Creating a Positive Organization Through Servant Leadership

Abstract

The concept of positive organizations is gaining traction among both scholars and practitioners. Recent developments by scholars include the publication of Positive Organizational Scholarship and Positive Leadership. The application of positive scholarship is elaborated on by Whole Foods’ CEO John Mackey in his book on Conscious Capitalism. The Container Store’s CEO, Kip Tindell describes similar practices in his book, Uncontainable. In this chapter, I review the core elements of positive organizational scholarship (POS). Then, I discuss servant leadership as the critical catalyst for developing these positive organizations. Finally, I present an integration of servant leadership with the tenets of POS by examining three exemplary organizations: TDIndustries, Whole Foods, and The Container Store.

There is a growing interest in creating positive organizations that is consistent with the current call for a more humanistic approach to managing people. The call for more humanistic management can be traced to McGregor’s (1957) classic arguments concerning the human side of enterprise. Contemporary scholars have been emphasizing a positive approach to organizational scholarship (POS) that explores the factors that contribute to the best of the human condition (Cameron, Dutton, & Quinn, 2003; Nelson & Cooper, 2007). POS supplements the instrumental concerns for productivity and profit with a concern for goodness and creating processes that unleash human potential.

The concern for developing positive organizations is emerging from several directions. Scholarly interest in the topic is represented in Positive Organizational Scholarship (Cameron & Dutton, 2003), Positive Organizational Behavior (Nelson & Cooper, 2007), and Positive Leadership (Cameron, 2012). On the practitioner front, the importance of positive organizations and meaningful work is reflected in the publication of Conscious Business (Kofman, 2008), Conscious Capitalism (Mackey & Sisodia, 2013), and Uncontainable (Tindell, 2014).

This accent on the positive aspects of leading and organizing reflects the intentionality associated with the servant leader’s concern for creating environments where people can thrive and flourish. Yet, the explicit connection between servant leadership and POS has not been fully developed. In this chapter, I will develop a link between these emerging themes.

This chapter begins with a review of the domain of POS that includes a discussion of the enablers and motivations that are the necessary conditions for creating a positive organization (Cameron et al. 2003). Enablers are the processes, capabilities, structures, and methods that support positive outcomes within organizations. Positive motivations include altruism, unselfishness, and making contributions without regard to self. These enablers and motivations lead to outcomes such as vitality, meaningfulness, exhilaration, and high-quality relationships within and between organizations (Cameron et al., 2003).

The creation of a positive organization is based on the altruistic motive patterns inherent in the philosophy and practice of servant leadership (Cameron et al., 2003; Fry & Whittington, 2005; Kanungo & Mendonca, 1996). The contemporary discussion of servant leadership is usually associated with the work of Greenleaf (1977); however, the philosophy of servant leadership can be traced to the teachings and examples provided by Jesus Christ as recorded in the New Testament (Whittington, 2015). Therefore, I devote the second section of the chapter to an examination of the biblical foundation of servant leadership.

The connection between the principles of servant leadership and positive organization has been implemented in a variety of organizations. In the final section of the chapter, I discuss the practice of servant leadership and positive organizations in three organizations: TDIndustries, Whole Foods, and The Container Store. Each of these organizations embraces servant leadership as the overarching philosophy from which they operate and they have made an explicit public commitment to the principles of POS.

Positive Organizational Scholarship

Positive organizational scholarship (POS) builds on the emergence of positive psychology (Lopez & Snyder, 2009; Seligman, 2002; Seligman & Csikszentmihalyi, 2000). Seligman (2002) criticized traditional psychology for its concentration on what is wrong or lacking in individuals, which assumes that human beings are fragile and flawed. Without ignoring these traditional concerns, positive psychology recognizes that goodness, excellence, and positive experiential states are “not illusions but are authentic states and modes of being that can be analyzed and achieved” (Cameron et al., 2003, p. 7).

As with positive psychology, POS moves away from a disease and dysfunction model. POS provides a new view of the world of work based on positive attributes of people and organizations. This positive perspective highlights the various aspects of organizational life that enable positive outcomes at all levels of the organization. While outcomes such as individual performance and corporate profits are not ignored, the positive view supplements these traditional organizational outcomes by encouraging the assessment of how well the organization creates abundance, resilience, and human well-being. POS has a bias toward affirming the inherent goodness of individuals. POS seeks to understand the role of leadership, human resource practices, and organizational structures in creating environments where people can flourish (Cameron et al., 2003; Nelson & Cooper, 2007).

Research in the domain of POS consists of three interdependent components: enablers, motivations, and outcomes (Cameron et al., 2003). Enablers are the processes, capabilities, and structures through which the organization accomplishes its purpose. Enablers are the antecedent conditions that make abundance, thriving, and vitality possible. The presence of these enablers represents the tangible manifestation of an underlying altruism that is centered on benefitting others (Kanungo & Mendonca, 1996; Whittington, Kageler, Pitts, & Goodwin, 2005).

The interaction of motives and enablers leads to organizations that are characterized by mutual support and collaboration without a primary regard to self-interest. The interaction of motives and enablers results in a virtuous organization where employees experience exhilaration in their work (Cameron, 2003). These employees are described as thriving and flourishing (Park & Peterson, 2003; Spreitzer & Sutcliffe, 2007). They are invigorated by the meaningfulness of their work (Shirom, 2007).

The dynamic interaction of enablers and motives creates a cycle that escalates the creation of positive consequences and creates a virtuous organization (Cameron, 2003; Park & Peterson, 2003). A virtuous organization is built on five widely valued organizational-level virtues (Park & Peterson, 2003). These organizations have a clear sense of purpose that articulates the moral goals of the organization. Virtuous organizations also foster safety by seeking to protect the organization and its members against threat, danger, and exploitation, both internally and externally. This protection is reinforced by an accent on fairness. Virtuous organizations are governed by consistent application of equitable rules for rewards and punishment. They are marked by the humanity they express through mutual care and concern for all members of the organization. In virtuous organizations, all members are treated with dignity as individuals regardless of their position.

Cameron (2003) defines organizational virtuousness as the desires and actions that produce personal and social goods, and reflect the best of the human condition. He identifies three core definitional attributes of virtuousness: human impact, moral goodness, and social betterment. Human impact refers to the intentional effort to create structures and processes that have a positive impact. Moral goodness reflects the Aristotle’s idea of “goods of the first intent” (Metaphysics, XII, p. 4). These are actions and attitudes that have inherent goodness and are thus worthy of cultivation. Goods of the first intent have intrinsic value and are contracted with goods of second intent that have instrumental value for achieving outcomes such as profit or prestige (Cameron, 2003). Social betterment refers to creating social value that extends beyond the self-interested instrumental desires of individuals and organizations. Social betterment reflects an altruistic motive pattern that is willing to produce benefits for others without concern for reciprocity or reward (Kanungo & Mendonca, 1996).

Positive Organizations and Meaningful Work

The POS paradigm is based on the assumption that people have a strong desire to experience life and work as meaningful (Frankl, 1946; Wrzesniewski, 2003). In addition to personal recognition for their contribution, employees want to be involved in something greater than themselves (Peters & Waterman, 1982). Engaging in work that is perceived as meaningful has significant positive effects, including increased levels of empowerment and a sense of fulfillment (Cameron, 2012). Experiencing work as meaningful is also positively related to affective organizational commitment, job satisfaction, and organizational citizenship behaviors (Whittington, Meskelis, Asare, & Beldona, 2017).

Meaningfulness means that both the work itself and the context within which the work is performed are perceived as purposeful and significant (Pratt & Ashworth, 2003; Rosso, Dekas, & Wrzesniewski, 2010). These perceptions of meaningfulness may derive from the intrinsic characteristics of the work itself or from the mission and values the organization is pursuing. There are four key attributes of meaningful work (Cameron, 2012). First, meaningful work has an important positive impact on the well-being of human beings. Second, the work is associated with an important virtue or personal value. Third, the work has an impact that extends beyond the immediate time frame or creates a ripple effect. Finally, meaningful work builds supportive relationships and a sense of community among people.

Pratt and Ashforth (2003) extend the discussion of meaningfulness by distinguishing between meaningfulness in work and meaningfulness at work. Meaningfulness in the work involves organizational initiatives that enrich the job themselves. Among the practices that may increase meaningfulness in the work are job redesign efforts (Hackman & Oldham, 1975, 1976) and increased employee involvement in decision making. Creating meaningfulness in the work itself is also supplemented by clarifying the connection between meeting performance expectations and receiving organizationally sanctioned rewards. These job enrichment and performance management practices are designed to enhance the individual employee’s fit with the job (Whittington et al., 2017).

While employees may experience their individual roles as meaningful, they also want to be part of something bigger than themselves (Peters & Waterman, 1982). Pratt and Ashworth (2003) refer to this as meaningfulness at work. Creating this sense of meaningfulness at work falls primarily on transformational leaders who clearly and consistently articulate the organization’s purpose (Pratt & Ashworth, 2003). These leaders cast a compelling vision that appeals to both the head and the heart (Kotter, 2012). Vision casting helps builds a strong culture and fosters a sense of community and unifying bond among the organization’s members (Schein, 2010). Whittington et al. (2017) found a significant relationship between the transformational leadership behaviors of leaders and the sense of meaningfulness experienced by employees.

Meaningfulness in work and meaningfulness at work are not mutually exclusive; there are various combinations of these dimensions of meaningfulness. When both are absent, workers may feel alienated (Pratt & Ashworth, 2003). Employees may respond to the experience of alienation by seeking to generate a sense of meaning through job crafting (Wrzesniewski & Dutton, 2001; Pratt & Ashworth, 2003). Job crafting refers to cognitive and behavioral changes that are intended to create a better fit between the job and the employee’s personal preferences, motives, and passions (Wrzesniewski & Dutton, 2001). In order to achieve this realignment, employees may utilize a variety of strategies. The first strategy involves altering the task-related dimensions of the job. This is essentially a form of task revision through which employees adjust the amount or content of their job tasks. The second job crafting strategy is focused on the social aspects of the employee’s job. In this strategy, employees seek to change the level and intensity of contact they have with colleagues or customers. The final form of job crafting is essentially a cognitive process through which an employee reframes the significance of their job in an effort to enhance the meaning of their work (Wrzesniewski & Dutton, 2001).

In contrast to the alienated condition that results from the lack of both meaning in and at work, employees may experience a state of transcendence in which both elements of meaning are present (Pratt & Ashworth, 2003). When both the organizational purpose and the individual employee’s role are perceived as meaningful, the employee will sense a connection to something greater than self. In this state of transcendence, employees also experience an integration of the various aspects of self into a roughly coherent system that fosters the realization of their own aspirations and potential (Pratt & Ashworth, 2003).

Leading to Create Positive Organizations

Leaders play a crucial role in creating positive organizations (Cameron, 2012; Schein, 2010). Leaders set the tone for the values and behaviors that are expected in the organization. They create clear boundaries for employee attitudes and behaviors by identifying desired performance outcomes, as well as unacceptable behaviors (Cloud, 2013). Within these boundaries, positive leaders then seek to use their position power and resources to remove obstacles and assist employees in meeting their performance objectives.

Leaders have an extraordinary degree of impact on the creation and maintenance of organizational climates (Schein, 2010). Beyond clarifying expectations, positive leaders “enable positively deviant performance, foster an affirmative orientation in organizations, and engender a focus on virtuousness” (Cameron, 2012, p. 1). By emphasizing positive deviance, these leaders are seeking to help individuals and organizations achieve extraordinary levels of performance “that depart from the norm of a reference group in honorable ways” (Spreitzer & Sonenshein, 2004, p. 209).

Positive leaders operate from an affirmative orientation, and they are intentional about creating environments where people can flourish. There are four strategies that enable leaders to create positive deviance in their organizations: positive climate, positive relationships, positive communication, and positive meaning (Cameron, 2012). Each of these strategies is discussed in the following sections.

Positive Climate

Positive leaders are intentional about creating a positive climate by fostering compassion, forgiveness, and gratitude among the members of their organization. Fostering compassion requires a deliberate effort on the part of the leader to increase awareness of what is occurring in the lives of other individuals. Employees in compassionate organizations keep track of one another and notice when colleagues are experiencing difficulties. This collective noticing informs efforts to explicitly express compassionate feelings and take actions that will foster healing and restoration (Cameron, 2012).

Positive climates are also characterized by forgiveness (Cameron, 2007, 2012). Forgiveness reduces the tendency to hold grudges or seek retaliation, and replaces negative attitudinal and behavioral responses with positive responses. Enabling forgiveness requires the leader to model the way by acknowledging, rather than ignoring, traumas. Leaders can foster forgiveness by treating negative events as opportunities to associate outcomes with the higher purposes of the organization and encourage members to move forward.

There is an inherent tension with the practice of forgiveness in organizations. Fostering forgiveness is not synonymous with tolerance for error or a lowering of expectations (Cameron, 2007). Handled correctly, forgiveness provides the opportunity to remind the employees that human development and welfare are as important in the organization’s priorities as financial results. In order to foster forgiveness, leaders must pay careful attention to their use of words such as reconciliation, compassion, humility, courage, and love. By doing so, the leaders send a strong signal that these are desirable elements in the organization’s vocabulary and practice.

Experiencing compassion and forgiveness leads to a sense of gratitude or thankfulness for the opportunity to work in an organization that embraces these virtues. A sense of gratitude is also enhanced by the intentional efforts of leaders throughout the organization. An example of this kind of effort is making “gratitude visits” with the express purpose of acknowledging performance and thanking individual employees and teams for their contributions to the organization (Cameron, 2012, p. 32).

Positive Relationships

Creating a positive climate that fosters compassion, forgiveness, and gratitude provides the context for the emergence and cultivation of positive relationships. The presence of positive relationships extends beyond getting along and avoiding conflict. Positive relationships are an energizing source of enrichment, vitality, and learning (Dutton & Ragins, 2007). Positive relationships are enabling forces that lead to positive deviance for individuals and the organization. The positively deviant outcomes associated with these relationships include increased physiological, psychological, emotional, and organizational health (Cameron, 2012).

A critical ingredient of positive relationships is the demonstration of organizational citizenship behaviors. These behaviors include spontaneous demonstrations of extra-role behaviors that demonstrate altruism, compassion, forgiveness, and kindness (Organ, 1988). Organizational citizenship behavior includes a quality of forbearance, the willingness to endure occasional costs, inconveniences, and the various structural and interpersonal frustrations associated with life in organizations. Organizational citizenship behaviors are discretionary; they are not rewarded or recognized in an explicit way by the organization, yet, these extra-role behaviors contribute greatly to the efficient and effective functioning of the organization.

The creation and maintenance of positive culture and positive relationships are enhanced by individuals who are “positive energizers” (Baker, Cross, & Wooten, 2003, p. 331). Positive energizers generate vitality in their relationships with others. Interactions with these people energize others and inspire higher levels of performance. Positive energizers have a contagious optimism that energizes others, inspires higher levels of performance, and encourages others to become positive energizers as well (Cameron, 2012).

In contrast to positive energizers, negative energizers are “very draining people” who deplete enthusiasm and sap the passion from people (MacDonald, 1997, p. 84). Negative energizers are critical, inflexible, selfish, and untrustworthy (Cross, Baker, & Parker, 2003). Interacting with negative energizers leaves others feeling exhausted, weakened, and diminished. Leaders must set boundaries around negative energizers in order to minimize the impact they have on the organization (Cloud, 2013).

Positive Communication

Leaders who are intentional about creating environments where people can flourish utilize positive communication (Cameron, 2012). They are aware of the impact of their behavior and their language on the members of the organizations they lead. Positive leaders are themselves examples of positive energizers, and they are intentional about using affirming and supportive communications (Cameron, 2012). These leaders seek to understand each follower’s unique “language of appreciation” in order to express appreciation in the most impactful way (Chapman & White, 2011, p. 23). Even when positive leaders must address poor attitudes or performance, they use a descriptive rather than an evaluative method of communicating. Instead of making judgments or labeling others, descriptive communication utilizes a fact-based approach that describes the event and its outcomes in detail. This description is followed by the development of acceptable alternatives. When done properly, the corrected individual’s self-esteem remains intact and they have a clear understanding of the necessary attitudinal and behavioral modifications that are expected (Cameron, 2012).

Servant Leadership as the Foundation for Positive Organizations

The practices associated with positive leadership reflect the philosophical foundations of servant leadership. Each of the behaviors described by Cameron (2012) is based on the conviction that the primary purpose of a leader is to create environments where people can flourish. These leaders see themselves primarily as servants. In his seminal work on servant leadership, Greenleaf (1977) distinguishes between those who would be “leader-first” and those who are “servant-first.” These are extreme types that form the anchors of a leadership continuum. The defining difference between the two is the concern taken by the servant-first to make sure that others’ highest priority needs are being served. This distinction is captured in Greenleaf’s (1977) “test” for those who would be identified as servant leaders:

The best test, and most difficult to administer, is this: Do those served grow as persons? Do they, while being served, become healthier, wiser, freer, more autonomous, more likely themselves to become servants? And what is the effect on the least privileged in society; will they benefit, or, at least, not be further deprived. (pp. 13–14)

Greenleaf identified Herman Hesse’s (1956) A Journey to the East as the source of his idea of the servant as leader. In his book, Hesse describes a journey taken by a band of men. The story centers on Leo, who accompanies the group. Leo performs a variety of menial chores and sustains the group with his spirit and songs. When Leo disappears, the group falls apart and the journey is abandoned. Years later, Leo is discovered to be the leader of the Order that had sponsored the journey. Even without a formal title and recognition as such, Leo was in fact the leader of the journey throughout, yet, he led from the role of a servant whose primary task was meeting the needs of the group. This servant-first attitude was rooted in Leo’s deepest convictions. Leadership was bestowed externally by others upon a man who was first a servant by nature. According to Greenleaf (1977), the servant nature of Leo was the real man and because this servant nature had not been granted or assumed, it could not be taken away.

Greenleaf offers Leo as the prototypical servant leader; however, the original concept of servant leadership can be traced to the example of Jesus as depicted in various gospel accounts. Through his teaching and his examples, Jesus modeled servant leadership. His clearest expression of servant leadership came in his response to the disciples’ apparent obsession with “becoming great” (Mark 9:35; Luke 22:24). Concern over their own status is a recurring theme in the gospels. This concern seems to have been particularly important to James and John. Their ambition was even reinforced by their mother who made a personal request of Jesus that he “command that in your kingdom these two sons of mine may sit one on your right and one on your left” (Matthew 20:20–21).

Each time this debate arose, Jesus addressed the desire in a similar fashion by telling the disciples—and their mother—that if you want to become great you must become a servant. In his responses to their ambition, Jesus consistently stressed the importance of personal humility and service as the prerequisite for a leadership role. This stands in stark contrast to the Gentile leaders who lorded their hierarchical position over their followers and exercised authority over them. Jesus also points out that even he did not come to be served, but to serve and give his life as a ransom for many (Matthew 20:25–28; Mark 10:35–45).

Jesus turned the tables on the disciples by suggesting that if they really wanted to rule, they would have to become a servant first. This view was contrasted with the secular authorities of the day:

You know that those who are recognized as rulers of the Gentiles lord it over them; and their great men exercise authority over them. But it is not so among you, but whoever wishes to become great among you shall be your servant; and whoever wishes to be first among you shall be slave of all. For even the Son of Man did not come to be served, but to serve, and to give His life as a ransom for many. (Mark 10:42–45, New American Standard Bible)

Jesus’ emphasis on leadership as serving is presented most dramatically in Luke’s report of the events known as “the last supper.” According to Luke, another dispute arose among the disciples “as to which one of them was regarded to be greatest” (Luke 22:24–27). In an effort to provide a more explicit lesson on this matter, Jesus performed the most menial of tasks by washing the disciples’ feet. In a culture that took its meals by reclining at a short table where one person’s feet were usually close to another’s face, washing the dirt and grime off feet that had been walking on unpaved roads was a crucial courtesy. This was an important task normally done by the lowest servant in the house. However, the disciples were so caught up in the debate about who among them would be the greatest that they failed to perform this common courtesy—even though a basin of water was readily available. Recognizing this oversight as a teachable moment, Jesus rose from the table, removed his outer garments, took up a towel, and began washing the disciples’ feet (John 13:1–20).

Jesus was not seeking to rebuke the disciples’ desire for greatness nor was he denying the need for authority (Bennett, 1993). Rather, with both his verbal responses and his object demonstration he was challenging the prevalent idea that greatness and leadership were tied to positions of status, honor, and power. He was teaching them that an attitude of humility was to be the primary motive underlying every action.

Jesus called his disciples to see themselves as servants. However, he was not calling them to be servants in the general sense of reporting to a master who ranks over them in a hierarchical relationship. Rather he challenged them to serve one another. Serving a master is expected; serving a peer is much more difficult. Serving peers requires a sense of humility that sees others as more significant than oneself (Philippians 2:3). Instead of looking out merely for their own interests and personal advancement, Jesus called his followers to also look out for the needs of others. Rather than being over others, Jesus encourages them to be under by demonstrating humility and withdrawing from the competition for status and power (Bennett, 1998; Whittington, 2015).

The Practice of Servant Leadership at TDIndustries

Servant leadership as modeled by Jesus and conceptualized by Greenleaf is based on service to others. Embracing service as a leadership philosophy promotes a holistic approach to work, a sense of community, and the sharing of power in decision making that is consistent with the principles of positive organizations (Cameron, 2012). No organization has more fully integrated servant leadership as a core operating approach than Dallas-based TDIndustries. In this section, I discuss TDIndustries as an exemplary organization that has created a positive organization through servant leadership.

TDIndustries is an employee-owned mechanical construction and facility service firm that has been listed in the Fortune Best Companies to Work For since the inception of the list in 1998 (TDIndustries, 2016). Throughout its history, TDIndustries has embraced the philosophy of servant leadership as developed in the writings of Robert Greenleaf (1977). Using Greenleaf’s framework as its guide, TDIndustries makes serving the needs of its employees its highest priority (TDIndustries, 2016).

There are four elements of servant leadership that are consistently practiced at TDIndustries: servant first, serving through listening, serving through building people, and serving through leadership creation (J. Lowe, personal communication, July 11, 2014). First, there is an emphasis on being a servant first and making sure that other people’s highest priority needs are being served. This priority is reflected in the company’s mission statement which inverts the normal hierarchy of customer first: “We are committed to providing outstanding career opportunities by exceeding our customers’ expectations through continuous aggressive improvement” (TDIndustries, 2016).

To ensure that the expectation of considering employees first is being met, managers are held accountable for employee growth and development. TDIndustries utilizes Greenleaf’s “test” as the basis for measuring the extent to which a manager is developing their direct reports (Greenleaf, 1977, p. 13).

The second element of servant leadership at TDIndustries is serving through listening. Listening forums are regularly scheduled events that facilitate open communication where employees can express concerns, make suggestions, and participate in corporate direction setting. Listening is also facilitated through regular surveying of employees to further identify and address employee concerns.

The third element of servant leadership is serving through building people. TDIndustries devotes substantial resources to employee training that includes an extensive orientation process and servant leadership training for all supervisors. The company has a generous tuition reimbursement plan to encourage the personal and professional growth of all employees. The fourth element involves building leaders, which is accomplished through a four-course sequence that is required for any employee who supervises others, has management responsibilities, or is a high-potential individual contributor. The result of this focus on building leaders is the creation of a leaderful organization (Raelin, 2003).

The positive organizational practices utilized at TDIndustries are described using a construction metaphor (J. Lowe, personal communication, July 11, 2014). TDIndustries considers the four elements of servant leadership—servant first, serving through listening, serving through building people, and serving through leadership creation—as the site preparation work that precedes the actual construction. Once the site has been prepped, the foundation can be laid. The foundation is trust that is established by leaders who demonstrate honesty, humility, vulnerability, and a good sense of humor. At TDIndustries, this foundation of trust has been strengthened over time through a commitment to listening to employees, being transparent about the financial realities facing the organization, and having “a good batting average over time” in terms of making decisions that resulted in positive outcomes for the organization (J. Lowe, personal communication, July 11, 2014).

TDIndustries builds on this foundation by emphasizing five pillars that are essential to creating a community of powerful, trusting employees. The first pillar is continuous improvement through quality management programs. The second pillar involves sharing financial success through an employee gain-sharing programs. Gain-sharing creates an incentive system that holds managers and employees mutually accountable to each other for accomplishments and setbacks. Supporting diversity in the workplace is the third pillar, which is reflected in the value the company places on individual differences, and the desire to foster an open, collaborative, and positive organizational climate. The fourth pillar reflects the importance placed on individual employee growth and development by providing substantial resources for continuous learning opportunities. The fifth pillar is the strategic plan which is the guiding mechanism for positioning the organization in the most favorable and sustainable position possible (TDIndustries, 2016). This strategic positioning also reflects a moral obligation to employees who are counting on the company. For TDIndustries, “a failure of foresight is an ethical failure” (J. Lowe, personal communication, July 11, 2014).

Through the careful site preparation of servant leadership, the solid foundation of trust, and the construction of these five pillars, TDIndustries creates a solid structure to support the community of powerful, trusting employees who are empowered to create delighted customers. This structure creates the business success and revenues necessary to enable TDIndustries to achieve its mission of providing outstanding career opportunities for each of its employees (J. Lowe, personal communication, July 11, 2014).

Creating a Positive Organization Through Conscious Capitalism at Whole Foods

The principles of servant leadership and POS are also embraced by Whole Foods and The Container Store. As with TDIndustries, these organizations are committed to a different way of doing business. In this section, I discuss the conscious capitalism model of positive organizing developed by Whole Foods CEO John Mackey (Mackey & Sisodia, 2013). Conscious capitalism is characterized by four interrelated tenets: a higher purpose, stakeholder integration, conscious leadership, and a conscious organizational culture.

Serving a higher purpose represents a shift from profit maximization to purpose maximization. This shift is an explicit recognition of the hunger for meaning that permeates the human condition (Frankl, 1946). Conscious organizations embrace the idea that the primary purpose of their organization is to improve peoples’ lives through innovation and creating well-being for all stakeholders (Kofman, 2008). The comprehensive approach to the well-being of all stakeholders is the key to unleashing dormant energy, and passion. This is reflected in the Higher Purpose Statement: “With great courage, integrity and love—we embrace our responsibility to co-create a world where each of us, our communities and our planet can flourish. All the while, celebrating the sheer love and joy of food” (Whole Foods, 2016).

Concentrating on a higher purpose leads to positive-sum approach to stakeholders that stimulates cooperation and collaboration among stakeholders rather than the traditional zero-sum thinking that requires making trade-offs among competing stakeholders. Instead of maximizing outcomes for shareholders at the expense of other stakeholders, the positive-sum approach emphasizes the synergy among all stakeholders (Kofman, 2008). Mackey calls this Win ⁶. The Win ⁶ framework recognizes the interdependence among six stakeholder groups: loyal, trusting customers; passionate, inspired team members; patient, purposeful investors; collaborative, supportive suppliers; flourishing, welcoming communities; and, a healthy, vibrant environment (Mackey & Sisodia, 2013).

The creation of a conscious organization requires servant leaders who are “acutely aware of the importance of service” (Mackey & Sisodia, 2013, p. 187). These servant leaders operate from an altruistic motive pattern (Kanungo & Mendonca, 1996). They use their position power and control of resources to create environments where employees can flourish. These leaders have a high level of integrity, and the congruence between their espoused and enacted values provides a platform of moral authority. These leaders are self-aware and constantly monitor their own behavior to close any gaps in their integrity (Fry & Whittington, 2005). These leaders also invite the scrutiny of others who have permission to question their motives and challenge the leader’s use of their position-based power (Whittington, 2015).

Conscious leaders are also aware of the important role they play in creating cultures that reflect the organization’s purpose (Schein, 2010). These leaders understand how crucial it is for them to model the way by offering themselves as an example of the behaviors they expect from their employees. Through their example and their expectations, these leaders generate a positive culture that is characterized by the TACTILE mnemonic: trust, accountability, caring, transparency, integrity, learning and egalitarianism (Mackey & Sisodia, 2013).

Trust is the essential lubricant for building social capital both internally and externally. Conscious organizations are built on mutual accountability that requires team members to keep commitments to each other and their customers. The caring, trust, and loyalty that characterize these organizations are reinforced by the practice of egalitarianism and ensuring that everyone is treated with dignity and respect (Kofman, 2008). Caring reflects genuine concern for other stakeholders through actions that are considerate and compassionate. Conscious cultures embrace transparency and provide access to the financial and strategic information that is normally hidden (Kofman, 2008). Integrity is based on candor, truth telling, and fair processes. While “lapses in judgment are readily forgiven, lapses in integrity are not tolerated” (Mackey & Sisodia, 2013, p. 219).

Conscious organizations also demonstrate mutual loyalty among the stakeholders (Kofman, 2008). Whole Foods articulates this in their Statement of Interdependence (Whole Foods, 2016):

Our motto—Whole Foods, Whole People, Whole Planet—emphasizes that our vision reaches far beyond just being a food retailer. Our success in fulfilling our vision is measured by customer satisfaction, team member happiness and excellence, return on capital investment, improvement in the state of the environment and local and larger community support … Our ability to instill a clear sense of interdependence among our various stakeholders (the people who are interested and benefit from the success of our company) is contingent upon our efforts to communicate more often, more openly, and more compassionately. Better communication equals better understanding and more trust.

Creating a positive organization requires that a great deal of attention be given to hiring practices. It is critical for purpose-driven organizations to hire employees at every level who are aligned with the organization’s purpose. Merely having the skills that match job requirements is not sufficient; employees must also perceive a high level of congruence between their personal values and the values of the organization. Providing clear indications of the organization’ values and priorities allows applicants to select themselves out during the selection process if they do not sense alignment with the organization (Dessler, 1999; Pfeffer, 1995). The value placed on hiring for fit is reflected in Whole Food’s statement to job seekers (Whole Foods, 2016):

Whole Foods Market attracts people who are passionate—about great food, about the communities they live in, about how we treat our planet and our fellow humans—and who want to bring their passion into the workplace and make a difference.

Positive Organizational Practice at The Container Store

The Container Store is another example of an organization that is committed to the principles of servant leadership, positive organizations, and conscious capitalism. The Container Store operates on a set of business philosophies that have been trademarked as the Foundation Principles (Container Store, 2016). These seven principles provide guidance for business decisions and employee behavior. The goal of these principles is to ensure that employees, customers, vendors, and the community are treated with dignity and respect (Tindell, 2014).

In explicit contrast to the claim that the purpose of the business is to maximize stockholder wealth (Friedman, 1970), The Container Store believes that conscious companies should balance and fulfill the needs of all stakeholders simultaneously. However, as with TDIndustries, at The Container Store employees are considered first among these equals. This priority is demonstrated in The Container Store’s highly selective hiring practices. Only three percent of applicants are hired because of a belief that one great employee provides three times the productivity of a good employee (Tindell, 2014). These hiring practices are supplemented by an extravagant (by retail industry standards) level of pay and training. The Container Store believes that this investment in human capital will lead to greater levels of sustained customer satisfaction and repeat business.

The second element in The Container Store’s operating philosophy is open communication. While acknowledging the possible liabilities of information getting to competitors, The Container Store believes these liabilities are offset by the positive effects of enhanced operational efficiency. Furthermore, open communication is a tangible way to demonstrate the intrinsic value of each employee and making sure all employees feel appreciated and empowered. The Container Store creates mutually beneficial relationships with suppliers by “filling their basket to the rim” (Container Store, 2016).

This operating philosophy reflects the golden rule of treating others as you, yourself, would like to be treated. Instead of working from an adversarial perspective, vendors are seen as partners who support and assist The Container Store’s goal of simultaneously providing customers the best selection of products with competitive pricing, and exceptional service.

Providing exceptional service requires a work-force that can anticipate customer needs and recommend products that will solve their problems. In order to deliver this kind of service, The Container Store provides extensive training to all employees. In an industry where the average amount of training is 8 hours a year, The Container Store’s full-time employees receive 263 hours of training in their first year, and part-time employees receive approximately 150 hours of training (Tindell, 2014). This training is designed to empower employees to use their intuition in understanding customer needs. Rather than stopping with the obvious, Container Store employees are encouraged to provide a complete solution that delights the customer. The genuine concern for customers is also reflected in store layouts that are bright, clean, and well-organized. The goal is to use committed employees and pleasant environments to create a welcoming and contagious air of excitement (Tindell, 2014).

Evaluating the Exemplary Organizations

The purpose of this chapter was to review tenets of POS and demonstrate the crucial role servant leadership plays in creating organizations that reflect these principles. Three organizations were identified as exemplars of positive organizational practices: TDIndustries, Whole Foods, and The Container Store. The positive practices of each of these organizations have been discussed in detail. In this section, I will use three frameworks to review and integrate these organizational practices. First, I will review each of these organizations against the foundations of POS developed by Cameron et al. (2003). Then, these organizations will be evaluated against Cameron’s (2003) three core attributes of virtuousness. Finally, I will use the elements of positive leadership (Cameron, 2012) to examine each organization.

Evaluating Exemplar Organizations Against POS Foundations

Cameron et al. (2003) identified three foundational elements of POS: enablers, motivations, and outcomes. Enablers are the processes, structures, and processes that serve as the antecedents and provide the context for the emergence of positive organizations. The enablers are supported by altruistic motivations that channel the energy of the members of positive organizations to transcend personal agendas to meet the needs of others. Enablers and motivations combine to produce positively deviant outcomes in the form of vitality, exhilaration, and meaningfulness.

As summarized in Table 1, each of the exemplar organizations has been aligned with these foundational elements of POS. Whole Foods employs the Win ⁶ mantra as an operating philosophy to create a positive-sum outcome amid mutually interdependent stakeholders. Whole Foods is explicit in its motive to improve people’s lives through innovation and seeking to create well-being for each of its stakeholders. The operating philosophy and motives are aimed at the transcendent goal of purpose maximization rather than profit maximization.

Table 1 Components of positive organizational scholarship in practice

The primary enabler at The Container Store is the Foundation Principles by which they operate. By hiring great, rather than merely good people, the stage is set for creating a strong culture (Tindell, 2014). The hiring of great people is leveraged through extensive training and open communication. The altruistic motive pattern of The Container Store is evident in their “fill the other guy’s basket to the brim” approach to vendor relationships (Container Store, 2016). The commitment to an employee-first philosophy is also evidence of altruistic, other-centered motives. These enablers and motives culminate in the creation of an “air of excitement” that transcends normal consumer retail experiences (Container Store, 2016).

Servant leadership sets the tone for everything that is done at TDIndustries. This philosophy serves as an enabler for creating a unique culture, as well as providing an explicit others-first orientation. The servant leadership philosophy provides the context for the five pillars of strategic planning, shared commitment to success, diversity, continuous improvement, and extensive training. These combine to produce a community of powerful, trusting partners who provide services that delight customers and produce the revenues required to achieve the transcendent purpose of creating outstanding career opportunities for employees (TDIndustries, 2016).

Evaluating Exemplar Organizations Against Virtuousness

A recurring theme in POS is virtuousness. Virtuousness results in personal and social benefits that are intrinsically good. There are three core characteristics of organizational virtuousness: human impact, moral goodness, and social betterment (Cameron, 2003). Human impact combines flourishing and character to create a meaningful purpose based on transcendent principles. Moral goodness refers to actions and attitudes that have inherent goodness and are thus worthy of cultivation. Social betterment refers to creating value that extends beyond the self-interested instrumental desires of individuals and organizations.

As illustrated in Table 2, Cameron’s (2003, 2012) dimensions of virtuousness are evident in each of these organizations. Whole Foods makes their concern for human impact explicit by pursuing the higher purpose of emphasizing stakeholder well-being. Moral goodness is reflected in the egalitarianism that de-emphasizes the power distance inherent in organizational hierarchies. Each employee is treated with dignity and respect. Embracing a zero-tolerance approach to lapses in integrity also demonstrates dedication to moral goodness. Whole Foods seeks social betterment by cultivating mutual loyalty among all of their stakeholders and seeking to create positive, rather zero-sum, outcomes.

Table 2 Virtuousness in practice

The significance of human impact as a core value is evident in The Container Store’s concern for putting employees first and making sure that vendors are cared for by “filling the other guy’s basket” (Container Store, 2016). Moral goodness is reflected in the Foundation Principles which are designed to ensure that all stakeholders are treated with dignity and respect. The concern for stakeholders extends to the communities in which The Container Store operates. Social betterment is achieved by partnering with local non-profit organizations devoted to women’s and children’s health and well-being.

A concern for human impact is at the heart of TDIndustries’ devotion to making sure that others’ highest priority needs are being met. Moral goodness is inherent in the servant leadership test that is used to evaluate managers based on whether their direct reports are growing wiser, freer, and more autonomous (Greenleaf, 1977). Social betterment is reflected in TDIndustries’ perspective on diversity as a business advantage.

Evaluating Exemplar Organizations Against Positive Leadership

The servant-first approach to leadership is the catalyst for creating positive organizations. Cameron (2012) embraces the principles of servant leadership in his discussion of positive leadership. Positive leaders utilize four strategies that enable positive deviance in their organizations: positive climate, positive relationships, positive communications, and positive meaning. Table 3 provides a summary of these strategies at TDIndustries, The Container Store, and Whole Foods.

Table 3 Cameron’s positive leadership framework

Positive leadership at Whole Foods is based on the fact that leaders are acutely aware of the importance of serving. This parallels TDIndustries’ concentration on servant leadership. Each of these organizations is also intentional about creating a positive climate. TDIndustries builds their culture by emphasizing trust through authentic listening. Whole Foods and The Container Store both utilize a highly selective hiring process as part of their strategy for creating a positive climate. Whole Foods seeks to hire for fit by looking for applicants who are aligned with the organization’s mission and values. The Container Store seeks to hire great employees who are then provided with a level of training that is extravagant in the retail industry. Extravagant training is also evident at TDIndustries.

Each of these organizations is dedicated to generating positive relationships among employees and the organization’s stakeholders. TDIndustries fosters these relationships through an intense obligation to listening and mutual accountability for success and failure among managers and employees. The priority given to open communication is also evident at The Container Store and Whole Foods. The Container Store states that “leadership is communication” (Container Store, 2016). Whole Foods builds positive relationships that are built on trust, caring, transparency, integrity, and egalitarianism. The listening forums utilized by TDIndustries reflect the importance placed on positive communication. Whole Foods demonstrates transparency by sharing company information with employees.

TDIndustries, Whole Foods, and The Container Store are examples of companies that embrace an integrated approach to stakeholders. These organizations are serving a higher purpose that transcends short-term, self-centered goals that maximize profits and shareholder wealth at the expense of other stakeholders’ interests. Interestingly, while these organizations have adopted a positive-sum approach to stakeholders, each of them identifies their employees as the first among equal stakeholders. This is explicitly stated in TDIndustries’ mission statement and in the “employees first” principle of The Container Store.

These companies provide a set of exemplars for putting the principles of servant leadership and POS into practice. The success of their approach has consistently been recognized through their appearance in Fortune’s list of Best Companies to Work For. By examining the operating philosophies of these companies, other organizations can find a road map of best practices for creating organizations where employees can thrive, and experience an exhilarating level of meaningfulness in their work and their lives.