So, I’m reading a new book this month which really piqued my curiosity. It’s called, “Conscious Capitalism,” by John Hallenbeck and Raj Sisodia. Many of you whom I’ve chatted with about inequality know that a key element that further widens the gap is “capitalism gone wild” – an unhealthy view that the only thing that matters is “maximizing shareholder return.” This was popularized by the late Milton Friedman, a huge thought leader and prominent economist from the University of Chicago and epitomized by my old CEO, Jack Welch of General Electric.
I do agree it’s very important to maximize shareholder value. After all, money is the lifeblood of business. But, it’s not the only thing that is important. In fact, if all you care about is money and a short term outlook then you are tempted to do silly things like:
- not pay your employees well because you consider them a bothersome expense as opposed to your greatest asset
- not be committed to quality and safety because “it costs too much” and we know we can bully consumers into arbitration (with an arbiter of our choosing) rather than leaving ourselves open to class-action lawsuits
- not really care about cleaning up our messes after we’ve strip-mined, drilled, pumped out noxious gas or generated toxic waste rather than taking the responsibility for also protecting our environment after it’s provided resources for us
In fact conscious capitalists see the big picture and realize that running a business is not just about focusing on one stakeholder – it’s about finding the right balance for all of them. This is good in the long run (kind of like caring for all 4 of the tires on your car – keeping only 1 tire in good condition while the other 3 waste away doesn’t really optimize the car as a high-performance system to get you from one place to the next).
Conscious capitalists care about:
- employee engagement
- customer satisfaction
- regulatory compliance
- investor return
- supply chain partners
- community reinvestment
- social and environmental responsibility and leadership
Great examples of companies which do so AND who have outperformed their peers (in spite of the protests from the Friedman school of “pure capitalists”) include:
- Whole Foods
- Costco
- REI
- The Container Store
- and more!
Anyways, if you want a great read that may be perceived as “sleeping with the enemy” (but is really a great way to build bridges with those on the right who may be skeptical about the issue of inequality in the first place) then check out Conscious Capitalism!