Something’s stinking up corporate America. On Feb 15, a 3% decline in shares of Walmart drove the Dow Jones Industrial Average (DJIA) down in negative territory. This was driven by internal e-mails about dismal February sales at Walmart that were leaked out, one saying “Where are all the customers? And where’s their money?” And then there is the issue of Walmart’s European arm Asda discovering horse meat in a “beef” pasta sauce it sells. If that wasn’t enough, Carnival Cruises CEO apologized this same week to 4000+ passengers stuck in a cruise ship in the middle of the Gulf of Mexico due to fires shutting off all power. The passengers suffered terrible conditions with the lower floors of the ship flooded with human excrement. Apparently the ship had suffered from issues prior to its sailing but no one made the decision to ask whether it was “sail-worthy”.
These two incidences this week reinforce a question asked in discussions at Davos in January, and in a recent book called “Conscious Capitalism“. The question is what’s the purpose of corporations? Of business in general? Apparently making money is high on the list given these two recent examples. But, could there be a higher calling?
What’s the Purpose of Business?
The short-term pursuit of profits led to the melt-down in the financial markets triggering a global recession. It leads to unethical behaviors and short-cuts, pollution of the planet, a work culture that demands a 24/7 work ethic from people while cutting back resources, and a general decline in trust in corporations.
“Conscious Capitalism” challenges the conventional wisdom that corporations are here just to make money for shareholders. Written by John Mackey (Co-CEO of Whole Foods) and Raj Sisodia (Co-Founder of the nonprofit Conscious Capitalism Inc.), it highlights the need for a higher calling for corporations. I recently spoke with Raj Sisodia to understand the basic tenets of the book and also the challenges that each of us as business people face in implementing these tenets. The book lays out a step by step plan calling for all businesses to become more “conscious” and align the needs of shareholders with all the other stakeholders.
The Tenets of Conscious Capitalism
The four key tenets of “Conscious Capitalism” are:
A higher purpose – Corporations need to discover and articulate the unique stakeholder needs that they are here to fulfill. The authors share evidence that sustainable businesses that create shared value are driven by purpose as their primary goal; superior financial returns are outcomes. They believe the real purpose of organizations is to improve peoples’ lives through innovation and creating well-being for all stakeholders.
Stakeholder integration – As a corporation articulates and expresses its core purpose in all its actions, this is like a magnet attracting loyal customers, inspired team members, patient and purposeful investors, collaborative & innovative suppliers and welcoming communities. The conscious corporation seeks win-win outcomes across its stakeholders rather than settling for trade-offs.
Conscious Leadership – Organizations need conscious leaders who are self-aware, motivated primarily by purpose and service, and have high integrity in order to fulfill the purpose of the organizations and reflect it in their day to day decisions and actions.
Conscious Culture – In order for these actions to happen sustainably, they must be reinforced by a culture that glues purpose, stakeholders, and people. The book describes seven characteristics of conscious cultures: trust, accountability, caring, transparency, integrity, learning and egalitarianism.
The Challenges to Conscious Capitalism
Within the context of a world of business where each of us feels pressure to make results happen, faces the stresses of our jobs, how do we get from here to there? Clearly it starts with leaders at the top of the organizations. Culture is most often set by the actions of top leaders and the boards that govern these organizations.
But CEO’s can’t be everywhere. Just this weekend I was at my local Whole Foods store. I saw a store manager rather loudly “telling off” an employee in the store. I could tell the manager was stressed about something that had gone wrong and was blaming the employee for it. I also saw the stress and confusion in the employees’ face. I didn’t see “the capacity for love and care” that the book talks about as one of the tenets of conscious leadership. Ironically, the book was being sold right next to where I observed this happen.
Implementing conscious capitalism is tough because at the end of the day, we’re all human. Under stress and pressure we make “unconscious” decisions and take “unconscious” action. If organizations want to embed these tenets of conscious capitalism we have to find ways to help all our employees become conscious in their leadership. We have to help them find personal purpose in the work they do, and grow and self-actualize through the leadership experiences they have.
Whose Job Is It?
What about the rest of us? Do we stand at the sidelines and watch the CEO’s do this work? We each have a decision to make. Do we want to become a more conscious leader? To be a more conscious consumer? To be a more conscious investor? Do we care to make this a better planet for future generations? Do we care enough about our customers to want to create better experiences for them? Do we care to inspire those we work with? As Gandhi reminded us, we can choose to “be the change” we wish to see in the world. In the final analysis it is really up to a decision each of us makes. Are we powerful enough to make a change, starting with ourselves?
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This article was written by Henna Inam, executive coach, speaker, and consultant. She works with women to help them realize their potential to be authentic, transformational leaders. They create organizations that drive breakthroughs in innovation, growth, and engagement. Her corporate clients include Coca Cola, UPS, Nestle, J&J, and others who know female leadership talent is good for business. To accelerate your own growth connect with her here. Connect on Twitter @hennainam