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TGLSTE 2010 Process Toolindd(2)

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					I.   THE BEGINNING OF TOMS SHOES
     A. Blake wasn’t trying to get in the shoe business when he went to Argentina; he was just on a
        vacation.

     B. While he was there, he met some people doing a shoe drive; they would go around and
        collect slightly used shoes from wealthy families in Buenos Aires and take them to children
        who needed them outside the city.

     C. Blake was touched by this, but felt it wasn’t a very sustainable model because they were
        completely dependent on donations.

     D. Blake’s background was entrepreneurial, and while he wanted to do something to help them
        and help the kids get more shoes, he didn’t want to start a charity.



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 SESSION TEN: MAKING CONSCIOUS CAPITALISM WORK: THE TOMS SHOES STORY


      E. So, the idea he came up with over four years ago was instead of looking to charity to solve
         this problem, what if we looked to business? What if he started a for-profit shoe company
         where every time he sold a pair of shoes he could give a pair away, one for one?

      F.   That way there’d be no formulas, no percentages, just very simple—you buy a pair of their
           shoes and they give one to a child that needs a pair.

      G. That’s how they started four years ago, and that’s still what they do today.


II.   A FOCUS ON GIVING
      A. The word “Give” is depicted all over the TOMS headquarters in Santa Monica, California.

      B. TOMS was started as a spontaneous response from Blake to want to give children shoes.

      C. It feels amazing to give.

      D. But the interesting thing that Blake has learned in the past four years with TOMS is that
         giving not only feels good, but it’s also a good business strategy and a good life strategy.

      E. One of Blake’s favorite ways that he learned this was the first time I saw someone wearing a
         pair of TOMS.
         1. Blake was in the New York City airport, and he was literally running to catch his flight.
         2. He was coming from the gym, so he wasn’t wearing TOMS like he usually does.
         3. He got to the check-in counter, and as he was doing the electronic check-in, he looked
             over and there was a girl wearing a red pair of TOMS.
         4. He’d never seen a stranger wearing TOMS.
         5. So, he turned to her and said, “Excuse me, I really like those red shoes that you’re
             wearing. What are they?”
         6. She looked up and said, “TOMS Shoes,” and then she physically pulled him away from
             the machine and said, “You don’t understand. This is the most amazing company in the
             world. When I bought this pair of shoes, they gave a pair to a child in Argentina. And
             there’s this guy, he lives in Los Angeles on a sailboat . . ..”
         7. As she was telling him his life story, he was feeling embarrassed, so he had to tell her
             who he was.
         8. She looked at him like a deer in the headlights and said, “Why did you cut your hair?”

      F.   The point is that she had watched the videos on YouTube of them giving shoes, and she was
           invested in it; she didn’t just buy a pair of shoes.

      G. When Blake got on his plane, he thought, “That was one girl who thought she was speaking
         to a stranger at the airport. And if she had that much passion to tell the TOMS story to a
         stranger, how many other people had she told?”

      H. So that day on the plane, Blake wrote in his journal, “All we have to do at TOMS is focus on
         giving.”




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SESSION TEN: MAKING CONSCIOUS CAPITALISM WORK: THE TOMS SHOES STORY


     I.   If they focus on giving in a sustainable and authentic way, their customers are going to do
          the marketing for them, and Blake thinks that’s why they’ve given more than 600,000 pairs
          of shoes away.
III.   STARTING A FOR-PROFIT VERSUS A NOT-FOR-PROFIT COMPANY
       A. During TOMS’ first year of business, Blake was speaking to a group and a gentleman stood
          up at the end and said, “I really love your story, and I can tell how passionate you are, but
          if you really cared about these kids, if your main focus was giving away as many shoes as
          possible, why not just start a non-profit?”

       B. The answer that Blake gave him was a theory at the time, but he can now speak with great
          confidence that it works because they’ve given so many shoes away.

       C. About eight months after Blake started TOMS, he sold the shares of an online education
          company he had been running and took that capital and invested it into TOMS so they could
          continue to grow the business.

       D. With that amount of money, Blake could have bought about 40,000 pairs of shoes, so he
          had done the non-profit model, he would have helped 40,000 kids—which would have been
          amazing because it took them a year to help 10,000 and the first two years to help a little
          over 50,000.

       E. So, 40,000 right at the beginning would have been amazing, but Blake’s resources would
          have been completely depleted at that point. He would have had to have gone out and
          asked for donations to continue the giving.

       F.   Instead, he took that money and he invested it in a for-profit business.



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SESSION TEN: MAKING CONSCIOUS CAPITALISM WORK: THE TOMS SHOES STORY


     G. Now, TOMS has not had any additional investment since that original investment three and a
        half years ago, yet that same amount of money has now helped more than 680,000 children
        get a pair of shoes—twenty times more kids.

     H. And it’s continuing to be sustainable; in years to come, they’ll give millions and millions of
        shoes away because of that initial investment.

				
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