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.
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