CONSCIOUS CAPITALISM

ACTUALIZING BUSINESS AND HUMAN POTENTIAL

Raj Sisodia
Professor of Marketing, Bentley University Chairman, Conscious Capitalism Institute

WHAT CAPITALISM HAS ENABLED IN A VERY SHORT TIME

A Tale of Two Short Centuries

GDP per Capita, 2000 $
2010: $7,278 $6,055

$2,113 $1,262 $873 Industrial Revolution Begins $467 $453 $596 $566 $615

$667

Year

500

1000

1500

2000

Source: www.VisualizingEconomics.com; Angus Maddison, University of Groningen; www.prb.org; www.worldbank.org

The Economic Success of Capitalism is Unprecedented in World History

Real per capita income has increased: 16x in developed countries 35x in Japan 3x in Africa 100x in the U.S. (adjusting for quality and affordability)

Capitalism is Ending Poverty on Earth

The percentage of people living on less than $1 per day has dropped from 85% in 1820 to about 17% today. If current trends continue, poverty will be virtually eliminated in the next 50 years.
100%

World Population Living on Less Than $1/Day (in 03$ )

50%

0% 1800 1950 1980 2003

Source: World Bank (constant 2003 dollars)

Business is heroic noble ethical good because because because because it it it it creates can lifts based elevate people value on voluntary our out existence of poverty exchange

Yet, Mistrust of Business is Pervasive

Americans confidence in big business has declined steadily, from about 34% in 1975 to a historic low of 16% in 2009, rebounding to 19% in 2011. Only 2 percent of investors believe that CEOs are very trustworthy; 72 percent believe that wrongdoing is commonplace at companies.

2011: 88% of Americans believe that big companies have too much influence on government, up from 83 percent in 2004.

2011: 79% believe business is too concerned about making a profit and not enough about responsibilities to workers, consumers, and the environment.

The whole growth model we created over the last 50 years is simply unsustainable economically and ecologically Both Mother Nature and Father Greed have hit the wall at once.
March 7, 2009

After just one century of modern living

75% of forests are gone

30% of arable land is gone

Large mammals are down 90%

Large fish are down 95%

Half of all species alive today are likely to disappear in 50 years

Toxic burden on humans is rising

Oil supply is decreasing just as demand is rapidly rising

After 1980, we started using more than Nature can renew; now 1.3 times

If everyone lived as Americans, would need FIVE earths as Europeans, THREE earths

% of Americans with a "Great Deal" or "Quite a Lot" of Confidence in Big Business 40% 35% 30% 25% 20% 15% 10% 5% 0%

Confidence in Big Business

Such cynicism and distrust have huge societal costs

WHY has this happened?

THE WORLD has changed PEOPLE have evolved BUSINESSES have not kept up

We are changing

THE WORLD CHANGES

1989

In 1989, for the first time in U.S. history, the majority of adults were over 40

Who is this man? What did he do to change the world?

Tim Berners-Lee
He invented the World Wide Web in 1989

A finer sense of right and wrong Understand all the consequences of our actions Commitment to the truth Fully mindful and awake Reject violence Live in harmony with nature

Peter Senge

The dogmas of the quiet past are inadequate to the stormy present.

What will it take for companies to flourish in the future? To flourish in the future, companies will have be aligned with the new realities of our lives and embody a more conscious way of being

A conscious business fosters peace and happiness in the individual, respect and solidarity in the community, and mission accomplishment in the organization.
Fred Kofman, Conscious Business

A HIGHER PURPOSE DECLARATION OF INTERDEPENDENCE 19:1 93% ANIMAL COMPASSION STANDARDS MEETINGS END WITH APPRECIATIONS MINISCULE MARKETING SPENDING MEMORIAL DAY FLOOD FUTURE SEARCH 1800%

The Tenets of Conscious Capitalism

STAKEHOLDER INTEGRATION CONSCIOUS LEADERSHIP

HIGHER PURPOSE & CORE VALUES CONSCIOUS CULTURE CONSCIOUS MANAGEMENT

Can you build a business on love?

Can you build a business on love?

Heart attacks are highest on Monday morning.

An Epidemic of Apathy

The Shame of Management

TODAY!

COMPASSION LOVE CARING SOULFUL JOY AUTHENTICITY

10.5-to-1 performance FoE (1646%)

S&P 500 (157%) Stock Returns over a 15 Year Period (96-11)

FoE Compared to Good to Great

15 Year

10 Year

5 Year

3 Year

Cumulative Annualized Cumulative Annualized Cumulative Annualized Cumulative Annualized

FoE Return GTG Return S&P 500 Return

1646.1% 177.5% 157%

21% 7% 6.5%

254.4% 14.0% 30.7%

13.5% 1.3% 2.7%

56.4% -35.6% 15.6%

9.4% -8.4% 2.9%

77.4% -23.2% 10.3%

21.1% -8.4% 3.3%

What is a Great Business?

Enriches the world Brings joy, fulfillment, and a sense of meaning to all its stakeholders Maximizes total value created Enhances the overall health and well being of society

Businesses Create, and Destroy, Many Kinds of Wealth

financial intellectual social emotional

spiritual

cultural

physical

natural

The Tenets of Conscious Capitalism

STAKEHOLDER INTEGRATION CONSCIOUS LEADERSHIP

HIGHER PURPOSE & CORE VALUES CONSCIOUS CULTURE CONSCIOUS MANAGEMENT

Happiness Meaning comes ensues from from: living a lifethat of Doing work meaning and matters purpose Selfless love Finding meaning in suffering

Profit ensues from working toward a higher purpose, building businesses on love, and growing from adversity

The Purpose Institute

Compensated engagement is going down

Uncompensated effort is going up volunteer work is nourishing people in a way that paid isnt

Great Purposes are HEALING

Healing: To restore to health or soundness; to cure; to restore to spiritual wholeness; to become whole and sound. In a world with too much suffering and ill-health, healing is divine work.

H E A L I N G

Heroic Evolutionary Aligning Loving Inspiring Natural Generous

The Power of Purpose

The difference you're trying to make in the world Drives everything you do Matters to all stakeholders Is your reason for being that goes beyond making money YET typically results in making more money than you thought possible

Roy Spence

Southwest Airlines

Give people the freedom to fly

Organize the worlds information and make it easily accessible and useful

Google

REI

Reconnect people with nature

The Tenets of Conscious Capitalism

STAKEHOLDER INTEGRATION CONSCIOUS LEADERSHIP

HIGHER PURPOSE & CORE VALUES CONSCIOUS CULTURE CONSCIOUS MANAGEMENT

Whole Foods Market Stakeholder Interdependence Model

56

S
SOCIETY

P
PARTNERS

I
INVESTORS

C
CUSTOMERS

E
EMPLOYEES

E
ENVIRONMENT

Business, Society and the Planet

The PLANET The PLANET SOCIETY

BUSINESS BUSINESS SOCIETY

Traditional View

Conscious View

Conscious Capitalism CSR

Shareholder-centric Independent of purpose Often grafted on to traditional business model Easy to meet as a charitable gesture Performance implications unclear Independent of type of leadership Stakeholder-oriented Incorporates higher purpose Societal orientation is at the core of business model Requires genuine transformation Significantly outperforms traditional business model Requires conscious leadership

The Tenets of Conscious Capitalism

STAKEHOLDER INTEGRATION CONSCIOUS LEADERSHIP

HIGHER PURPOSE & CORE VALUES CONSCIOUS CULTURE CONSCIOUS MANAGEMENT

We must be the change we want to see in the world.

Conscious Businesses Need Conscious Leaders

Purpose-driven

Authentic Caring

Systems thinkers and systems feelers

Emotionally intelligent
Strong character and integrity

Spiritually evolved

Trustee oriented

The Tenets of Conscious Capitalism

STAKEHOLDER INTEGRATION CONSCIOUS LEADERSHIP

HIGHER PURPOSE & CORE VALUES CONSCIOUS CULTURE CONSCIOUS MANAGEMENT

Culture eats strategy for lunch!

breakfast!

T A

Trust Accountability Caring Transparency Integrity Loyalty Egalitarian

Cultures of Conscious Businesses

C T I L E

Humans are born to care. Our institutions magnify or depress the human capacity to care.
Jane Dutton University of Michigan

Conscious Management
Beyond Theory Y

Self-Organizing Self-Motivating Self-Managing Decentralization Empowerment Teamwork Collaboration

Conscious Capitalism works

Higher sales intensity & growth

Lower gross margins, higher net margins

Lower marketing, product return costs

Lower legal and administrative costs

Greater employee retention & engagement

Creative, Caring Human Energy!

The biggest difference between ordinary and conscious businesses?

We are all in the same boat.

71

I would not give a fig for the simplicity on this side of complexity but I would give my life for the simplicity on the other side of complexity.
Oliver Wendell Holmes, Jr.
US Supreme Court Justice

Humanity is one spirit

Ron Pompei

Natural resources are finite

Our inner resources are infinite

The Opportunity
Those of us alive today have the opportunity to lead the most meaningful lives ever lived Our challenges are great, but so is our consciousness and our ability to change things We have all the tools we need; we just need to unleash human ingenuity on our challenges in a holistic, conscious, caring way
Lynne Twist

Essential Reading for Conscious Capitalists

www.ConsciousCapitalism.org

Raj.Sisodia@ConsciousCapitalism.org
Please email me if you are interested in being involved with setting up a South Africa Conscious Capitalism Chapter

Some Questions
Can successful profitable organizations really be built on love? Is a Conscious agenda realistic in tough, recessionary times? How can we embed conscious living and conscious business principles in young people early on?