The Boss Show

Workplace wisdom with heart and humor

June 5, 2016

Conscious Capitalism, Part 2

For capitalism to benefit all humanity and the planet, companies must (1) serve a purpose greater than profit; (2) hire conscious leaders; (3) create conscious cultures; and (4) integrate the needs of all stakeholders, not just investors. In the second of two parts, Jim & Steve explore whether a “conscious” form of capitalism can resolve the catastrophic impacts capitalism has created.

 

 


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Speaker 1: It’s a Northwest lifestyle weekend on KOMO News, now a show for anyone who is or has a boss. This is, “The Boss Show” with Jim Hessler and Steve Motenko.

 

Steve: Hi there and welcome to the boss show, I’m Steve Motenko, I’m the psychology guy. I’m a certified personal development coach and an executive coach here in the Seattle area.

 

Jim: I’m Jim Hessler, I’m the business guy, I’m the guy that wrote along with Steve the book, “Land On Your Feet, Not On Your Face” and I’m also the founder of Path Forward Leadership Development. We do, the fancy term is longitudinal leadership development programs, which are programs that are very experiential in nature and take place over an extended period of time, in a kind of a coached and facilitated environment. It’s a good program, we’d love to have you know more about what we do.

 

Steve: By the way, that longitudinal piece, we’re fiercely opposed to any leadership development program that’s not longitudinal. One shot workshops don’t work other than to provide some short term inspiration.

 

Jim: If you’d like to learn more about what we do, go to pathforwardleadership.com.

 

Steve: This is a show for anyone who is or has a boss, we hope to offer you a little bit of workplace wisdom with heart and humor. Today in “The Boss Show” part two of our two part series, so the grand finale, Conscious Capitalism. Conscious capitalism, is it an oxymoron or isn’t it? Few sparks flew between Jim and me in part one which you can access on thebossshow.com, you can also get all our shows on Sound Cloud, Sticher and of course iTunes.

 

  In part one, to kind of summarize where we were, we were looking to what extent truly, “Conscious,” i.e. devoted to something larger than, a higher purpose than profit maximization, whether that’s possible for capitalism. We kind of took an outside/in approach. Jim kind of argued in some ways that he doesn’t have high hopes that that is possible.

 

Jim: First of all, what I hear when I hear the word conscious capitalism, is it just means that as we’re making our money, as we’re running our businesses, we’re mindful of the total holistic impact that our business has on the larger community and the lives of the people that touch it. Whether that be employees, or suppliers or customers, or the people who live next door to our meat packing plant or whatever. We’re conscious of that at all times.

 

Steve: That consciousness should be prioritized over profit maximization. That’s a tricky thing to say, because if you ask a doctor, why she does what she does, she’s going to say, to heal people. If you ask a teacher why she does what she does, she’s going to say, to give children opportunity, to learn and be successful in the world. The common wisdom is that, if you ask a business person why he does what he does, he’ll say, it’s to maximize profit that’s what corporations are for.

 

Jim: Isn’t it interesting that you use the female for this, for other way as you went to the capitalism we went to the male figure in that.

 

Steve: It wasn’t intentional, but I want to say, the bottom line for me, pun intended I guess, is that while profit is absolutely necessary to run a business – you can’t run a business without making a profit – that is very different from saying that our purpose for being in business is to maximize profit. A teacher has to make money, a doctor has to make money, but that’s not their purpose for existence. Somehow we’ve gotten it wrong that business’s purpose/raison d’etre is to make money.

 

Jim: Oh my God did you just speak French?

 

Steve: Yeah that’s French. How’d I do?

 

Jim: Not bad. I think that this is again, where I would agree because again, we talked in the previous show, I’ve worked for a major American corporation that said out loud, that they existed for the purpose of delivering value to their shareholders. It made it a pretty miserable place to work, and so I hear that. I hear that if they had taken a different point of view and said, “You know what? If we run the kind of business we dream of running, then our shareholders will also do well.” That would have been a completely different message.

 

Steve: Yeah, and that’s the core notion behind the movement, the conscious capitalism movement, whether or not you agree. When we come back from the break, we’ll dive a little to a layer deeper about, what are the four principles that make up so called conscious capitalism. You’re listening to, “The Boss Show.”

 

Speaker 1: It’s a Northwest lifestyle weekend on KOMO News, “The Boss Show” continues.

 

Jim: I’m Jim Hessler, I’m the business guy.

 

Steve: I’m Steve Motenko, I’m the psychology guy, and we’re in part two of our two part series on conscious capitalism oxymoron or no? What I’d like you to do as you listen to this, for the rest of the show is to do a thought experiment, to imagine yourself in a world where all corporate decisions … This just makes me want to say, imagine a world-

 

Jim: This is not a movie trailer.

 

Steve: Oh yeah. Imagine a world where all corporate decisions are made from calculating what would produce the greatest long term benefit for humanity and the planet, I hear you laughing, some of you, as opposed to a world where corporate decisions are made solely to maximize profits. Imagine what it would look like if your workplace were a conscious capitalist workplace, and how things might be different in the day to day.

 

Jim: It’s a heck of a standard to hold yourself to, it really is. I think it’s an interesting conversation for you to have with your business and with your coworkers. What are we really doing here, is I guess, how you pose this quote, what the heck is this all about? What’s our purpose?

 

Steve: That’s a great segue Jim into the first of the four principles or tenets or pillars, that they’re sometimes called the conscious capitalism as outlined in the book, “Conscious Capitalism” by John Mackey and Raj Sisodia. By the way, if you have any issues with John Mackey, then go back to part one of this series and listen to Jim’s rants. Because we agree with you to a certain extent, he may not be the poster boy for “Conscious Capitalism” in our minds. Let’s not shoot the message for the messenger and the Segway, which I’ve now gotten way off [crosstalk 00:07:00].

 

Jim: Bring it back, let me throw you a grappling hook.

 

Steve: I need it. The very first tenet of conscious capitalism is this notion of higher purpose and really what we want to do, what you want to do, with you in your team, or your company, is to ask the questions that Jim posed, “What are we doing here? What’s the point of all these?” It’s absolutely critical to start there, or nothing conscious can flow from it.

 

Jim: By the way, it’s a great relationship question to ask too. “What are we doing here? Why are we in this relationship?” Whether that’s a friendship or a marriage or parent and child, it’s sister, great. What is this all about, why are we here? It sounds excessively philosophical but it has a real practical impact on how you run your life.

 

Steve: Yes, and it only has that practical impact if you make it have that practical impact. The same is true in your team or your company. You can do a values exercise, and have it go sit on the shelf and it’s a bunch of wasted time, or you can do a values exercise done well with input from all layers of the organization and literally have it drive decisions on the ground, day to day.

 

  This what Howard Behar founding president of Starbucks International whom we interviewed in a two part series a few weeks ago. You might want to check that out on website thebossshow.com. This is what he says Starbucks has done, now if you’ve worked at Starbucks or if you’ve read about Starbucks, you can make your own decision but we asked him some questions about, how do you take that notion of higher purpose, which Starbucks clearly has.

 

  It talks about being a people centered company that serves coffee, as opposed to a coffee centered company that serves people. It’s a lot of words but how does it get applied to day to day decisions, and that’s the challenge.

 

Jim: The question that they pose to themselves … This is where the capitalist in me gets all excited about this conversation, because one of the reasons Starbucks was able to do that is because they were market leaders, and they have done a masterful job, in a very capitalistic way, of convincing people to spend two dollars for a cup of coffee.

 

Steve: Five dollars for a cup of coffee two dollars for your drip.

 

Jim: I get the drip yeah, simple drip. They’ve been masters at that, and so, sometimes I think there is a convenience that comes from running a really successful company. Then you can go back and say, “Well it’s because we are people oriented.” Yeah it’s because you’re people oriented, it’s also because you picked a really good product at a really good time, and delivered it with a high level of value and quality to your end user customer.

 

Steve: There may also be a feedback loop there. They may have chosen the right product and the right vehicle for delivering it, partly because of their values or their sense of purpose.

 

Jim: It could be it, it’s that third place idea that we talked to him about too.

 

Steve: When we come back, we’ll talk about … We’ve mentioned how your purpose, what are the other three core principles of conscious capitalism, you’re listening to, “The Boss Show.”

 

Speaker 1: Now back to Jim Hessler and Steve Motenko. This is, “The Boss Show” on KOMO news.

 

Jim: I’m Jim Hessler, I’m the business guy.

 

Steve: I’m Steve Motenko, I’m the psychology guy. I just can’t wait to hear how you come in, saying those seven words.

 

Jim: We’ll start singing, I’m going to rap it next time.

 

Steve: Can’t wait for that, oh man, yeah, that one I’m going to boost on Facebook. We’re talking about conscious capitalism part two, you can find part one on our website, thebossshow.com, in which we kind of took a meta view and talked about, is it even possible. Today we’re talking about the core principles or pillars of conscious capitalism and I’m asking you to imagine what’d it be look like to apply it to your workplace.

 

  The first one is higher purpose and the one thing I wanted to say about this notion of higher purpose is, if you think, “Man we can’t be focused on purpose, in my work, we have to be focused on getting products out the door.” Purpose is just an intellectual exercise.

 

Jim: Sometimes it’s really mundane stuff, it’s hot dogs and brooms, and stuff that’s not very sexy.

 

Steve: Even brooms and hot dogs can be framed in a higher purpose, it could be about keeping places clean or it’s not going to be keeping people healthy for hot dogs but just giving them some short term gratification.

 

Jim: It depends on what kind of hot dogs?

 

Steve: Okay there you go, the veggie dogs and I’d like to, all of their processed too, but we digress. The one other thing I want to say about this notion of higher purpose is that, I think it’s very easy to imagine and studies confirm, companies who are really focused on a purpose beyond maximization of profit on a purpose that involves some sort of a contribution to humanity or the world, these companies tend to attract more evolved, more passionate, more psychologically mature workers. These companies focused on higher purpose, tend to foster more creativity, more collaboration, they’re just better places to work and they attract better people.

 

Jim: So there is a virtuous circle. Then hopefully that would also attract, to a certain degree, customers who are attracted to the mission of that company. I know I make purchasing decisions based on the ethos of the company [crosstalk 00:12:39].

 

Steve: Absolutely, as do I.

 

Jim: And say and also supplier. I’ve had some interesting conversations, it’s been years now but are there companies that we wouldn’t do our leadership workshop for, just based on an ethical divide. We had some interesting conversations about that, which largely resolved around the idea, do you change something from the outside or you change something from the inside? I think what we finally decided is we do a workshop for almost anybody, if we felt like we could have an impact on their culture that was positive. These are the decisions we all make, hopefully, if we are conscious.

 

Steve: If we’re conscious.

 

Jim: If we’re conscious consumers.

 

Steve: I think part of the point you’re making is that, if your company is devoted to a higher purpose, the customers as you say will be attracted … The customers who will be attracted to that higher purpose are going to be more loyal. You can both encourage your suppliers to kind of tap into that purpose and be more conscious themselves in order to get your business.

 

Jim: You end up kind of surrounding yourself with a network of stakeholders who your consciousness is kind of impacting their consciousness. Because everything is interdependent.

 

Steve: My cynicism shows up a little bit too because there are companies that are clearly playing this for a marketing advantage. Now, Coco Pops, are, what do you call it, when you don’t have the wheat stuff.

 

Jim: Gluten free.

 

Steve: They’re gluten free, but they’re still terrible for me.

 

Jim: A lot of products that advertise as gluten free always were gluten free, but that’s not conscious.

 

Steve: Fish, gluten free fish.

 

Jim: That’s called green washing, and it doesn’t count. When we come back we’ll talk about another core principle of conscious capitalism, stakeholder integration, what does that mean? You’re listening to, “The Boss Show.”

 

Steve: KOMO news, “The Boss Show” is back on a Northwest lifestyle weekend, here is Jim Hessler and Steve Motenko.

 

Jim: I’m Jim Hessler the business guy.

 

Steve: I’m Steve Motenko the psychology guy, we should do it in two part harmony.

 

Jim: Yeah we should, we’ll work on that before our next show.

 

Steve: We’ll write something for our next show, don’t count on that, don’t hold your breathe. I’m Steve Motenko, I’m the psychology guy, I think I said that. We are talking today about conscious capitalism, and by the way, if you’ve got some insights or comments, questions, objections to anything we say, give us a ring on our listener comment line 206-973-7377 or if you’re a little more chicken, send us an email at talktous@thebossshow.com.

 

Jim: A little more chicken, there ought to be some official word for that.

 

Steve: Chickener.

 

Jim: Chickener?

 

Steve: Anyway we are talking about conscious capitalism and we have mentioned higher purpose as the first of the four tenets of conscious capitalism as outlined in the book of the same name. The second one is called stakeholder integration. This is really what a conscious business does, it considers not only it’s impact on it’s customers but it sees it’s stakeholders truly in a much, much larger circle going all the way to kind of all of life on the planet.

 

  The book and for my money, the book is not the final word on conscious capitalism, it’s one word. There are other books that I would recommend more highly, primarily reinventing organizations in terms of what it looks like to run a conscious business. The stakeholder notion in this particular book talks about six different kinds of stakeholders, customers, of course, team members, meaning employees, investors, suppliers, the community and the planet.

 

  All of those, what Jim might call, kind of pollyannic claim of the conscious capitalism movement, is that, if you truly pay attention to all of them, in your decisions, then you lift the boats. You lift all boats, that business is not a zero sum game, that everybody can win, not necessarily in the short term but in the long term by paying attention to all these six different stakeholder communities.

 

Jim: Something we talked about during the break, that I think is maybe going to be the biggest challenge facing humanity or maybe second only to climate change. That is what happens when the population of the planet stops growing. Because if you think about capitalism, it’s really very growth oriented. Companies that aren’t growing in revenue and profits and things like that are generally going to lose their investors and they’re going to lose their … It’s hard to run a business that’s not growing, it really is, it’s difficult.

 

Steve: My bigger concern is what’s going to happen to the planet if population keeps growing.

 

Jim: Agreed, but our economic system and capitalism specifically is really a very growth oriented, because the idea as you put your money into a business and you want to get a return, capitalism is about putting money to work.

 

Steve: I agree with that and part of what the conscious capitalism folks say, is that investing in conscious capitalism is much more than just about putting your money to work. That similar to the profit motive in business, it’s necessary but it’s not the highest priority. It’s the foundation. It’s kind of like, we wouldn’t work if we didn’t get paid, but pay doesn’t motivate us on a day to day basis, it’s exactly the same for corporations.

 

  Ideally for investors, that I invest in this company because they are doing good things in the world and I expect a return but I’m more focused on the good that they’re doing in the world than on my own small financial return.

 

Jim: One of the things that has to change for this conscious capitalism to take hold is, investors need to look very different way. I think it starts there as much as it does with management.

 

Steve: Conscious capitalism says, “Investors should have an ongoing long term relationship with the companies that they invest in,” there should be a conversation going on between the leaders and the investors on an ongoing basis. This is a relationship not just a financial transaction.

 

Jim: It’s not, “Here I give you some money I want double my return back in five years or I’m going to fire you and put my money somewhere else.”

 

Steve: What does conscious leadership look like that’s the third of the four pillars in conscious capitalism. We will explore that when we come back, stay with us it’s “The Boss Show.”

 

Speaker 1: It’s a Northwest lifestyle weekend on KOMO news, “The Boss Show” continues.

 

Jim: I’m Jim Hessler and this is, “The Boss Show,” I’m the business guy.

 

Steve: You have to have heard the earlier segment of the show in order to find that funny or maybe if you’ve heard them you still don’t find it funny. I’m Steve Motenko I’m the psychology guy, we’re talking today about conscious capitalism, the last two principles or tenets of conscious capitalism are, kind of intertwined. One is conscious leadership which is all about the individual kind of self of the leader and fourth one is conscious culture and management which of course flows from conscious leaders. As I was reading the conscious leadership section, you won’t find anything new here …

 

Jim: If you’ve read our book.

 

Steve: … If you’ve read our book or hundreds of other books that set out what a conscious leader needs to be. Virtually every blog post that I read on leadership today, talks about in some form, what leadership looks like when it’s conscious as opposed to the old command and control paradigm, the theory ex-paradigm of, you got to control people and make them do what you want to do, or they won’t work for you.

 

  The conscious paradigm as I think Douglas McGregor, referred to his theory why, holds the notion that everyone is capable and everyone wants to do a good job, and everyone has this creative instinct. Your job is to as much as possible get out of the way, setting clear parameters but get out of the way and let them flourish, and support them and challenge them and flourish.

 

Jim: We talk about this, all the time with our clients and it’s fine that all the bloggers get it and it’s fine that all the organizational development experts get it and all the psychologists get it. We can vouch for the fact that a lot of people still don’t get it. It’s hard in practice, especially if you’re balancing the need to generate profit against the needs of an individual or a supplier for that matter.

 

  You might have a supplier, let’s give you an example, you have a supplier you’ve been doing business with for many, many years. Another supplier comes in and offers the same quality product for 20% less, what does conscious capitalism teaches about what to do in that circumstance?

 

Steve: It’s interesting because, what pure conscious capitalism would do is it would say, “Go buy it from this other company.” Believe it or not, that’s kind of what is held out in the book.

 

Jim: In other words the company that was charging 20% more would say, you-

 

Steve: “If you can find it for cheaper, we support you in doing that.” That’s pure and pretty idealistic but what they expect to happen, first of all, they’re prioritizing their customer satisfaction even if they’re not their customers anymore over their own profit maximization. As a byproduct of that, what often happens. If I have somebody at a retail store tell me, “I don’t have what you want, but you can get it at the store down the street.” I’m much more likely to come back to that first store and shop for other things, because, “Oh wow, they’re going to tell me the truth.” I’m going to develop some loyalty to them. Again, this is something that shakes out in the long term, not necessarily in the short term.

 

Jim: Also we have to remember that, you and I can afford the extra 10% or 15% that takes to buy organic food at Whole Foods, and a lot of people can’t afford that.

 

Steve: Right, but our being able to afford that, allows us to kind of be leaders in ways that bring economies of scale to the point where eventually, more people will be able to afford it.

 

Jim: It’s one way to look at it.

 

Steve: One way to look at it and there are many others, do you have a way to look at it, email us at talktous@thebossshow.com, final thoughts on this bizarre notion of conscious capitalism, when we come back, you’re listening to, “The Boss Show.”

 

Speaker 1: Now back to Jim Hessler and Steve Motenko, this is, “The Boss Show” on KOMO news.

 

Jim: I’m Jim Hessler, I’m the business guy.

 

Steve: I’m Steve Motenko, I’m the psychology guy, thanks for sticking with us for our two part series on conscious capitalism. The last point I want to make, is that Jim mentioned that, the choices to be made as a conscious leader are very difficult and I agree with that, and they should not be underestimated in terms of what is possible for bringing consciousness to your business.

 

  As I said at the end of part one, the single thing that matters most is the psychological maturity of the leader. Those choices are easier to make, if you’re not worried about protecting your own fear based self, worried about what might happen if you make a decision that somebody else doesn’t like. If the decisions that you make, are made in the best interest of something larger than just the profit motive or just your own career. There are enough people making those decisions then we have a chance at conscious capitalism.

 

Jim: Maybe conscious capitalism is about growing up as a society, “The Boss Show” is produced by Boss Media Productions, and our sound engineer is Kevin [inaudible 00:24:51].

 

Steve: If you missed any of the show, you can get it in it’s entirety online at thebossshow.com which is where you can go to subscribe to our podcast and contact us for any reason.

 

Jim: Thank you for listening.

 

Steve and Jim: And don’t forget rule number six.

 

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