Capitalism, once lauded as the proud foundation of America's success, has had a bad rap lately. Free-market capitalism has been blamed for everything from the collapse of real estate and the stock market to the widening gap between haves and have-nots and even the onslaught of terrorism. Capitalists are the bad guys in nearly every movie, every classroom, and at least half the political speeches — or so it seems.
But there is nothing free about American markets today. Government intervention has led to a Bizarro world of crony capitalism that mimics free enterprise while tying its hands. John Mackey calls it "the intellectual hijacking of capitalism." Regulations intended to protect the consumer and the employer create unintended imbalances that limit competition and inadvertently encourage unfair practices. Capitalism gets the black eye, while government goes in for the sucker punch. But it's the consumer and the employee who end up on the canvas, knocked out.
Mackey, founder of Whole Foods Markets, and Raj Sisodia have written a book, due to come out on January 12, to counter this false impression of the business person. With the subtitle "Liberating the Heroic Spirit of Business," Conscious Capitalism is a handbook of great business practices told through the anecdotes of highly successful and highly conscientious business people. Mackey and Sisodia demonstrate that business owners can be compassionate and successful. In fact, the "conscious capitalist" will be more successful by following the leadership advice outlined in this book.
What is a conscious capitalist? One who is fully aware. Conscious capitalists make deliberate decisions based on the longterm consequences of their actions. They are aware of the impact their actions have on customers, suppliers, shareholders, the community, and the environment. They recognize that when they consider the needs of others and act fairly, others will probably do the same, and everyone will benefit.
Government intervention has led to a Bizarro world of crony capitalism that mimics free enterprise while tying its hands.
Mackey is the ideal person to write a book like this, because he has himself embarked on a philosophical journey that allows him to see the problems from one perspective and the solutions from another, uniting philosophies in what he sees as a "win-win" relationship. He describes the "progressive political philosophy" he espoused in young adulthood, when he saw problems in the world and believed that "both business and capitalism were fundamentally based on greed, selfishness, and exploitation." His personal life is grounded in the kinds of causes usually embraced by anti-capitalists, including his vegan diet, his Eastern meditation techniques, and his deep concern for animals and the planet. He is a gentle man in every way. But he has also become a fierce defender of free market capitalism. Through his experience as an entrepreneur he discovered "that business isn't based on exploitation or coercion at all. Instead . . . business is based on cooperation and voluntary exchange . . . for mutual gain." Bringing the spirit of cooperation and caring to the forefront of business management is the purpose of this book.
Throughout the book, Mackey and Sisodia return to the theme that "business is not a zero-sum game with a winner and a loser. It is a win-win-win game." They demonstrate how the conscious capitalist creates a symbiotic relationship among several stakeholders, including the business owner, the workers (or "team members," as Mackey prefers to call them), the consumers, the shareholders, the suppliers, and the community. Working together for their own betterment, they make each other's lives richer as well.
One of my favorite sections of the book focuses on worker motivation. The authors identify three main principles of motivation: job, career, and calling. A "job" is a transaction: if you put in a certain number of hours, you go home with a certain amount of money. A "career" can be more satisfying: it requires a certain amount of training and skill, and it brings a greater sense of responsibility, as well as respect and money. A "calling," on the other hand, "offers value and satisfaction beyond the paycheck." Work that feels like a calling may be time-consuming and even exhausting, but there is seldom a distinction between being "at home" and being "at work," because it is simply who we are. Many people devote their lives to a calling and earn no money for it at all.
Since, on a normal day, most people spend more waking hours at their place of employment than they do at home, a sense of purpose is essential for satisfaction and happiness. One way to instill the sense of calling, according to this book, is to broaden that sense of purpose for the people who earn a paycheck. A team member at Whole Foods, for example, is not just a grocery clerk; as Mackey sees her,she is part of a team that provides nutritious and delicious food to people who live in the community. She is proud of the charitable work provided by Whole Planet (a charitable organization sponsored by Whole Foods) and enjoys the employee benefits that she herself participated in selecting, including a health plan that should be a model for the nation. She also enjoys the trust that management exhibits toward her; Whole Foods has a policy of encouraging team members to "use their best judgment" when something unusual occurs or a particular rule or practice seems not to fit a particular incident.
Conscious capitalists exhibit this attitude of partnership and respect toward the suppliers of their companies. Negotiations with suppliers can often turn into adversarial relationships whereby one side ends up with a disproportionate amount of the benefit, and the other with a disproportionate amount of resentment. Mackey and Sisodia recommend treating suppliers as one would treat consumers. Treat them fairly, pay them on time, understand their needs, and recognize that they have to make a profit while doing business with you. In so doing, you will create an atmosphere of loyalty and favored status that could be very important when supplies are limited. And it's good karma, too.
Conscious Capitalism is full of anecdotes not only about Whole Foods but also about such successful companies as The Container Store, Southwest Airlines, Walmart, POSCO (formerly Pohang Iron and Steel Company), 3M, UPS, and many others. A lot of them adhere to one or more of the four "categories of great purpose" described in the book. The great purposes include:
These stories about modern businesses that are providing goods and services that are good, true, beautiful, or heroic in a conscientious manner bring the book to life and give the reader a buoyancy of spirit. Capitalism is good. Entrepreneurship is honorable. Businesses do contribute to the overall good. Managers do not have to demean or mistrust those whom they supervise. In fact, everyone benefits when workers are trained and trusted to "use their best judgment." Conscious Capitalism is a book you will want to share with every business owner, manager, and worker you know.