A Conscious Capitalism Turnaround

By Kent Gregoire

In 2019, TekDoc Solutions – an IT service provider company in the Boston area, was in trouble.  They reached out for help to Kent Gregoire, an accomplished CEO and business consultant who happened to be working through the Conscious Capitalism Consultant Certification Program at the time.  The company’s survival was in jeopardy and their goal was to turn around their situation and survive another day. Profits, margin and cost reduction were front and center in their minds, while purpose, caring culture, stakeholder management and conscious leadership were not.  However, Kent saw a way to add what he was learning to find an immediate path to profitability through the four pillars of conscious capitalism.

Kent used this case to earn his Conscious Capitalism Consultant Certification in late 2020, but his work with the companies continues.  Organized around the four pillars of Conscious Capitalism, this blog chronicles TekDoc’s transformation to date, 

Part 1: Stakeholder management

Conscious companies operate with their entire business ecosystems in mind. They concentrate on optimizing equal value for all of their stakeholders without tradeoffs. This includes customers, employees, suppliers, shareholders, society at large and the environment. In turn, strong and engaged stakeholders lead to a healthy, sustainable, resilient business.

While it is easy to agree with this concept in principle, acting as such can be quite challenging, particularly when you face hard decisions about your business. That was certainly the case for Tekdoc, which in 2019 was facing tremendous financial hurdles. Cash was tight and they were looking at reducing salaries, squeezing their suppliers for discounts and other drastic measures to keep afloat.

However, while they were looking for a path towards profitability, their solutions were all trade-off centric and they believed that for certain stakeholders to win – in this case the shareholders and the leadership team –, others would have to lose – namely employees and their vendors.

There is just one problem: when a trade-off is involved, this is not the right choice to make. This idea is the absolute key to stakeholder management in the conscious capitalism movement.

Therefore, Kent worked with all stakeholders towards a win-win solution focused on long term benefits.

Kent’s first priority was to accelerate cash flow and, therefore, helped move projects through service delivery in a more expeditious way. To do so, he helped alleviate burdens on employees, moved most customers to ACH payments five business days prior to the 1st of each month (creating predictable cash revenue), developed trade credit with suppliers and instituted a policy for pre-payment on all projects. This was a true win-win approach since employees got to work in a more seamless manner, customers were served more rapidly, and suppliers were paid more promptly. There were no tradeoffs.

Kent also advised the CEO on how to negotiate with all financial institutions and banks for better interest rates and repayment plans. They understood that, since Tekdoc is a service business with no material assets, it was in their best interest to agree to work on a repayment plan that the company could meet every month. 

All while this was happening, greater attention had been placed on winning new monthly recurring revenue accounts. And as the tide turned, negotiations were made with each of the remaining creditors. Within 8 months, the company was at a cash break-even point. 

The most delicate stakeholders to work with were the customers. One of Kent’s early analyses recognized that there were unprofitable customer accounts. However, raising fees during the COVID-19 pandemic was received with skepticism. Kent pointed out that the company had the responsibility to provide a continuous service to its customers, and if they couldn’t address unprofitable accounts, they wouldn’t be able to serve any at all. Each customer was contacted to discuss the increase in their fees and only one pushed back. As it turns out, this one customer was already threatening to take their business elsewhere and they were offboarded smoothly.   

More work still had to be done, especially around the other three pillars of conscious capitalism: conscious leadership, caring culture and purpose. However, Tekdoc realized the full potential of this movement. Around this time, their CEO, Brendon Johnson, became an active member of CC Boston.

Part 2: Purpose

Every business plan claims to solve a problem. However, this problem rarely impacts significantly the lives of people or the world we live in.

In a conscious organization, the revenue generated by sales becomes the fuel for the larger mission. The company’s reason for being is to solve a specific, important social or environmental problem.

However, it became evident to Tekdoc that their relative lack of strong purpose was a weakness for their organization. In an internal survey, only 24% of their employees declared finding intrinsic satisfaction in their work beyond the salary that they earn and would decide to leave if the company ceased to be true to its purpose. 

Together with Kent, the company went to work on defining a compelling purpose. Members of the leadership team and employees alike asked themselves: “What is the problem to solve? What is the root cause of the problem to solve? What is the business solution that will solve the problem?“

After weeks of work and brainstorming, they defined their true north: Tekdoc exists to support people in building a life in which they thrive, starting with their own employees and customers. In doing so, they are focusing in key areas: helping people with a sense of belonging, with their mental and emotional wellbeing, and with their hopes and dreams.

To put their goal into perspective, Tekdoc established bold KPIs to reach before the end of 2026: a 90% employee satisfaction rate, a 2.5X growth rate, and zero voluntary employee turnover.

The reason for attaching a financial KPI to their purpose is simple: they wish to showcase the world that a caring culture can also impact a company’s bottom line. They want to showcase that doing the right thing, is also the smart thing to do. They want others to follow in their footsteps.

Part 3: Conscious Leadership

Conscious leaders understand and embrace the higher purpose of business and focus on creating value for, and harmonizing the interests of, the business stakeholders. Driven primarily by service to the firm’s purpose, rather than by power or money, conscious leaders inspire, foster innovation and transformation, and bring out the best in those around them.  

When it comes to leadership, Tekdoc was facing several obstacles: most of the leadership team members had not received any prior training or support to help them in their role as leaders. They also suffered from a lack of cohesion – many of them working in silos – and their employees had trust issues due to a lack of upward communication and transparency.

As a first step, to help build stronger ties among the leadership team as well as to help develop leadership skills, Kent invited them to read together one chapter of Brave New Work by Aaron Dignan each week for six weeks.  The first assignment focused on the theme: “The future of work”. On this occasion, each leadership team member shared their interpretation and insights with one another about how this new thinking could influence the choices and decisions made at Tekdoc. The Brave New Work reading was repeated with the remaining five chapters, generating genuine enthusiasm among all participants as well as an opportunity to bond.

Kent also helped the leadership team function better as a group by organizing regular meetings and touchpoints throughout the week. As a result, their employees saw them work together in a coordinated manner, and this provided them with a new sense of confidence and clarity. 

To support a more transparent working environment, two 30-minute all-staff meetings each week were also put in place. One of these meetings revolved around a happy hour with the opportunity for employees to share information about their personal life as well as their hopes and dreams (e.g. their favorite travel destination). The second all-staff meeting would start with an ‘Ask Me Anything’ session. The first four meetings had a lot of questions, often times hard to answer. However, the leadership team made a firm commitment to answer all of these questions using facts and absolute truth. After a while, most questions ceased, and the following all-staff meetings reported on results and plans for the future. 

By addressing leadership hurdles, Tekdoc was then allowed more time and space to learn and grow as an organization. The organization has now become more caring and leaders are showing interest in developing win-win scenarios. 

Part 4: Caring Culture

In Conscious Capitalism, culture becomes the social fabric of a business, which connects the stakeholders to each other and to the purpose. A company that embraces a caring culture isn’t focused on increasing employee engagement (that’s a result)– it’s about an environment in which employees are being cared about.

In the United States today, 88% of the workforce does not experience this kind of care, which represents both a barrier and an opportunity for improvement. 

Tekdoc workforce was part of this large majority. As a result, a small task force was put in place to address employee engagement – not just from the point of productivity and performance which would have been the focus in a traditional environment – rather to help employees thrive.   

The company was, however, facing major hurdles: it was lacking core resources to expand, which meant that employees were facing a large volume of tickets, and were being reactive instead of proactive. The company needed more engineers on the team and, without it, the long-term gross profit margin would continue to be compromised. Indeed, customers would not receive the full payoff for outsourcing their essential service – beyond break and fix – to help them grow their businesses.

Two major fortuitous events happened around this time: the company became the beneficiary of both PPP and EIDL funds. This allowed Tekdoc to invest in its workforce.  

The funds were used to make fair pay adjustments, to restore benefits, to hire two new engineers and to invest in much-needed marketing and sales support. The company also instituted a two-month payroll savings account in the event of another devastating event.

With less stress on finances, all employees are now looking beyond getting a job done and investing in their future. The company is allocating resources for skill development to support those employees who desire to become experts in specific areas.  There are also more spontaneous learning opportunities being provided by each member of the team. 

Today, most Tekdoc employees are expanding their capacity to learn above and beyond a standard level of expectation. They are fulfilling their full potential because they are beginning to see that they are not cogs in a gear. They realize that Tekdoc now has their back.

A NOTE FORM THE AUTHOR

Kent Gregoire

Hi, I’m Kent Gregoire and my journey with Conscious Capitalism began over four years ago when I attended the CEO Summit.  I discovered a welcoming community of like-minded people.  The course provided access to deeper learning, and insightful and inspirational conversations with my cohort.  The capstone project ended up being fun (!) giving me the opportunity to demonstrate my comprehension, application, and engagement results through presentation of a client case study.  I now have the confidence to speak to audiences around the globe to advance the movement and when consulting with small to mid-market organizations where I aspire to unleash the entrepreneurial spirit for good.    Class 5 of the program begins in a few weeks, and I invite you to consider joining me and my colleagues as a part of the global body of Certified Conscious Capitalism Consultants

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