Capitalism with a Higher Purpose – Can it Survive?

In my LinkedIn Group Trust Across America, an Article from Fortune magazine was posted with the Headline, “Can compassionate capitalists really win? To which I say absolutely!

Raj Sisodia, the head of the Conscious capitalism Institute, was interviewed by David Whitford from Fortune Magazine.  He shared the Four Pillars of Conscious Capitalism:

–    There is a higher Purpose to our work, it is NOT just about the money, (For most Entrepreneurs it is to change the world with their invention, or their new approach)
–    Aligning the Interests of all Stakeholders to that purpose and to each other (We are ALL in this together, after all)
–    Conscious Leadership is driven by purpose and service to others (Think Servant Leadership )
–    Conscious Culture (Trust, Caring Compassion, Integrity)

The Author caught what I often hear in my discussions about the subject, the apparent gap that our society has had between linking consciousness and capitalism.  Whitford says, “That sounds conscious but it doesn’t sound like capitalism.”

Like Sisodia, I believe capitalism and business are perhaps the most powerful forces for change we have available to us. Most of us work and we spend almost one-half of our waking hours engaged in work. So, the influence of our organizations culture or the culture of the companies we do business with cannot be diminished.

Sisodia in the book Firms of Endearment, (2007) lays out convincing evidence that the four pillars above in fact lead to better performance in the market place. That however, is not the reason to become conscious about our business.

The reason to become conscious is that it is the right thing to do.

We have a choice:

We can right size and realign, and squeeze costs and drive hard bargains – OR  – We can remember our purpose, we can align our values and our stakeholders values so that everyone benefits

We can take the step like the CEO, in the article, who did not lay off his people. Instead, he had them help build his new plant. In the process, he kept people employed and keeping the ripple of lay-offs and foreclosures out of the economy.  

My question, friends, is, which world do you want to live in?

Have a Great Day!

One Comment:

  1. The concept of capitalism vs conscious capitalism is one that comes and goes over time, with a variety of pseudonyms. Pure capitalism, as defined by Adam Smith focuses on profitability and the nature of profitability in determining which businesses survive and which don’t.

    Peter Drucker was one of the first to talk about the social responsibility of business and he made a very compelling argument. If the focus is solely on profit at the expense of everything else then shareholder value is maximized, but only in the short term. In the long term “driving a hard bargain” and cost minimalization results in unskilled laborers, an inferior product, and a shrinking market place.

    This is much of what drove American business in the late 1980’s and 1990’s and created much of the economic problems that we face today.

    A longer range view of business and the community creates a healthier and more productive business and social environment. And by definition, long term success for all of those it touches.

    Thanks for posting such a thoughtful article.

    Dave

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