Dr. Raj Sisodia is currently a FW Olin Distinguished Professor of Global Business and Whole Foods Market Research Scholar in Conscious Capitalism at Babson College. He also serves as the chairman of the Conscious Capitalism® Institute. As the author of seven books and over 100 published articles, Sisodia rightly earned recognition as one of the “50 Leading Marketing Thinkers” in 2003 and one of ten “Outstanding Trailblazers of 2010.” Sisodia is a conscious thought-leader perpetuating the standards for a conscious society by pioneering the conscious capitalism movement.
What is Conscious Capitalism®?
Conscious Capitalism® is a new way of thinking about business that goes considerably beyond the traditional way that most executives and business teachers think about it. It basically has three elements. They include:
- A higher purpose for the company’s existence,
- A stakeholder orientation that focuses on joining, aligning and finding synergies rather than trade-offs across stakeholders, and
- Leadership that is servant-oriented, or service-oriented.
The first element is that business operates with a higher purpose that goes beyond profit maximization. The reason a company exists is not simply to make money or to maximize returns. It actually exists to achieve a broader goal in the world.
Take for example, Southwest Airlines. When it first was established in the early 1970s, their purpose was to democratize flying. They wanted to make flying accessible to the ordinary American. When they began, only 15 percent of Americans had ever flown in an airplane. Today, that number is about 85 percent. A large part of that increase can be attributed to the approach Southwest used, and that others subsequently emulated. It is important for businesses to have a higher purpose, one that resonates with all of the different stakeholders.
The second component of being a conscious business is to operate with a stakeholder orientation. We describe stakeholders in our framework using the acronym SPICE. SPICE stands for society, partners, investors, customers, and employees. Society is mentioned first for a very important reason. Businesses have to be on the favorable side of society. They have to have a net positive impact on the world. This also correlates to having a higher purpose as an organization.
These stakeholders not only have to be considered in terms of the emphasis the company places on them, but also in terms of joining and aligning their interests with those of the company. It is not about trade-offs. In the past, we may have overemphasized our investors and our customers. We need to place more focus on the relationship with our employees. The real magic comes from figuring out a way to actually create synergy, so that what is good for employees is also good for customers, investors, partners, communities, the environment, society, and so on.
The third element has to do with leadership. We are finding that the days of the traditional imperial, command and control CEO are numbered. We do not find many examples of companies today practicing this form of corporate leadership. Instead, we have found servant leaders, or conscious leaders. These leaders exist to serve the company’s higher purpose and also in service of the corporation, the employees, and the stakeholders. They view their function as developing the potential of other people within the company. They work to ultimately align everything the company does around the achievement of that higher purpose. They tend to be paid more modestly compared to CEOs of the old leadership model. These leaders tend to have a much deeper and more passionate commitment to the basic purpose of business.
In summary, there is a movement that seems to be under way that reflects a different way of thinking about business. It uses words like conscious, and caring, and creative, and compassionate, words that normally we did not associate with business. It is called Conscious Capitalism®. One must realize that success is not running after the biggest bank balance. Success is about having a positive impact.