I’m reading an advance copy of new book called Conscious Capitalism: Liberating the Heroic Spirit of Business by John Mackey, the founder and co-Ceo of Whole Foods Market, and business school prof Raj Sisodia. It’s very good, with useful insights on almost every page so far. (I’m only 70 pages in.)
Mackey was a liberal hippie. He’s now a libertarian entrepreneur and cheerleader for capitalism. He’s also a vegan who meditates and practices yoga. Not your typical CEO of a FORTUNE 500 company.
One reason I like the book is that I agree with much of what Mackey says. This passage, about what Mackey and Sisodia call the “paradox of profits,” comes from a chapter about how purpose, and not profits, is what drives all great companies:
Just as happiness is best experienced by not aiming for it directly, profits are best achieved by not making them the primary goal of the business. They are the outcome when companies do business with a sense of higher purpose, build their businesses on love and caring instead of fear and stress…
If a business seeks only to maximize profits to ensure shareholder value and does not attend to the health of the entire system, short-term profits may indeed result; perhaps lasting many years, depending upon how well its competitor companies are managed. However…without consistent customer satisfaction, team member happiness and commitment, and community support, the short-term profits will proved to be unsustainable over the long term.
The No. 1 competitive advantage of purpose driven companies (or values-driven companies, if you prefer) is that their workers are engaged, as I wrote in my own book, Faith and Fortune: The Quiet Revolution to Reform American Business, back in 2004. Mackey and Sisodia put it this way:
The difference in business impact and personal happiness between a team member who is inspired, passionate, and committed and one who merely shows up for a paycheck is enormous. The blame for this does not lie with ‘lazy and unmotivated’ workers but with companies that fail to create workplaces in which people are given the opportunity to find meaning, purpose and happiness…
They note that people devote enormous amounts of time, money, and effort to causes that often have nothing to do with their narrowly defined self-interest, and say:
To tap this deep wellspring of human motivation, companies need to shift their emphasis from profit maximization to purpose maximization. By recognizing and responding to the hunger for meaning that is a quintessential human companies, companies can unlock vast sources of passion, commitment, creativity and energy that lie largely dormant in their team members.
Makes sense, no? People who care a lot about food, health and the environment can pursue their passions at Whole Foods or Stonyfield Farm. People who love the outdoors can be fulfilled at Patagonia or REI.
Of course, a strong sense of purpose isn’t, by itself, enough to assure profits. (Look at the newspaper industry.) But it helps.
This book reminds me that there’s a big opening out there for a bank that is really, truly committed to serving its customers and workers.