Companies that are Changing our World and the Way we do Business

Conscious Capitalism - WholeFoods StaffWelcome to a smarter, more socially and environmentally sustainable model for doing business today. It’s such a wonderful surprise to find a large, publicly listed company with more than 74,000 staff, in the highly competitive grocery industry boldly stand and say ‘noble cause before profits’.  This company even made the statement, ‘It’s not about share of wallet anymore, it’s about share of heart’ and the leaders of this company are happy to put both on the table, placing their trust in others by offering them a share in the profits as well as recognition for the difference they make in the world.

John Mackey, founder and CEO of Wholefoods Market is a force to be reckoned with.  He is fighting an American business war with loving kindness and generosity of spirit by putting people above profits and starting a global movement called ‘Conscious Capitalism’ and he is encouraging others to follow his example.

There are some out there who are hard-core believers that profit above all else is the only way to survive and that  Conscious Capitalism is a ‘Pollyanna’ point of view and not even possible for publicly listed companies to behave in such a way. But when companies like Walmart start looking over the fence at what is happening (and changing some of their own strategies to follow suit) there must be something in it beyond just being a nice thing to do.

Conscious CapitalismThere must be some pretty sound business principles and structures in place. So let’s look at why this is not just a great, ethically and socially responsible idea but why John Mackey, Wholefoods Market and Conscious Capitalism (which includes globally recognised brands such as South West Airlines, Google, IDEO and Timberland to name just a handful) are living proof that this is not just a rose coloured view of the world but a smart way to get ahead in business. It also supports Peter Drucker’s theory that culture eats strategy for breakfast. Strategy is still important but no matter how brilliant a company’s strategy might be, the strategy’s execution depends on great performance by the people inside the organization.

Let’s first compare the financials of businesses who operate under the banner of Conscious Capitalism to those who operate on more traditional models (a lot of these same companies were also studied and featured in the book, ‘Firms of Endearment’).

Investment Performance of Businesses Operating under the Conscious Capitalism model vs the S&P500

Ave S&P 500 Co.      3 Years   – Annualised  3.3%;    Cumulative  10.3%
Conscious Cap. Co. 3 Years   – Annualised  21.1%;   Cumulative  77.4%

Ave S&P 500 Co.      – 10 Years  – Annualised  2.7%;     Cumulative  30.7%
Conscious Cap. Co. - 10 Years – Annualised  13.5%;  Cumulative  254.4%

Ave S&P 500 Co.     15 Years – Annualised   6.5%;    Cumulative  157.0%
Conscious Cap. Co. 15 Years – Annualised  21.0%;  Cumulative 1,646.1%

There are four specific tenets of the Conscious Capitalism Model. 

Tenet Number One:  A Higher Purpose and Core Values.

Conscious Capitalism - Wholefoods Environmental StewardshipA ‘noble cause’ is at the core of everything they do and the way they operate.  For Wholefoods Market it is to educate people and provide easy access to healthy eating to improve the world’s health. The people at Wholefoods Market live and breathe this noble cause – from conducting free nutritional seminars within their stores for their customers; educating their staff and giving them additional discounts on healthier foods; providing their own staff healthcare program; to a huge fund to help developing nations feed themselves by providing the materials for farming and sending their staff over each year to assist, plus many more projects of equal merit.

Tenet Number Two:  Stakeholder Integration.

They actively align the interests of all stakeholder groups, not just balance them against one another. They have carefully devised a business model where the objectives of each stakeholder can be met simultaneously and are strengthened by other stakeholders.

The key is that the activities within the business are executed within a system that allow for the active alignment not competition of stakeholder interests. Wholefoods Market captures this idea in its formal “Declaration of Interdependence,” which acknowledges the idea that all stakeholder groups constitute a family whose members depend on one another.

Tenet Number Three:  Conscious Leadership.

Conscious Capitalism - Wholefoods MgtLeaders operating within this framework are required to display the characteristics we admire most in exemplary human beings such as emotional intelligence; spiritual intelligence (ability to access our deepest meanings, values and purposes); servant leadership; capacity for love and care; and systems intelligence. Such leaders are required to continually evolve, learn and grow in these areas.  John Mackey himself said that his own personal growth in these areas was necessary in order for his company to evolve and be of benefit to the lives it touched.

Tenet Number Four:  Conscious Culture and Management.

This revolves around the decentralisation of information to gain more widely dispersed collective intelligence and collaboration. People within a business operating inside of this model have a high degree of accountability and a shared fate… the better the company does… the better the customers do… the better the team members do… the better the shareholder investors do.

At a lot of companies, team members develop an entitlement mentality. They want to benefit from the boom times but want to be shielded from the tough times.  This is not the case at conscious companies.  All of the people within the company are required to put forward their ideas on getting through the tougher times and looking at all angles of what’s possible. This not only brings with it a lot of innovative thinking but brings solutions that can defy normal thinking. Structures and strategies to help innovation are seen everywhere within a conscious business.

Innovation, collaboration and self-management are important factors and tend to go hand-in-hand with the decentralisation of information and the empowerment of all.

According to Mackey, there are seven characteristics of a conscious business which can be summed up with the acronym… T.A.C.T.I.L.E.

Trust:  Conscious businesses have a high level of internal and external trust, both vertically (between leadership and frontline team members) and horizontally (within the leadership team as well as across teams at all levels).  Externally there’s a high degree of trust between the company and its customers; suppliers; other business partners; and the communities within which they operate.

Accountability:  Combined with those high levels of trust and caring is a strong emphasis on accountability. Team members are accountable to each other and to their customers.  People stick to their commitments and hold each other responsible for performance, efficiency and deliverables.  Suppliers are accountable to the company and vice versa.

Conscious Capitalism - Wholefoods StewardshipCaring:  The human need to care and be cared for is extremely powerful, often equal to and exceeding the need to pursue self interest.  Conscious cultures are marked by their genuine heartfelt love and care for all stakeholders.  Caring begets caring and the company’s stakeholders in turn exhibit genuine caring towards the company.  People in conscious cultures behave in ways that are thoughtful, authentic, considerate and compassionate.

Transparency:  There are few secrets in a conscious culture because there is little to hide.  Financial books are usually open; salary information is more readily available and strategic plans are widely disseminated and discussed.  The reality is that we live in an increasingly transparent world in which most information of genuine significance becomes known anyway.  Conscious firms embrace this reality and benefit from it.

Integrity:  A conscious culture is marked by strict adherence to truth telling and fair dealing.  Conscious firms readily forgive lapses in judgement, but do not tolerate lapses in integrity.  Conscious firms are guided by what they believe is ethically right, not merely by what is legally required or socially acceptable.

Loyalty:  Conscious businesses exist in a system of high loyalty. All stakeholders are loyal to each other and to the company.  This is a natural consequence of the relationship mindset that permeates such businesses. It means that these businesses don’t have a ‘what have you done for me lately?’ attitude.  Stakeholders are more patient and understanding of each other when short term blips occur.

Conscious Capitalism - Wholefoods LeadersEgalitarianism:  Conscious businesses do not have a class system that separates their leaders from the team members at large.  Everyone is treated with the same respect and dignity. The salary differential between the top echelon and the front lines is smaller than typically found at traditional companies.  Senior executives generally do not enjoy special privileges and perks not available to others.  To a large extent all team members have input into how the company is managed and led.

Precision Profiling in collaboration with Leaders of Distinction, has created a one week ‘hands on’ study tour at the coalface of some of Australia’s leading exponents of these philosophies where Return on Investment and the total belief and support of a noble cause are jointly enshrined as integral to the  long term success of the  business.

The tour’s theme is “R.O.I + I.” (Return On Investment and Integrity), and it will include on-site case studies where we engage with and learn directly from those leading the way in this new paradigm of business and corporate responsibility, where making money and making a difference hold equal sway.

As Sir Richard Branson, arguably the most successful and internationally recognised entrepreneurs of our time and founder of the global Virgin mega-brand, puts it in his most recent book,  ‘Screw Business as Usual,’….  “There’s a massive generational shift occurring that will blur the distinction between doing good and doing business…  In our newly interconnected world, no one can any longer ignore the issues we are facing… I believe that business can be a force for good… because never has there been a more exciting time for all of us to explore this next great frontier where the boundaries between work and higher purpose are merging into one and where doing good really is good for business.

For expressions of interest and background information on the make-up of the tour, its leaders, and the organisations we will be showcasing and visiting, send your requests for further information directly to brian@precisionprofiling.com.au

Until then… Let’s seek to understand more and judge less. Have a great week – Brian

Precision ProfilingWhat Makes You Tick? Through ‘Motivational Fingerprinting’ we uncover what you do, how you do it and why you do it, and most importantly, the hidden patterns that lead to your success, and that of your team.

About Brian Clark

Brian Clark is the principal director of Precision Profiling®.

He is a renowned practitioner, writer and speaker on building total customer cultures; values driven leadership and world best practice strategy and implementation.

He has been a guest lecturer on world best practice for the executive management programme at Monash University’s business college (Mt Eliza campus); an adviser to and key note speaker for the Singapore Productivity Association and a consultant to many major Australian and overseas corporations and government departments.

Read more about Brian Clark Here

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