Conscious Capitalism Club Launch

I spent the weekend at John Mackey's ranch in Austin, Texas discussing the launch of the Conscious Capitalism Club.  As the founder, Chairman and CEO of Whole Foods Markets, John has been one of the leading pioneers of capitalism's ability, when deployed correctly, to be a force for positive change throughout an entire industry's ecosystem.  Taken to its logical limit, conscious capitalism has the potential to serve all of humanity through the awakened practices inherent to the culture and business practices of one of these players.  Conscious capitalism is a particularly integral view of commerce, which is why I participated and why Integral Institute will be doing much more in this area over the next year.  It has two guiding tenets: 1. conscious capitalists are driven by a deep purpose that transcends (but very importantly includes) the profit-maximization motive of classical economics and 2. conscious capitalistic companies attempt to build and perpetuate a multiple stakeholder model in their business models, core values, and employee, supplier, customer and investor relationships.

Out of this weekend several exciting outcomes are in the works ... a conference is being planned for later this year and through our partnership with C3 we will be helping to craft what it means to be an integral leader, an integral entrepreneur, and how embodiment of these principles form the basis for right livelihood with integral life practice as a foundation.

Comments

[Tom Armstrong]

I have trouble with the idea of Conscious Business, not because it's not a good idea for leaders of industry to be morally aware, but because it creates the circumstance where "good businesses" have two things that they are doing that may be in conflict: Servicing the bottom line for the benefit of stockholders AND doing good. Also, I see it as GOVERNMENT's responsibility to properly incentivise businesses.

Conscious businesses will be at a huge disadvantage in the marketplace competing against greedy businesses unless consumers get involved in buying every product based on weighing how "good" a business they think the manufacturer/provider/grower/distributer is. I think this is asking too much of consumers.

Also, I think businesses insert themselves into their employees' lives too much now, as it is. A conscious business will limit its prospective employees to those who are like-minded, weeding out good productive prospective employees in order to create a social club where everyone is good at kicking around the hacky-sack and thinks that every Woody Allen movie is hilarious.

The corporate takeover of the world is already a bit of a problem. Won't Conscious Capitalism only serve to make things worse?

[ralph weidner]

i agree with you, tom, that conscious business appears, at least presently, to be in conflict with profit-oriented business. however, it doesn't have to remain that way. it is possible to arrive at an integral perspective where they are no longer seen as necessarily in conflict, where it is not a necessary choice between one or the other, but both can be honored and included in an integral embracde in which all of your objections dissolve into the past.

[Robb Smith]

Tom -

Your observations have merit but in our conception of conscious, or integral, capitalism we include all existing aspects of capitalism and transcend it in two important ways: 1) deeper purpose for business itself and 2) multiple stakeholder consideration. So integral capitalism will still through market mechanisms creatively destroy/fail a lot of integral businesses. This is natural and expected. But the winners will be those who can best balance the needs of the entire stakeholder ecosystem and on average will actually out-compete any non-integral business. For data supporting this notion see Rajendra Sisodia's book Firms of Endearment. So it's the exact opposite of what you might expect, which makes sense if you truly think about the developmental progression suggested here: this is a major change in the way we think about business and done well each stakeholder will want the ecosystem to succeed.

As for employee selection: cultural and technical fit is a major consideration in any case, whether it be for the Air Force, IBM, Google, or a new integral business. What this means in particular will vary based on the deeper purpose being pursued and its implications for culture and strategy, and is the right of the employer to best balance the ecosystem.

Finally, I don't see corporate takeover of the world as a problem because I don't understand what that means.

Ralph -

Agreed. But nothing we're proposing is in conflict with profit, and in fact data suggests that integral businesses will be more profitable than standard ones. Plus, most emergents do not survive long if they conflict with their constituent parts, so look for a real transclusion here.

[gregory]

for a non-integral in concept but not in content, see www.bubblegeneration.com, the guy is speaking your language

[Jeffrey Cherry]

Gentlemen:
I'm a little late to the discussion but thought I'd add some insight just the same. Just for some background, I was the CEO of a management consulting company for 20 years (Inc. 500 in 1996) which I recently sold in order to start an alternative investment company in NYC. Our strategy is based on the ideas developed in Raj Sisodia's book mentioned above. My partner and I got involved with the Authors and the C3 because in 20 years of consulting to fortune 100 companies, government agencies and small businesses alike we noticed some pretty strong trends, on the ground, in real "profit minded" businesses: "Like Minded" employees are in fact one of the only things that will spell success for most businesses. They understand your strategy and more importantly are positively engaged in that execution such that they will provide discretionary effort to it's fruition. (Francis Cairncross, rector of Exeter College at Oxford and once an editor for The Economist has said, "A company is the sum of what its people understand and know how to do well". We believe a company is the sum of what its people understand, know how to do well and will actually DO for the benefit of the company). Stakeholders are actually taking note of companies that serve a higher purpose and are willing to either pay more or come back more often, provide license to operate or bring innovations in order help those companies be successful; and finally and perhaps most importantly we found that we've been conditioned to accept this false construct of a choice between doing good and doing well, when in fact in a well integrated stakeholder focused business, that choice in non-existent. The polarity that must be managed between serving a purpose and making a profit is uniquely and ideally executed when a company decides to operate with a stakeholder focus. The irony is that not only don't you need to make that choice when you pursue a stakeholder focused model, but shareholders are actually rewarded with GREATER returns when compared to those received from investing in "Shareholder first" focused companies.

[dhfx]

I independently came to the realization that a corporation is an alliance between customers, suppliers, employees and stockholders, with management in the middle making it work and distributing the benefits among all four. The customers are the source of all monetary revenue, so it makes no sense to stiff the customers by cutting back on quality and service so as to leave more for the investors. Likewise, if you squeeze the employees, this lowers morale and dedication, resulting in inferior productivity and ultimately less revenue from dissatisfied customers. This has nothing to do with "doing good" or corporate morality but seems like simple hard-headed business sense to me; the only difference is that it goes beyond considering only immediate effects.

The sad thing is that most of what's been taught in business schools for the past 30-or-so years seems to have been garbage.