by Dr James Opms
“We need red blood cells to live the same way a business needs profits to live, but the purpose of life is more than to make red blood cells, the same way the purpose of business is more than simply to generate profits.”
– Ed Freeman, Professor, Darden School of Business, University of Virginia
Throughout our history as a global community, our progress is often designated by the creation of new buzz words, the latest phrases, and of course new industries. For example, it used to be that people in the work force were referred to simply as that – people. As we continued to grow and move forward we began to refer to them as human resources. Today, it is not uncommon to hear the term human capital when referring to those men and women working as employees for one company or another.
This labeling tendency has extended to numerous areas whenever things begin to change, and change is, as everybody knows, the only thing we can truly count on. The problem arises, however, from the fact that, more often than not, the actual element we are trying to label or re-label by creating newer and more trendy buzz words and phrases ends up getting lost in translation.
Let me take a little time at this point to ask you a question. What do companies such as Southwest Airlines, Amazon.com, Starbucks, UPS and Costco have in common? Well, according to a review of the book titled Conscious Capitalism: Liberating the Heroic Spirit of Business, each of these world class businesses practice what could be titled social entrepreneurship or corporate social responsibility or simply giving back!
At the core of each of these phrases is the idea that the economic success of one business or another carries with it the responsibility to return something of value to those responsible for creating that success … and that it is incumbent upon those businesses to look outside of the company’s structure itself when determining what forms repayment should take and how they should be implemented. With regard to the companies listed above, they choose to call what they are doing “Conscious Capitalism.”
To go into a little detail, I would like to quote that book review once again. “Conscious capitalism is an evolving paradigm for business that simultaneously creates multiple kinds of value and well-being for all stakeholders: financial, intellectual, physical, ecological, social, cultural, emotional, ethical and even spiritual. This new operating system for business is in far greater harmony with the ethos of our times and the essence of our evolving beings.” That, in my opinion, encapsulates the term pretty comprehensively. In case you were wondering, the term conscious capitalism originated with John Mackey and Raj Sisodia, co-authors of the book mentioned above. They are also co-CEOs of Whole Foods Market, a highly successful grocery retailer in the United States. One addition side-note – Raj Sisodia is also a marketing professor at Bently University.
The purpose of this initial piece is introductory in nature. It is not my intent, at this point, to go in to any depth regarding conscious capitalism. We will have ample time to do that as we go forward. At this point it is enough that you get a basic understanding of the term and that you let it roll off your tongue a few times while you digest the meaning that I have introduced you to.
Conscious capitalism – in my considered opinion – is the essence of social entrepreneurship, CSR and adds depth, height and breadth to the phrase ‘giving back.’ Those things will be explained next time we meet.