The Power of Conscious Capitalism

Foreign.

Hi, I'm Susan Drum and welcome to the Enlightened Executive, where your personal evolution sparks your leadership evolution. Each episode we feature groundbreaking techniques and strategies to help you get the edge in personal effectiveness and leadership. This episode is brought to you by Meritage Leadership. At Meritage, we strengthen teams and empower leaders to achieve high performance. Go to meritageleadership.com to learn more. Are you curious about your own development path to enlightened leadership? Take our free 5 minute quiz@susandrum.com to discover your superpower and the roadblocks that could get in your way of effective leadership Today. I am so excited about this episode. We are discussing social entrepreneurship and I am excited to introduce my guest, Philip Wilson, who I met while traveling in Guatemala with my EO Entrepreneurs Organization Forum. And I'm so excited to have him on the show because I believe he is one of the most enlightened executives I've met to date. Philip is the founder and CEO of Ecofiltro, a social enterprise dedicated to providing clean water to the rural core of Mexico, Central and South America. With over 25 years experience as an entrepreneur in the US and Guatemala, Philip believes the world's most pressing problems in can be solved by applying business practices to social challenges. Philip was named Social Entrepreneur of the Year for Central America by the Schwab foundation in Davos and one of the 10 most successful social entrepreneurs in Latin America today. Over 500,000 families in rural areas have been served by Ecofiltro and the goal is to reach 1 million by this year. Recently, Philip built an innovation center in his hometown to help entrepreneurs scale their startups and reach their greatest potential. And I got a chance to tour it as well. So welcome Philip. I'm so happy to see you again.

Thank you, Susan. An honor to be on your podcast.

Well, the social impact you're making is one of the most extraordinary examples of the power of an entrepreneur to make a difference in this world. So let's start with a little bit of your journey. You weren't always in this position and making the impact that you are today. You went through a bit of a personal crisis. Can you share a little bit about what that was and how it actually ended up leading to your success?

Yeah, yeah, yeah. So I turned 40 and I don't think I'm the first person this happens to. But Susan, I was having trouble getting out of bed and I've been an entrepreneur since my 20s. It's always been really hard. I've always struggled, but found success in a lot of My entrepreneurial ventures, and every entrepreneurial venture would get easier and easier. But you turned 40. I didn't really have to work anymore. And I just, I don't know, I felt like a leaf in the wind without direction. And it was really my mother, My mother's been a social worker since, I think, since she was born. And I told mom that Christmas, I really don't have any purpose. And what, what would you recommend someone like me? You know, the first thing, she's like, oh, my gosh, you're so successful. Because I was considered the successful kid in the family. But she's like, you know, what are you struggling with? I says, I don't know why I should get up in the morning. So she recommended this book called Man's Search for Meaning by Victor Frankel. And if there's one thing, yeah, if there's one thing, I just read it for the third time this past year. If there's one thing that I want everyone that hears and sees us is to read the book, because it really, it's kind of a deceptive title. Man's Search for Meaning. And with Viktor Frankl, one of the premises of the book is it's a big mistake to look for success, to search for success. If you're committed to a cause greater than yourself, success ensues. And that was like, oh, I never really thought about that. I've always been entrepreneurs where I think we always get into these situations, could confirm this, probably, since you're an entrepreneur yourself. I think we're always on to the next thing and then the next thing, and we're living in the future all the time. And, you know, I, I, I was always kind of searching for that success, the next big thing. And that's why I, I reached 40 and I'm miserable. And my mother, who had this amazing foundation that was focused on providing access to, to portable water in rural Guatemala, I, you know, I said, mom, do you need some help? You know, maybe after reading the book, I was like, you know, maybe I can do something to help you reach more people. Because not only her foundation, but most foundations, foundations, I come to find out they are very different from entrepreneurs in the sense that many times they're measuring intentions and not results. I mean, an entrepreneur, if you don't measure results, you go bankrupt. Right? You know, we're wired to really figure out how to make something work. And I remember the first morning that I'm at the foundation. First of all, I started just going to, you know, see how I could help my mother that was, like, very motivating to me. And I had read the book, and I was like, oh, there's something to this. You know, being involved in something greater than just me, you know, myself outboarding, which I did most of my life, focused on accumulation. But I saw, and this is a shout out to all the entrepreneurs out there. I was like, wow, entrepreneurs are probably the most capable people in the world to solve most problems at scale. Like, that was the first kind of light bulb that went off. And the reason that I came to that conclusion is my mom was reaching 2000 families a year with her solution in a country that had a million families without clean water. So when you're an entrepreneur, you're like, okay, what's the size of the market? You measure the penetration weekly, monthly, and.

Huge untapped potential there. Not getting clean water. Yeah.

And many times, foundations don't have that mindset. And so, you know, I basically went with my sister out to the middle of nowhere. Remember, it was a beautiful drive out to the countryside. And we go into this village, the poorest of the poorest of the poor. We go into this home. And, you know, it was a very poor home. Dirt floor, lots of smoke. Guatemala. The Guatemalans cook with open pitfires. I remember my eyes started turning red, but I also saw a tv. I saw two smartphones in the home. My sister had donated already in this area at Acafeltro. And the Acafoltro was there. It was kind of in the corner because it was a free product donated to this family. The television was covered by a small blanket because it was something they had purchased. And so I start observing. I go into about 20 homes, and then I told my sister, I says, hey, can we go to a community that hasn't received water filters? Let me just see what are they doing right now to provide portable water? And so we walk, which was fascinating. I've always been entrepreneur in California or selling things to other businesses in urban. Urban context. So I'm walking in the morning in this beautiful village in the highlands, and we get to this village of about 30 huts, and I just got out my agenda because I love writing. Right. I seem to stick in my brain a little longer. But I just interviewed these families, and basically, they were boiling water with firewood, and it was costing them $13 a month. So Philip Wilson, the entrepreneur, all of a sudden. And, you know, I was so excited, Susan, because I'm like, wow, I feel like I'm going to be able to use my entrepreneurial experience to make a change in the world. And so I'm almost. It was almost kind of selfish. I'm like, wow, this feels so good. It's like a drug. You know what was interesting, Susan, is when I saw that all these really poor families were spending so much money on fire with the boil of water, I says, you know, Dominique, I think we're going to stop seeing the poorest of the poorest objects of pity, and we're going to see them as real customers. I think it's more dignifying, and I think we can get out of this rut of just helping 2,000 families.

Right.

Which, I mean, it was kind of pathetic. Right. In terms of solving the problem.

The problem, yeah.

So I go back, and the biggest struggle and. And I. I failed at bringing all the staff of the foundation to a place where we were going to completely change the model. You know, I would get comments like, well, I think it's kind of a sin to sell to a very poor family. You know, we're. We're really not going to help them that way. And I'm like, I don't want to do this to make money. I just want to do this in a way that allows us to reach millions of people as opposed to few thousand.

Yeah.

And so to make a long story short, we did an amazing value proposition. I had to create an enterprise because I couldn't move the foundation to a place where we were going to change the model. And we created a B corp that was just focused on a mission of reaching millions of people with clean water. And we priced the filter at a level that would pay for itself in three months or less versus fire. So that was the value proposition. We just got really good. We'd be like, hey, if you give us $30, we're going to return to you 300. They're like, everyone's like, how are you going to do that?

Because, yeah, it's like, it's a little bit like teaching to fish versus giving the fish. Right. And you're pricing it. It's still costing something, so it's valued, but in the long run, it's saving them money and helping the environment by not burning firewood.

Yeah. And I mean, the rest is history. We, you know, I remember we started reaching 25,000 families and then 50, and then 100. And this year we think we can reach about 450,000. So it works. And kind of selfishly, you know, I kind of started down this road because I was like, gosh, you know, why is Philip Wilson around? Why do I exist? And then I get into this situation where and I actually question myself sometimes. I'm like, this feels so good. Am I doing this for the right reason? And then I'm like, of course, you know, bringing clean water to the forest of the poor. But I started understanding, kind of with experience. What Victor Frankl was saying in man's search for meaning is that I wasn't looking for success at Ecofotro. I was just trying to explain the why, solve the problem. And the outcome is peace, joy, you know, which is kind of a deeper level of happiness. You know, it's hard to describe, but it wasn't happiness. It was like, wow, there's a reason why I'm around. And then I was like, I gotta tell everyone this because I have so many friends that could really use kind of this shift of no longer pursuing the success, but just try to find a noble purpose.

Yeah. Behind what you're doing. And that is such a core tenet, I think, in the enlightened executives that I've interviewed in the past, is getting committed to a meaningful mission outside yourself. You brought up a good point early on, which was, you know, if you're going after something for egoic reasons like accumulation or. Or success in the eyes of others, it can elude you. Some still are able to, but you actually won't find what you just mentioned, which is true joy and fulfillment.

Yeah.

And I've certainly seen this with billionaire clients, Right. That aren't experiencing the level of joy and fulfillment that you are experiencing. And it's a little bit like the same. I tell people, if you go after trying to be right or be in control or be the smartest person in the room, all of those things, if that's your goal, inevitably you don't achieve them. It's this sort of paradox. But if you are committed to a meaningful mission outside yourself, you get those things and you get the success as a result of. Not a pursuit of.

Yeah, yeah, yeah. It ensues. It's such a beautiful word. And I mean, I think it's probably 1% of the world out there that understands what we're talking about. How do we get it to 2% and 5%? And I think that'll bring so much more peace to the world and actually so much more business success to people. That's the whole irony of everything I did actually made me a more successful entrepreneur. And I wasn't looking for that. It just happened.

Right.

And so Victor Frankl was right.

Now, there's two parts to this, because it's not just about the meaningful mission that I was so touched and inspired by when I got a chance to tour your. Your factory. The other piece of it is the way you're running your business and the way you're running your company and how you lead your employees. So can you share a little bit about how you're doing the inside job there, not just the outward mission piece?

Yeah. So when we started having lots of success, scaling and solving the problem, access to clean water, you know, you're the leader of a social enterprise. And I remember one night, I'm like, well, what does it mean to really treat the people that are making this happen in a different way from, I was never a bad founder. I always treated people with dignity. But I said, what if I really empower everyone? You know, remove the hierarchy of Echo Filter. I started with Echo Filter than I did with my other companies. But what if I manage, for instance, the factory, you know, set up with 150 people with, you know, managers and supervisors. What if I do it with teams and create team leaders and say, look, these are the objectives, but I want to leave it in your hands on how to get to those objectives. And that was like an amazing transformation where people were like, oh, my gosh, you really are going to let me use my own creativity to meet these objectives? And I'm like, yeah. And, you know, of course, the outcome, the factory became super efficient. You know, people say that costs increase every year with inflation, this or that, where all cars go down and the margin goes up every year. And then, you know, on an economic basis, they said, well, why don't we share? Because EchoFiltro is a profitable company, and it has to be profitable because we're scaling. I mean, we're going to grow 45% this year. And when you grow, as you know, most entrepreneurs know when they're scaling that, you know, liquidity is not something that's very abundant. And so you have to be profitable. And so I said, what if we share 25% of all the profits and we give it on a monthly basis in the first 10 days of the next month? Because a lot of our, you know, a lot of our teams are, you know, they're factory workers and, you know, they live month to month. Not anymore, actually, because they've been accumulating a lot of profit sharing. But that was the most amazing outcome. And, you know, when I started sharing our results with other eoers, I'm a member of entrepreneur organization, I said, you know, because the mindset with many entrepreneurs is hey, if I make 10 and I share three, I only make seven. I says, no, you'll actually make 15. And this is why. And then I, you know, I, I understood that most people in most companies are not motivated because they're not empowered and they don't grow economically with the business. And so that's the arbitrage. You know, if you empower and share profits, people are really going to give everything it takes to make your company successful. But there's a caveat. You don't do it for that reason. So you're not like, okay, I'm going to empower and I'm going to share profits because I want to have this billion dollar company and make. No, it's not going to work. It has to be authentic because you really want people to reach their potential. And they reach their potential when you empower them and when you let them grow economically. I mean, you know, we just, I, I haven't gotten the December numbers yet, but in November, you know, we shared an extraordinary amount, 5, 500,000 quetzales of profit share, which is, you know, about $60,000. I mean, how beautiful is that? I mean, I was at the Christmas party and the hugs and oh my goodness, going to be able to add another room to my house and.

Yeah.

And I'm like, at the end of the day, I think that's success more than anything I can accumulate for myself. And it all came from, you know, going to talk to my mom with the personal crisis and then seeing the impact of entrepreneurship in the social space and then kind of implementing just a more humane way to treat the people that make things happen in your organization.

Well, it's so powerful because I just want to go back to you saying 25% of your profits go back to your people on a monthly basis. So they're getting immediate rewards and they're so much more motivated to make efficient decisions because they know they're going to reap the benefits of that if they do.

Yeah. I mean, another thing we did three months ago, unlimited vacation.

So. Wow.

We don't track people's days off. And it's the messaging, right? So when you announce that, I mean, it's very clear what your goals are every. You know, we, you know, just because we're a social enterprise doesn't mean we don't run our factory like GE or Ferrari or. I mean, we're.

Oh, yeah, no, I saw it. It was amazing.

You saw it. We manage with, you know, we have these big monitors in the factory. Daily goals, weekly, monthly, everyone Knows what they need to do. But you know, if some teams reach their goal on the 20th of the month, well, let them spend 10 days with their family, go on a little vacation. And so. But the message is, I believe in your creativity. I don't want to control your time because I really believe in you. And I know that you're going to invest your time in a way that that's good for the company. And that was very transformative. It's something we did a few months ago. And I advise other entrepreneurs and business executives to, you know, take a look at that.

Yes. When I toured the factory, there are monitors everywhere and everything is very transparent in terms of success. Everything's measured and how the team is doing is very transparent. And so that allows you to measure based on outcomes, not on subjectivity.

Yeah, that's right. You have to have the clarity. So I always tell people, like, because now we're getting a lot of interest in what you know, because Ecofiltra is super successful. And so a lot of people are asking me to talk to their boards and I tell them, you know, sometimes people are like, well, I don't know. I don't want to know. I don't want people to know how much I make or how much the company makes is.

They are.

Everyone already knows. Today, everyone knows everything. It's much better if you're completely transparent. And those people that are transparent, we allow everyone into the factory. We're an open factory. Like, you know, as you witnessed when you came here, it's so hard to take what we're doing and copy it. Right. You know, it takes a lot as an entrepreneur to, to create a world class company. But I said culture and a world class culture. But I tell people, you know, you do have to have a human resource department and you have to have an induction campaign with current employees or new employees that come in so that they understand what empowering means. What does sharing profits mean? The responsibility that you have by receiving profits. And so there's a whole process that has to happen so that you can have that incredible outcome that empowering shared profits will give your company.

Yes. Because I can imagine some people might ask the question, have you ever been taken advantage of with these types of behaviors, perks, all of that? I think that's the fear for many leaders.

Yeah. Yeah. And the answer is no. So what happens is, at the very beginning, the culture will not allow certain individuals that are not team players to be in the company anymore. So you don't remove the people, but the culture I think it was 2 or 3% of the collaborators in our company. So that's an interesting phenomenon that happens when all of a sudden everything's on a team basis. But no, you don't. When you share profits, particularly, you create auditors, you know, because they're making money from the profit. So everyone is making sure that everyone is being as efficient as possible because the work of the team next door is going to affect yours. And so you create entrepreneurs because it's as close to entrepreneurship as you can bring. A collaborator is empowering and sharing profits. Right. You know, some people don't have the risk appetite that you and I may have, but as close as you can get to entrepreneurs, empowering someone and sharing profits, and so it makes them really excited about your company. They're, they're enthusiasts, they're optimists, they're fanatics, and they want to make sure the company succeeds. So there's no downside. I mean, I, as you know, we have to speak based on experience, right? We can't be like, well, I rent this book and I heard that empowering and sharing was.

Yes, it was a concept, right?

Like there was a before and after, and it's a dramatic difference and very positive. And there's not a downside if you do it correctly.

They absolutely should do a case study at Harvard Business School on this company. That's what I believe, because it's so profound, what you've created and how you've been able to create that and, and where it all came from was one powerful book. What a story of that. Now, what would you recommend someone listening to this, that a step that they might take towards more enlightened leadership or how they lead their team? What's one step that they could take tomorrow or this week?

You know, I think one. One major difference between the Philip Wilson of 20 years ago and the Philip Wilson of today is I, I leave with my heart now, not with my mind. And you know, when you, I would say if you're a founder, an executive of a company, treat people how you would like to be treated, and that just, that just that leads you to what I did, you know, how would I want to be treated? And I think that just leads you to be an authentic leader that will have people that will die for you, and they'll do whatever it takes to make sure the organization succeeds, but it has to be authentic. So it's actually two recommendations. Leave with the heart and make sure it's authentic. Don't do it. Avoid greenwashing and avoid Doing things because, oh, you read this book and it's fashionable, you know, it has to be a personal transformation.

Yeah. I think the two biggest takeaways I'm hearing is one, get connected to a meaningful mission outside yourself. To truly experience success in the form of fulfillment and joy, which is truly what we're after. We think the things are going to bring us that, but not necessarily for sure, I've seen too many times. And also to love your people because if you want to experience that type of work, you've got to lead. It's heart based leadership. And for some people that sounds oh well and good and nicey nicey, but you're a living example of the power of success from that type of leadership. So it's truly extraordinary. And I imagine you're probably a magnet for talent now, meaning you probably have plenty of people wanting to apply for any opening that happens in work.

Yeah. So for every opening, you wouldn't believe the amount of curriculum. Just today I delivered two because I had two personally delivered to my home. Can you, you know, they're like, okay, how do, how do we get a, an inside advantage to getting a job at Ecofiltra? And I had these two people leave CVs in my, I don't know how they found out where I live, but I think that's one of the advantages of B Corps or enterprises that have a noble purpose is young people, particularly Susan. So I would say the 20 to 35 year olds that top talent wants to come and be a part of something greater than, you know, just an interesting industry or a company that's very successful financially. So that's kind of one of the advantages of an Ecofiltro versus a traditional company.

Yeah. Powerful, powerful things. Well, where can people learn more about you and your work as an example?

Yeah, well I, they can if, if they want to engage. If there's anyone out there that you know, wants to go into details of how we did it, happy to chat. They just go to my LinkedIn, you know Philip Wilson, you can find me echo and echo.com there's several ways to get to me. I, I, I'm a mentor to a lot of entrepreneurs. I'm also a mentee. So I'm a 90 year old mentor from California. And one of the things, it's really good advice for everyone that's wants to achieve success is have a great mentor that you want to be like. And one of the things that my mentor would always say is to increase your being, you have to give yourself away. And that was before I read the book for meaning. But it's very aligned, you know, like give, give, give, give, give, give, give everything you have and don't ex, you know, without expecting anything in return. And that's the road to peaceful and true success.

Yes. And because as you give, you're actually getting the gift.

Yeah.

Yeah. Well, thank you so much for joining us on the episode today. And I hope our listeners were as inspired as I was by hearing your story and what you're up to in the world. So thank you.

Thank you, Susan, for this opportunity to share our story. Yes.

Yes. And if you like this episode, you won't want to miss my interview with Matt Hudson, who combines telling the deep truth in a nurturing and personal and professional way that cultivates exceptional people and leaders. Let's lead the way. Hope you enjoyed today's episode. And I'd like to point you to the next important step. Hit the subscribe button to get notified when we release new content. I'll see you on the next episode of the Enlightened Executive.