Who do you work for?

With the publication of my new book, Save the World and Still Be Home For Dinner, I’ve posted a survey at www.SavetheWorldBook.com to help you determine whether you work for an enterprise that is helping forge a sustainable future or one that is trapped in the dying ideas of business-as-usual.  Who we work for is important.  If we want to change our future we must lead.  There is plenty to be hopeful about, and I want to get a pulse on your experience of the employer you work for or the organization you lead.

Recently I was doing leadership training for the Gap at their San Francisco headquarters.  I like the people at Gap a lot.  They understand how their huge global business can be a force for good, and they are serious about using their economic clout, market reach and worldwide workforce to create a better future than the self-consuming dinosaur business model we’ve trapped ourselves into.

It’s true; we live in a time when confidence in business leadership is at an all time low.  Just look at these statistics:

• 94% of the public does not trust business to regulate itself (AccountAbility).
• 86% view business as negatively impacting the public good (Harris Poll/Business Week).
• 76% of employees have observed illegal or unethical conduct by their employer in the past 12 months! (Harris Poll/Business Week)
• 98% of the public don’t believe CEOs are very trustworthy (NY Times).

This is sad. What’s really sad is that most of us would nod our head in agreement with these polls.  Business is the most powerful institutional force in the world, and the world doesn’t trust it.  That’s because human history has proven it’s not smart to trust that someone else’s self-interest will benefit you in the long run.  The Great Recession has just made that crystal clear.  But there is good news.  It’s that the world has changed.  Citizen consumers and citizen employers have awakened to the fact that we must create a new sustainable future.  One that works for our children.  All our children.  Perhaps nowhere is this more clear than in the market place which is changing at a breathtaking pace.

As more and more consumers and employees have demanded greener, healthier products responsibly made, the number, choices, and quality of these products has skyrocketed.  For instance, every major auto manufacturer is now engineering hybrid models that will be sold in every country in the next few years.  China has adapted tougher auto emissions and mileage standards than we have.  But for some companies like Gap, it’s more than just making t-shirts out of recycled plastic or organic fibers.  Increasingly it’s about human sustainability.

For instance, in Gap factories in developing nations they’ve instituted a personal and professional development program called P.A.C.E.  It’s designed to help under educated young seamstresses strengthen their literacy, their health, their life skills and business acumen.  Gap’s corporate social responsibility is investing in poor women because they are society builders.  And Gap is not alone.  In company after company I visit I see a roaring torrent of programs to enable employees to volunteer for their favorite cause, to raise their business standards on environmental impacts, and to promote health and human rights.

But wait, you say.  Isn’t all this just a little “greenwashing” and image polishing?  After all, it’s corporations that tare down the old-growth rain forests, over-fish our oceans, pollute our air, water and earth, and strip-mine our world from its natural resources.  Exactly.  All of that is true.  But it’s also true that global corporations and fast acting enterprises are the institutions most able to drive fast positive change.  They operate across boarders without political inhibitions.  They must respond in real time to consumer and employee attitudes.  Corporations are self-interested, but consumers determine where that self-interest leads them.  As long as we escalate our insistence on sustainable, responsible products and processes we will get more of them.

And now there is something turbo-charging demand for business responsibility.  It’s a new generation of employees.  The flood of 20 to 30-year old practical idealists who believe we can reshape our businesses into a force of progress and sustainability is raising the tide of positive change.  The energy of sustainability and social good is contagious, and I am seeing an epidemic of virtue take over business-as-usual.

This is not my imagination.  As Gen X independent thinking pragmatists take over more leadership roles, they are more connected to sustainable innovation, cutting bureaucracy and re-inventing our future.  And the new workforce of Gen Y and Millennials (those 16-30) are focused on re-making business into institutions of global sustainability.  What makes this new generation of leaders so potent is their number (126 million—far larger than the 75 million boomers) and their newly developed social technology which is driving change, informing attitudes and creating new business models faster than at any time in history.

I am hopeful this is happening in the nick of time.  We have ignored our problems for too long.  We’ve let what were little brushfires turn into a raging wildfire threatening our heath, our environments, our peace and every other important asset to our quality of life.

What’s the best thing we can do?

Participate in the business revolution!  I am seeing global companies life Gap, Nike, FedEx, and Johnson & Johnson transform themselves at a breathtaking rate.  No, it’s not perfect.  It will take years.  But the speed of change is accelerating.  Just 5 years ago sustainability and corporate social responsibility was something tree huggers and hippies whined about.  Today it is driving corporate strategy.  It’s time to turn up the volume of our demands for business to use their power and innovation to create sustainable value.  It’s time for us, no matter where we work, to transform our daily jobs into a global force for change.  We are the leaders of the sustainability revolution.  You and me.

So who do you work for?  Please take this short 5-minute survey and find out.  It’s a way to amplify your voice by helping us build a database to influence leaders.

And one more thing.  What do you think?  Do you have positive stories of companies, non-profits or individuals transforming the future?  Do you have personal aspirations to do so?  Tell us about them!

The Gap Does More Than Set Fashion Trends

I recently came across The Gap’s social responsibility website. I was quite impressed and wanted to give a shout out to their efforts. While their contributions to Project Red and their stand against child labor are more well known, what I was most impressed with is their dedication to employee involvement in their CSR initiatives. Some of their initiatives include:

• 2000 employee community leaders who organize company-sponsored service events and act as ambassadors for their work in the company and the community.
• In 2008 alone they donated $10.3 million in employee-driven community investment.
• Their Money for Time program provides a $150 grant to nonprofits for every 15 hours of employee volunteer time.
• Their Take Five program offers exempt corporate employees five hours of paid time off to volunteer each month, or 60 hours per year.
• In Action Days are events organized by employees of Gap Inc. brands to provide local volunteer opportunities. Thousands of employees have participated, dedicating hundreds of hours to a wide variety of projects.
• Team Grants support employee team projects. When at least three store employees spend 25 hours volunteering with a nonprofit that supports underserved youth or women, Gap Inc. provides a $250 grant to that organization. Each store receives an annual grant budget based on store volume. Since the program began in 2006, it has grown significantly, increasing from 220 team projects in 2007 to 723 in 2008.

Will Marre, leadership expert, is a huge proponent of employee involvement in CSR initiatives. In “Personal Social Responsibility Drives Employees to More Deeply Commit to Their Organization’s Success” he cites research that reveals that 93 percent of American employees say it is important for their companies to provide them with opportunities to become involved in social issues, and 72 percent want their employers to do more to support a cause or social issue. Marre believes that the best way to engage employees and create deep loyalty is to provide them with opportunities to make a difference in their community. He calls this Personal Social Responsibility.

Gap Inc. is a great example of Personal Social Responsibility. On their website it states, “We see a direct connection between our employees’ volunteerism and their commitment to Gap Inc. Engaged employees deliver strong business results, which is good for the community and our company. In a 2007 employee survey, nearly all respondents said it is important for them to work for a company that invests in the community. Studies also show that when a person is emotionally connected to a cause, giving is related to positive emotions and personal happiness. The bottom line: volunteering makes people happy, and happy people make better employees.”

Personal Social Responsibility is indeed becoming the new trend of CSR. As Marre states, “In the real world organizations are finding success by transforming a paternalistic paradigm of CSR into a launch pad for inspired employees to “save the world” right where they are.”

What Comes Around Goes Around

One of my husband’s favorite television shows is My Name is Earl.  Earl’s new found belief in karma is the backdrop of the show in which Earl tries to set right everything bad he’s done in hopes that by doing good, good will come to him.  While the show is fun and entertaining, I think it makes a good point.  Call it whatever you want—karma, the spirit of the universe, God— I have to agree with Earl.  When we honestly do as much good as we can, it not only benefits those we serve, but the good comes back to us ten fold.  And this rings true in every aspect of our lives, both personally and in business.

So this brings me to my question, why isn’t every company in the world grabbing social responsibility by the horns and incorporating it into their core business model? In Don’t Underestimate Power of Social Responsibility Lisa Hickey asserts that the common phrase, “what goes around comes around” is especially true in business.  She states, “There is a perfect correlation between socially responsible companies and economically viable companies.” 

In The Business Benefits of Corporate Social Responsibility several benefits to business are discussed such as building a reputation as a responsible business sets you apart, customers are rewarding responsible companies, and reducing waste and emissions saves money.  Additional benefits addressed in the article are as follows:

• A good reputation makes it easier to recruit employees.
• Employees stay longer, reducing the costs and disruption of recruitment and retraining.
• Employees are better motivated and more productive.
• CSR helps ensure you comply with regulatory requirements.
• Activities such as involvement with the local community are ideal opportunities to generate positive press coverage.
• Good relationships with local authorities make doing business easier.
• Understanding the wider impact of your business can help you think up profitable new products and services.
• CSR can make you more competitive and reduces the risk of sudden damage to your reputation (and sales). Investors recognize this and are more willing to finance you.

 

Corporate Social Responsibility also describes six driving factors for CSR: (1) the shrinking role of government, (2) demands for greater disclosure, (3) increased customer interest, (4) growing investor pressure, (5) competitive labor markets, and (6) supplier relations.

Will Marré, acclaimed CSR speaker and advocate, is a passionate voice for the benefits of social responsibility.  In Will Marre, Leadership Expert, on How Green Business Is the New Revolution of Business Strategy he’s quoted, “When you combine the triple bottom line of people, planet, and profit, the new sources of value and points of differentiation you uncover yields topline growth, fiercely loyal customers, and committed internal and external talent.”  Marré takes it a step further asserting that when CSR is incorporated into the business model it creates the greatest economic opportunity in the history of the world.   He states in Social Enterprise: How to Save the World and Grow Your Business at the Same Time, “Every problem is an opportunity. In the next decades we will have to re-invent every product we use to be ecologically friendly, energy efficient and recyclable. Just the opportunity to change all the light bulbs in the world has a mind-boggling upside.  The opportunities to lift billions of people from poverty, educate billions to live in the 21st century and unlock the keys to sustainable living and sustainable relationships are endless.”    

So, I return to my question: Why isn’t every company in the world embracing their social responsibilities when there is nothing to lose and everything to gain?  Doing good is a virtuous cycle that positively influences everyone and everything it touches.  So let’s take our cues from Earl, and even if our reason for doing good is so that good will come to us, we’ll make the world a better place.

 

Does Employee Engagement Come Down to Social Responsibility?

There is a crisis in the workplace today—employee disengagement.  In fact, Disengagement has reached what many would call a crisis level encompassing over 70% of the workforce and over 50% of management (Towers-Perrin Global Workforce Study).  Disengagement manifests itself in a lack of commitment to an organization’s goals, absenteeism, low performance, cynicism, low trust and chronic complaints of being overstressed.

The High Cost of Employee Disengagement reports that “actively disengaged” workers are costing US businesses $300 billion a year in productivity losses.  $300 billion!
Measurable costs such as product failures, customer service failures, and absenteeism are huge, but immeasurable opportunity cost associated with lack of innovation and execution are likely even larger and are manifested in loss of market share, margin, growth and even survival.

So what’s the answer?  It might surprise you.

According to Will Marré, acclaimed expert, in The Future of Work:  Engaging Employees to Drive Innovation asserts that disengagement stems from employees not having their needs met at work.  Marré refers to research that indicates that employees today long for three things: 1) meaningful work that contributes to a better society and healthier environment, 2) flexible working arrangements, and 3) personal growth.   The article states, “What 21st century employees want is to be engaged in meaningful work that benefits society.  This is the biggest driver of engagement.”

Tony Robbins agrees that a sense of fulfillment is important for our happiness and wellbeing.  In the TED video, Tony Robbins Asks Why We Do What We Do, he states, “When it comes to fulfillment, that’s an art.  And the reason is, it’s about appreciation and it’s about contribution.”  He further discusses the importance of our need to make a greater contribution.  Of six basic human needs, according to Robbins, our sixth need is to contribute beyond ourselves.  He states, “We all know, corny as it sounds, the secret to living is giving.  We all know life’s not about me, it’s about we.”

Social Responsibility Boosts Employee Engagement also agrees that a company’s social responsibility can lead to more engaged employees.  The article quotes Douglas Klein, President of Sirota Survey Intelligence who states, “”Businesses that recognize the importance of social responsibility often have employees who tend to be more satisfied with their jobs, adopt similar values, and become more committed to achieving success within the industry.”

Furthermore, Corporate Social Responsibility Pays Off reports that 70 percent of North American students surveyed in the 2003 CSR Monitor by Globescan said they would not apply for a job at a company deemed socially irresponsible.  What’s more, the survey found that 68 percent disagree that salary was more important than social responsibility.   The article also states, “Instead of just cutting a check to a foundation, companies find that the connection between CSR and employee engagement is deeper if employees are directly involved.”

The bottom line is we want to have meaningful work that makes a greater contribution to humanity and the environment.  It’s not just about a paycheck anymore.  It’s about a sense of fulfillment and a purpose beyond our own.  We want to make a difference.

What Comes Around Goes Around

One of my husband’s favorite television shows is My Name is Earl.  Earl’s new found belief in karma is the backdrop of the show in which Earl tries to set right everything bad he’s done in hopes that by doing good, good will come to him.  While the show is fun and entertaining, I think it makes a good point.  Call it whatever you want—karma, the spirit of the universe, God— I have to agree with Earl.  When we honestly do as much good as we can, it not only benefits those we serve, but the good comes back to us ten fold.  And this rings true in every aspect of our lives, both personally and in business.

So this brings me to my question, why isn’t every company in the world grabbing social responsibility by the horns and incorporating it into their core business model? In Don’t Underestimate Power of Social Responsibility Lisa Hickey asserts that the common phrase, “what goes around comes around” is especially true in business.  She states, “There is a perfect correlation between socially responsible companies and economically viable companies.”

In The Business Benefits of Corporate Social Responsibility several benefits to business are discussed such as building a reputation as a responsible business sets you apart, customers are rewarding responsible companies, and reducing waste and emissions saves money.  Additional benefits addressed in the article are as follows:
•    A good reputation makes it easier to recruit employees.
•    Employees stay longer, reducing the costs and disruption of recruitment and retraining.
•    Employees are better motivated and more productive.
•    CSR helps ensure you comply with regulatory requirements.
•    Activities such as involvement with the local community are ideal opportunities to generate positive press coverage.
•    Good relationships with local authorities make doing business easier.
•    Understanding the wider impact of your business can help you think up profitable new products and services.
•    CSR can make you more competitive and reduces the risk of sudden damage to your reputation (and sales). Investors recognize this and are more willing to finance you.

Corporate Social Responsibility also describes six driving factors for CSR: (1) the shrinking role of government, (2) demands for greater disclosure, (3) increased customer interest, (4) growing investor pressure, (5) competitive labor markets, and (6) supplier relations.

Will Marré, acclaimed CSR speaker and advocate, is a passionate voice for the benefits of social responsibility.  In Corporate Social Responsibility and ThoughtRocket.com he’s quoted, “When you combine the triple bottom line of people, planet, and profit, the new sources of value and points of differentiation you uncover yields topline growth, fiercely loyal customers, and committed internal and external talent.”  Marré takes it a step further asserting that when CSR is incorporated into the business model it creates the greatest economic opportunity in the history of the world.   He states in Corporate Social Responsibility Gains a Daily Voice on the Web,
“Every problem is an opportunity. In the next decades we will have to re-invent every product we use to be ecologically friendly, energy efficient and recyclable. Just the opportunity to change all the light bulbs in the world has a mind-boggling upside.  The opportunities to lift billions of people from poverty, educate billions to live in the 21st century and unlock the keys to sustainable living and sustainable relationships are endless.”

So, I return to my question: Why isn’t every company in the world embracing their social responsibilities when there is nothing to lose and everything to gain?  Doing good is a virtuous cycle that positively influences everyone and everything it touches.  So let’s take our cues from Earl, and even if our reason for doing good is so that good will come to us, we’ll make the world a better place.

- Jeannie Foy, ThoughtRocket Editor

CSR Will Still Survive the Economy

This past February in my post, CSR Will Survive the Economy, I make a case for CSR initiatives still having a bright future despite the economic downturn.  But as the recession continues and companies struggle through recovery, it makes me wonder…Just how long will the triple bottom line prevail when profit is at the front of everybody’s mind?

In Bonus Rage and its Pitfalls John Robertson discusses how new restrictions for top executives has a downside, social responsibility initiatives in particular taking a big hit.  He contends that in order for companies to operate under the triple bottom line of people, planet, profit, executives need the freedom to exercise judgment.  He states, “If companies were to be more than simply cash registers, executives had to be empowered to make choices. Directors needed to decide how the value being created should be divided up: how much to employees, how much to suppliers, how much to shareholders, how much to deserving community organizations and at what cost to the physical environments in which the company operates.”  He continues, “Unfortunately, this is precisely the discretion being stripped from the repertoire of the modern corporate executive as he is forced to make an unequivocal commitment to financial success.”

Robertson also contends that this won’t get better any time soon with governments looking to maximize the financial returns from their recent equity purchases, executives trying to repay loans as quickly as possible, and employees too scared of losing their job to demand better from their employer.

While Robertson makes a convincing argument, I believe that it’s only an excuse, a reason for leadership to free themselves of any obligation to humanity and the environment.  You see, this viewpoint stems from the idea of corporate social responsibility being solely a cost, rather than an integral, revenue building part of the business model.  Companies and leaders alike that still hold to the belief that CSR is merely writing a check will most likely cut back or quit their CSR practices altogether in the name of financial strife.

On the other hand, however, there are others who will strongly embrace the great opportunities social responsibility presents and come out stronger on the other side of this recession. Will Marré, CEO of REALeadership Alliance, states, “When times are tough it’s hard not to be hijacked by fear. Thinking about how much good we can do becomes downright unnatural when we’re genuinely afraid we won’t have what we need.  But what if we turn that fear upside down?  Imagine that the key to security, prosperity, and happiness comes from doing good.  As much good as possible.”  According to Marré, now is the time to invest in social responsibility.  In fact, he contends that saving the world is the greatest economic opportunity of our time.

I do indeed stand by my original posting…CSR will survive the economy.  We cannot allow our values to be turned on and off depending on the weather of the current situation.  The triple bottom line is a way of doing business, not a fad that has run its course.

Let Destiny Catch You

*******CLICK HERE FOR A FREE DOWNLOAD from Will Marre’s Save the World and Still Be Home for Dinner book, being published in September 2009*******

After living nearly six decades on our planet I’ve observed that the bounds of human arrogance are nearly limitless. One way this troublesome truth shows itself is the all too frequent smugness of the extraordinarily successful. These are folks who say they don’t believe in luck. Last year I watched none other than Oprah Winfrey extol the virtues of wish fulfillment as presented in the pesky book titled The Secret. She said simply, “I don’t believe in luck.” Really?

Well believing in focusing one’s intention on all the good things we want cannot be the whole story. If it were true, the collective knowledge of our thousands of years of human experience would have trained all of us in the secret of being healthy, beautiful, rich and content. If intense intention were the answer, we would have learned to intend away our job losses, foreclosure, cancers, relationship problems, struggles with children and every other condition we intensely don’t want. And yes, if the answer was simply wishing with the strength of a personal emotion-mental-spiritual atomic-powered will for all good things—health, love, wealth and happiness. If that was the real secret…well that’s what we’d all have. Intense desire is not hard for humans to master after all. But we don’t have those things. Instead we have a smorgasbord of good things and rough things, or struggles and successes of satisfactions and longing. All of us. Even Oprah.

I am thinking about this because recently I was helping a group of executives from a big brand name company re-commit to their “noble cause.” We were talking about corporate social responsibility and how they could use their immense wealth, talent and global reach to create a sustainable future. Awesome stuff. And an inspiring conversation. Part of the discussion than turned to life balance. As leaders of a global enterprise, few of them had much daily contentment with their lives. They feel constantly torn between their worthwhile and very demanding work and their families and personal interests. One of them said that when you’re engaged in a great purpose, that purpose must come first because if you don’t make it happen, who will?

I called time out. I said that although that kind of thinking is very seductive, it’s wrongheaded. It feels noble. Even self-sacrificing. But it’s infected with self-inflation. As a wise counselor once said to me in a time of my personal soul searching, “The world doesn’t need another savior, and if it did, it wouldn’t be you!” The clarity of that idea hit me like being whacked in the face with a big wet fish. I got it.

From that day forward I learned that what life is calling me to do is to simply show up and make by best contribution to what is at hand. To act on what pulls my attention, gets my blood hot and sustains my interest. One thing I’ve leaned is not to over try. To try so hard to be important or to make my difference that it hurts the ones I love the most. What I’ve come to believe is that all of us should strive to become the best all-around person we can imagine being. And that process never stops. Never. If destiny or luck or whatever gives us a temporary leading roll in the drama of human history than the director will call our name. We don’t have to bully our way to fame; we just need to know our lines.

Most people who become publicly extraordinary seem to be chosen by extraordinary good fortune. But the size of our good influence is trivial compared to the quality of it. Over my lifetime I’ve seen too many people with mediocre talent become wealthy and famous, while I observed many bright, well-educated, hard working people struggle. I’ve seen the good suffer and bad prosper. I’ve seen stupid ideas adapted while brilliant ones were discarded. To think that people get what they deserve is a comforting illusion, and I say that with the full understanding that out of the billions who have walked this earth I am among the most fortunate.

But whatever we get should not be a source of frustration because if there is anything the collective wisdom of the ages teaches it’s that the whole point of life is not what we get but what we give. And that we have total control over.

So what do you think about luck? About what we should sacrifice and what we should not? What about the obvious inequities of life?

Corporate Social Opportunity Rules

I’m always talking about changing the view of corporate social responsibility into corporate social opportunity.  How if done right, companies don’t have to choose between profits, people, and the planet.  This is what I mean.

I was reading an interesting article today of an interview with Rosabeth Moss Kanter, Professor Business Administration, Harvard Business School. She was asked a very good question, “Can one realistically expect values to prevail over profits?”  She answered, “It does not have to be principles over profits. In fact, principles often get you profits.”  She goes on to give an example of Banco Real, a bank in Brazil that has environmental and social responsibility criteria on loan applications.  By so doing, the bank has customers coming back to them with a plea to help them comply and also new customers who, because of this standard, won’t put their money anywhere else.

Another example Kanter cites is P&G and their water purifier called PuR.  At first, the company couldn’t make a profit out of it and many wanted to stop the project.  But instead the company embraced the product’s importance for people who don’t live near clean drinking water and created a non-profit organization to distribute it.  It turns out that after the tsunami, the demand skyrocketed so they not only recovered the cost but even more value came from employee commitment, demonstrating their values to customers, etc.

These two examples are proof that if we truly embrace our social responsibilities and transform them into social opportunities, the rewards will be endless.  The triple bottom line is not too idealistic…it works.

Social Responsibility vs. Greenwashing

Wow—greenwashing sure has been the subject of a lot of discussion lately.  I wanted to follow up on my recent post on the subject, War on Greenwashing.  It seems that while we are paying closer attention and trying to support green companies, we’re just as worried about being misled about who and what is actually as green as they claim to be. The “Green” Hypocrisy: America’s Corporate Environment Champions Pollute The World reports some disappointing news.  It states, “The irony of the “green” movement of US companies is that many of the firms that spend the most money and public relations effort trying to show the government, the public, and their shareholders that they are trying to improve the environment are also among the most prolific polluters in the country.”

The article goes on to list the Top Ten Greenwashers in America.  They are as follows:
1.    General Electric
2.    American Electric Power
3.    ExxonMobil
4.    DuPont
5.    Archer Daniels Midland
6.    Waste Management, Inc.
7.    International Paper
8.    British Petroleum
9.    Dow Chemical
10.    General Motors

Some are no surprise such as ExxonMobill (Read my post Exxon-Exoff), but all should be ashamed.  This time in history presents us with such an amazing opportunity to do something great in changing the world, in making a real difference in the lives of so many.  And when I see big companies with powerful leaders wasting this opportunity by flitting away their money on some bogus PR campaign or half efforts at protecting the environment, it drives me crazy.  Sure, things are bad right now, but at the same time we have the power to turn it around and give a real future to our children.  It’s exciting!  And if you’re not willing to rise above the herd and, as the saying goes, turn lemons into lemonade, then get out of the way and make room for someone who is.

Social Responsibility and Education: The Answer to Everything and the Cost of Doing Nothing

If our society has a core social responsibility it’s to educate our children. This is simply the greatest thing we can do.  Nothing else even comes close.  Nothing.  In study after study, education, especially education after high school, is associated with everything more we want and less of everything we don’t want.  Generally the more education a person has the more likely they are to be healthy, economically secure, happily married, vote, tolerant of others, give to charity and care about the common good.  And to the contrary people who don’t graduate from high school are more likely to be substance abusers, spouse and child abusers, go to jail, be stuck in poverty, divorced and die young.  If we ended all social programs to deal with the symptoms of a poor education and poured all these public resources into providing a world-class life-long education system we might all be better off.

Unfortunately that’s not likely to happen.  The status quo of higher education is a sacred cow and a financial bonanza for free riding bankers who make billions from offering government guaranteed loans to college students.  This is an example where our common good is held hostage by special interests that care more for themselves than our children.

It was Abraham Lincoln who had a vision of free college education when he championed the land grant state college system begun in the 1860s.  Today college costs are outrageous because so little of college budgets are spent on classroom learning.  College tuition has gone up over 600 percent since 1990.  Colleges spend billions on turning their campuses into shopping malls and their sports teams into brands.  And while some universities should indeed be centers of research, most of our children would be better served if most colleges were focused on state of the art teaching.  The biggest breakthrough will come when we quit educating like the Greeks did with live teachers teaching a few students under a pillar and use the web and social networking to enable the world’s best teachers to teach us what we need to learn when and where we need to learn.  Imagine Google and Facebook having a best in class university.  (I have working on such an initiative for the past 18 months.  WeAreCitizenOne.com)

In the mean time we need to bring the cost of borrowing for tuition down as much as possible and increase the availability of grants as much as possible.  In study after study the most efficient way to do this is direct student loans from our government without the greed of Sallie Mae’s bankers and others (Bank of America, Citi, Wells Fargo) playing middle man while adding no measurable value.  In 2008 Sallie Mae, a private bank that does nothing but package government guaranteed student loans, paid their money losing CEO $4.8 million and their vice chairman $13.2 million.  Of course they have a corporate jet.  It’s hard to see what private banks do to earn any of the gigantic fees they earn from these loans.  They claim they provide value by marketing, packaging and collecting the loan payments.  But a parallel government direct program does all the same things at less cost.  I know.  How can that be?  Well large corporate bureaucracies are not more efficient than government ones.  (Just consider GM.)  Offering government guaranteed loan programs through private banks is nothing more than corporate welfare like we offer to the oil industry, food industry and even the tobacco industry.  Meanwhile in an article in the San Diego Tribune on April 13th, Lenders to Oppose Student Loan Plan, it stated that:

“The Congressional Budget Office says that replacing subsidized loans made by private banks with direct government lending would save $94 billion over the next decade – money that Obama would use to expand Pell grants for the poorest students.”

Sometimes corporate social responsibility mandates corporations get out of their business and that all the people these enterprises employ devote their energies to creating a future we need by working for someone else.  (Beyond private student loans I can think of the cigarette business…)  Today the student loan business has created a generation of debtors.  The typical college graduate has $20,000 of student loan debt and many owe $50,000 or more.  This is an unsustainable system.  We could do much better for our children.  Much better.

What are your thoughts on education?  The cost of college, etc?

Next Page »