Fortune has an interview with Raj Sisodia, chairman and co-founder of the Conscious Capitalism Institute, in which he discusses what the magazine calls “the changing dynamics of American capitalism after the deepest recession in decades.”
Conscious Capitalism is defined as seeing one’s business as having a higher purpose than just generating profits, as having all one’s stakeholders aligned around that purpose, led by a “conscious leader” who helps to establish a “conscious culture.” Among the companies that are part of the Institute are Whole Foods and Costco.
Some excerpts:
• “It was interesting to observe how some of the companies that we've become very closely aligned with dealt with the global economic downturn in 2008. The Container Store and REI, for instance. Those two CEOs said first of all, "We are not going to lay off anybody. That's number one. Second, we are going to protect the weakest within the system, which are the part-time workers. They will not be asked to take any kind of pay cut, any kind of benefit deduction, or even reduction in their hours, because they are the most vulnerable in the system. And then all the salaried people will take an across-the-board pay freeze, or even a pay reduction." The sacrifice was shared equally between the people who could most afford to do it, and the weakest were protected.”
• “There is a fundamental shift going on in the culture. It's not a drastic choice anymore between Communism and capitalism; everybody believes in free markets and free people. The question is how do we refine it? How do we create the best possible kind of free markets and free people? Beyond that, the median age crossed 40 for the first time in 1989. If you look at what happens to people as they age, mid-life and beyond, it's not so much about, ‘How much can I accumulate?’ and ‘What's in it for me?’ They start asking questions about meaning and purpose and legacy. And then if you look at the impact of the Web, it has created almost total transparency and almost total connectivity. So people know about more things. They're more concerned about the well-being of others.”
• “If you have a conscious approach to business, it doesn't lead to inequality. There's a built-in mechanism to make sure that everybody prospers at the same time. And that's ultimately the power behind this: Recognizing the interconnectedness and interdependence. Any exploitation of one element for the benefit of others in the long run is not going to work. It's basic system theory. The system is only as good as its overall ability to function, and to be healthy all the components have to be healthy.”
Conscious Capitalism is defined as seeing one’s business as having a higher purpose than just generating profits, as having all one’s stakeholders aligned around that purpose, led by a “conscious leader” who helps to establish a “conscious culture.” Among the companies that are part of the Institute are Whole Foods and Costco.
Some excerpts:
• “It was interesting to observe how some of the companies that we've become very closely aligned with dealt with the global economic downturn in 2008. The Container Store and REI, for instance. Those two CEOs said first of all, "We are not going to lay off anybody. That's number one. Second, we are going to protect the weakest within the system, which are the part-time workers. They will not be asked to take any kind of pay cut, any kind of benefit deduction, or even reduction in their hours, because they are the most vulnerable in the system. And then all the salaried people will take an across-the-board pay freeze, or even a pay reduction." The sacrifice was shared equally between the people who could most afford to do it, and the weakest were protected.”
• “There is a fundamental shift going on in the culture. It's not a drastic choice anymore between Communism and capitalism; everybody believes in free markets and free people. The question is how do we refine it? How do we create the best possible kind of free markets and free people? Beyond that, the median age crossed 40 for the first time in 1989. If you look at what happens to people as they age, mid-life and beyond, it's not so much about, ‘How much can I accumulate?’ and ‘What's in it for me?’ They start asking questions about meaning and purpose and legacy. And then if you look at the impact of the Web, it has created almost total transparency and almost total connectivity. So people know about more things. They're more concerned about the well-being of others.”
• “If you have a conscious approach to business, it doesn't lead to inequality. There's a built-in mechanism to make sure that everybody prospers at the same time. And that's ultimately the power behind this: Recognizing the interconnectedness and interdependence. Any exploitation of one element for the benefit of others in the long run is not going to work. It's basic system theory. The system is only as good as its overall ability to function, and to be healthy all the components have to be healthy.”
- KC's View:
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The simplicity of this concept is appealing - that we’re all in this together. Achieving this won’t be easy for a lot of companies, but one can imagine that it has the potential for putting to rest some of the management-labor strife that seems to affect too many companies.
Pie in the sky? Maybe. But what’s the point of dreaming if we can’t dream big?
