A Shift Towards Conscious Business
Review of John Mackey & Raj Sisodia's "Conscious Capitalism"
Championing the progressive shift in mainstream business culture, co-authors John Mackey and Raj Sisodia provide a framework for how business can rediscover its “virtuous nature” as “the largest creator of wealth humanity has ever conceived" in their new book, Conscious Capitalism: Liberating the Heroic Spirit of Business.
The book is the most recent call-to-arms advocating for a shift in the way we do business. While Whole Foods co-CEO John Mackey is himself a captivating blend of beliefs not often held in unison – simultaneously a self-described libertarian and vegan Buddhist – he blends his values in Conscious Capitalism, illustrating the complementary relationship between successful business and high ethical standards.
The authors claim that shifting focus from short-term profit maximization to long-term stability can restore the for-profit sector's reputation as a critical and respected institution. The resulting read makes a compelling case for free-enterprise capitalism as "a powerful creative system of social cooperation and human progress."
What's a conscious business?
Win-win relationships between all stakeholders correlate to better customer experiences, less employee turnover, higher engagement, lower overhead, higher profits and sustained growth.
Mackey and Sisodia state that their purpose is to inspire more conscious businesses – "businesses galvanized by higher purposes that serve and align the interests of all their major stakeholders...and who exist in service to the company’s purpose, the people it touches, and the planet.” The authors offer four tenets of this type of business:
- Higher purpose
- Stakeholder integration
- Conscious leadership
- Conscious culture and management
The combination results in win-win relationships between customers, employees, shareholders, suppliers, communities and the environment. Win-win relationships between all stakeholders correlate to better customer experiences, less employee turnover, higher engagement, lower overhead, higher profits and sustained growth. As Mackey explains, “the four [tenets] are interconnected and mutually reinforcing. We refer to these as tenets because they are foundational; they are not tactics or strategies…they must be understood holistically to be effectively manifested.”
The case for Conscious Capitalism is vetted by frequent references to the successes of Whole Foods Market and other pioneering companies, including REI, , eUnilever, Twitter, Southwest Airlines, Tata Group, and POSCO. Unfortunately, the almost exclusive quotation of leaders already on Conscious Capitalism Inc's Board of Directors makes Mackey’s validations feel like an insider executive roll call. Conscious Capitalism could have enjoyed greater depth of perspective by including the voices of customers, employees, or activists in the text, instead of simply speaking for and about them.
That being said, the book recognizes Whole Foods' role as a flag-bearer of conscious business. Privately administered healthcare for employees, maintenance of executive salary caps, full wage transparency, and generous benefits all demonstrate that Whole Foods walks the Conscious Capitalism talk. In resonance with these internal practices, Whole Foods is one of only thirteen companies to be listed in Fortune's “Best Places to Work” every year since the list’s inception in 1998, and received multiple awards and recognition from the Environmental Protection Agency among other honors. At the same time, the company has enjoyed a high degree of success on the stock market compared to its sector’s average, and continues to enjoy sustained growth.
The role of stakeholder support
Purposeful, mission-oriented strategy is noble, and it represents a viable long-term model for the business world.
The fundamental assertion in Conscious Capitalism — that free market capitalism is “inherently virtuous because it is based on voluntary exchange” — is an oversimplification of a more nuanced history. But that doesn’t negate the fact that the larger point rings true. Purposeful, mission-oriented strategy is noble, and it represents a viable long-term model for the business world. Hopefully, by providing a road map for how to implement its four tenets, Conscious Capitalism can articulate this truth to a wider audience. By highlighting the virtue of “shared-value business,” Conscious Capitalism should help shift the current malaise towards “business as usual” into the optimism and trust fostered by “doing well by doing good.”
We can only hope that Conscious Capitalism can help realize a conscientiously-oriented business paradigm for the 21st century.