Raj Sisodia - Conscious Capitalism at Barrett CTT 2012 Conference South Africa

Raj Sisodia - Conscious Capitalism at Barrett CTT 2012 Conference South Africa
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 $596 $467 $667 $566 $615 $453 Year 0 500 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 World Population Living on Less Than less than $1 per $1/Day (in ‘03$ ) 100% day has dropped from 85% in 1820 to about 17% 50% today. If current trends continue, poverty 0% will be virtually eliminated in the 1800 1950 1980 2003 next 50 years. Source: World Bank (constant 2003 dollars)
Business is noblebecause ititcan elevate our existence heroicbecause itit lifts people out of poverty ethical because creates value good because based on voluntary exchange
Yet, Mistrust of Business is Pervasive Americans’ confidence in big Only 2 percent of investors business has declined steadily, believe that CEOs are “very from about 34% in 1975 to a trustworthy”; 72 percent historic low of 16% in 2009, believe that wrongdoing is rebounding to 19% in 2011. commonplace at companies. 2011: 79% believe business is too 2011: 88% of Americans concerned about believe that big companies making a profit and not enough have too much influence on about responsibilities to government, up from 83 workers, consumers, and the percent in 2004. 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
Confidence in Big Business % of Americans with a "Great Deal" or "Quite a Lot" of Confidence in Big Business 40% 35% 30% 25% 20% 15% 10% Such cynicism and distrust have huge societal costs 5% 0%
WHY has this happened? THE WORLD has changed PEOPLE have evolved BUSINESSES have not kept up
We are changing…
1989 THE WORLD CHANGES
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 Tim Berners-Lee world? 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 CONSCIOUS INTEGRATION LEADERSHIP HIGHER PURPOSE & CORE VALUES CONSCIOUS CONSCIOUS CULTURE 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 1646.1% 21% 254.4% 13.5% 56.4% 9.4% 77.4% 21.1% GTG Return 177.5% 7% 14.0% 1.3% -35.6% -8.4% -23.2% -8.4% S&P 500 Return 157% 6.5% 30.7% 2.7% 15.6% 2.9% 10.3% 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
Happiness Meaning comes Profit ensues from from: ensues from living a life of Doing work that working toward a meaning and matters higher purpose, purpose building businesses Selfless love on love, and Finding meaning growing from in suffering adversity
Uncompensated effort is Compensated engagement going up – volunteer work The Purpose Institute is going down is nourishing people in a way that paid isn’t
Great Purposes are HEALING Healing: To restore to H Heroic health or soundness; to E Evolutionary cure; to restore to spiritual wholeness; to A Aligning become whole and L Loving sound. In a world with too much I Inspiring suffering and ill-health, N Natural healing is divine work. G 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
Google Organize the world’s information and make it easily accessible and useful
REI Reconnect people with nature
Whole Foods Market Stakeholder Interdependence Model 56
S P I C E E SOCIETY PARTNERS INVESTORS CUSTOMERS EMPLOYEES ENVIRONMENT
Business, Society and the Planet The PLANET The PLANET SOCIETY BUSINESS BUSINESS SOCIETY Traditional View Conscious View
Conscious Capitalism ≠ CSR • Shareholder-centric • Stakeholder-oriented • Independent of purpose • Incorporates higher purpose • Often grafted on to • Societal orientation is at the traditional business model core of business model • Easy to meet as a charitable • Requires genuine gesture transformation • Performance implications • Significantly outperforms unclear traditional business model • Independent of type of • Requires conscious leadership leadership
“We must be the change we want to see in the world.”
Conscious Businesses Need Conscious Leaders Authentic Purpose-driven Caring Systems thinkers and “systems feelers” Emotionally intelligent Spiritually evolved Strong character and integrity Trustee oriented
Culture eats strategy for lunch! breakfast!
T Trust A Accountability Cultures of C Caring Conscious T Transparency Businesses I Integrity L Loyalty E Egalitarian
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 Natural Our inner is one resources are resources spirit finite are infinite Ron Pompei
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?

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