Re-inventing the motive of profit – “ Conscious Capitalism “

A synonym being used for the free Enterprise economy in today’s time is popularly known as “Entrepreneur “ – A mastermind behind creativity, imagination, and generation of ideas with driving progress in business, society and world.  Using their imaginative diagnosis they come out with remedies and possibilities that never existed before to embellish the lives of billions.

Taking this picture of an entrepreneur in mind, I intend to introduce a new thinking which has been evolved by John Mackey , Co CEO , Whole foods Market and Raj Sisodia  in their  popular  book “ Conscious Capitalism.”

Before we explore this concept lets us go back in history and understand the meaning of capitalism. Traditionally we have heard capitalism as an economic system which underlines ownership of means of production or privately controlled economy and always been characterized by fact that companies exist only for profit motive. Concept of capitalism has never been in the good books of intellectuals, who often have described capitalism with words like cheating consumers, spreading inequality, increasing the gap between rich and the poor.  Capitalism role as a villain for masses has been created due to the myth of profit maximization, which originated with the industrial revolution earliest economist due to incomplete information on business success.

However this book on “conscious capitalism” is an initiative to break this myth by making the entrepreneurs a true hero of free capitalist economy who starts business not only to maximize profits but utilize their energy and enthusiasm as fuel to generate extraordinary value for the customers, team players and stakeholders. The crux of the book lies in to restore the true meaning of capitalism, which has been damaged by misconception of profit maximization.  To reestablish its true essence one need’s to understand the meaning of being “conscious”.

As said by Fred Kaufman “To be conscious means to be awake, mindful. To live consciously means to be open to perceiving the world around and within us, to understand our circumstances, and to decide how to respond to them in ways that honor our needs, values, and goals.”

The same need to be applied to business and institutions. A conscious business is one that is beyond the return on investment, which exists for a purpose, a predefined goal and which is responsible to deliver value to all is stakeholders.

It is not always necessary for a business to have a purpose for making the world better place, but a conscious business have to reflect something of , value that it stands for and promises to its stakeholders. Bill gates did not start Microsoft with the goal of becoming the richest man in the world. He saw the potential of computers to transform our lives and was on fire to create software that would make them so useful that eventually all of us would own one.  He followed his passion and in the process became the richest man in the world – but that was the outcome, not his goal or purpose.

By rendering services to its stakeholders a business strengthens involvement and loyalty with its stakeholders and builds connection based on reciprocity rather than a transaction or manipulation. They exist in the real world, by dozens today but soon to be by hundreds and thousands. And this defines this new age concept of “ Conscious Capitalism”  – a growing epitome for business that simultaneously creates multiple kinds of value and well being for all stake holders: financial intellectual , physical , ecological , social , cultural , emotional , ethical and even spiritual . It reflects a deeper consciousness about why business exists and how they can create and build more value.

John Mackey and Raj Sisodia base the concept of capitalism on its four principles or tenets:

·      Higher purpose: A motive much beyond the profit maximization, integrating the interest of stakeholders.

·      Conscious leadership: Conscious minds to understand relationships between all of the interdependent stakeholders.

·      Conscious culture and management:  Popularly can be called as CAT – C- care , A – Authenticity , T – transparency . Three are very important for employees and stakeholders.

·      Stake holder integration: Positive –sum thinking – positive sum game to create win for all stakeholders of the business.

One should not consider conscious capitalism as similar to corporate social responsibility. A successful business does not necessarily need to do anything different to be socially responsible.  When a business aims to build value for it stakeholders it is itself acting in a socially responsible way.  To put this in a different way let me take the example, which is very well quoted and explained by John Mackey and Raj Sisodia on “HCL technologies” one of renowned organization in Information Technology . The company was recording good profits but at one point in time was not growing in terms of its market share. The challenge to put the company on growth trajectory was taken up by Vineet Nayar , CEO with many radical ideas about leadership and management.

He initiated this on the basis of his three growth Mantras which brought in the change in the culture of the organization and which in turn reflected in their increased profits and market share. Out of these three the first one was radical transparency- HCL initiated a system on their intranet site where in any team member is free to ask question of the leadership team at anytime , the idea behind this was to create more transparency in the organization , where everybody is aware of the challenges being faced by the company. Second mantra of Vineet Nayar was open 360 degree feedback, anyone is free to give feedback on anyone else in the company which helped the company in identifying good candidates to be promoted to broader roles and the last but not the least was the reinventing the role of CEO – Nayar using the intranet site opened up a section called as “My Problems” which was the platform for all team members to read the strategic challenges being faced by the company and freedom to respond to them with solutions. This helped him in bringing the culture of fresh and strategic thinking, which led HCL to be the company recording a profit of $3.53 billion in 2011, despite of the difficult global economy.

Conscious capitalism thus view business as an ongoing and adaptive system, which aligns profitability through higher synergies unlike CSR, where share holders have to sacrifice for the society adding a ethical burden to business goals.

To sum up when we talk about conscious business building value for stakeholders is treated as one of the core business philosophy and operation model. This model of conscious business brings in the system of social cooperation, which tends to transform lives and bring opportunity for billions on planet still living in poverty.

The whole premise of conscious capitalism lies on a business which views its human capital as resources but not as sources; A resource is like a lump of coal you use and its gone. A source is like the sun – virtually inexhaustible and continually generating energy, light and warmth. A conscious business endows people and captivates their best contribution in service for its noble higher purposes.