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United States Carbon: Conscious companies can revive capitalism

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Free markets often get the blame for such troubling outcomes as inequality, corporate scandals and economic crises. In “Conscious Capitalism,” Whole Foods co-founder and co-CEO John Mackey and business professor Raj Sisodia argue that economic liberty needs a reboot.

The authors say that the trouble with capitalism isn’t that firms have too free a rein; it’s that economists have told them to focus on the wrong thing and that government gets in the way. They suggest that companies should focus on purpose rather than profits. And they blame crony capitalism for poisoning an otherwise excellent economic system.

They’re not wrong. Corporations are too close to lawmakers, and the result is overcomplicated tax systems which don’t serve the public good. Governments end up over-regulating in the name of safety, only making it safer for big companies to trample small ones that can’t cope with higher compliance costs.

While stomping out cronyism is a fairly easy sell, Mackey and Sisodia have more work to do to persuade readers that most businesses should turn their strategies upside-down. The heart of their reform plan for capitalism is captured by a paraphrase of Richard Leider, an executive coach and author. He asks what the most important day of one’s life is, other than birth. “It is the day you realize why you were born.”

Similarly, say Mackey and Sisodia, the most important thing a company can do is understand and pursue its higher purpose. They cite Walt Disney Co, which asks employees to use their imaginations to bring happiness to millions. For Southwest Airlines, it’s to give people the freedom to fly.

If a company aims chiefly at its purpose, profits will follow, they say. While that sounds plausible, it’s pretty vague. And Wall Street analysts are unlikely to smile when higher purposes lead to lower profits for a quarter, or perhaps a decade. Investors might want to see more emphasis on the bottom line before they part with their funds. But then again, the conscious company of Mackey and Sisodia is not merely run to enrich shareholders. Instead, it must integrate the interests of all stakeholders.

That means paying your workers well and your executives relatively modestly. No gouging of suppliers to cut costs. Such corporations must be a positive force in their community. The authors would even have firms befriend their foes: “A more constructive way to think about competitors is as allies in striving for mutual excellence.”

The image of corporate leaders sitting around a campfire, joining hands and singing Kumbaya, may warm the soul. But bitter experience, not to mention thousands of runs of the “prisoner’s dilemma” game, teaches that cooperation is not guaranteed, even if it’s in everyone’s best interests. Unless people begin to exhibit and deserve greater trust and reliance, many conscious companies will end up beaten unconscious.

That may be where conscious leaders come in. The authors portray them not as the smartest and most cunning, but excelling in emotional, spiritual and systems intelligence. They say the best leaders are empathetic, not ruthless. They probably meditate. And they must successfully manage relations between all stakeholders as one.

With such leaders in place, cooperation could lead to kinder competition. And maybe they could even convince investors that their purpose matters more than analysts’ financial models. The conscious economy that Mackey and Sisodia imagine sounds perfect. But people aren’t. Until humans evolve into a race of hyper-moral, fully-actualized beings, their capitalist ideal may be too lofty an ambition.

To learn more about United States Carbon and our energy reduction technology that will help you become greener, cleaner, and more socially responsible please contact us at (855) 393-7555 or visit our website: www.unitedstatescarbon.com

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United States Carbon: Companies that Practice “Conscious Capitalism” Perform 10x Better

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Even today, “conscious” and “capitalism” remain unlikely bedfellows. Both are freighted words that have come to stand for fundamentally different worldviews. Capitalism is associated with individualism, personal ambition, the accumulation of wealth and power, and an identity grounded in external accomplishment. The word conscious, or more specifically consciousness, is associated with self-awareness, personal development, the greater good, and a worldview that eschews competition, hierarchy, and materialism.

The thesis of conscious capitalism — outlined in a new book of the same title by John Mackey, founder and co-CEO of Whole Foods, and his thought partner, Raj Sisodia, a business professor — is that capitalism can be a force both for economic and social good. Or as Bill George, former CEO of Medtronics, puts it in the book’s introduction: “Well run, values-centered businesses can contribute to humankind in more tangible ways than any other organization in society.”

I don’t kid myself about the unenlightened and even cruel ways capitalism has been practiced by many companies: accumulating wealth for a few while paying most employees subsistence wages; fighting regulation while blithely degrading the environment; avoiding taxes and ignoring responsibilities for the communities in which they’re based. The truth is I meet few CEOs or senior executives at large companies who seem to have a vision much beyond the next quarter’s earnings, or a sense of responsibility and commitment to their employees, customers, suppliers, and communities that equals their focus on their shareholders.

But I did last week. Even more than anything the eight CEOs I met had to say — and much of it was inspiring — I felt moved by them as people. They made no demands to be treated as “special” during the conference. We all stayed in simple quarters, with no access to cell phone service. They listened when others spoke. And they invested three days with one another for no other reason I could discern than to learn, and build a community of like-minded colleagues.

At the most basic level, consciousness simply means being conscious of more. That begins with self-awareness — the willingness to look inside, to acknowledge our limitations, uncertainties and fears, and to take responsibility for our actions. Mackey has drawn some critical attention for his libertarian views, and I found myself debating with him frequently over the three days. But I also found him to be open, real, vulnerable, and deeply committed to growing and becoming more conscious. How many leaders would be willing to say, as Mackey does: “The company was unable to grow until I was able to evolve — in other words I was holding the company back. My personal growth enabled the company also to evolve.”

I also admire leaders who put their money where their mouths are. The Container Store‘s CEO Kip Tindell explained why he pays full-time sales employees a minimum of nearly $50,000 a year — approximately double the average for retail stores. Put simply, Tindell believes the best and most motivated employees, which he says the store is consistently able to attract, are three times as productive as an average worker. One of the payoffs is a turnover rate under 20 percent — a fraction of the turnover that most of his retail competitors endure.

Consciousness is also about being socially conscious — recognizing and taking responsibility for the needs of the larger community. Blake Mycoskie, who founded Tom’s Shoes at age 26, talked about the profitable business he’s built on a model of giving a pair of shoes to a child in need for each pair of shoes the company sells. Shubhro Sen, who leads people development for Tata, the huge, privately-owned Indian conglomerate, described the founding tenet of the company that endures to this day: “We earn our profits from society and they should go back into society.” Most of the company today is owned by philanthropic trusts.

I took away from these three days a very clear and inspiring message. It’s not necessary to choose up sides between consciousness and capitalism, self-interest and the broader interest, or personal development and service to others. Rather, they’re each inextricably connected, and they all serve one another.

Raj Sisodia looked at 28 companies he identified as the most conscious — “firms of endearment” as he terms them — based on characteristics such as their stated purpose, generosity of compensation, quality of customer service, investment in their communities, and impact on the environment.

The 18 publicly traded companies out of the 28 outperformed the S&P 500 index by a factor of 10.5 over the years 1996-2011. And why, in the end, should that be a surprise? Conscious companies treat their stakeholders better. As a consequence, their suppliers are happier to do business with them. Employees are more engaged, productive, and likely to stay. These companies are more welcome in their communities and their customers are more satisfied and loyal. The most conscious companies give more, and they get more in return. The inescapable conclusion: it pays to care, widely and deeply.

To learn more about United States Carbon and our energy reduction technology please contact us at (855) 393-7555 or visit our website: www.unitedstatescarbon.com

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