July 24, 2007
To: Shareholders of The Berrett-Koehler Group, Inc.
Re: Succession Planning for Berrett-Koehler
Fr: Steven Piersanti
Dear BK Shareholder,
Please share over coming months any thoughts or information that you have about the topics in this document that might be useful to Berrett-Koehler’s future progress.
In preparation for our Annual Shareholders Meeting, we surveyed all Berrett-Koehler shareholders concerning what topics they would like to see covered in the Shareholders Meeting and in other communications to shareholders. We were pleased that 54 shareholders completed the survey, which is an excellent response.
One of the major messages emerging from the survey is that many BK shareholders are concerned about Berrett-Koehler’s succession plans. This concern was expressed with comments such as: “Considering the importance of Steve to BK, I would like to understand what succession plans you have in place” and “How long is Steve going to keep doing this? Are plans needed yet for future leadership?”
The short answer is that I just turned 54 and currently have in mind to work at Berrett-Koehler for approximately 10 more years. Also, I currently have two full-time jobs — president and acquisitions editor — which is more than I can effectively handle. Sometime in the next five years I would like to give up one of those two jobs, although I don’t know yet which it would be. If we hired a new president (and I kept my acquisitions editor work), I would probably want to be chairperson of the Board of Directors for the remainder of the 10-year period, thus maintaining overall guidance of the company while giving up responsibility for day-to-day management. Obviously all of this could change and my tenure at Berrett-Koehler could be shorter or longer.
So I do think that it is timely to start thinking about succession planning for BK, both in my case and in terms of BK management practices generally. However I am quite clear that I want to go about this very differently than the normal approach, which is primarily focused on developing and/or finding persons to fill positions. Instead, I want to focus first on creating the structures and commitments that will allow Berrett-Koehler to stay true to its mission and vision before turning attention to who would fill what roles.
There are at least three sets of structures and commitments that I would like to see Berrett-Koehler establish:
Below are some preliminary ideas about what might be encompassed in these structures and commitments. I welcome feedback on these ideas and expect that they can be substantially improved in substance and expression. I expect that useful perspectives for improving these ideas will come out of our Shareholder Meeting discussions, the BK Future Search, Staff Meeting discussions, BK Authors Retreat discussions, and other forums. We may also want to survey our various groups of stakeholders about some of these ideas or engage our stakeholders in other ways. I especially welcome thoughts about what process or processes to use for improving and codifying these structures and commitments.
One well-known example of organizational commitments that have had a big impact in guiding an organization for decades after they were first formulated is “The HP Way.” Here is a link to view a statement of The HP Way: http://www.hpalumni.org/hp_way.htm
I hope that we could come up with a set of structures and commitments that have even more impact on the future of Berrett-Koehler than The HP Way has had on Hewlett-Packard. I welcome your ideas and suggestions for what these structures and commitments might include.
Thank you,
PRELIMINARY IDEAS ABOUT STRUCTURES AND COMMITMENTS TO GUIDE THE FUTURE OF BERRETT-KOEHLER
1. Ownership and governance structures. My goal is to develop over the next few years the legal and organizational structures that will help Berrett-Koehler remain independent while supporting its prosperity, fulfilling its mission, and meeting the needs of its various stakeholders, including making sure that investors, employees, authors, customers, suppliers, service providers, and other stakeholders are receiving excellent value in return for what they have contributed or are contributing to the company. One aspect of this may be moving the bulk of my personal Berrett-Koehler stock to some form of trust that has legal requirements to accomplish these purposes. Another aspect of this may be enhancing Berrett-Koehler’s Articles of Incorporation and other legal structures in some ways. I am currently gathering lots of information about existing and proposed innovations in these areas that have promise, including the “Upstream 21 Charter” work of Leslie Christian and others, the “B Corporation” work of Jay Gilbert and others, the “SR Corporation” work of Alan Kay and others, and the work that BK author Marjorie Kelly is pulling together in a book on a wide range of the corporate legal structure innovations (from trust ownership, social enterprises, publicly owned socially responsible subsidiaries, and hybrid structures to employee ownership, cooperatives, and government chartering). I also believe that our current grand experiment, The BK Authors Cooperative, is going to open up possibilities and show us a way to accomplish some of these objectives.
2. Publishing commitments. Berrett-Koehler has a distinctive editorial vision that fills a need in the world today and that can attract large numbers of members of many communities in creating, reading, discussing, and acting on publishing materials framed by this vision. Among the elements of this distinctive vision are the following:
a. The guiding purpose is creating a world that works for all.
b. Change is pursued at the individual, organizational, and societal levels, with special attention to cutting across and integrating the levels.
c. Emphasis on positive change. The purpose is never just to critique, expose, or titillate but always to advocate positive possibilities and solutions.
d. Expansive rather than closed vision, always searching for new ideas, cutting across existing boundaries, and opening up new ways of seeing things instead of defending an established discipline or approach.
e. A quest for understanding and changing the underlying beliefs, mindsets, institutions, and structures that keep generating the same cycles of problems.
f. Commitment to nonpartisan dialogue to find new common ground and not be trapped in traditional divisions and politics.
g. Open, egalitarian, and richly participatory involvement by all stakeholder groups as active partners in the community and the publishing and dialogue.
3. Management commitments. I am not sure how to be express and codify this list, but some of its elements might include:
a. Multiple stakeholder focus. The business is operated and the organization is run for the benefit of all stakeholder groups, including investors, employees, authors, customers, suppliers, service providers, and other stakeholders.
b. Stewardship approach to management and leadership. The role of BK management and staff is to act as trustees serving and balancing the interests of the various stakeholder groups while achieving the mission of the company and honoring the publishing and management commitments.
c. Partnership. Employees work with authors, customers, suppliers, service providers, and other stakeholders as partners in the publishing processes rather than in a hierarchical way.
d. Openness. Berrett-Koehler shares information about all of its operations openly with its stakeholder groups and encourages them to do likewise.
e. Fairness. Employee compensation systems, management structures, and other aspects of operations are designed to be fair to all, avoid a class system, and “raise the whole boat” rather than give special privileges and treatment to some groups of employees.
f. Quality. BK products and services provide the usefulness and value expected by customers, promised by BK marketing, and consistent with a reputation for quality.
g. Sustainability. In all areas of our business, BK follows practices that are sustainable for the environment and the communities in which we operate.
h. Integrity. We do what we say we will do. We operate the company in accordance with the company’s commitments.