“To cure and serve and not to exploit and use”
Before enunciating the principles of capitalism in his famous work The Wealth of Nations, Adam Smith had already devoted a book, his first, to the Theory of Moral Sentiments. In this book a theory of sympathy is proposed, which advocates that the act of imagining ourselves in the place of others would serve to make us more aware of ourselves and also of the morality of our behavior.
According to Raj Sisodia, ” That higher consciousness of caring, which should pervade all of our societal institutions, got left out of the foundational understanding that most people had about capitalism”Integrating this awareness into the corporate fabric is the goal of the already (re) known Conscious Capitalism movement, of which Sisodia is a forerunner and co-founder and occupies the central place in the interview that follows
- When you [and John Mackey] initiated the movement of “conscious capitalism” along with the book Conscious Capitalism: Liberating the Heroic Spirit of Business, both of you said (and wrote) that one of the most predictable responses you get from people when you mention the idea of conscious capitalism is, “That’s an oxymoron!”. What is your definition of these two unusual words put together?
Everything that we do in life is done with consciousness. We can either do it with a high level of consciousness, or a low level of consciousness. Put another way, we can do it with a consciousness of seeking to heal and serve, or a consciousness of using and extracting.
In this context, our purpose in juxtaposing these two words that are normally not associated with each other is to highlight the fact that we have been practicing capitalism with a low level of consciousness for much of the time since Adam Smith in An Inquiry Into the Nature and Causes of the Wealth of Nations articulated the power of markets and arrived at the insight that freedom leads to prosperity. He suggested that when societies are organized around the principle that individuals are free to pursue their own self-interest by focusing on what they choose to and are free to trade with one another, most of the needs of most people will be met by other people, leaving relatively little for the government to do. This aspect of human nature has to do with survival and then success, often narrowly defined as material well-being.
However, there is a higher aspect of humanness, which is the need to care. Adam Smith brilliantly wrote about this in his earlier book, The Theory of Moral Sentiments. That higher consciousness of caring, which should pervade all of our societal institutions, got left out of the foundational understanding that most people had about capitalism. Our movement is an effort to integrate that higher consciousness into the fabric of business. By doing so, businesses can tap into the extraordinary capacity for caring that all of us as human beings are naturally endowed with. This would make for not only a more prosperous world, but also a world that is free of much of the suffering that we see all around us today.
- Karl Marx would have celebrated his 200th birthday in 2018. His criticism of capitalism appears, for a lot of people, even more pertinent today amidst climate crisis, chronicle unemployment and global inequality. He has also predicted the end of capitalism. In a way, does your movement go in the direction of “this is the end of capitalism as we know it”?
I agree that if we continue down the path that we are on, we could very well see the end of capitalism as we know it. The fact is that the system has been hijacked to overwhelmingly and disproportionately benefit a few, while imposing Draconian costs on many others. We see this in the fact that in the US, worker pay only rose 10% over 35 years between 1978 and 2013, while CEO pay rose 937%. As Peter Georgescu has written, “For the past four decades, capitalism has slowly been committing suicide. The rules of the game have become cancerous. They are killing us.”
Capitalism is a system that can and must promote widespread flourishing. It is fundamentally rooted in human dignity and freedom. But the way we have articulated it and practiced it has led to a host of serious problems. The degradation of the environment and the resulting peril to our future as a species are well known. But we have also caused an extraordinary amount of suffering for workers, their families, communities and even customers. All of this has arisen because we have had a consciousness of treating all of these participants in the system as a means to our end of making as much profit as possible. We urgently need to shift that consciousness towards embedding a higher purpose into each business that transcends profit, and consciously seeking to create value for and serve all of the stakeholders of the business. That includes society, partners, employees, customers, communities, the environment and investors.
- As Conscious Capitalism is not “a business strategy or business model, but a comprehensive philosophy of doing business”, how does a business become conscious?
A business becomes more conscious in the same way that a human being becomes more conscious: through deeper awareness and understanding the consequences of remaining less conscious. The avenue for doing so is through the leaders of the business. They have to be awakened to the reality of the consequences of all of their actions on all the lives that are impacted by their decisions. They need to see and viscerally feel the suffering that exists within their own companies: the harsh working conditions and poor pay of many of their employees, the impact on the children of those employees of having parents who are absent, highly stressed, financially insecure, depressed and anxious. When humane leaders are confronted with the consequences of their actions, it awakens their deeper sense of right and wrong. As James Baldwin said, “Not everything that is faced can be changed. But nothing can be changed until it is faced.”
This kind of examination can lead to feelings of despair among leaders unless at the same time they are presented with an alternative. That is what we in Conscious Capitalism seek to do. We show them that it is possible to build a business on love and care, in addition to pursuing the legitimate self-interest of generating returns for shareholders. We show them that such businesses are not weak or ineffective, but are in fact stronger and more resilient than their competitors. We show that despite paying their people better, investing in customer care, not squeezing their suppliers, investing in their communities, and investing in the environment, such companies can also be highly profitable. While at first glance this seems implausible, we are able to show them how this actually happens.
Once they have mentally, but more importantly emotionally and spiritually committed to this path of transformation, we have an abundance of tools, frameworks and systems to help them embark on the journey of becoming a more conscious business. It starts with a comprehensive assessment, which gives them a sense of where they are already doing well and where the greatest opportunities lie along the four pillars of Conscious Capitalism. They can use our book Conscious Capitalism Field Guide: Tools for Transforming the Organization as a guide on this journey.
- “Business is good because it creates value, it is ethical because it is based on voluntary exchange, it is noble because it can elevate our existence and it is heroic because it lifts people out of poverty and creates prosperity. But we can aspire to even more” is your credo. As this congress is exactly about inspiring to live business as a noble vocation, what kind of inspiration could you share with business leaders in order to make them also aspire for “even more”? – [more than profit, at least].
Business leaders are human beings before they are anything else. As such, like most human beings, they respond to the power of stories. In my book Firms of Endearment: How World Class Companies Profit from Passion and Purpose, I profile 28 companies that follow the tenets of Conscious Capitalism, and included a great many stories that show the human impact of this way of being. Unless a leader is truly devoid of heart and humanity, they cannot help but be touched and moved by the stories. In my next book, called The Healing Organization: Awakening the Conscience of Business to Help Save the World, I have many more stories that take this even further: they show how businesses have taken people, communities and ecosystems that have been stressed-out and damaged and restore them to full health and vitality. In each of these books, we show how companies that operate this way are actually more successful over the long term financially than companies still laboring under the old paradigm of creating wealth by extracting from people and from the planet.
- The father of microcredit and Nobel Peace Prize laureate Muhammad Yunus was the first to use the term “socially conscious capitalist enterprise” in 1995. Almost 25 years later it seems that its evolution isn’t as bright as it should. What are the main obstacles you encounter in leaders to change their “business as usual” model?
The main obstacle is the consciousness of the leaders who still occupy positions of power in companies and in boardrooms. These are individuals who have risen through the ranks because of their capacity to consistently deliver the numbers, which in business terms means reliably showing growth and profits. They are also individuals who are primarily motivated by power and money, each of which they have achieved in significant measure because of the existing system. While it is possible to alter the consciousness of some of these individuals, many of them are in fact deeply wedded to this way of being, and some of them are incapable of changing. Indeed, studies have shown that there is a high proportion of sociopaths in corporate board rooms, comparable to the percentages found in high-security prisons.
So the gatekeepers are many and the desire to maintain the status quo is an inherent human quality. But there is hope because of three factors. First, due to the rapid aging of most societies on the planet, many more people are in midlife and beyond. This is a time of intense questioning of the meaning and purpose of one’s own life. It is a fertile time for people to re-examine their priorities and dedicate the balance of their lives to a more fulfilling pursuit. Second, we are seeing the rise of women in the world as well as the rise of feminine values. These are strongly correlated with a desire to do business in a way that is holistic, inclusive, fair and sustainable. Third, the largest generation we have ever had is the Millennials, who are now moving into the workforce and into leadership in large numbers. By most measures, this is the most purpose and values driven generation we have ever had. It is our hope and belief that a combination of these factors will soon create a tide of momentum that is unstoppable, and will fundamentally transform the landscape of business and of society within the next decade or two.
- You are not very enthusiastic about social corporate responsibility? Why is that?
Too often, corporate social responsibility is an add-on to an existing way of doing business. It simply adds a “burden of responsibility” on to the existing model. It recognizes that in the course of doing business, we may be causing certain kinds of harm in society. Companies then invest in social responsibility programs that seek to alleviate some of those negative consequences. For example, a processed foods company may put money into nutrition education programs. A tobacco company may support nonprofits that are trying to prevent people from smoking or helping people to stop. We believe in corporate social alignment. What the company does at its core should be fundamentally good for society. There is no need to remediate or alleviate anything, because the company is not causing harm in the first place. Even if such a company does not spend one penny on corporate social responsibility programs or even on philanthropy, it is still far better for society than a traditional business that uses CSR as a license to continue to inflict harm and cause suffering.
- You dedicate a whole chapter to love in your book Conscious Capitalism. What’s love got to do with business? Is it also because, as you say, conscious leaders do seek “power with” rather than “power over” people?
Love has a lot to do with every aspect of our life! It has been said, perhaps by Sigmund Freud, that “love and work of the cornerstones of our humanness.” We are the only species that works even when we do not need to as a matter of survival. Our movement is about combining love and work. Why do we need to have this artificial separation between our personal and work lives? Why must we be required to check our humanity at the door when we arrive at our workplace? Why can we not bring our whole beautiful selves to work every day? Why can we not feel and express love for the people we work with? Why can we not serve our customers with a genuine feeling of love and care?
In a free society, businesses are given the opportunity but also the great responsibility of meeting most needs of most people. We human beings have needs, but we also have vulnerabilities. It is possible for certain kinds of businesses to exploit those vulnerabilities, to make us feel insecure, to convince us that unless we buy their products, we will not be safe or liked or loved or fulfilled. When we approach business primarily motivated by self-interest, we end up seeing other people as objects for our success. We exploit and use employees, customers, investors, communities and the environment in order to make money for ourselves.
But if we approach business, as we should, as a vehicle for self-expression and for caring for others and serving them and creating value for them, business becomes a way to express our deepest humanity, a way for us to express love towards our fellow beings. Every single business on the planet can operate this way. Every single business, regardless of the specifics of who it is serving and what it is selling can be a healing business. Healing means to make people whole, to restore them to a state of well-being. When we authentically meet somebody’s genuine needs, we do in fact make them whole.
Adam Smith discovered that freedom leads to prosperity. But prosperity does not guarantee happiness. We propose that operating from genuine love leads to healing: the alleviation of suffering and the elevation of joy. That is something worth striving for.