Thoughts on Innovation and Responsibility Following a White House Business Council Roundtable

Last week I had the privilege of attending a White House Business Council Roundtable, part of a series of discussions between the Obama administration and business owners around the country. Twelve business owners and I, along with the Director of the Office of Advisory Committees at the Department of Commerce, discussed whether President Obama is acting on the promise he made in his State of the Union address, to “out-innovate, out-educate, and out-build our competitors,” and what more can be done to get there. I learned about some of the good work the administration is doing and learned from the experiences of my peers, but I left feeling like Obama and his team were missing a great opportunity to fulfill this promise by capitalizing on one of the most exciting innovations in U.S. business history. I call this innovation the “Tom’s Shoe Moment.”

The Tom’s Shoe Moment finds its roots in our country’s unique brand of social responsibility that De Tocqueville first identified in the late 19^th century. Most recently, it is borne out of the corporate social responsibility (CSR) movement, which strives to align business objectives with social and environmental objectives in order to create new business opportunity. I’d say it’s the culmination of this effort, in fact, moving from alignment to total integration, as has been achieved by the Tom’s Shoe company. If you’re not familiar with Tom’s, check them out. They are growing fast, with a tribe of fanatical customers and employees that think of their mission and (business) model as inseparable truths. Their “One for One” model means that with every pair of shoes they sell, they give one to a child in need. It’s simple and clear and the company has out-innovated its competitors with this innovation. Never before has the opportunity for this type of innovation been greater. There is no denying that a tipping point has been reached in the psyche of the American consumer, investor and employee that makes this innovation possible.

If I were part of the Obama administration, hoping to out-innovate while ushering in the “new era of responsibility” that he so eloquently summoned in his inaugural address, I would take a close look at this model and think about how to incentivize more businesses to shift towards it, as well as how to export it for the world to follow. As it now stands, far too large a chunk of federal investments goes towards strategies that don’t support this type of innovation. I believe the President cannot execute on his promise unless he shifts investments towards programs that accomplish this type of true innovation. Businesses that start now have the advantage of being able to fuse mission and model from the very beginning. Companies that have legacy models will take time to evolve and would benefit from help.

When it comes to out-educating, I think we should look to this same tradition for a clue. As a parent of three, I have seen first-hand what bands of volunteers can do for a public school. They instruct, fundraise, feed, make safe and generally help the place hum. Our budget-starved public elementary school wouldn’t be half the place it is were it not for our volunteers. The problem for many schools, particularly in our inner-cities, is that parents don’t have the time to volunteer frequently because they work so hard. I see an opportunity for the retiring boomer generation to fill this void and make an enormous difference in our public schools. Policy should support this strategy by offering these boomers incentives to get involved.

Americans have always loved to band together to help. As the President said in his inaugural speech, the problems we face may be new, but this spirit is old, dating back to our founding fathers. He’d be smart to tap this uniquely American spirit if we are to out-innovate and out-educate for years to come.

- Andy Mercy, CEO