First Principles
Any conversation about business in the 21st century takes place within the history of capitalism, a system that has been fantastically successful globally on its own terms, has materially improved the lives of billions, and has also entrenched various kinds of exploitation in ways great and small, old and new.
Our view is that capitalism, the markets that fund it, and the business practices based upon it, are both good and corruptible. We know of no other economic system in our imperfect world that can produce such prosperity, liberty, and satisfaction by allowing us to use our gifts, pursue our interests, collaborate through self-organizing communities, and generate value for our fellow humans.
At the same time, precisely because of its social and economic potency, and its invitation to power and wealth, business has also proven to be an enabler of widespread harm, exclusion, and exploitative extraction of value. Though markets can offer us virtuous incentives to meet the needs of certain groups, they can also generate perverse incentives to exploit and exclude others.
And while each generation eradicates some of the worst business practices of earlier eras, it manages to introduce new ones in their wake. We still live in an age of sweatshops, predatory sales practices, financial fraud, environmental degradation, and racial inequity. Some of today’s most profitable and highly capitalized businesses are predicated on leveraging their customers’ attention and privacy, or their workers’ vulnerability, with astonishing levels of sophistication and misdirection. Workplaces remain the site of millions of small daily indignities, visited on fellow human beings in every area of business from contract negotiations to team dynamics.
This fundamental tension at the heart of capitalism—its proven power for social good entwined with its legacy of harm—has been present since Adam Smith articulated its principles and limitations in the 18th century. In the 1970s, economist Milton Friedman famously proposed that the “social responsibility of a business is to increase its profits,” so as to maximize shareholder value. In this view, society is best served through a single, clear accountability to investors, who in enlightened self-interest work through rational markets to reward organizations that benefit the world over the long run.
Redemptive business leaders are stakeholder capitalists in heart and practice.
Business should work like that, but it so often doesn’t. Indeed, ever since Friedman’s view was codified, reformers have sprung up to challenge and moderate it, offering such alternatives as “creative capitalism,” “shared value capitalism,” “conscious capitalism,” “compassionate capitalism,” “inclusive capitalism,” “completing capitalism,” and so on. These all reflect two widespread convictions about the purpose of business.
First, it seems we want to live in a society in which organizations carry obligations not only to their present shareholders, but also to current and future stakeholders—employees, customers, shareholders, partners, and communities. Second, these obligations cannot be adequately valued or incentivized through financial metrics alone, and therefore a more comprehensive and balanced accounting of the impact of a business (often referred to as a multiple bottom line) is needed.
Companies such as Whole Foods, Chobani, and Patagonia were prophets of this “stakeholder capitalism” view from their inception, and scaled their philosophy into the world as they succeeded on the market’s terms. Likewise, ventures in the social entrepreneurship sector, or those in the B Corp movement, are defined by their rigorous pursuit of social, cultural, and environmental impact metrics alongside financial ones. The stakeholder view is moving toward the mainstream, and is now espoused—at least publicly—by many of today’s most prominent institutional investors and corporate leaders.
While there is still plenty of room for debate on the best regulatory, governance, or equity arrangements, redemptive business leaders are stakeholder capitalists in heart and practice. We view God—not our investors, and certainly not ourselves—as the ultimate source of accountability. We are called to love our neighbors, create lasting cultural products, and steward the resources of creation, whatever kind of business we are in. So whether running a fashion brand, offering cleaning services to homeowners, developing enterprise software, leading a healthcare startup, manufacturing appliances, or launching a restaurant—we are to care for every stakeholder of the business as part of our mission.
We confront two central myths in business: the supremacy of money and the inevitability of progress.
That said, we are confronted every day with two central myths of business: the supremacy of money and the inevitability of progress. The first of these, simply, is that the bottom line is the bottom line. Nearly every decision will test and reveal the leaders’ ultimate view of money—namely, in this business, is money a means or an end? Regardless of what we say about our people, mission, and values, do we feel so beholden to “the money” that financial considerations exert downward pressure on every element of the enterprise? Are financial returns in the short or medium term the one non-negotiable factor that must always be maximized, or are they one vital factor to be optimized among several? Does doing the right thing simply mean to forgo some profit today with the expectation of greater profit later, or are we free to make certain decisions according to other convictions, knowing that “the right thing” could actually limit profits over time?
Many founders never allow themselves to ask these questions, instead defaulting to short-term, finance-first views based on the prominent examples of publicly-traded or venture-backed companies. They make plans and raise funds with a preset, constrained view of money, time, and growth for their enterprise. Certainly an unprofitable business cannot be redemptive (as it will cease to exist). Yet at the other extreme, a business designed to be maximally profitable in the near term is likely to fall short of its greatest potential impact on employees, customers, and partners.
As with the supremacy of money, redemptive entrepreneurs must confront another myth that is embedded just as deeply in our present-day system of enterprise: the inevitability of progress.
This myth says that development is always, on the whole, improvement. If we are able to accomplish general technological and productivity advances, we are led to believe, the good life is just over the horizon. But we can now see how incomplete this view is. To be sure, the jobs created by capitalism have reduced global poverty and turned a fortunate billion human beings or so into the wealthiest generation in the history of the world—yet many of these blessings have been secured at the exclusion or expense of vulnerable groups. What’s more, we are not just material beings. Though we carry supercomputers in our pockets, just 12% of Americans enjoy their jobs; life expectancy, social capital, and attention spans are shrinking; and suicide, addiction, and depression among our youth have reached levels never before seen.
As we build out mass automation, machine learning, genetic modification, and other historic breakthroughs, it is by no means clear that these developments will in fact produce more human flourishing. Indeed, to believe so requires something approaching blind faith. Indeed, even a noble social mission—say, “to give people the power to build community and bring the world closer together,” the corporate mission statement of Facebook—can coexist with (and legitimize) notoriously extractive practices with customers and partners. (Almost always, such moves are made in the service of money, prioritizing profits or user growth over the actual flourishing of those very users. This is an example of how the supremacy of money and the inevitability of progress reinforce one another.)
Redemptive business leaders celebrate and leverage certain trends, while actively resisting others that are out of line with their convictions about human flourishing. They are not satisfied only to profit on the system’s terms; their greater ambition is to act as prophets of a better way. In fact, some of the most redemptive leaders not only create new products, services, and business models that take advantage of the “rules of the game”; they also have the sacrificial and prophetic imagination to challenge those rules for the benefit of others.
Let’s explore in more depth what it means to be redemptive, and how this powerful idea lies behind our entrepreneurial calling.
We use a tool called The Redemptive Frame to define and explore redemptive possibilities in organizational or vocational settings. It combines the Three Ways to Work with the Three Dimensions of Work.
Three Ways to Work: Exploitative, Ethical, and Redemptive
People, communities, and organizations approach the world in one of three ways.
The Exploitative way is to take all you can get—to gain any advantage, to prevail, to possess. Exploitative actors most often approach the business with a zero-sum, “I win, you lose” scarcity mentality. The motivating force behind the Exploitative way is to win and control.
We are surrounded by the Exploitative way; we all fall naturally into it; and we are always trying to escape its effects on us.
The Ethical way is to do things right—to do no harm, keep the rules, play fair, solve problems, add value. Ethical actors pursue “win-win” whenever they can. The motivating force behind the Ethical way is to be good.
We expect the Ethical of ourselves and of those around us, yet we sometimes fall short; and we’re grateful when we encounter it.
The Redemptive way is creative restoration through sacrifice—to bless others, renew culture, and give of ourselves. Redemptive actors pursue an “I sacrifice, we win” approach with the resources and agency available to them. The motivating force behind the Redemptive way is to love and serve.
We rarely expect to encounter the Redemptive; though whenever we do, we’re changed.
But what does it really mean to be Redemptive? And why does it never fail to change us?
Defining Redemptive
The Christian account is that God created humanity in his image—so even though we are more frail and proud than we are willing to admit, we are more loved and worthy than we can imagine.
Our shared cultural work—to bear God’s image in the world by creating and cultivating with the resources he gave us—is distorted by our selfishness, and cannot be put fully right through human efforts alone.
Yet putting the world right—bringing about personal, spiritual, social, cultural, and environmental healing and restoration—is part of God’s loving and glorious purpose in the world he created. As people loved through grace, we are called to love God and neighbor by joining him in that work.
Redemption is an economic term that means to buy back something (or someone) to restore it to its rightful place. It is also used to describe Jesus’ act of sacrificing his life so that we can be ultimately restored to a right relationship with God and his creation.
Wherever there is loss, brokenness, unfairness, waste, or harm—and someone willingly enters into the situation by bearing a cost or taking a risk, to help the person, resource, or system to be restored—that’s redemptive action. And redemptive action at any scale usually requires creation or innovation, such as a new product, expression, model, or norm.
We respond to the redemptive, in stories and especially in real life, because we know that the world is broken; because we long to participate in its healing, even in the smallest ways; and because we sense that sacrificial love is the world’s most powerful force.
So this core pattern—creative restoration through sacrifice—not only describes Jesus’ ultimate redemptive work to save the world but also our daily redemptive work to serve the world. It gives shape to our mission as those who have been written into the greater story of his purposes through no merit of our own.
We believe we are to follow the redemptive pattern of creative restoration through sacrifice in our life and work.
Three Dimensions of Work: Strategy, Operations, Leadership
Strategy centers on what we build. It’s everything an organization does to express mission, serve customers, and create value—in the form of products, services, programs, brands, and even digital and physical experiences. We define Strategy by its cultural impact.
Redemptive Strategy doesn’t exploit or leverage cultural trends for gain, or merely advance culture in the direction of progress. Instead, it is products, services, programs, brands, and experiences that renew culture to be more humanizing, truthful, beautiful, lasting, and God-glorifying.
Operations centers on how we build. It’s everything a business does to develop, support, and deliver the Strategy—in the form of culture, systems, capital and other assets, business models, innovation, and partnerships. We define Operations by its people impact.
Redemptive Operations refuses to use people merely as resources to achieve organizational goals; and it seeks to go further than merely respecting team members and partners. Instead, it is culture, business models, capital stewardship, and partnerships that bless people through grace, generosity, justice, patience, and mutuality.
Leadership centers on why we build. It’s the motives, ambition, worldview, character, and imagination of the organization’s leaders—which set the course and define the horizons of possibility for the venture’s Strategy and Operations. We define Leadership by its success script.
Redemptive leadership is marked not by an ambition to live for ourselves, or even just to improve ourselves. Instead, it is patiently rewiring our motives, worldview, imagination, and practices around dying to self—becoming more surrendered, accountable, rested, and generous.
A Redemptive Imagination for the Business Sector
Despite the disheartening areas of brokenness, we come down firmly on the side of business as a worthy vocation and a vehicle for meaningful service, impact, and deep joy. So much innovation genuinely contributes to human flourishing, and there are ways to benefit from money’s liquidity, exchange, and accounting value without granting it a supreme place. We believe that redemptive entrepreneurship is a profoundly “disruptive innovation”—a way to bring the upside-down reality of the kingdom of God to the world. Organizations led in this way can serve people at scale through the unique power of modern markets, while working against the exploitation of all stakeholders—teams, investors, partners, customers, and even competitors.
If this vision of creative restoration through sacrifice is consistently lived out, we will see transformation in every industry. Redemptive leaders will invite their teams, boards, investors, and community to keep them accountable to remain aligned with missional purposes. Our organizations will become pacesetters for rebuilding the squandered reserves of trust that are so essential to productive markets—and provide workplaces where people are challenged, developed, and truly known. The entrepreneurial ecosystem will become radically more equitable in how it enables access to capital, talent, and opportunity. We will all partake of the cultural benefits of having more of the next generation’s most able minds focused on solutions to consequential problems. We will see in our neighbors’ lives the downstream effects of products, services, and brands that redefine the good life away from individual consumption and toward contentment and community.
By fixing their imagination on what is lasting—even eternal—entrepreneurs can be among the greatest contributors to the common good here and now.