September 28, 2016

Conscious Capitalism

Welcome to our Conscious Capitalism and Entrepreneurship portal.

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This portal is influenced by John Mackey’s Conscious Capitalism. John cites Marc Gafni twice in ways which capture why conscious capitalism is so important to the Center for Integral Wisdom.

Marc Gafni has observed that we are powerfully re-visioning the role of business in society. Marc Gafni has observed that capitalism has lifted more people out of poverty than any other force in history, and it’s done so through voluntary exchange rather than coercion.

Communism tried to do so by coercive means and ended up killing millions of people in the process. By ameliorating poverty, the values in the Great Traditions are enacted and a gateway opens for growth. It opens a gateway for human beings to grow morally, socially, spiritually.

Now, for the first time in history, business is awakening to itself for the first time in history, bringing more community, mutuality, and profit by engaging everyone in the system. By becoming conscious, business can create more community and mutuality and paradoxically more profit by engaging everyone in the system.

Narratives are the stories that infuse our lives with meaning. The true narrative of business is creating places for people to build relationships and transform society. The majority of people work through some form of business, but the narrative is that it’s manipulative and corrupt. Therefore most people experience themselves as furthering greed and exploitative.

What happens when people experience themselves that way? They become that way.

By changing the narrative, people will realize there part of the force of positive transformation in history, they change. Through conscious capitalism, the economic driver of society becomes a potent force for the evolution of the Good, True, Beautiful.

Power is a quality of essence; it is gorgeous. Corporations offer opportunities for moving beyond first-level consciousness and allow us to talk about genuine esteem and self-actualization.

In this new evolutionary emergent, business awakens to its potential when capitalism moves beyond its many corruptions and shadows. Conscious capitalism articulates a vision to make corporations into great cathedrals of spirit in our time.

 

The Conscious Capitalism Movement

The Core Values of Whole Foods’ Business Mission

The Core Values of Whole Foods’ Business Mission

Most movements have their iconic images or foundation stories: For the civil rights movement it could be Rosa Parks on a bus, or the Selma march; for the human potentials movement, it’s surely Esalen. Adam Smith’s pin factory provides an image for the advantages to be gained from economies of scale enabled by capitalism. For the new movement known as conscious capitalism, the foundation story has to be the great flood on Memorial Day, 1981.

Whole Foods had been in existence for just eight months in one store on Lamar Avenue in Austin when a hundred year flood sank the store under eight feet of water. After eight months of modest success, the store, under-capitalized but thriving, was wiped out, all of the inventory and equipment destroyed.

Then an amazing series of events unfolded. In founder John Mackey’s words:

John MackeySquareAs we despondently started trying to salvage what we could, a wonderful, completely unexpected thing happened: dozens of our customers and neighbors started showing up at the store bringing buckets and mops and whatever else they thought might be useful. They said to us, in effect, “Come on, guys; let’s get to work. Let’s clean it up and get this place back on its feet. We’re not going to let this store die. Stop moping and start mopping.” (Mackey and Sisodia, 5)

The customers loved the store. Its employees, or “team members” as they came to be called, thought of it as the best job they’d ever had. Over the next few weeks, their suppliers were quick to restock the shelves on credit because they trusted Whole Foods’ management and wanted to see this nascent effort survive. The community threw in its support. Even their investors agreed to increase their commitment to its vision, namely, to align and serve the interests of all of the just-named stakeholders, and not be seduced by a single-minded pursuit of profits. 28 days later, the store re-opened. 32 years later, Whole Foods is a $16 billion colossus that has changed the eating habits, animal husbandry practices, and the viability of organic agriculture across the country.

Could there be a better story showing one of the basic principles of Conscious Capitalism, that aligning the interests of all stakeholders is a better and wiser course than the single-minded pursuit of the interests of investors? If a company is successful in serving the interests of its customers, its employees, its suppliers, its community and their natural environment, then, what-ho—the interests of its investors will be better served than if that company had single-mindedly pursued only the interests of its investors.

Financial performance of stakeholder-driven Firms of Endearment measured against the shareholder-driven performance of the S&P 500, 1996-2006

Financial performance of stakeholder-driven Firms of Endearment measured against the shareholder-driven performance of the S&P 500, 1996-2006

While Mackey and Whole Foods may be the flagship of this movement, they are hardly alone. Raj Sisodia and his grad students at Bentley University conducted research that they report in a book too cutely titled, Firms of Endearment: How World-Class Companies Profit from Passion and Purpose Don’t let the title put you off. Behind the warm and fuzzies there’s some solid research. Raj and his students started with a group of 200 companies, then whittled that list down to 60 companies that demonstrated most of the principles of conscious capitalism. Another sieve that did not include financial performance got them down to 28, and when they then focused on 17 of those 28 that were publicly traded, they then performed a financial comparison with the S&P 500. “Imagine our surprise, then, when we completed our investor analysis. These widely loved companies (those that are publicly traded) out-performed the S&P 500 by significant margins over 10- 5-, and 3-year time horizons.” (Sisodia et al., 2007, 16)

In a 15-year review of the same companies, the numbers only improved.

So Whole Foods is not alone. A growing number of companies are flying the flag of Conscious Capitalism. And, starting in 2011, a growing number of CEOs of those companies have been gathering at Esalen for a series of annual conferences to trade notes on best practices and build a fellowship under the shared auspices of Esalen’s Center for Theory & Research (CTR) and Conscious Capitalism Inc. (CCI).

 

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