…According to John Mackey, CEO of Whole Foods, among others.
Capitalism. Creative Capitalism. Conscious Capitalism. No matter what word we choose to modify it, capitalism is in the midst of a makeover. In many ways, it’s one of the most interesting—if not essential—“redesigns” taking place.
Bill Gates—acting as more of a “David” than a steely captain of industry—launched a stone at the Goliath of capitalism in his speech at Davos last year when he introduced the concept of “creative capitalism.” Here Gates casts capitalism in a two-pronged role: a redesigned free-market system intent on making money and helping the poor. Not an either-or but an and-and where, as he says, “governments, businesses, and nonprofits work together to stretch the reach of market forces so that more people can make a profit, or gain recognition, doing work that eases the world’s inequities.” A replay of his speech and the conversation it has generated is captured in Michael Kinsley’s book “Creative Capitalism, A Conversation with Bill Gates, Warren Buffett and other Economic Leaders.”
But Gates’ creative capitalism has some competition. John Mackey, CEO of Whole Foods, is promoting conscious capitalism. At first blush, this word mash-up is a brow-furrowing oxymoron, like: jumbo shrimp or business ethics. Two words you wouldn’t necessarily put together. Those were some of the cheap guffaws going around the “Conceptualizing Conscious Capitalism” conference at Bentley College the other week—a conference for academics and business leaders to unpack the emerging ideas around conscious capitalism.
Unarguably, being conscious is good. And unarguably, competition is good. In fact, it’s an essential ingredient of capitalism. As Muhammad Yunus, the dean of a new capitalism or “social businesses” that are both financially sustainable and help the poor says, “Competition in the marketplace of ideas almost always has a powerful positive impact.”
Despite the name, conscious capitalism is an effort underway to recast the role of business in service of social good. Wait, you may be thinking: isn’t that the role of Corporate Social Responsibility? John Mackey sees a marked difference and, like Gates, is calling for an all-out transformation. A fundamental re-think of the purpose of businesses:
“The whole corporate social responsibility idea is trying to graft something onto the old profit maximization model. What we need is a transformation. The way we think about business, what it’s based on. People want businesses to do good in the world. It’s that simple….We need a deeper, fundamental reform in the essence of business.”
An invitation to join the Conscious Business Alliance—members include business leaders such as John Mackey, Shelly Lazarus from Ogilvy & Mather, Sally Jewell from REI—defines the three pillars of conscious capitalism:
- A higher purpose that reaches beyond the singular goal of profit maximization.
- A stakeholder model where the best interests of customers, employees, suppliers, investors, the community and the environment drive decisions.
- Leaders who serve the company’s deeper purpose.
Purpose was the word-of-the-day. Purpose being the definitive statement of the difference you’re trying to make in the world. Why you matter. Why people should care about you. Maverick Roy Spence from GSD&M, an Austin based ad agency, brought this to light by stressing that successful business have to be in the business of making a difference. A good daily question to ask: If you woke up and your business was gone, would anyone miss you? “I don’t miss Linen n’ Things. Do you?” Spence asked. But could you say the same if Whole Foods, Southwest Airlines, John Deere, Google vanished into thin air? What about General Motors? Enron? Philip Morris?
What about your company?
Perhaps the most compelling question was asked by John Mackey about what truly defines a “socially responsible” company. During one of the speaker’s Q&A session, Mackey asked: “If a company provides excellent goods and services for consumers, well-paying jobs, profits for stakeholders, pays taxes that benefit society but does not do any philanthropic giving, is this a “socially responsible” company?
The tongue-tied speaker fumbled and dodged an answer. Which led Mackey to answer his own question: Yes. It would be. He went on to resist the notion that companies are inherently guilty and have to atone for existing—the growing undercurrent in the “anti” capitalism conversations. But this narrative of evil, greedy, selfish corporations versus altruistic, good, non-profits or small scale mom and pop shops is a narrative that is no longer useful. If capitalism’s makeover will be successful, it needs a new story.
Despite the semantic gymnastics for what best modifier to apply to capitalism, both creative capitalism and conscious capitalism are calling for a more flexible and elastic set of ideas about what it means to be in a good business.
