Thursday, November 27, 2008

All of You Agree That We Do Not Live In The Democracy Our Founders Envisioned.

The voting period for my poll has expired and here are the results:

78% of you voted that our only chance to return to the democracy that our founders envisioned is "if we make some huge changes". Not one person voted that this is the democracy that the founders envisioned.

I'm interested to know, from all of you, what kinds of changes need to be made for our country to be more democratic. Please post a comment.

Wednesday, November 26, 2008

A $6 Billion U.S. Company Turns Democratic!

Take DaVita. Today, the El Segundo, Calif., company is the largest independent provider of dialysis services in the United States, with more than 30,000 employees and annual sales of nearly $6 billion.

But back in 1999, the situation was bleak: the company was functionally bankrupt, under investigation by the U.S. Securities and Exchange Commission, being sued by shareholders, and the majority of senior executives had left. Its new CEO, Kent Thiry, understood that changing course meant embracing a fresh, democratic approach. So he and his team implemented the following:

“Town Hall” meetings to share information about new programs, spotlight achievements, and answer questions. Quarterly “Voice of the Village” meetings allow “teammates” the opportunity to ask the CEO and senior leadership any questions they want.

Opportunities for all employees to engage in democratic decision-making through voting on a range of issues including the renaming of the company, its core values, job titles, logos, and new initiatives.

Annual forums at which DaVita’s CEO and COO publicly share their personal successes and failures in front of more than 2,000 colleagues.

Decentralization that lets each of its 1,300 clinics be its own “boss.”

As a result, DaVita dramatically reduced its turnover rate, stimulated organic growth above the industry average, and became the industry leader. Net operating revenue grew from $1.45 billion in 1999 to $5.26 billion in 2007. And over the past five years, DaVita’s stock has soared 279 percent, while the S&P 500 Index has returned 52 percent.

“We feel our approach adds more value to the American health system, not just in savings but also in transparency and accountability,” says Mr. Thiry. “I firmly believe that every company can be a democratic community. And I know it’s worth it!”

His statement underscores the potential of democracy to transform not only corporations but the millions of lives they affect. That, in turn, raises a pressing question: Do big businesses have a responsibility to be organized democratically because of the power they wield?

(Taken From: Even Big Companies Are Embracing a Democratic Style -- Traci Fenton)

Tuesday, November 25, 2008

Corporations Evade $250 to $300 Billion in Taxes Per Year

From 1950 to 2000, corporations contributed an average of 17% of the U.S. tax revenue. Currently corporations contribute 7% of the U.S. tax revenue.

Why are corporations paying less taxes? In the last 7 years a very sophisticated industry of selling "tax shelters" has become big business for bankers and accountants. What is a "tax shelter" and how does it help corporations steal? A simplified explanation goes something like this:

Corporation A makes $100 Million in profit during 2008. A consulting group like KPMG calls up Corporation A and says, "we can save you $7 Million in taxes if you pay us $1 Million." Corporation A agrees. KPMG then uses $20 Million from Corporation A to lease land in China from Corporation B (a friend of KPMG). Corporation B then leases the land back to Corporation A for $20 Million.

In the end, Corporation A no longer has profits of $100 Million. Instead they have profits of $80 Million, a lease from Corporation B for $20 Million, a lease to Corporation B for $20 Million, and taxes (at 35% tax rate) of $28 Million ($35 Million - $7 Million).

How do corporations get away with this? The truth is, the IRS is too underfunded and lacking in resources to prosecute corporations that evade taxes. The result has been that corporations are evading between $250 & $300 Billion in tax dollars a year.

How does this effect you or I? Have you ever bought food with your coworkers and someone doesn't pay? Well, in this case, your coworkers are American Corporations and since they won't pay, you and I pay 15% more in taxes every year. How much did Corporate America steal from you this year?

(statistics from PBS Frontline: Tax Me if You Can)

Friday, November 21, 2008

My Email to President Obama

President Obama is taking emails from everyone and anyone who has an idea. I sent him an email about democratic businesses. Here is what I said...

President Obama,

I have to say. I feel a renewed sense of energy and motivation since you have been elected that we, the people, might be listened to a bit more than in recent years.

I have an idea that I have developed from hundreds of hours of research. Please tell me what you think...

I believe that a tax cut should be given to "Democratic Businesses". Companies like Great Harvest, Da Vita, Southwest, and Linden Labs--to name a few. A tax cut will inspire more democratic businesses to be started or made from currently non-democratic companies. Democratic companies are designed to benefit all the employees and not just employees at the top.

A tax cut for democratic companies would save and make the government billions of dollars.

Employees of democratic businesses have more of a say concerning compensation, which means they get better retirement plans. An expert in a PBS Frontline Documentary called "Inside United's Bankruptcy" stated that corporations are currently underpaying their employee's pension plans by $450 Billion. As you may know the P.B.G.C. is already currently in a $23 Billion debt. The government can't afford to guarantee all these and future pension plans.

Employees of democratic businesses are able to afford health care. Wal-Mart and other non-democratic companies have cost the government billions of dollars by encouraging employees to apply for government health care instead of making it affordable to their employees.

Employees of democratic businesses are more engaged and productive. In 2006, Gallup estimated that disengaged employees cost the American economy $350 Billion per year. When employees feel a sense of ownership in their companies they are more engaged. Employees in democratic businesses are engaged because employees feel valued and motivated instead of coerced and fearful.

While democratic businesses expand into other countries, they never outsource jobs to other countries. Billions of dollars are lost to our economy when jobs are outsourced. In a democratic business, every single employee is valued and jobs are not sent overseas.

During the hundreds of hours of my own research on democratic organizations, I have discovered the website of an organization called WorldBlu. WorldBlu may be able to help you determine which companies get a democratic tax cut and which ones do not. Over the last ten years, they have developed a "score card to evaluate an organization based on ten principles of organizational democracy such as the level of transparency, accountability, decentralization, and choice practiced throughout the organization." ( I have never even talked to or emailed this organization before, so I don't know if they can help. Still, it is good to know that you don't have to start from scratch to develop a way to determine which companies qualify for a democratic tax cut.

Thank you for listening to me and everyone else who emails you.

May God bless you in your presidency,

David Sheffield

Thursday, November 20, 2008

PBS Reports: Corporations Are Withholding $450 Billion in Pensions!

As you have seen in the news, chapter eleven banktrupcy has become very popular. In the recent past, it has become a strategic tool for companies, instead of a last resort. As a result, the P.B.G.C., the government agency that insures pension plans (i.e., 401Ks, traditional IRAs, etc.) that have been dumped to save a company from bankruptcy, is currently in a $23 Billion debt. It is estimated that of all corporate pension plans in the U.S., $450 Billion of your money is currently underpayed by corporations. The more businesses that get close to bankruptcy in the coming months and years will add to the P.B.G.C.'s debt. We are looking at another economic crisis and who will pay? The taxpayer.

In addition, (prior to the economic meltdown) those workers currently poised to retire only have enough money to live for seven to eight years in retirement. The average worker poised to retire is now deciding between working for the rest of her/his life to maintain a middle-class lifestyle or going on social security after a few years when the funds run out. While corporate elite salaries are getting larger and larger, corporations are passing off more and more of their expenses to the government. Who are these corporations actually serving?

(statistics from PBS Frontline: Inside United's Bankruptcy)

Tuesday, November 18, 2008

Democratic Businesses = No Government Health Care

In a perfect world, all businesses would be democratic, health care would be affordable for everyone, and Michael Jackson would still live in Neverland.

If all businesses were democratic, companies would exist, first, to serve all of their employees.

If all companies existed, first, to serve all of their employees, all employees could afford health insurance.

Democratizing American corporations is the better alternative to politicizing the health care industry.

How do we democratize businesses? We petition the government to give a tax cut to all businesses that are run democratically, whether they be start-up businesses or former oligarchical businesses.

Monday, November 17, 2008

Do Businesses in America Serve Those in the Businesses or Those at the Top of the Businesses?

Interesting to note...The last time the economic divide was any wider was during the Industrial Revolution when oligarchical corporations controlled government interests.

Friday, November 14, 2008

What is important to Wal-Mart?

"If we keep our prices low and raise our average wage substantially, we would, in fact, decrease our profitability disproporationately and we would sacrifice a healthy chunk of what it is that our shareholders expect from us." -- Lee Scott [current President and Chief Executive Officer at the Wal-Mart's 2005 annual shareholder's meeting] (Wal-Mart has the 25th largest economy in the world)

The sadest thing is that because of my business education, my first instinct is still to defend this statement.

Thursday, November 13, 2008

Is it time to Rethink the Corporate Structure?

Warning! Do not buy gift cards at these stores! and Use your gift cards before it's too late!

If you know of other failing businesses, please leave a comment.

Shoe Pavilion -- Closing all stores
Circuit City -- Closing all stores
Anne Taylor -- Closing 117 stores
Eddie Bauer -- Closing 29 stores by year end
Cache Clothing -- Closing 20-23 stores
Lane Bryant, Fashion Bug, Catherines -- Closing 150 stores
Tallbots, J. Jill -- Closing 100 stores
Gap, Old Navy, Banana Republic -- Closing 85 stores
Footlocker -- Closing 140 stores
Wickes Furniture -- Closing all stores
Levitz, Bombay -- Closing all stores
Zales, Piercing Pagoda -- Closing 105 stores
Home Depot -- Closing 15 stores
CompUSA -- Closed all stores
Macy's -- Closing 9 stores
Movie Gallery, Hollywood Video -- Closing 920 stores
Pacific Sunwear -- Closing 150 demo stores
Pep Boys -- Closing 33 stores
Sprint, Nextel -- Closing 125 stores
J.C. Penney -- Closing some stores
Lowe's -- Closing some stores
Office Depot -- Closing some stores
Ethan Allen -- Closing 12 stores
Wilson's the Leather Experts -- Closing 158 stores
Sharper Image -- Closing 90 stores
KB Toys -- Closing 356 stores
Dillard's -- Closing another 6 stores

--Summary of email. Original email from Vivian L. Brewer of Washington Mutual Bank--

Southwest Airlines Statistics

Southwest Airlines Statistics

(1) The only airline to create an employee profit-sharing plan, simply, because they thought it was the right thing to do.

(2) The only airline to post profits for 35 consecutive years (going on 36).

(3) Since inception, Southwest Airlines has averaged a 26% (compounded yearly) return on investment. That is almost unheard of!

I don't want to focus on money when it comes to democratic businesses, but I do want to emphasize the viability of democratic businesses.

Wednesday, November 12, 2008

The World's Top 100 Economies

Of the world's top 100 economies, 51 were corporations in the year 2000. If you subtract the money made by these corporations from the national GDPs, I wonder if you would even find one country in the top 10.

Tuesday, November 11, 2008

The Tide of Democracy

After hundreds of hours (literally) of research, I have decided the direction of my website and, partly, my life. I want to organize and create a democratic business.

Sounds like wishful thinking? Well that's what I thought for a couple of days. I thought I was just being a little too wishful. Then I searched "democratic business" on google and I found a ton of results. I found out about businesses like Semco, DaVita, Southwest, and Great Harvest. I discovered that not only are the oligarchical-style corporations not necessary to create a stable company, but they impede stability. Most important, they undermine our faith and the faith of people around the world in democracy in so many ways.

I believe that if every American corporation was a democratic corporation, in less than 50 years, we would convert the entire world to democracy. Think of it. No more sweatshops. Everyone could feel invested in their job and company. What force would be strong enough to stop democracy from filling the world? Not even the world banks and oligarchy-style corporations could stop the tide.

I'm not the only one starting this movement. Research online. Discover for yourself the faith people are finding in democratic workplaces. Go to Many of the most talented people coming out of our universities are opting to be part of these democratic businesses because they offer work/life balance and they offer the ability to truly be part of the company and not just to work for a company.

I want to be part of starting another company on democracy's side. If you want to be part of the movement, email me, make comments, and tell everyone you know. I will be tracking the advancements of democracy in the workplace here, so keep updated.

Monday, November 10, 2008

What would the world be like if all businesses were democratic?

Democratic Business Principles from the Website:
1. PURPOSE AND VISION A democratic organization is clear about why it exists (its purpose) and where it is headed and what it hopes to achieve (its vision). These act as its true North, offering guidance and discipline to the organization's direction.
2. TRANSPARENCY Say goodbye to the "secret society" mentality. Democratic organizations are transparent and open with employees about the financial health, strategy, and agenda of the organization.
3. DIALOGUE + LISTENING Instead of the top-down monologue or dysfunctional silence that characterizes most workplaces, democratic organizations are committed to having conversations that bring out new levels of meaning and connection.
4. FAIRNESS + DIGNITY Democratic organizations are committed to fairness and dignity, not treating some people like "somebodies" and other people like "nobodies."
5. ACCOUNTABILITY Democratic organizations point fingers, not in a blaming way but in a liberating way! Democratic organizations are crystal clear about who is accountable and responsible for what.
6. INDIVIDUAL + COLLECTIVE In democratic organizations, the individual is just as important as the whole, meaning employees are valued for their individual contribution as well as for what they do to help achieve the collective goals of the organization.
7. CHOICE Democratic organizations thrive on giving employees meaningful choices.
8. INTEGRITY Integrity is the name of the game, and democratic companies have a lot of it. They understand that freedom takes discipline and also doing what's morally and ethically right.
9. DECENTRALIZATION Democratic organizations distribute leadership and power across their enterprise.
10. REFLECTION + EVALUATION Democratic organizations are committed to looking in the mirror and asking, "How can we be better?" -- not just quarterly or annually, but daily.

How Will You Measure Your Life?

I recently read this article by Clayton Christiansen out of Harvard entitled, “How will you measure your life?” It is what he tells his students on the final day of his class.

One of the items that he mentions sticks out to me. It reads as follows:

“One of the theories, . . . . . how to be sure we find happiness in our careers—is from Frederick Herzberg, who asserts that the powerful motivator in our lives isn’t money; it’s the opportunity to learn, grow in responsibilities, contribute to others, and be recognized for achievements. I tell the students about a vision of sorts I had while I was running the company I founded before becoming an academic. In my mind’s eye I saw one of my managers leave for work one morning with a relatively strong level of self-esteem. Then I pictured her driving home to her family 10 hours later, feeling unappreciated, frustrated, underutilized, and demeaned. I imagined how profoundly her lowered self-esteem affected the way she interacted with her children. The vision in my mind then fast-forwarded to another day, when she drove home with greater self-esteem—feeling that she had learned a lot, been recognized for achieving valuable things, and played a significant role in the success of some important initiatives. I then imagined how positively that affected her as a spouse and a parent. My conclusion: Management is the most noble of professions if it’s practiced well. No other occupation offers as many ways to help others learn and grow, take responsibility and be recognized for achievement, and contribute to the success of a team. More and more [people think] that a career in business means buying, selling, and investing in companies. That’s unfortunate. Doing deals doesn’t yield the deep rewards that come from building up people."

I’m sure you can see why it sticks out.