(Review of book named “Conscious Capitalism” by John Mackey & Raj
Sisodia published by Harvard Business Review Press)
Definition of Business
as Management Gurus and Management Books keep on defining is to maximize profits or to maximize
shareholder’s wealth. It clearly
specifies that Business & Capitalism are fundamentally based on greed,
selfishness & exploitation. This
exploitation could be exploitation of consumers, workers, society and the
environment. Those (Managers,
Proprietors, Investors) who have clear cut personal goals of money making, cannot
do so much for the business, employees and the customers. Therefore we can say that profit is a
necessary evil for businesses.
Gallup has found that confidence level of customers in big
businesses has declined tremendously from 34% in 1975 to 16% in 2009 in
America. Business in today’s world, for internal as well as external stakeholders,
is synonym for stress and fear. (www.Gallup.com/poll/148163/Americas-Confident-Military-Least-Congress.aspx)
Awareness level of
Awareness level of all stakeholders has increased in last
some years after the advent of Internet & other social networking
applications. So, today we have smart
consumers, smart employees, youngsters in workforce, informed and effective
media etc. Therefore, old tactics like
carrot and stick etc. are not workable in the present form of society or
scenario, which has changed a lot from the historical ones. Stakeholders want transparency and inclusion
at every step involved in a business.
Organizations who are trying to befool the stakeholders cannot run the
show for too long. So need of the hour
is to take them into full confidence and move ahead.
What is the solution?
It was researched in many good organizations which are very
excellently making profits even in the adverse of conditions and it was found
that there are some good practices and policies in such companies which the
others are lacking and because of which their prime objective and purpose
although is not profit making but still profit is a side product of such
companies for which they don’t have to bother.
Such organizations are not in hundreds but in thousands all around and
all parts of the world. Examples are
Whole Foods Market, The Container Store, Patagonia, Southwest Airlines, Eaton,
the Tata Group, Google, POSCO, Twitter, and many more. Therefore
solution is Conscious Capitalism. This is an evolving paradigm for business that
simultaneously creates multiple kinds of value and well-being for all
stakeholders, like financial, intellectual, physical, ecological, social,
cultural, emotional, ethical and even spiritual. This is based on love and affection towards
the organization and towards the people.
It involves dealing consciously with employees, customers, investors and suppliers.
Employees look for a lot of things and expect a lot from the
job where they spend one-third of their time of the day. His job should not only give him a career but
he should be attracted towards his work like a magnet does towards an iron
object. Things of focus here are
intrinsic motivation from within, conscious hiring and retention policies, a
conscious approach to compensation (not too much difference between highest
paid and lowest paid workers), promoting Teamwork, special benefits to
employees based on tenure rather than ranks which they hold, Benefits related
to life insurances and health.
Dealing consciously with
Treating Investors responsibly & consciously and
transparently, Investors should be well informed, Exit facility available to
investors without a time lock period, Rather than any external short term
analysis report create panic in them, they should be made aware by the
organizations much before that, no false promises or dreams should be sold to
them rather it should be tried that they should have long term associations in
order to enjoy the returns and keep associated from generation to generation.
Dealing consciously with
Treating them fairly, ensuring that they are earning good
profits while doing business with the organization, understanding their
problems & requirements, trying to find ways to improve relationships with
them, paying them on time, helping them to survive and flourish, involve them
in innovations, award them for innovations, creating long term agreements with
revisions whenever required from both sides, working together for CSR.
An example of Tatas
in dealing with a tragedy (Conscious Capitalism)
In November 2008, there was a worst attack of terrorists in
Mumbai where Taj Mahal Palace & Tower Hotel was the center point of
attack. 164 people were killed &
wounded at-least 308 in the southern part of the city. Eleven hotel team members were killed, most
while helping 1500 guests escape from the place. For the entire duration of the attack, not a
single team member abandoned his or her post.
Many repeatedly guided guests to safety before they themselves were shot
by terrorists. Some even stood in front
of guests to take bullets.
Indeed in an act of defiance, hotel reopened for business a
mere 21 days after the attack even though it was damaged about 2/3rd. Though it took more time for the rest of the
hotel to be repaired and reopened. Ratan
Tata and other senior company leaders attended all 11 funerals and visited the
homes of all 80 members who were either killed or injured during the attack.
Tata provided compensation to the families of all deceased
members. In addition Tata did the
1.Guaranteed that deceased team members’
residences would be provided to the family, throughout the lifetime of the next
2.Waived off loans and advances, regardless of
3.Committed to paying the team member’s last
salary for life.
4.Took complete responsibility for the education
of children and dependents through college-anywhere in the world.
5.Provided full health care coverage for all
dependents for the rest of their lives.
6.Provided a counselor for life for each person.
7.Relief and assistance to the families of those
who were killed in the vicinity of the hotel and at railway station a few miles
8.Railway Employees, police staff, street vendors
and pedestrians who had nothing to do with the company were offered monetary
assistance for 6 months.
9.Street Vendors who lost their carts were given
new ones who have nothing to do with the company.
Food for thought:
has the property of eating everything, they keep on growing and growing by
eating and eating. Some caterpillars
grow to size about 100 times its original size.
Our Capitalism is like this hungry caterpillar whose purpose is just
profits without emotions and consumption of all kind of resources and affecting
the environment too.
When the right time comes, caterpillar changes into cocoon
and further transforms into a colorful Butterfly. Butterfly signifies beauty and does the work
of pollination of plants and thereby production of food and shelter for others
to live. This is like conscious
Now we ourselves have to decide what we want to
be like, a hungry caterpillar or a beautiful butterfly.