229. This Isn’t Working: What Business Gets Wrong About People and Profit, with Meghan French Dunbar

0:00Picture this for me. You're studying monkeys in the jungle and you discover one monkey who's hoarding all the bananas, sitting on a massive pile, fighting any other monkey who comes close, while all the other monkeys struggle to find food. What would you do? You'd study that monkey to figure out what was wrong with it, right? Well, according to our guest today, that's exactly what we should be doing with billionaire business leaders. And as humans, we put that monkey on the cover of Forbes and say that they're the pinnacle of success in business and in life because they're hoarding wealth while other people go without.

0:35And especially when they're hoarding wealth from the people who help them accrue it. Meet Megan French Dunbar, former magazine CEO, business anthropologist, and quite possibly the only person who's ever got her entire fist stuck in a peanut butter jar in college. No follow up questions on that one, apparently. Megan built a nationally distributed magazine, raised funding and looked successful on paper. But behind the scenes, she was working herself to the bone, chasing all the wrong metrics. Until a half-drunk and Zoom call during COVID changed everything. This moment over like a pumpkin beer in October, crying my eyes out was like, oh my God.

1:13I have been thinking about success in the entire wrong way. Like this is success. success as impact like the purpose the meaning today we're asking what if everything we've been told about business success is completely backwards this is going to challenge how you think about growth profit and what it really means to win in business hello and welcome to truth lies and work the award-winning podcast where behavioral science meets workplace culture brought to you by the hubspot podcast network the audio destination for business professionals. My name is Leanne, I'm a Chartered Occupational Psychologist.

1:51My name is Al and I'm a business owner. And we are here to help you simplify the science of work. Megan French Dunbar has interviewed over a thousand business leaders in her career and in her new book This Isn't Working, she challenges the fundamental assumptions about how we build companies. But this isn't just another one of those anti-business manifestos, it's actually a roadmap for entrepreneurs who want to succeed but don't want to sell their soul. We're going to hear how active listening transformed her hiring process, why she thinks shareholder supremacy is destroying society, and the surprising companies that are proving you can be wildly profitable while treating people extraordinarily well.

2:29So in a moment, we'll meet Megan properly and discover why the best job interviewer of her life started with a conversation about fertility struggles. Oh, and I accidentally called her Megan Furlong Detroit in a previous episode. So we'll find out how she responds to that just after the break. The dirty little secret is that most businesses think they know their customers. They have the data, the records, the history, but it's scattered across three teams and four systems. And in our case, it's about 216 ,000 spreadsheets, which means nobody can actually use it. What you should be doing is using HubSpot because why?

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3:24My name is Megan Furlong, Detroit. No, no, sorry. Wait, it's Megan French Dunbar. What I do, So I study business. I say that my best friend, Hannah, when I was like talking to her about, I don't know what I actually say that I do anymore. She's like, you're a business anthropologist. You geek out about studying business. And I have done for the last decade, journalism, events, podcasts, all sorts of things. And I've interviewed over a thousand business leaders in my time. and I'm just super passionate about it. I'd say the thing I'm probably most famous for is in college, I woke up and I had my entire fist stuck inside of a peanut butter jar.

4:13No follow-on questions. Thank you. We first met you in a LinkedIn thread where someone called you the best boss they've ever had and then weirdly said because you had some of the most deepest personal conversations, I believe on day one, tell us, What was that first day and what the heck did you talk about? I mean, this is the thing about leadership that I think we sometimes forget is that the more human we are, the better. And as I co-founded and was CEO of a magazine, it became a nationally distributed publication in the U.S. and events and podcasts. We did a fundraising round. It was a nicely sized little media company.

4:55And we were looking for a new editor in chief of the magazine. and Vanessa Childers, my beloved hype woman, walked in the door and she was just so human and so personable. I was just doing interview after interview after interview and so many people were showing me the shiniest, most polished versions of themselves and Vanessa came in and yes, There were accolades and a resume to back up her skills, but she was just open and honest and human and was talking to me about her fertility journey. And I opened up and talked to her about a miscarriage I had previously had and how we really as a team, that was one of the things that we really worked on was giving people space to grieve, to be human, to whatever you're going through, we will figure out ways to support you, even though we're a small team.

5:57And that was just, that was day one. And I hired her, I think, on the spot before we even finished the interview. I just knew that she was going to be the best. And she was up until when I resigned and left company. And we still work together to this day. And I adore her. Much of ours interviewed you, Vanessa. How would I be able, as a male, be able to build a similar kind of rapport? I think we've bifurcated some concept of masculine and feminine characteristics or skills or traits. And in reality, they're just human traits. And we've had societal conditioning that makes women feel like we're supposed to and allowed to be vulnerable and listening and communicative and compassionate and all of these things.

6:45and that men are, you know, all the business skills, that their leadership qualities, that they're supposed to be decisive and confident and competitive and aggressive and all these things. And we do a disservice to every single human, regardless of gender identity, when we say you men can't access these particular traits. These are feminine traits. all of that to get to. Vulnerability and talking about things that are personal is something that anyone can do regardless of gender identity. I mean, my brother and sister-in-law had a very sincere fertility journey as well. And I immediately think of my brother in that situation.

7:31If Vanessa had mentioned the challenges they were going through, You know, men often feel like they have to be a little bit more closed off in general as I've worked with them. But my brother could have 100 % related to her or asked her questions about it. I mean, that's the thing. There's either opening up and being vulnerable and relating to people if there's something there that you understand and can develop that connection via empathy because you know you've been there, you've done it. or it's just active listening, like asking human beings to go a little bit further or share anything more that they want to share about what it is that they have brought up instead of immediately changing the topic because it feels uncomfortable.

8:19Active listening is the go-to and it's of every leader that I've interviewed, the number one skill across the board that people say has made them the most effective at leadership in regardless of industry type of business is genuinely listening and actively listening and asking people to tell more about whatever it is that they want to talk about. I learned this at a leadership program that I went through. And there's kind of two main principles with active listening. One is if you are active listening, literally don't do the thing that I first mentioned about empathizing and bringing it, relating to them with something that you've experienced.

8:57Active listening, when you, most of us, we autobiographically listen. You say something, I went to Greece this summer. Oh, I went to Greece two summers ago. And that, like, we feel like we're building connection by finding some sort of mutual shared understanding of something. So, but when you take the, when you say that, then you're bringing the attention to your story. Active listening is the main principle is how do I keep the, how do I keep listening to the person who is speaking. So you don't say the autobiographical thing that you want your brain naturally comes up with. Keep the attention on them and then avoid yes, no questions.

9:36And like all of the follow on questions are, do you want to tell me more about that? Or is there anything from that that you want to expand upon? Or how did that make you feel or anything that is open-ended and invites them to gently go further if they want to. I think the like simplest question that doesn't put pressure on is, is there anything more that you wanted to talk about with that? Or is there anything more that I can understand that you can help me understand about that? And it's such, when you're with someone, I've been with people who are like master active listening. And when you hear people like Bill Clinton, I've never met him, but when people like talk about Bill Clinton, they used to be like, he makes you feel like you're the only person in the room.

10:30Whenever you hear that, that means that person is an active listener because they actually, even if it's one or two follow-up questions where they show they're genuinely engaged in what you have to say, one, we're very rarely actually present with the people that we're together with at this point in life, with everyone on phones and distracted by all the things. And then two, even if you are present with someone, we often fall into that rhythm of I say something, you say something, I'm waiting to say something that I want to say. But just asking people to expand and elaborate on what they are actually saying and being genuinely interested in it as a gorgeous skill to work on.

11:10You've interviewed, as you said, over a thousand people. How has this active listening helped you to understand people better than just asking questions? I always, I would come with my prepared questions, but I would usually say, you know, here's all the questions that I think I'm going to ask you. And I'm a naturally curious human. And when you say something that I want to key in on, I'm probably going to follow up on that. And the way that the person who I learned this from talked about it was the idea of you just open the next door that interests you. And so whenever anyone says something that I find to be particularly interesting, it's honestly just actively being genuinely curious and staying present to like, what are they actually saying?

12:03and following through on a follow-up question. I've had a lot of people be like, I talked about things in that interview that I've never spoken out loud before. And I'm like, it's because we're not great at actually listening to each other when it comes down to it. Even if we have our prepared questions, it's hard to stay present and engaged and listen to someone for a full hour, which I think is what we're trying to tell people to do right now. We've heard how Megan revolutionized her hiring process through genuine human connection. But here's where her story gets really interesting and a little bit controversial.

12:43Yeah, Megan built a magazine about conscious business practices, but she was simultaneously burning herself out, chasing traditional startup metrics and also preaching the opposite message. The irony was not lost on her. And she's got some very strong opinions about what's broken in the business world. We're talking 40 % of Amazon workers filing injury claims and a profit at all costs mentality that she argues is literally destroying society. But before you think this is just another anti-corporate rant, wait until you hear about the companies that are doing it right. This and so much more is covered in her book, This Isn't Working.

13:18I'll ask Megan who it's for, and perhaps more importantly, who it's not for. Your book is called This Isn't Working. What isn't working? I mean, I'll start with the meta, the big thing that isn't working, which is shareholder supremacy. And the profit at all cost paradigm that has really just taken over the business world over the last 50 years that has caused business leaders to be incentivized to exploit human beings and resources to the best of their ability to make money as long as it's kind of legal. I mean, one of the statistics I found in the book is that 40 % of employees have filed some sort of worker injury or worker health related concern at Amazon.

14:05Like, that is profit maximization, like cutting corners on safety measures, overworking people. Like, it is just squeezing every last drop of productivity and efficiency and not treating human beings as human beings. like there's Monsanto covering up research that shows that their products are literally killing people. There's Purdue Pharma showing pushing oxycodone, knowing that it's highly addictive. Like there's all because of profit maximization and specifically publicly traded companies. Both Milton Friedman's 1970 article in the New York Times about shareholder supremacy came out in the exact same year that the SEC in the United States decided that we needed to do quarterly returns for publicly traded companies.

14:58And so all of a sudden we have profit is the end all be all and you have to do it as quickly as possible because you're going to be judged on it every three months. And you can look at pretty much most markers of societal well-being from 1970 on And most of them are like precipitously declining as a result of shareholder supremacy. I think I understand why companies do this, but is it not their responsibility to maximize it for shareholders? So fiduciary responsibility. This is like this gorgeous little phrase that we hide behind so that we can do whatever we need to maximize profit and say, we have a fiduciary responsibility to our shareholders.

15:42And there is a new wave of businesses coming through benefit corporations here in the United States where it's a legally structured entity and your duty is to maximize your benefit to stakeholders, not shareholders. And so that is a legal obligation. So that is one way to very clearly get around it. the other point that I consistently make, as when you're talking about fiduciary responsibility, you could 100 % say that 40 % of workers like being hurt and all of the terrible business things that we do that is maximizing profit, it might be in the short term. In the long term, it is the number one way to destroy your company.

16:30The most resilient, long-term, profitable organizations that have stood the test of time are investing in their workers, are doing all these extraordinary things to make the lives of the people that they're working with better. And in turn, they have incredible retention rates, loyalty through the roof, customer brand acquisition, like every single marker of business success. There's one company, Charani Syrups, which in the U.S., if you ever go to a coffee shop and say, I want a vanilla latte, They have been around for 100 years, and they're like these people who started the flavored latte craze.

17:08They're the syrups that are almost in like every single coffee shop. They've grown 20 % year over year for 34 years in a row under their CEO, Melanie Delbecco, and their nearly a billion-dollar company because they invest in their workers. They invest in all their stakeholders. They treat people well, and in turn, those people help the company succeed. firms of endearment, Raj Sasodio's book, which was one of my kind of first books that I read that blew my mind. And I was like, oh, my gosh, I have to learn more about this entire industry. He's the co-founder of Conscious Capitalism. They studied businesses like this, firms of endearment, meaning companies that tried to maximize the benefit to all stakeholders.

17:50They outperformed the S &P 14 to 1 throughout the length of their study. Like there's tons of research behind this. Like when you're saying fiduciary responsibility, the best way to ensure that you are in fact ensuring fiduciary responsibility over the long term is to do oftentimes the very opposite of what most of these companies are doing. MIT's recent research on the great resignation found that the number one source of employees' resignations is toxic workplaces. You just said do the opposite. So what we're saying, our own thinking that what we're saying is we look at Zuck, we look at Mosque, we look at Bezos, and I apologize to you gentlemen if you are listening.

18:33We look at them and do the opposite. I mean, you can be the richest man in the world and treat every single human around you like absolute garbage and build a gigantic house of cards. That gets so big that, like, they're monopolies at this point. It's like, and we're watching, I mean, what just happened with Twitter and X, like, you But Elon Musk's reputation and the way that he treats humans, you know, Tesla's stock is down. Like, it's starting to crumble beneath him. My dad asked me when was the last time I logged on to Facebook the other day, and I was like, I think it was 2000. Like, these brands are losing customers and, like, they're shaky houses of cards.

19:21And, like, there's, I mean, there's a million, there's so many arguments we could talk about with each of these things. With Amazon being the monopoly that it is, it's hard to compete and he can do whatever he wants. But, like, is that what we want to model leadership after? Is that like really what we want to emulate as a trillionaire who's ruining people's lives? It's a personal question, I guess. I want to talk more about the smaller companies. It's a fabulous book. Well, I think it's a fabulous book. Maybe you don't. By Bo Burlingham called Small Giants, which talks about smaller businesses that win.

19:59And going through the entire book seems to be the theme that they care about people. as a particular company, beginning with that. I want to say Zemermans, I think. Oh, my gosh. They're like one of my favorite case studies of the United States. And when I told you I get really excited, this is like the Steve Irwin thing where I'm like, ah, let me tell you all about Zengermans. Anyway, I got to interview Paul Zaginot and they treat people very, very well. It was like the crux of their company. But the thing that they did that flipped the entire thing on its head was instead of franchising, which they very clearly could have done, They were this incredibly successful deli.

20:35They looked at how could we create a family of businesses all in the Ann Arbor, Michigan area where they were based so that we can boost the local economy and not just businesses that are, you know, a family of businesses, but businesses that support and feed each other. So they made a bakery that does the delis and like coffee shops and like everything that they do. And then everyone who works at these owns a percentage of all of the companies together. So it's this diversified portfolio of small businesses that create immense economic opportunity for Ann Arbor, but then also help break generational cycles of poverty because there's this gigantic employee profit distribution that's going because they have ownership.

21:23in all the different companies. They're just, they're thinking about business as a way to create opportunity for people. And then they also have this gigantic zing train, which is their corporate training, where they're teaching people the skills that we should have been having in kindergarten, like listening and communication and also open book management. They are fully transparent with every single person on their team about finances, They're all making decisions together, fully transparent, which is one of the things that we love to do in organizations is hoard information and not share it with people and immediately make people feel like you don't trust them and that you don't respect them enough to share company financials, even though it's the place that you ask them to work every single day.

22:14So, yeah, Zingerman's is one of my favorites. They're an extraordinary company. I suppose the pushback would be, well, it's okay for them. They've been going decades. They can do all this stuff. I'm struggling to take home$50 ,000 a year as my business owner. I can't start doing this stuff now. Like with everything, there's varying degrees of ways that you can turn up the volume on things. I mean, at most we had 10 employees. We were a very small company. It was stressful. I was going through all of the small business owner stuff of like, oh, my God, are we going to make payroll next cycle? like I have been there.

22:56The last thing that I wanted to do was pop my head up to work on the business, on the things that I espouse that most companies that, you know, mid and large enterprises should be doing. Employee ownership, profit distribution, all those things. I think that those come in layers as organizations get larger. That doesn't mean, though, that as a small business, you can't treat your people extraordinarily well. I mean, Vanessa, very sweetly, you know, nominated me as this like best boss. And I mean, we worked together six years ago when we were at Conscious Company and we had a third party consultant come in and was because my company got acquired in 2017 and I stayed on as CEO.

23:45And so I was a wholly owned subsidiary brand under and there are four other brands in this portfolio under our parent company and there was a third party consultant that came in and audited the company culture of all four of the organizations and the parent company we're trying to do some culture work and they shared with me later that like I had the highest culture scores that they'd ever seen and I was a small business I was struggling this isn't to toot my own horn but it was very much from that place of leading like a human. I was completely flexible. I know that there's a term results-only workplace environments, row workplaces that are very autonomous, like work whatever hours you want, work wherever you want.

24:33Here, just make sure you're getting your stuff done, treating people like humans, unlimited time off. And we did this stuff as a very, very small business. And I had one person leave in the five years I was there. One employee quit. And we punched above our weight. And we're, you know, a fantastic little company. So there's degrees to which you can do it. And it's about like, the next best step not you have to model yourself after the Eileen Fishers and the Taranis of the world that have these humongous, like, they're, you know, they're doing very big things that small companies can't afford to do.

25:19But as you get larger, they're things to consider. Eileen Fisher. She makes timeless clothes for, that are comfortable and predominantly cater to like 50 to 70 year old women. But she's been in business since 1984, nearly a billion dollar fashion empire and is one of the coolest leaders I have ever had the opportunity to meet when I got so that cover was our third cover of our magazine it's the first cover that she had ever done she's notoriously reclusive she's very very shy and very quiet and really does not like the media and but because of what my little magazine stood for which was impact-driven businesses and businesses that do good for the people on the planet.

26:07We sent her a copy of the magazine and said, hey, do you want to be on the cover? And she said, this is like the first time I'm in a grant cover interview. I went to her gorgeous home in Irvington, New York, and I thought that I was going to be meeting Miranda Priestly from The Devil Wears Prada, like fashion icon, CEO, mogul. I thought she was going to be so New York and mean. And I was like this like just like little country mouse from Colorado wearing$15 power suit that I bought at Marshall's, the like discount store here. And I walk in and she's like the soft, she's the kindest. She listens.

26:44Like she starts the interview by asking me a ton of questions. She's kind of shy, like just not the type of leader I was expecting. But then you learn about what she does with her organization, which I mean, this was either the Washington Post or New York Times wrote her up years and years ago. She was like, well, when I started making enough profit that it felt like I had enough, like naturally, the only thing to do would be to give it to my employees. Like that doesn't, there's no other, they're the people that help build the brand. Why would it go to anyone else? She also built the brand organically and had very little outside investment, so she was able to make decisions like this, but she's a certified B Corp.

27:26They started one of the entire programs around the Sustainable Apparel Coalition. They, by 2020, made nearly all of their fabrics environmentally sustainable. They do workers' rights programs. Every single stakeholder in their value chain, they have found a way to improve their life in very significant ways, like their employees, all the way down to their community. They host leadership workshops in Irvington, New York and online programs. I did one yesterday. Everything is about, I have enough, how do I give it back? And it's unbelievable. Megan's laid out the problem. It's shareholder supremacy culture that's making banana hoarding monkeys into business heroes.

28:14Brand new sentence right there. But here's what I absolutely love about her approach. She's not just complaining about what's broken. She spent years finding the companies that are proving there's a better way. And these aren't just feel-good stories. We're talking about businesses that are dramatically outperforming traditional companies while treating people very, very well. Megan's journey to understanding this wasn't theoretical. She learned it the hard way through her own startup experience. And that story is both heartbreaking and inspiring. While Megan was building this conscious business magazine and interviewing all these amazing leaders, she was simultaneously destroying herself, chasing the exact opposite values.