globalisation gone crazy?

I just made an online purchase with:

• a United States eBay account
• paid for with an Australian MasterCard
• charged in Euros
• the item is made in Japan
• shipped from Hong Kong
• shipped to Canada

6 countries, 1 purchase

Is this global access and convenience good?
Or is this why we need to get back to relational trade?

relational trade [part 4]: visiting Level Ground Trading

…continued from [part 3]

Sitting around a large custom-made table in the boardroom, Mark asked “How is Level Ground structured?” Hugo’s face lit-up as he told Mark he was sitting around the structure. Hugo had insisted that Level Ground have a round conference table (made environmentally friendly of course), since rectangle tables place someone at the head and give that voice more importance, yet all voices at Level Ground are valued. There is of course a hierarchy at Level Ground, but it doesn't seem to dominate the culture. Hugo admitted that certain hierarchical questions, like “How do you decide how much different people in different roles gets paid?” was really tough to answer. Level Ground have several bonuses available: a “quality bonus,” based on team performance, rather than on the individual; and a “fair share” bonus based on the business' growth paid monthly, which can add up to about a full months pay over the year.

The relational principle is extended to how Level Ground pays and intensifies their sales staff. When a new sales person starts at Level Ground, they get to choose what kind of remuneration structure would suit who they are: a low base salary and a high commission rate is good for some people, but others want the peace of mind of knowing a steady salary will come in, with the opportunity to make a small bonus based on their performance, the third option being a mid level base salary and a mid-level bonus. From my own experience, working from a low base salary is very difficult; it doesn’t work for me. At Level Ground the emphasis on knowing people makes possible a remuneration structure that will work for the employee and the business – win, win!

Walking around Level Ground, there are pictures and branding material on the walls. Hugo is an avid photographer (a Nikon D300 shooter) and takes all the snaps of the producers, their farms, and their communities himself. As we walked around the building, Hugo paused to tell us the names of each person in the photographs and part of their story. Most businesses will get their marketing agencies to choose “stock” photographs from libraries for their promotional material and pay a royalty fee for the use of the photo. Level Ground however only use their own photographs, taken from when Hugo and other Level Ground employees make their annual or bi-annual trips to see the producers and their farms. Hugo also insists on paying the producers a royalty fee for being in the photographs that Level Grounds uses on its packaging, website and promotional materials. I didn’t notice it, but Hugo pointed out in one picture that a girl’s (I can’t remember her name, but Hugo knows her) teeth were a bit dirty and she was missing one earring because her ear was infected. Level Ground had made the decision not to “air-brush” any photos, but rather present the coffee producers as they are.

Hugo and his partners have lived-out their Christian faith in the way they do business, taking the Fair Trade concept to every part of Level Ground by having "righteous relationships" as a central frame for each business relationship. For me, Level Ground is a great example of how Christian people should conduct business. Hugo has a dream, in fact a “life goal”, to be an example of how fair trade and righteous relationships can be practised across different industries and business models (the recumbent bike market may be next…).

What if Christians could change their attitudes towards business, and what if Christians could begin to change the attitude of the world toward business?

Wayne Grudem, How Business in Itself Can Glorify God

It was never my intention to write about Level Ground from a consumer point of view. However, I know my focus on Level Ground as a business centered upon righteous relationships has resulted in a few purchases of Level Ground’s products. If you would like to buy Fair Trade coffee and support a company like Level Ground, then please make the switch, here is where you can buy Level Ground products:

North Americans:

• Order Online - FREE SHIPPING on orders over $25 to the USA & Canada
• through 160 Ten Thousand Villages stores
• + see the Level Ground Store Locator

Vancouverites:

• can get 2lb bags of beans from local Costco’s
• through local Ten Thousand Villages stores @ 2909 West Broadway, 1204 Commercial Drive, 929 Denman Street
• at The Well @ Regent College & Dunbar

South Africans:

• Through a relationship with Level Ground, the Bean There Coffee Company in Jo’Berg started a Fair Trade business.

[part 1] / [part 2] / [part 3] / [part 4]

relational trade [part 3]: visit to Level Ground Trading

Over the summer, I met Hugo Ciro, CEO of Level Ground Trading [part 1]. I am really impressed with Hugo and his business from a ‘relational trade’ perspective [part 2]. This week I took a trip out to visit Hugo and see Level Ground Trading first hand [part 3]. Mark, a good mate from College who also met Hugo over the summer and is doing a Marketplace concentration, came along.

It was a big day, ride to the bus, bikes on the bus and two buses to the ferry terminal, the 95 minute journey to Vancouver Island and then a 17.5km ride to Level Ground. When planning the trip, I thought was only appropriate that public transport and pedal power get us there, in honor of Level Ground’s environmental endeavors. Hugo’s recumbent bike was parked outside; Hugo greeted us and had a lengthy discussion about his experimental transit machine. We were sweaty, hungry and late, but Hugo was pleased to see us.

It was 2pm: after handing Hugo my two empty coffee bags (that can't be recycled, but can be turned into energy), brewing espresso from Café La Paz was the first order of business. I usually don’t take sugar, but thought I had to try Panela de los Andes – the cappuccino was sweet! We sat down, got to know each other a little better over a sandwich and coffee - all very relational – and we started to talk about Hugo’s background and the story and motivations that led to Level Ground’s birth eleven years ago.

On the ferry, Mark and I agreed we should start our time with Hugo by trying to understand his personal story and how that brought about Level Ground’s “relational business model” (how Mark and I saw Hugo’s business [see part 2]). Hugo told us about his childhood, spending two months a year on family coffee plantations in Columbia, then working in San Francisco and finally ending up at Regent College to think through missions work, where he felt affirmed by Eugene Peterson that he could be a Christian and pursue a career in business. Combining his knowledge of coffee, his desire for mission, and his entrepreneurial talents, Hugo came up with the idea of starting a Fair Trade coffee business. Hugo noted that it was the Mennonite missions group, Ten Thousand Villages, was the Fair Trade pioneer and gave Hugo the opportunity to distribute Level Ground’s coffee, on the condition that the coffee was excellent quality, and it is...

Here is where the four owner families of Level Ground got involved, contributing capital and expertise. My burning question was how and why did the four families agree on the relational trade model, instead of the typical profit-maximizing business model? For Hugo, this was easily answered – the four families had a shared story and values, they were followers of the Lord Jesus Christ. My sense was that relational trade wasn’t an ideological position for them, but rather it flowed naturally out of their identity in Christ. This still amazes me… my experience is that Christians don’t agree on much within the church, let alone in the marketplace, except that they often have nothing to say about how faith interacts with business. Yet, as Stacey (Hugo's business partner) put it, "everything we do is about relationships", and in a separate conversation, Hugo said his desire was to have "righteous relationships" as central frame for what Level Ground was about, which manifests itself not in "free trade", but in "fair trade".

Yet, Level Ground never considered itself a “Christian business.” Rather it is a business run by Christians (about half of the 30 staff) on Christian principles and values, as if there was no other way to run a business.

We weren’t long into the conversation when Hugo mentioned that an excellent question was raised by a reader in [part 2], about how to raise capital relationally. Hugo was excited, and after I heard what he had to say I was blown away! From before its first day of business, Level Ground has always raised capital relationally. It all started with a loan from one of the four founding families to buy the first shipment of coffee beans and has evolved into Level Ground issuing promissory notes to friends and family of the business. Level Ground pays 7.5% per annum and will pay back the money on demand. In today’s economic and credit climate, unsecured promissory notes are risky business. But, the friends and family of Level Ground like the business and are engaged with Level Ground’s ongoing story, and are happy to risk their cash. The money is loaned in trust in a relational context – as Hugo said it “we aren’t going to shaft our friends and family”.

Touring Level Ground’s facilities was an education, we learned how coffee is grown, picked, dried, shelled, shipped, stored, roasted, packaged and sold. It was also great just to be in a vibrant workplace – everyone was friendly, relaxed, in good spirits and not fazed that the CEO was walking through the facilities - there was a great vibe!

We talked at length about Level Ground’s advanced payment of a micro lot of beans from the Montaños family in Bolivia. The advanced payment was made by Level Ground unsecured – paid back at harvest time in coffee beans, the first crop that the dryer would produce. Quantities weren’t negotiated, contracts not signed, but a relationship was the basis of this deal to allow the Montaños to build their business long term, and to provide Level Ground with the best-of-the-best crop. Hugo admitted that any number of Level Grounds producer deals could go bad by doing business this way, not writing contracts, only letters of intent to buy X number crates of beans. Yet no deal has ever gone bad for Level Ground, the deals are made in relationships where faith and trust abound.

to be continued…

[part 1] / [part 2] / [part 3] / [part 4]

relational capital: lessons from Islamic finance?

In my previous post on relational trade, a question was asked about how to raise capital in a relational model - I offer an example of alternative capital raising in the comments. Perhaps Islamic finance may have a few lessons to teach us…

An interesting article appeared on smh.com.au this week: Islamic finance rides the storm. This is not the first time I have read about the rapidly growing industry of Islamic finance, but in light of the world financial crisis that is unfolding, and the Islamic finance industry's resilience to the turbulence of plummeting world markets, perhaps this is a good time to peer outside our dominant capitalist model to see how else things could be done.

There are several relational elements of Islamic finance (pulled from the article) that are appealing, such as:

• the partnership between the lender and borrower is arranged such that the risk is shared, and therefore the lender does a better job at evaluating the risk before granting loans
• interest is not charged because it is considered immoral as it does not take into account how changes in the value of the loan's security can affect the borrower
• the short sale of shares is not permitted because it stops traders profiting from assets they don't own
• depositor know their money will not be invested in unethical industries

I don’t have the expertise to layout a comprehensive analysis between our system and the “sharia” way - Clancy Yeates does a good, but basic job in the article. However, I find it fascinating that Moslem's have seen the incongruities between their faith and Western capitalist finance, and in response have developed a model that does not sacrifice their faith to the prevailing model. If Christ reigns over our world, and our economies and financial markets, why is it that Christians have assimilated their beliefs, largely uncritically, to a financial model that isn’t congruent with Kingdom values?

Readers who know more about financial markets and systems - any reflections in light of the credit crunch would be most appreciated. As would anyone who knows of examples of alternative, and perhaps Christian motivated, financing arrangements?

relational trade [part 2]: Level Ground Trading

Studying some marketplace theology at Regent College, I have been reflecting on my experience of working in the business world and looking to find examples of businesses that are run by Christian people, who don’t follow the pervasive rules of strict profit-maximisation that the capitalist market economy demands, seeking instead to run their businesses by different rules, with multiple bottom-lines, perhaps even going as far as God’s Kingdom rule here on Earth. During summer school, I met Hugo Ciro [read part 1], a founder and the CEO of Level Ground Trading, a business leader and a business with which that I am deeply impressed.

Being involved in the fair trade movement, seeking to bring economic justice and opportunity to small-scale producers of coffee, cane sugar and dried fruit is impressive in itself. Hugo’s company however seems to take the ‘fair trade’ concept far beyond a simplistic definition, and thread the ‘fair trade’ ethos throughout the whole of Level Ground’s business activities and relationships. Here’s how they do it:

• Fair trade & relationships with producers – there are established minimum premiums that are paid to producers in order to be certified as a ‘Fair Trade Company’. However, instead of meeting the minimum, Level Ground seeks to know their producers personally, and thus their producers' needs and circumstances. As a result, they frequently pay in excess of the minimum requirements, to ensure a fair deal is negotiated.
• Level Ground goes beyond the traditional B2B supplier relationships, by donating time, money, and expertise to enable its supply partners to produce more efficiently and develop communities, thereby supporting farmers who are seeking to experiment and farm using sustainable techniques, like an organic farmer who uses “a bio-digestor that converts his compost and manure into usable cooking fuel.”
• Level Ground seeks to be actively open and accountable to their stakeholders, including customers, by making information about "what the farmer gets" available online, and be audited to prove it.
• Fair trade & relationships with the environment: through composting, twelve recycling streams and smart purchasing decisions, Level Ground only trash one shopping bag of waste each week – a growing medium sized business achieves a feat that would be impressive for a small household! Plus, they try to be aware of where they are failing, be open about it with their customers and seek solutions.
• Hugo arrived at Regent College, coming from Vancouver Island not in the company car, but on his recumbent bike (see similar bike). Level Ground also support their staff who are seeking to make environmentally friendly decisions that are connected to their work: “On an on-going basis, staff who regularly cycle, bus or carpool to work are paid a monthly green transportation bonus.”
• Hugo’s business card was “Printed on 100% post-consumer paper”.
• Fair trade & relationships with employees – They try to recognise that employees have different motivations and commitments outside of the workplace and seek to be flexible to accommodate these needs to achieve an effective, rather than just talked about, work/life balance. In-turn, Level Ground has been recognised by the provincial government with a WorkLife award.
  
  To me, this model of business is remarkable in how the ‘fair trade’ concept is permeating all facets of Level Ground Trading’s business, or in Level Ground's words:
  

  “Level Ground Trading envisions a world wherein lifestyles are simpler, relationships are deeper and justice is inherent in each exchange. We remain focused on Direct Fair Trade through dialogue with producers, payment of a fair price, respect for the environment and transparency in the marketplace.”

  In class discussion, Hugo told us of interactions with other sellers in the coffee industry, who could not comprehend why Level Ground would not want to maximise their profits by paying the premiums they do. Hugo then challenged us to re-think our business relationships, ensuring that they were fair. The ongoing success, growth and profitability of Level Ground Trading gives me hope that seeking fair trade relationships in all aspects of marketplace exchange is viable, and much of the exploitation, injustice and dehumanising tendencies of our global economy can be overcome, if we have the will to pursue fair trade relationships.
  
  I am thinking about making a ‘field-trip’ to Level Ground Trading's HQ on Vancouver Island; I think taking my bike on the ferry would be the appropriate way to travel, and I will take my empty coffee bags with me, so that Level Ground can turn them into energy (as they aren’t yet recyclable). I want (or need) to ask Hugo about what is the primary motivation behind his company:
  

  • Is it that Hugo is a Columbian-Canadian, who knew first-hand of unjust trade relationships in Columbia?
  • Is it a shared Christian faith among Level Ground’s founders that drives them to seek shalom in this world?
    Are they seeking to live out Micah’s challenge ‘to act justly’?
    Are they seeking to be aligned with Jesus, as he read from Isaiah’s scroll ‘to release the (economically) oppressed’?
  • Or something else?

  I would like to ask Level Ground’s Canadian based employees…
  

  • If they feel like their work is more fulfilling and rewarding because they work for this fair trade company?
  • How so they think fair trade relationships could be encouraged and implemented in other business?

  Over to my readers: please post a comment…
  

  • Are you impressed with Level Ground Trading?
  • What else do you think I should ask Hugo and the Level Ground staff?
  • Do you value fair trade relationships enough to sacrifice a ‘maximum profit’?
  • What do you think Jesus would say about the need, or lack of it, to pursue fair trade relationships?
  • Do you know of any other businesses that adopt Kingdom of God ethics to their relationships in the marketplace?

[part 1] / [part 2] / [part 3] / [part 4]

summer school + relational trade [part 1]

If you read our blog, you could get the impression that all Jess and I do is spend time in places like Hawaii, the Rockies & the vineyards of South Australia – it isn’t true… so here is a post that branches out from one of my Summer School courses a few weeks ago.

The one-week course was called The Christian Leader in the Secular World of Work, which I took for my marketplace concentration. Peter Shaw, a former senior British public servant who is now an executive coach, ran the course. Peter has written extensively to both Christian and secular audiences looking at the life of Jesus to see what we can learn about how Jesus lead (as a visionary, servant, teacher, coach, radical and healer), made difficult decisions, used conversation as a tool, and made the most of each moment. While enjoying the discussion, at times the approach was perhaps a bit too reductionist and had the danger of straying into ‘eisegesis’, or reading stuff into the text.

The highlight of the course, however, was the discussions that Peter facilitated, which formed a solid chunk of our time together. The group consisted of about 25 people including a former big business CEO, a CFO, a high profile Vancouver lawyer, several management consultants, senior pastors and a teacher. This mix of people brought wonderful insights from the range of experience people had, which was truly valuable. Each day we sat in a different seat and in pairs got to share parts of our leadership and workplace journeys. By the end of the week, I got to know five people well.

One of the guys I got to pair up with was a CEO, this time of a smaller business. Hugo was part of four families who formed Level Ground Trading, a fair trade company, established in what seems to be the pioneer-days of the fair trade movement, in 1997. Hugo was a fascinating guy, and it was great to hear about his experience as well as his values for operating in the marketplace. Hugo’s business really impresses me too, and not just because he’s buying coffee beans at a price that is fairer to the farmers who work hard to produce them. In my next post, I’ll explain why I am so impressed with Level Ground Trading.

This morning, our coffee beans had run out, so I went to our cupboard and reached for the new two-pound bag that we bought last week. I got a pleasant surprise when I realised that we have been drinking Level Ground’s Café Mbeya since March. We were astounded to come across Fair Trade Coffee at Costco (a large wholesale chain in North America) and we were even more surprised at how good this organic dark blend from Tanzania tasted, and at the great price of $15. When I first came across the coffee’s packaging, it was the big bright pictures of the local communities, their stories, and a map showing where the beans were from that stood out to me, and not the Level Ground Trading logo. As a marketer, I could critique this as a mistake, but after learning more about Hugo and his company, I think the packaging’s emphasis is just right.

More about Hugo and Level Ground Trading next time… but in the meantime, I invite you to check out levelground.com, which is a beautifully presented website and really informative too.

[part 1] / [part 2] / [part 3] / [part 4]