There a Conscious Capitalism?
By Corinne McLaughlin
Are you feeling alarmed about the growing greed and widespread harm caused by
big corporations? Did you know that today only 19% of Americans have confidence
in big business? Is capitalism an evil empire destroying our world—or can it
save the world and “elevate humanity” as a recent conference I attended
Despite all the problems caused by big business, I’ve been encouraged by some
good news recently. There’s a new movement growing across the country called
“Conscious Capitalism”, started by former Trader Joe’s president Doug Rauch and
the CEOs of a number of successful companies. They’ve found that applying
spiritual and humane principles to business can actually help the bottom line.
How refreshing! Profit and ethics don’t have to be in conflict.
“The true purpose of business is to improve our lives and create value for all
stakeholders -- customers, employees, suppliers, investors, and society at
large,” say John Mackey and Raj Sisodia, the co-authors of a new book called
Conscious Capitalism. Mackey is co-founder and CEO of the acclaimed $11
billion Whole Foods Market and Sisodia is Professor of Marketing at Bentley
University. They were among the major speakers at the ground-breaking conference
I recently attended called Conscious Capitalism: Elevating Humanity through
I’ve been writing about the movement to bring
spiritual values into business since 1998, but I was initially skeptical
about this new Conscious Capitalism movement as Mackey made some bizarre
political statements recently that drew a lot of criticism. However, I found
the philosophy and the examples presented by the Conscious Capitalism conference
and his book both intriguing and inspiring—as well as brilliant marketing for
What do these proponents mean by “conscious”? They say that “conscious” means
being more fully awake and mindful of your inner self, so you can see reality
more clearly and understand the consequences of your actions, both short and
As Casey Sheahan, CEO of Patagonia, the popular outdoor clothing company said at
the conference, “Leadership is an inside job.” By becoming more conscious,
capitalism can create more community, more mutuality, and paradoxically, more
profit because it engages all the stakeholders in the system in a mutually
Profit maximization isn’t the main cause of business success according to this
new approach. “Profit is a business result, not a purpose,” says Patricia
Aburdene, author of Conscious Money and Megatrends 2010. Conscious
businesses are growing today in the real world and a representative sample has
outperformed the overall stock market by a ratio of over 10 to 1 from 1996 to
2011 according to Conscious Capitalism. Why is this? Because customers
love them and love the value they offer. Some well-known, larger conscious
businesses include Whole Foods, The Container Store, Google, Southwest Airlines,
Bon Appepit, REI, Patagonia, Trader Joe’s and the Tata companies of India.
“Our success didn’t come from focusing on money,” Fedele Bauccio reported at the
Conscious Capitalism conference. Bauccio is CEO of Bon Appetit with over $1
billion in revenues. He said it was the result of focusing on their higher
purpose of providing good food as well as environmental sustainability.
Mackey and Sisodia outline four keys in their Conscious Capitalism book
for long-term success: having a higher purpose, stakeholder integration,
conscious leadership, and conscious culture and management. They see higher
purpose is a definitive statement about the need in the world that you are
meeting and the difference you are trying to make. “It’s where your talents and
the needs of the world intersect,” as Roy Spence said at the conference.
A higher purpose is transcendent, energizing and inspiring for all stakeholders.
It gives tremendous energy and relevance to a business and inspires employees,
attracting the best people. Inspired employees then attract enthusiastic
For example, Mackey says the purpose of Whole Foods Market was originally just
to sell healthy food, make a profit and have fun. But then their purpose
expanded into educating people in healthy eating to reduce obesity and heart
disease, and into protecting the environment. Now they’ve expanded their
purpose again to include helping end poverty worldwide through their Planet
Foundation, which provides micro-enterprise loans to the poor. Whole Foods
donates 5 to 10% of their profits to good causes.
When a business communicates its values and purpose consistently, it attracts
stakeholders—employees, customers, suppliers and investors--who are most aligned
with its philosophy and vision, says Mackey. This is the secret of success.
Mackey says his practice of yoga and meditation help him stay aligned with his
higher purpose. And he credits his study of Eastern philosophy and religion with
contributing to his success as an entrepreneur, as he had no traditional
business studies to unlearn. He tells people that his company was unable to
grow until he was able to evolve—his personal growth enabled the company to
Employees are key stakeholders in a conscious business because when they’re
happy, they make customers happy. Several of the larger conscious companies,
such as Google and the Container Store, have been included in “The 100 Best
Companies to Work For” by Fortune magazine. These 100 Best Companies
outperformed the market between 1997 and 2011, according to Conscious
Capitalism. Google offers employees many benefits, such as free meals, as
well an optional Mindfulness meditation training program it calls “Search Inside
Yourself,” started by Google engineer Meng Tan.
When work becomes more meaningful to employees and they are empowered and cared
for with innovative healthcare and generous benefits, they become more creative.
As their personal development is supported, they in turn produce more value for
the company. At Whole Foods, employee turnover is less than 10%, compared to an
industry average of 100%, and this saves recruiting and training costs.
Employees are officially called “team members” to emphasize a more caring and
egalitarian approach, and every meeting ends with appreciations.
Conscious managers create a supportive and empowering business culture that
embodies trust, accountability, and loyalty. Nordstrom’s stores, for example,
tell their employees, “Rule #1: Use good judgment in all situations. There will
be no additional rules.”
When a company’s leaders are more conscious, expressing “emotional intelligence”
and “spiritual intelligence”—qualities such as caring, compassion, integrity,
transparency and intuition--the business thrives. Conscious leadership today
also requires systems intelligence—the ability to see relationships and how
everything is interconnected, such as multiple stakeholder needs.
Suppliers are also key stakeholders in Conscious Capitalism. A collaborative
partnership with suppliers that encourages innovation is crucial for competitive
advantage. Many companies, such as Patagonia, have recognized both the ethical
and the business case for working with more conscious suppliers of their
clothing. They provide safer working conditions for their employees, for
Financial stakeholders who are guided by values and connected with their higher
purpose are essential to Conscious Capitalism, according to Mackey and Sisodia.
These shareholders are more patient than those concerned with short-term returns
and a quick exit strategy. A conscious business sees investors as true partners
and knows it’s important to listen to them and develop good relationships with
A parallel conscious investing movement is recently emerging that I’ve become
involved with, catalyzed by some of the founders of the Social Investment
movement. (See my previous article on Conscious Investing). Conscious investing
begins with self-awareness and builds long-term relationships based on mutual
respect and trust. Investment decisions are made mindfully and are based on
ethical, spiritual and social values that honor all life.
When a company recognizes the larger society and the natural environment as key
stakeholders, as Paul Hawken notes in his book Natural Capitalism, it
reduces its energy use and negative environmental impacts. UPS’ leading edge
sustainability practices not only reduced its energy use, but also increased its
efficiency. Ray Anderson, founder of Interface Carpets, became an outstanding
example of a conscious leader in sustainability and a transforming force for
When the interests of
various stakeholders—suppliers, customers, employees, investors or
community-- are in conflict, conscious, ethical leaders are committed to
finding innovative, synergistic solutions that are win/win/win. This is
the key to a company’s financial success and good public relations as
If this Conscious
Capitalism movement continues to prove the business case for applying
consciousness principles, and the profits of companies applying them
grow more rapidly than others—this might actually help change the world!
is co-author of The Practical Visionary, Spiritual Politics
(Foreword by the Dalai Lama), and Builders of the Dawn and
is co-founder of The Center for Visionary Leadership in California.
She directed a national task force for President Clinton’s Council on
Sustainable Development and is a Fellow of The World Business Academy
and the Findhorn Foundation. She is a co-founder of Sirius Community,
a spiritual/environmental center in Massachusetts and a member of The
Transformational Leadership Council.