Conscious Capitalism: Time to wake up
Capitalism is good.
That's what star speaker Raj Sisodia clarified at the top of his talk last Wednesday at Elevate Business 18. This was the launch event by the Portland chapter of Conscious Capitalism, a global movement of businesses that seek purpose — not just profits.
Sisodia is the author of business titles including Conscious Capitalism and Firms of Endearment, and is a professor of global business at Babson College in Wellesley, Massachusetts.
He pointed out how capitalism has raised standards of living over the last 2,000 years. For example in the year 0 the estimated average income globally was $477 a year. That dipped to $453 in the Dark Ages around 1000 CE. By 2015 that was up to $10,057, much of the rise coming in the last 100 years. He hews to Adam Smith's line in the Wealth of Nations that the principal driver of prosperity is freedom: religious, legal and political.
"There is this narrative that capitalism enslaves people and only benefits the rich, but that's simply not true," Sisodia said.
Put another way, in 1800, 90 percent of the world was living in abject poverty on $1.90 a day. In 2012, that was down to 9 percent.
Yet trust in big business is plummeting. During the Great Recession, 16 percent of Americans said they trusted corporations. Now it has crept up to 21 percent, but the figure is low.
"When people are cynical and disengaged and distrustful we don't get creativity, innovation, caring, we don't get the things we need," he said.
You're in the Army now
Sisodia is worried about how we will find the energy and food for 9 billion people.
"We took this beautiful thing (capitalism) rooted in human freedom and dignity, and somehow we made institutions around that make people cynical and disengaged," he said. "The biggest single factor is this idea that business only has one purpose, to make money."
Business (or commerce) is alone in this respect among professions. He says doctors care about healing, teachers about knowledge, lawyers about justice. "Why is it business people are seen as only mercenaries?"
He says we've lost sight of the fact that business is about people.
Capitalism won the Cold War without a shot being fired, but massive changes, especially in the last 30 years, have left business practices nearly obsolete.
Part of the problem is that when big corporations first emerged in the 19th century they took their organizational template from the military, and the language persists: command and control, strategy, tactics, headquarters, campaigns and more.
"Business is a win-win game, but war is usually a lose-lose game, at best a win-lose," he said.
The event was a series of talks, heavy on inspirational anecdotes and light on graphs and statistics. One host, Jody Foster, told the story she heard from Doug Rauch, former president of Trader Joe's. He spoke of a Trader Joe's clerk in New York who swiped his own credit card for a stressed-out woman with small kids who had forgotten her wallet. The clerk told the woman to pay him back next time she was in. When Rauch asked him why he did it he said he did it because if he were in that situation, he would want to be trusted.
"And that's conscious business," said Foster. "The most important thing is you lead with trust and you lead with care, and you treat people how you would want to be treated."
It was a conference unlike any other business conference. Between guests, Cory Blake, the master of ceremonies, interpreted the mood in the room and the emotional highlights of each speech. He also led exercises. One was a grounding exercise where the audience had to stand and become aware of their bodies. In another, one side of the room had to feel conscious and perhaps place their hands where they felt appropriate (open palms was popular). The other side had to feel like capitalists, some leaning forward or gripping imaginary phones. Then they advanced toward each other. Some groups hugged, some stood around awkwardly. ("But that's OK too," said Blake.)
According to Sisodia, it's no surprise Rick Warren's book "The Purpose Driven Life" has been "the best-selling book of the last 40 years."
Sisodia predicts that the 21st Century will be about "the end of the sidelining of the feminine."
The Athena Doctrine is in the ascendant, the idea of being both tough-minded and tender-hearted.
He presented an acronym he has formulated for becoming more conscious: HEALING, standing for Heroic, Evolving, Aligning, Loving, Inspiring, Natural and Galvanizing.
He was clearer when it came to companies with a clear purpose: Whole Foods, to sell food that is good for people and the environment, or Google, to manage the world's information for the benefit of everybody.
As business author Peter Drucker said, organizations generate only friction, confusion and underperformance. So, they need leaders. "Selfless leadership. Leaders eat last, like in the military."
Sisodia also said that 25 percent of top executives at work behave like psychopaths, about the same percentage found in maximum security prisons. In the general population it is 1 percent.
The message is that it is becoming essential for more and more people that their work has a purpose, that it makes people feel good and useful beyond just the paycheck.
Afterward, Sisodia told the Business Tribune that he is used to giving the Conscious Capitalism 101 talk. "Things happen faster now, you reach tipping points sooner. And there's a sense of positive momentum, we have 35 chapters in the US and 14 other countries now."
They will have a 1,000 person event in Dallas at the end of April. Many speakers expressed surprise that Portland has only just now got its chapter up and running. It's not always obvious whether the brands you follow are certified B Corps or inspired by conscious capitalism. B Corps such as New Seasons follow a clear set of guidelines for measuring their impact, such as social and environmental) whereas conscious capitalism can be more loosely applied to a company or just the leaders. Keen Shoes, Oregon Chai and Salt & Straw are conscious capitalism companies.
"We see a lot of companies moving in this direction. Purpose is almost becoming mainstream, Michael Porter at Harvard started the idea of shared value capitalism, about integrating business and society together," Sisodia said. "And that's something a lot of companies have latched on to. There are a lot of parallel movements: the B Corps, inclusive capitalism, the Me Team, by one count there were 138 groups trying to do somewhat similar things."
He noted Walmart has tried to change its attitude to the environment and praised the megacorporation Unilever under Paul Polman for becoming conscious, as well as AT&T (his client) and American Airlines.
"It takes a deep commitment on the part of leadership, including the board," Sisodia said.
Sometimes a board will pull the rug on the consciousness project if they don't get it or if the CEO leaves. He says they have to stress forward-looking indicators, not lagging ones like margins, market rates and market share, to get a sense of when conscious capitalism is working.
How to self-help
Sisodia's upcoming book The Conscious Capitalism Field Guide shows how companies can implement conscious capitalism. Costco and Southwest Airlines have gone through leadership changes, but have made the culture part of the institution.
When a board member says 'But what about share price?' he says to them, "There are many studies that show the shares outperform, and I would say 'You should do this, even if the effect on profit is neutral, because it gives your people better life. They're happy.' Every business runs on human energy. This harnesses human energy in a deeper way. Most people in traditional companies are just showing up, they're not sharing the gifts they're capable of."
Conscious capitalism is not unique to the U.S. He lists the diverse countries where it is popping up, and says it is a human culture, not a regional culture.
Some executives want to try it because it appears to be good for shareholder values.
"I say to CEOs, these are not tactics, they are tenets. We have to believe that people should lead a good life, and their life should be enhanced by business. If you do it to make money, people are going to feel used," he said.
Part 2 follows on Friday, March 2.
Reporter, The Business Tribune
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