Positive Power of Principled Profit
Volume 3, Number 12—August, 2006

Positive Power Spotlight: Cognex

How many CEOs would discuss their compensation like this?

"I don't need any more. Most people find that very strange. The analogy I give is that of having a restaurant meal with friends. You had drinks, dinner and dessert. The waitress comes over and says, 'We are offering a special tonight. Here's another meal.' Is that a good thing? Money is much the same thing."

That's a direct quote from Robert J. Shillman, Chairman/CEO of Cognex, a Boston-area high-tech company, as reported in the Wall Street Journal. Shillman stopped taking a salary in 2001, and donates his salary and bonuses to various charities. he has also donated substantial amounts of company stock, though he retains a 7.6% interest in the company--worth about $105,000,000.

Shillman takes a long-term view. He doesn't believe in signing bonuses, calling them "morally corrupt" because of the negative influence they have on loyal existing employees--but he frequently comes up with innovative noncash methods of rewarding employees, such as dinner for two and a limo ride to the restaurant for 108 employees. After 15 years, long-term employees are also entitled to a trip for two to one of the Seven Wonders of the World, with an extra week's vacation and $1000 to spend and another Wonders trip for eight after 20 years.

Cognex states 10 core values on its website:
* Customer First
* Excellence
* Perseverance
* Enthusiasm
* Creativity
* Pride
* Integrity
* Recognition
* Sharing
* Fun

Shillman states, "We take these values seriously and we live by them. They are paramount in all that we do, including the process of interviewing prospective employees. As a matter of fact, before becoming a Cognex employee, each person must agree in writing to abide by these values.

"With regard to corporate governance issues and to how we run our business, you can be assured that we do our best to only hire individuals who have the highest standards of integrity and who will bring those standards to bear in their work at Cognex.

"Cognex has had a corporate code of ethics for years, predating the current regulatory requirements."

And speaking of that ethics code...oversight for the code rests with a Vice President...a full page (out of seven) is devoted to outlining potential conflicts of interest...and three pages discuss the compliance mechanisms, including the responsibility of every employee to report ethics violations, the ability to report anonymously, and a promise of no retaliation for reporting.

I find this very refreshing, and am pleased to spotlight Cognex in this month's Positive Power. Thank you to Harry Pariser for sending me the WSJ story link.

Another Recommended Book: Values-Driven Business: How to Change the World, Make Money, and Have Fun, by Ben Cohen and Mal Warwick

The founding CEO of one of the largest green businesses in the world (Ben & Jerry’s) joins up with the CEO of a boutique consulting firm to show that businesses of any size can benefit from sustainability. In this well-written book, they lay out five dimensions of a values-driven business: relationships between your company and its employees, customers, suppliers, and community. Each of these gets a full chapter, as does the business’s impact on the environment.

The best thing about this book is the set of action steps and checklists to help any entity (business, non-profit, institution, or even activist organization) incorporate a social and environmental agenda while in most cases actually becoming more profitable.

Examples include:
* Five justifications for why socially responsible companies are often more profitable
* Ten-point checklist to determine readiness to start the process
* Seven arguments for paying your employees well (my favorite: it forces the company as a whole to work smarter)
* Five reasons why profitsharing with employees builds a business, and six models to incorporate the idea into practice
* Ten ways to turn your employees into your partners
* 19 specific methods (many of them easy and no-cost) to reduce your company’s environmental footprint

The other thing I love about this book is the use of clear, simple case histories, drawing extensively from the authors’ own history but also from many other companies. You’ll learn, for instance, about Clif Bar’s five-fold bottom line: "the planet, the community, our own people, the health of our brands"; you’ll also learn about Mal Warwick’s extremely innovative charitable programs...Peachpit Press’s amazing vacation policy...Recycline’s commitment to reduce the waste stream...and how all of these and many other social/environmental policies actually help these companies be more profitable.

Order from Amazon: http://snipurl.com/uzyo

Order from a BookSense independent bookseller:
http://www.booksense.com/index.jsp?affiliateId=FrugalFun