Raj Sisodia - Conscious Capitalism

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Raj Sisodia - Conscious Capitalism

  1. 1. CONSCIOUS CAPITALISMACTUALIZING BUSINESS AND HUMAN POTENTIALRaj SisodiaProfessor of Marketing, Bentley UniversityChairman, Conscious Capitalism Institute
  2. 2. WHAT CAPITALISMHAS ENABLED IN AVERY SHORT TIME
  3. 3. 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 $453Year 0 500 1000 1500 2000 Source: www.VisualizingEconomics.com; Angus Maddison, University of Groningen; www.prb.org; www.worldbank.org
  4. 4. The Economic Success of Capitalismis Unprecedented in World HistoryReal 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)
  5. 5. Capitalism is Ending Poverty on EarthThe percentage ofpeople living on World Population Living on Less Thanless than $1 per $1/Day (in ‘03$ ) 100%day has droppedfrom 85% in 1820to about 17% 50%today.If current trendscontinue, poverty 0%will be virtuallyeliminated in the 1800 1950 1980 2003next 50 years. Source: World Bank (constant 2003 dollars)
  6. 6. Business is noblebecause ititcan elevate our existence heroicbecause itit lifts people out of poverty ethical because creates value good because based on voluntary exchange
  7. 7. 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.
  8. 8. “The whole growthmodel we created over the last 50 years is simply unsustainable economically and ecologically… Both Mother Nature andFather Greed have hit the wall at once.” March 7, 2009
  9. 9. After just one century of modern living…
  10. 10. 75% of forests are gone
  11. 11. 30% of arable land is gone
  12. 12. Large mammals are down 90%
  13. 13. Large fish are down 95%
  14. 14. Half of all species alive today are likely to disappear in 50 years
  15. 15. Toxic burden on humans is rising
  16. 16. Oil supply is decreasing just as demand is rapidly rising
  17. 17. After 1980, we started using more than Nature can renew; now 1.3 times
  18. 18. If everyone lived as Americans, would need FIVE earths… …as Europeans, THREE earths
  19. 19. Confidence in Big Business % of Americans with a "Great Deal" or "Quite a Lot" of Confidence in Big Business40%35%30%25%20%15%10% Such cynicism and distrust have huge societal costs5%0%
  20. 20. WHY has this happened? THE WORLD has changed PEOPLE have evolvedBUSINESSES have not kept up
  21. 21. We are changing…
  22. 22. 1989THE WORLD CHANGES
  23. 23. In 1989, for the first time in U.S. history, the majority of adults were over 40
  24. 24. Who is this man? What did he do to change the Tim Berners-Lee world?He invented the World Wide Web in 1989
  25. 25. 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 naturePeter Senge
  26. 26. “The dogmas of the quiet past areinadequate to the stormy present.”
  27. 27. 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
  28. 28. “A conscious business fosters peace andhappiness in the individual, respect andsolidarity in the community, and mission accomplishment in the organization.” Fred Kofman, Conscious Business
  29. 29. A HIGHER PURPOSEDECLARATION OF INTERDEPENDENCE19:193%ANIMAL COMPASSION STANDARDSMEETINGS END WITH APPRECIATIONSMINISCULE MARKETING SPENDINGMEMORIAL DAY FLOODFUTURE SEARCH1800%
  30. 30. The Tenets of Conscious Capitalism STAKEHOLDER CONSCIOUS INTEGRATION LEADERSHIP HIGHER PURPOSE & CORE VALUES CONSCIOUS CONSCIOUS CULTURE MANAGEMENT
  31. 31. Can you build a business on love?
  32. 32. Can you build abusiness on love?
  33. 33. “Heartattacks are highest on Monday morning.”
  34. 34. An Epidemic of ApathyThe Shame of “Management”
  35. 35. TODAY!
  36. 36. COMPASSIONLOVECARINGSOULFULJOYAUTHENTICITY
  37. 37. 10.5-to-1 performance “FoE” (1646%)S&P 500 (157%) Stock Returns over a15 Year Period (’96-’11)
  38. 38. FoE Compared to Good to Great 15 Year 10 Year 5 Year 3 Year Cumulative Annualized Cumulative Annualized Cumulative Annualized Cumulative AnnualizedFoE 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%
  39. 39. 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
  40. 40. Businesses Create, and Destroy, Many Kinds of Wealth financial intellectual social emotional spiritual cultural physical natural
  41. 41. The Tenets of Conscious Capitalism STAKEHOLDER CONSCIOUS INTEGRATION LEADERSHIP HIGHER PURPOSE & CORE VALUES CONSCIOUS CONSCIOUS CULTURE MANAGEMENT
  42. 42. HappinessMeaning comes Profit ensues from from: ensues from living a life ofDoing work that working toward a meaning and matters higher purpose, purpose building businesses Selfless love on love, andFinding meaning growing from in suffering adversity
  43. 43. Uncompensated effort is Compensated engagement going up – volunteer workThe Purpose Institute is going down is nourishing people in a way that paid isn’t
  44. 44. Great Purposes are HEALINGHealing: To restore to H Heroichealth or soundness; to E Evolutionarycure; to restore tospiritual wholeness; to A Aligningbecome whole and L Lovingsound.In a world with too much I Inspiringsuffering and ill-health, N Naturalhealing is divine work. G Generous
  45. 45. The Power of Purpose  The difference youre 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 possibleRoy Spence
  46. 46. Southwest AirlinesGive people the freedom to fly
  47. 47. GoogleOrganize the world’s information and make it easily accessible and useful
  48. 48. REIReconnect people with nature
  49. 49. The Tenets of Conscious Capitalism STAKEHOLDER CONSCIOUS INTEGRATION LEADERSHIP HIGHER PURPOSE & CORE VALUES CONSCIOUS CONSCIOUS CULTURE MANAGEMENT
  50. 50. Whole Foods Market Stakeholder Interdependence Model 56
  51. 51. S P I C E ESOCIETY PARTNERS INVESTORS CUSTOMERS EMPLOYEES ENVIRONMENT
  52. 52. Business, Society and the Planet The PLANET The PLANET SOCIETY BUSINESSBUSINESS SOCIETYTraditional View Conscious View
  53. 53. 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
  54. 54. The Tenets of Conscious Capitalism STAKEHOLDER CONSCIOUS INTEGRATION LEADERSHIP HIGHER PURPOSE & CORE VALUES CONSCIOUS CONSCIOUS CULTURE MANAGEMENT
  55. 55. “We must bethe change wewant to see inthe world.”
  56. 56. Conscious Businesses Need Conscious Leaders Authentic Purpose-driven Caring Systems thinkers and “systems feelers” Emotionally intelligent Spiritually evolved Strong character and integrity Trustee oriented
  57. 57. The Tenets of Conscious Capitalism STAKEHOLDER CONSCIOUS INTEGRATION LEADERSHIP HIGHER PURPOSE & CORE VALUES CONSCIOUS CONSCIOUS CULTURE MANAGEMENT
  58. 58. Culture eatsstrategy for lunch! breakfast!
  59. 59. T Trust A AccountabilityCultures of C CaringConscious T TransparencyBusinesses I Integrity L Loyalty E Egalitarian
  60. 60. Humans are born to care.Our institutions magnify or depress thehuman capacity to care. Jane DuttonUniversity of Michigan
  61. 61. ConsciousManagement Beyond Theory Y• Self-Organizing Self-Motivating Self-Managing• Decentralization• Empowerment• Teamwork• Collaboration
  62. 62. 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
  63. 63. Creative, Caring Human Energy! The biggest difference betweenordinary and conscious businesses?
  64. 64. We are all in the same boat.71
  65. 65. “I would not give a fig for the simplicityon this side of complexity but I wouldgive my life for the simplicity on theother side of complexity.” Oliver Wendell Holmes, Jr. US Supreme Court Justice
  66. 66. Humanity Natural Our inner is one resources are resources spirit finite are infiniteRon Pompei
  67. 67. 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 wayLynne Twist
  68. 68. Essential Reading for Conscious Capitalists
  69. 69. www.ConsciousCapitalism.org Raj.Sisodia@ConsciousCapitalism.orgPlease email me if you are interested in being involved with setting up a South Africa Conscious Capitalism Chapter
  70. 70. Some QuestionsCan successful profitable organizationsreally be built on “love”?Is a “Conscious” agenda realistic in tough,recessionary times?How can we embed conscious living andconscious business principles in youngpeople early on?

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