Publication date:	02/26/2019
Pages:	592
Sales rank:	1,214,753
Product dimensions:	6.10(w) x 9.10(h) x 2.00(d)

About the Author

James O’Toole is the author of seventeen books, including Work in America and Vanguard Management. Professor Emeritus at the University of Southern California’s Marshall School of Business, and Founding Director of the Neely Center for Ethical Leadership. While at USC, he held the University Associates’ Chair of Management, served as Executive Director of the Leadership Institute, and editor of New Management magazine.

Table of Contents

Preface: The Good Unearthed xi

Introduction and Background: Why It Is Hard to Do Good xix

Part I The Pioneers

1 The First Business Reformer: Robert Owen (1771-1858) 3

2 Man with a Thousand Partners: James Cash Penney (1875-1971) 31

3 The Businessman Who "Cleaned Up the World": William Lever (1851-1925) 51

4 Kisses Sweeter Than Wine: Milton Snavely Hershey (1857-1945) 71

5 Creating an Enduring Enterprise: James Lincoln (1883-1965) 94

6 New Forms of Incorporation and Governance: John Spedan Lewis (1885-1963) and John Joseph Eagan (1870-1924) 120

7 Johnson & Johnson's Roller-Coaster Ride: Robert Wood Johnson (1893-1968) and James Burke (1925-2012) 145

8 Great Genes: Levi Strauss (1829-1902) and His Heirs 176

9 Marks & Sparks: Michael Marks (1863-1900) and the Marks and Sieff Families 206

Part II The Golden Era

10 Leadership as an Art: Max De Pree (1924-2017) 227

11 Too Much of a Good Thing: William C. Norris (1911-2006) 243

12 Business Mavericks: Ken Iverson (1925-2002), Robert Townsend (1920-1998), Herb Kelleher (1931-), Bill Gore (1912-1986), and Terri Kelly (1963-) 264

13 The Patricians: Thornton Bradshaw (1917-1988), J. Irwin Miller (1909-2004), Edwin Land (1909-1991), John Whitehead (1922-2015), and Roy Vagelos (1929-) 304

14 Environmentalists or Capitalists? Anita Perella Roddick (1942-2007) and Tom Chappell (1943-) 342

15 Lever Redux: Ben Cohen (1951-) 376

16 Capitalists of a Different Stripe: Yvon Chouinard (1938-), Jack Stack (1949-), Robert Beyster (1924-2014), and Others 395

Part III Yesterday, Today, And Tomorrow

17 Looking Back: What We Have Learned 423

18 Looking Forward: The Prospects for Enlightened Corporate Leadership 442

Conclusion: Difficile Est Bonum Esse 473

Acknowledgments 479

Notes 483

Index 511

Editorial Reviews

12/10/2018

O’Toole (Creating the Good Life) makes a meticulous and captivating study of business leaders throughout history who, having succeeded at business, attempted to do good, ruefully concluding not many could juggle both long-term. Some prevailed for a time, such as Robert Owen, who transmuted the Dickensian horrors of Great Britain’s industrial revolution into a model workplace while generating record profits in his textile mills. Owen reduced hours, guaranteed employment, provided medical care and pensions, ensured workplace safety, and offered schooling. While Owen’s achievement was remarkable, it was never duplicated, and he later lost his fortune attempting to build a utopian commune. More recently, Gravity Payments CEO Dan Price found himself reviled by his peers and even criticized by his employees after he cut his own salary and raised every worker’s minimum pay to $70,000 per year in 2015 (some workers felt it was unfair that less-experienced colleagues received pay increases). O’Toole is an enthusiastic and heartfelt advocate of corporate virtue, but, he concludes, “the practices of investor capitalism... threaten the cultures of enlightened companies.” He sees potential solutions in private and founder ownership of companies—to prevent shareholders from “excising” beneficial practices—and consumer pressure on businesses to address social issues. This comprehensive and thoughtful study of the often troubled relationship between business and benevolence will provide readers unexpected food for thought. Agent: James Levine, Levine Greenberg Rostan Literary Agency. (Feb.)

Publishers Weekly

As the issue is top of mind for Wall Street and Silicon Valley today, O’Toole’s book will be a valuable collection of case studies on what works and what doesn’t.

Business Insider

[An] enormous but accessible book… Fascinating.

Financial Times

[An] admiring but unflinching survey… Mr. O’Toole has made a strong case that enlightened stewardship is in the interest of stockholders. In setting out to write a brief for social responsibility, he has delivered some managerial wisdom. Humanity in the corner office need not be altruistic; it may simply be good business.

Wall Street Journal

Brainy and provocative.

Financial Advisor

James O’Toole’s clear-eyed assessment of the history of ‘enlightened capitalism’ is a must-read for any business leader serious about shaping its future—and thus our own.

Jay Coen Gilbert

[An] enormous but accessible book… Fascinating.

Financial Times

[An] admiring but unflinching survey… Mr. O’Toole has made a strong case that enlightened stewardship is in the interest of stockholders. In setting out to write a brief for social responsibility, he has delivered some managerial wisdom. Humanity in the corner office need not be altruistic; it may simply be good business.

Wall Street Journal

2018-11-21

A history and analysis of "enlightened capitalists [who] sought to address social problems primarily through their business practices, rather than by acts of charity or philanthropy."

With the exception of the relatively recent rise of movements like corporate social responsibility, the divide between corporate ambition and philanthropic efforts has been relatively stark. O'Toole (Emeritus, Business/Univ. of Southern California; Creating the Good Life: Applying Aristotle's Wisdom to Find Meaning and Happiness, 2005, etc.), founding director of the Neely Center for Ethical Leadership and Decision Making, gives background and context to the efforts of those who have attempted to challenge one of business's oldest axioms that it is "hard to be good." These enlightened capitalists, writes the author, are notable for their strong ethical compasses, respect for other people, and commitment to sticking to their values through good times and bad. The more familiar characters include James Cash Penney, who created a retail empire that's barely holding on today; and Levi Strauss, whose company has "a jaw-dropping capacity to undertake a corporate volte-face in company policy and strategic direction." In the second half of the book, O'Toole narrates more modern stories—e.g., the epic battles between William C. Norris and Seymour Cray to create the supercomputer; business mavericks like Herb Kelleher of Southwest Airlines and Bill Gore, who coined the term "unmanagement"; and environmentalists like Anita Lucia Perella Roddick, who genuinely tried to change the culture with her Body Shop chain of natural products. Looking forward, the author examines how some business leaders are changing their tunes on environmental and social challenges, integrating ethical considerations into corporate strategy and using social engagement with customers to gain a competitive advantage. O'Toole writes that his method in performing this social review is simple storytelling, and it works; the book serves as an informative road map for leaders who dare to break the mold.

A tapestry of remarkable characters, high drama, and entertaining story arcs for leaders of businesses large and small.

Kirkus Reviews

03/01/2019

O'Toole (emeritus, Univ. of Southern California Marshall Sch. of Business; Creating the Good Life) details several British and American companies that adopted "enlightened" policies regarding the environment, treatment of employees and customers, or relations with the communities in which they are embedded. As a result, this book draws conclusions from the experiences of a specific set of companies. While the author clearly is sympathetic to these enlightened capitalists, criticisms of these leaders are also taken into account. One of the conclusions is that corporate social responsibility adds complexity and difficulty to a manager or director's job responsibilities. The author notes that it can also be seen as in conflict with the overriding goal of a company's management: stock price maximization. This leads to a second conclusion that, because shareholders tend to be solely fixated on short-term performance regarding the stock price, companies with publicly traded stock are inhospitable to enlightened leadership, which often results in long-term projects not immediately beneficial to the company itself. VERDICT This accessible, informative work should appeal to readers interested in learning more about corporate social responsibility.—Shmuel Ben-Gad, Gelman Lib., George Washington Univ., Washington, DC

Library Journal

Read More