Conscious Capitalism Munir Haddad 022110

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The "Great Recession" has expedited a shift in corporate culture and governance as well as challenged common perceptions of capitalism. There are a few revolutionary business leaders who are strongly capitalist, but believe in a way to balance the needs of all of their corporate stakeholders to build businesses for sustainable and profitable growth. This emerging trend is called by some "conscious capitalism." We will explore examples of some of these leaders, their strategies and discuss how you can put the principles into action.

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Conscious Capitalism Munir Haddad 022110

  1. 1. Conscious Capitalism & the “New Normal” February 21, 2010 HTTP://EN.WIKIPEDIA.ORG/WIKI/FILE:THE_EARTH_SEEN_FROM_APOLLO_17.JPG Tuesday, February 23, 2010 1
  2. 2. What is Conscious Capitalism? FINANCIAL, ENVIRONMENTAL, SOCIAL A STATE OF MIND OR THINGS? Tuesday, February 23, 2010 2
  3. 3. Why can’t we be the company that saves the dolphin? Wouldn’t you pay a penny to save a fish that thinks? AS PARAPHRASED BY MY FRIEND THE (FORMER) MERRILL LYNCH COMMERCIAL MORTGAGE BROKER Tuesday, February 23, 2010 3
  4. 4. NOT A NEW CONCEPT AS PARAPHRASED BY MY FRIEND THE (FORMER) MERRILL LYNCH COMMERCIAL MORTGAGE BROKER Tuesday, February 23, 2010 3
  5. 5. MAXIMIZE PROFITS Shareholder Equity Investors 20TH CENTURY CAPITALISM BUILT ON 18TH & 19TH CENTURY IDEALS Tuesday, February 23, 2010 4
  6. 6. CORE PURPOSE Stakeholder Relationship Management Customers Employees Investors Community Environment Vendors CONSCIOUS CAPITALISM BALANCES STAKEHOLDERS TO BUILD GREATER LONG TERM SHAREHOLDER EQUITY Tuesday, February 23, 2010 5
  7. 7. What’s the new normal? FINANCIAL, ENVIRONMENTAL, SOCIAL A STATE OF MIND OR THINGS? Tuesday, February 23, 2010 6
  8. 8. GLOBAL SHIFT Tuesday, February 23, 2010 7
  9. 9. WORLD STOCK MARKET CAPITALIZATION TRILLIONS OF USD JANUARY 1996 TO MAY 2009 Tuesday, February 23, 2010 8
  10. 10. U.S. FORECLOSURES Tuesday, February 23, 2010 9
  11. 11. SHORT ON CONSCIOUS CAPITAL THE NEW NORMAL Tuesday, February 23, 2010 10
  12. 12. THE “NEW NORMAL”? UNEMPLOYMENT +10% Tuesday, February 23, 2010 11
  13. 13. THE “NEW NORMAL”? UNEMPLOYMENT +10% Tuesday, February 23, 2010 11
  14. 14. HTTP://KYLESISK.TYPEPAD.COM/SISKER/2009/09/CALIFORNIA-IS-ON-THE-MEND.HTML LOWER TAX BASE VICIOUS CYCLE Tuesday, February 23, 2010 12
  15. 15. FISCAL RESPONSIBILITY Mountain of debt imperils tomorrow’s taxpayers Congress is poised to raise the debt limit, after maxing-out the national credit card in another year of runaway spending. Unless lawmakers get 188.8% serious about spending cuts—especially exploding costs for Social Security, Medicare and Medicaid—future taxpayers will shoulder history-making debt. Publicly Held Debt as a Percentage of Gross Domestic Product 150% World War II 108.6% 100% War on World The Great Terrorism War I Depression 50% 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2035 For more on cutting the debt, go to heritage.org and click on Entitlements. Source: Heritage Foundation compilations of data from U.S.Treasury, Institute for the The Heritage Foundation Measurement of Worth, Office of Management and Budget, and Congressional Budget Office. BORROWING AGAINST TOMORROW RATE CANNOT BE SUSTAINED Tuesday, February 23, 2010 13
  16. 16. PERSONAL SAVINGS % OF INCOME = 0.56% PERSONAL CONSUMPTION GROWING Tuesday, February 23, 2010 14
  17. 17. THE END OF POVERTY...? NUMBER OF PEOPLE LIVING ON LESS THAN A DOLLAR A DAY DECREASING Tuesday, February 23, 2010 15
  18. 18. Socialism vs. Capitalism COMMUNISM KILLED CAPITALISM 100 MILLION PEOPLE HAS SUCCEEDED BUT IS QUESTIONED LAST 100 YEARS Stéphane Courtois, “The Black Book of Communism” 1997 Tuesday, February 23, 2010 16
  19. 19. AR NA W ETI TION ’R EI CO MP HARE E W SH T HE MAR KET S CRU TLING FOR BAT PHORS INDUSTR IAL META CAPITALISM DARWINIAN NATURAL SELECTION DESTROY IT’S THEM KILL SURVIVA GR ‘EM L OF IND THE ING FITT OU EST TP RO FIT S Tuesday, February 23, 2010 17
  20. 20. CDO - COLLATERALIZED DEBT OBLIGATION SIVA (STATED INCOME, VERIFIED ASSETS), NIVA (NO INCOME, VERIFIED ASSETS) & NINA... Tuesday, February 23, 2010 18
  21. 21. CORPORATE DISTRUST http://www.thecorporation.com Tuesday, February 23, 2010 19
  22. 22. Why? CORPORATE DISTRUST RESULT FROM OUTDATED THEORIES OF CAPITALISM Tuesday, February 23, 2010 20
  23. 23. The paradox of profits Tuesday, February 23, 2010 20
  24. 24. FOOD EQUIVALENT OF THE CDO THANKS TO UMAIR HAQUE Tuesday, February 23, 2010 21
  25. 25. THE RETAIL EQUIVALENT OF CDO THANKS TO UMAIR HAQUE Tuesday, February 23, 2010 22
  26. 26. HOUSE FARM... Tuesday, February 23, 2010 23
  27. 27. RESOURCES ARE FINITE PLASTIC BOTTLES: 3 LEVELS OF DETAIL Tuesday, February 23, 2010 24
  28. 28. RESOURCES ARE FINITE RECYCLING MEETS SOME NEEDS Tuesday, February 23, 2010 25
  29. 29. RESOURCES ARE FINITE NEW SCIENTIST - HTTP://FLOWINGDATA.COM/2009/04/24/HOW-LONG-WILL-THE-WORLDS-NATURAL-RESOURCES-LAST/ Tuesday, February 23, 2010 26
  30. 30. WEALTH, VIRTUAL WEALTH & DEBT PHYSICAL LIMITATIONS - FREDRICK SODDY, 1926 TIME (DIGESTION, GESTATION), RESOURCES (LAND, FOOD, WATER), LITTER SIZE Tuesday, February 23, 2010 27
  31. 31. DATA PROVIDES AWARENESS THE VALUE OF WATER AS A RESOURCE IS JUST BEGINNING TO BE UNDERSTOOD Tuesday, February 23, 2010 28
  32. 32. http://en.wikipedia.org/wiki/Conservation_of_mass http://en.wikipedia.org/wiki/Gaia_philosophy - James Lovelock http://en.wikipedia.org/wiki/File:Einstein1921_by_F_Schmutzer_4.jpg GAIA PRINCIPLE COMPLEX INTERDEPENDENT SYSTEM IN HOMEOSTASIS Tuesday, February 23, 2010 29
  33. 33. “ The larger system is the biosphere and the subsystem is the economy. The economy is geared for growth...whereas the parent system doesn’t grow. It remains the same size. So as the economy grows...it encroaches upon the HERMAN DALY PROFESSOR, SCHOOL OF PUBLIC POLICY, UNIVERSITY OF MARYLAND FORMER SENIOR ECONOMIST, WORLD BANK http://www.theoildrum.com/node/3941 ” biosphere and this is the fundamental cost. Tuesday, February 23, 2010 30
  34. 34. RAY KURZWEIL SINGULARITY, LAW OF ACCELERATING RETURNS Tuesday, February 23, 2010 31
  35. 35. THE COUNTDOWN TO THE SINGULARITY RAY KURZWEIL Tuesday, February 23, 2010 32
  36. 36. MOORE’S LAW AS INTERPRETED BY RAY KURZWEIL’S LAW OF ACCELERATION Tuesday, February 23, 2010 33
  37. 37. HTTP://SINGULARITY.COM/IMAGES/CHARTS/SUPERCOMPUTERS.JPG PROCESSING POWER “WE SHAPE OUR TOOLS, THEN OUR TOOLS SHAPE US.” UNDERSTANDING MEDIA, 1964 Tuesday, February 23, 2010 34
  38. 38. PROCESSING POWER “WE SHAPE OUR TOOLS, THEN OUR TOOLS SHAPE US.” UNDERSTANDING MEDIA, 1964 Tuesday, February 23, 2010 35
  39. 39. MARSHALL MCLUHAN “WE SHAPE OUR TOOLS, THEN OUR TOOLS SHAPE US.” UNDERSTANDING MEDIA, 1964 Tuesday, February 23, 2010 36
  40. 40. SOCIAL NETWORK CONNECTIONS INCREASING NETWORK THEORY Tuesday, February 23, 2010 37
  41. 41. LINEAR VS. INTERACTIVE Tuesday, February 23, 2010 38
  42. 42. Studies suggest that a company needs to have seven different 'contacts' with a customer (on average) before they make a purchase. DATA SOURCES: MEDIAPOST, WIKIPEDIA FROM THE OLD WORLD TO THE NEW WORLD Tuesday, February 23, 2010 39
  43. 43. HTTP://EN.WIKIPEDIA.ORG/WIKI/FILE:ARGON_ICE_1.JPG CRITICAL POINT IN PHASE TRANSITION RAPIDLY MELTING ARGON ICE Tuesday, February 23, 2010 40
  44. 44. SEA CHANGE TECHNOLOGY, BUSINESS, ENVIRONMENT, PEOPLE Tuesday, February 23, 2010 41
  45. 45. How many of you are entrepreneurs? INTERACTIVE Tuesday, February 23, 2010 42
  46. 46. What is the purpose of your business? INTERACTIVE WILLING PARTICIPANTS? Tuesday, February 23, 2010 43
  47. 47. To maximize profits? INTERACTIVE WILLING PARTICIPANTS? Tuesday, February 23, 2010 43
  48. 48. To teach. WHAT IS THE PURPOSE OF A TEACHER? Tuesday, February 23, 2010 44
  49. 49. To heal. WHAT IS THE PURPOSE OF A DOCTOR? Tuesday, February 23, 2010 45
  50. 50. To uphold justice. WHAT IS THE PURPOSE OF A LAWYER? BUELLER...? Tuesday, February 23, 2010 46
  51. 51. MAXIMIZE PROFITS Shareholder Equity Investors 20TH CENTURY CAPITALISM BUILT ON 18TH & 19TH CENTURY IDEALS Tuesday, February 23, 2010 47
  52. 52. CORE PURPOSE Stakeholder Relationship Management Customers Employees Investors Community Environment Vendors CONSCIOUS CAPITALISM BALANCES STAKEHOLDERS TO BUILD GREATER LONG TERM SHAREHOLDER EQUITY Tuesday, February 23, 2010 48
  53. 53. GROWING POWER - WILL ALLEN NOURISHMENT TO LOW INCOME COMMUNITIES Tuesday, February 23, 2010 49
  54. 54. TECHNICOLOR “REVOLUTIONIZE THE MOTION PICTURE INDUSTRY” - HERBERT KALMUS, 1915 Tuesday, February 23, 2010 51
  55. 55. PROMOTE SAVINGS Tuesday, February 23, 2010 52
  56. 56. APPLE - “THE BEAUTY OF TECHNOLOGY” CORE PURPOSE DRIVES INNOVATION Tuesday, February 23, 2010 53
  57. 57. TRANSFORMATION Tuesday, February 23, 2010 54
  58. 58. LUIS VON AHN MAKING YOUR TIME VALUABLE Tuesday, February 23, 2010 55
  59. 59. How many hours have you played solitaire? INTERACTIVE Tuesday, February 23, 2010 56
  60. 60. 9 Billion hours in 2003 20 Million hours to build Panama Canal INTERACTIVE Tuesday, February 23, 2010 56
  61. 61. Tuesday, February 23, 2010 57
  62. 62. GAMES WITH A PURPOSE 7 MILLION MAN HOURS TO BUILD THE EMPIRE STATE BUILDING Tuesday, February 23, 2010 58
  63. 63. RECAPTCHA TRANSLATING SCANNED BOOKS AND PAPERS Tuesday, February 23, 2010 59
  64. 64. CORE PURPOSE GUIDES ALL STAKEHOLDERS “GOOD TO GREAT” Tuesday, February 23, 2010 60
  65. 65. There is no reason you can’t be one of the most successful organizations in the world and one of the most altruistic. There is no inconsistency between these. JIM COLLINS ON ALTRUISM IN CORE PURPOSE Tuesday, February 23, 2010 61
  66. 66. How many of you have customers? INTERACTIVE Tuesday, February 23, 2010 62
  67. 67. ZAPPOS.COM / TONY HSIEH POWERED BY SERVICE Tuesday, February 23, 2010 64
  68. 68. UNITED BREAKS GUITARS - 7,819,199 VIEWS + THE SECOND VIDEO & THE ANCILLARY DISTRIBUTION &... Tuesday, February 23, 2010 65
  69. 69. PARTICIPATORY PRODUCT DEVELOPMENT YOUR CUSTOMER’S HELP DEFINE WHO YOU ARE Tuesday, February 23, 2010 66
  70. 70. CONTROLLED -> OPEN SOURCE THE TIGHTER YOU TRY TO HOLD ONTO SOMETHING THE MORE LIKELY IT IS TO GO AWAY Tuesday, February 23, 2010 67
  71. 71. HTTP://WWW.FLICKR.COM/PHOTOS/VOYAG/3506956372/ CONTROLLED -> OPEN SOURCE THE TIGHTER YOU TRY TO HOLD ONTO SOMETHING THE MORE LIKELY IT IS TO GO AWAY Tuesday, February 23, 2010 67
  72. 72. USER GENERATED FASHION CHANGE A PARADIGM Tuesday, February 23, 2010 68
  73. 73. GIVE YOUR CUSTOMERS TOOLS THEY WILL CREATE YOUR NEXT GREAT PRODUCT Tuesday, February 23, 2010 69
  74. 74. MODERN DAY BAZAAR DEMOCRATIZED FINE ART Tuesday, February 23, 2010 70
  75. 75. How many of you have employees? INTERACTIVE Tuesday, February 23, 2010 71
  76. 76. DEMOCRATIZE AIR TRAVEL “YOU ARE NOW FREE TO MOVE ABOUT THE COUNTRY” Tuesday, February 23, 2010 72
  77. 77. CONSISTENTLY HIGH EMPLOYEE SATISFACTION #80 ON THE TOP 100 Tuesday, February 23, 2010 73
  78. 78. 10% OF TIME FOR OWN PROJECTS #4 ON THE FORTUNE TOP 100 COMPANIES TO WORK FOR Tuesday, February 23, 2010 74
  79. 79. Happy employees = Happy customers Tuesday, February 23, 2010 75
  80. 80. Happy employees + Happy customers = Shareholder Equity Tuesday, February 23, 2010 75
  81. 81. How many of you have investors? INTERACTIVE EVEN INVESTORS HAVE INVESTORS... Tuesday, February 23, 2010 76
  82. 82. OUTPERFORMS THE S&P 500 BY 11% COMPANIES THAT INVEST IN EMPLOYEES DELIVER RETURNS www.business.und.edu/goenner/research/.../100%20best%20j-econ.pdf Tuesday, February 23, 2010 77
  83. 83. WHOLE FOODS SHARES JUMPED NEARLY 13% AFTER THE GROCERY CHAIN LATE TUESDAY REPORTED FIRST-QUARTER RESULTS IN WHICH PROFIT CLIMBED 79% CONSCIOUS CAPITALISM = LONG TERM EQUITY Source: http://eresearch.fidelity.com/eresearch/goto/evaluate/snapshot.jhtml?symbols=WFMI&rsrch=gqb Tuesday, February 23, 2010 78
  84. 84. How many of you live here? INTERACTIVE Tuesday, February 23, 2010 79
  85. 85. BETTER PLACE BUSINESS BUILT WITH A PURPOSE Tuesday, February 23, 2010 80
  86. 86. STAKEHOLDER EQUITY IS BALANCED GROWER, RETAILER, CONSUMER Tuesday, February 23, 2010 81
  87. 87. GRAMEEN BANK MUHAMMAD YUNUS AND GRAMEEN BANK WIN NOBEL PEACE PRIZE 2006 Tuesday, February 23, 2010 82
  88. 88. PEPSI: REFRESH EVERYTHING MOVED $20 MILLION AWAY FROM THE SUPERBOWL, REDIRECTED TO THIS EFFORT Tuesday, February 23, 2010 83
  89. 89. EMBRACING CHANGE, NOT FIGHTING IT A SYSTEMATIC CHANGE IN DOING BUSINESS Tuesday, February 23, 2010 84
  90. 90. SUSTAINABILITY PROMISE IF WALMART IS PAYING ATTENTION, EVERYONE’S PAYING ATTENTION Tuesday, February 23, 2010 85
  91. 91. BIODYNAMIQUE TERROIR Tuesday, February 23, 2010 86
  92. 92. Are we happy now? INTERACTIVE A NEW MODEL OF JUDGING SUCCESS Tuesday, February 23, 2010 87
  93. 93. MONEY REACHES A PEAK OF UTILITY PURE PROFITS ALONE DO NOT CREATE VALUE Tuesday, February 23, 2010 88
  94. 94. BHUTAN: GROSS NATIONAL HAPPINESS MEASURING EQUITY DIFFERENTLY Tuesday, February 23, 2010 89
  95. 95. BHUTAN: GROSS NATIONAL HAPPINESS MEASURING EQUITY DIFFERENTLY Tuesday, February 23, 2010 89
  96. 96. Team Member Happiness Motivated Team Members Healthy Positive Work Innovation & Community Environment Customer Service Community & Environmental CORE Satisfying & Delighting Responsibility PURPOSE Customers Sales Growth Capital to Invest Increased Profit Growth Shareholder Value NEW BUSINESS PARADIGM RIFFS ON JIM COLLINS->JAMES HESKETT->JOHN MACKEY->MUNIR HADDAD Tuesday, February 23, 2010 90
  97. 97. Team Member Happiness fat ed sh at e ar ar e f sh ed Community & Environmental CORE Satisfying & Delighting Responsibility PURPOSE Customers sh ate fat ed ar ar f ed e sh Increased Shareholder Value NEW BUSINESS PARADIGM RIFFS ON JIM COLLINS->JAMES HESKETT->JOHN MACKEY->MUNIR HADDAD Tuesday, February 23, 2010 90
  98. 98. Tuesday, February 23, 2010 91
  99. 99. CONSCIOUS CAPITALISM GREEN SHOOTS Tuesday, February 23, 2010 92
  100. 100. Munir Haddad http://twitter.com/Scromp HAVE AN IMPACT KEEP IN TOUCH Tuesday, February 23, 2010 93

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