Managing Upside Down by Tom Chappell. Morrow, 219 pages, $25.

Even while he was experiencing wild success with his all-natural personal care business, Tom Chappell, co-founder and CEO of Tom's of Maine, came to terms with an all too common lament -- something was missing.

From a consummate authoritarian CEO heading a politically infighting hierarchy of managers, Chappell became an open-minded member of a collaborative team of equals.

In Managing Upside Down, a follow-up to his 1993 book The Soul of a Business, Chappell credits this transformation of both himself and his company to a commitment to values-centered leadership.

The Seven Intentions

Tom's of Maine has long been a company devoted to preserving the environment, but as any leader can attest, it's tempting to throw your values overboard if they threaten the bottom line.

Recognizing this friction between values and profit, Chappell has outlined his "Seven Intentions of Values-Centered Leadership":

1. Recognize "goodness" -- a force outside of you and bigger than you. Realize that you are part of the universe, not the center of it.

2. To find meaning in your work, evaluate your talents and values. Discuss them with friends and draw a business plan for your ideal job based on those values.

3. Envision how your values call you to serve your community (either locally or globally).

4. Seek advice from a variety of sources -- you are not infallible.

5. Venture out on your vision: Collaborate with others, be creative, take risks and be flexible.

6. Be accountable to your values by assessing and revising, if necessary, your work and management. "Upside down managers have three obligations: (1) serving customers; (2) performing that service in a way that doesn't harm people, the community or the environment; and (3) making money," Chappell says.

7. Pass on what you have learned so other people and the community as a whole can benefit.

For Chappell, managing upside down means letting business strategies evolve from values, and never compromising those values.

This may seem like a fast way to go bankrupt, but Chappell has found, much to his amazement, that being socially responsible is profitable.

He doesn't say it's easy, however. One prime example is the disaster that Tom's of Maine experienced when it produced a new deodorant that actually made body odor worse! Against the advice of others, he made the decision to recall the product and issue apologies to customers, costing the company $400,000 -- 30 percent of its projected profits for that year. But in the long run, the company kept the trust of its customers, which, he writes, is priceless.

Other Changes

Chappell also transformed his company by getting rid of job titles that labeled people as either superior or subordinate. He designed product development groups of no more than three, with "champions" as their leaders. (After a three-year period of no new product development, these new teams increased the Tom's of Maine product line from 27 to 117 in less than two years.) He also had to fire some great friends who were not committed enough to the company's vision to put it above the bottom line.

Here's a book for people in positions of leadership who are looking to rekindle a vision. Chappell's candor gives his seven intentions credibility; they are virtuous, but not overly lofty.

Copyright 1999, Soundview Executive Book Summaries.