By: DeLinda Forsythe CEO|Founder Innovative Commercial Environments
We are at a crossroads in America, do we attempt to move forward mired in the same failing dynamics of the past or are we ready to fully embrace a hope for tomorrow? I previously noted that 2019 was clearly a turning point for the conscious capitalism movement in America, confirmed by many of our staunchest supporters of capitalism, the Business Roundtable and Michael Milken, amongst others.
Conscious Capitalism Inc., the national organization that supports the conscious capitalism movement launched by the 2013 John Mackey and Raj Sisodia book Conscious Capitalism, hosted a month long Expanded Virtual Conference March 30-April 30, 2020 to provide insights, statistical data and innovative solutions to support businesses while we were in the heat of the COVID-19 battle. They offered daily opportunities to connect with and learn best practices from global business leaders and to share, learn and grow in community from anywhere in the world. Their goal was to help us all emerge from the pandemic smarter and stronger as an organization.
One of the speakers that influenced me the most was Riane Eisler, a former university educator, attorney, speaker and prolific writer. Her decades of research as a pioneer in the field of the partnership model of leadership versus domination model has influence many fields, including history, literature, philosophy, art, economics, business, psychology, sociology, organizational development, political science, and healthcare. As a young child, Ms. Eisler and her parents fled the Holocaust from Vienna. No doubt this experience completely influenced her work as a cultural historian and systems scientist and her work on cultural transformation continues to inspire scholars and social activists through her non-profit Center for Partnership organization.
Eisler proposes that new social paradigms are needed that transcend the limitations of conventional social categories such as religious vs. secular, right vs. left, capitalist vs. communist, East vs. West, and pre-industrial vs. industrial or post-industrial. She notes that societies in all these categories have been repressive and violent, and that none answer the question of what kinds of institutions and beliefs support more equitable and peaceful relations. In addressing this question, Eisler's multidisciplinary, cross-cultural research provides a new analytical tool for understanding and improving social systems: the biocultural partnership-domination lens. The identification of the partnership system and the domination system as two underlying social configurations draws from a database that includes key social features that are currently ignored or marginalized, such as the social construction of human/nature connections, parent/child relations, gender roles and relations, and the way we assess the value of the work of caring for people and nature.
Ms. Eisler bases much of her research and conclusions on past partnership-oriented societies.
Examples of partnership-oriented societies include the Teduray, a tribal society studied by the University of California anthropologist Stuart Schlegel;[4] agrarian societies such as the Minangkabau, studied by the University of Pennsylvania anthropologist Peggy Reeves Sanday;[5] and technologically advanced ones like Sweden, Norway, and Finland, where there is a more democratic and egalitarian structure in the family, economy, and the state, more equal partnership between men and women (for example, women are 40- 50 percent of national legislators), and more caring social policies such as universal health care, paid parental leave, and high quality early childhood education, as well as the rejection of violence in both intimate and international relations.[6]
Ms. Eisler identified in her book “The Real Wealth of Nations” it’s our people that define our wealth, not just our GDP. She offered multiple ways to measure this wealth; it is measurable. As a small business owner offering marginal business differentiators, I am in total agreement with Ms. Eisler: our wealth is absolutely our people! She went on to show how organizations that adopt this mindset have experienced significant return on investment as noted in this slide from her presentation.
Jay Jakub with Mars Inc. Catalyst, a $33 billion purpose-driven company, shared the extensive work Mars has conducted since 2006 in measuring the “economics of mutuality”. They have implemented extensive process changes in both the poorest and the richest of countries, applying a sense of purpose, human wellbeing, social capital and environmental stability at the center of their business. After years of extensive field work that fundamentally changed their KPI’s to also focus on social and human capital, they still weren’t sure how successful they would be until they started experiencing long-term financial metrics derived from these changes. Initially they noted some limited short-term benefits but over time, they realized expansive long-term benefits including increased profitability. Mars and Mr. Jakub confirmed that there was no financial loss when Mars decided to put the wellbeing of their farmers and the environment before the Holy Grail of most companies, their P&L statement.
Attending another webinar hosted by the Conscious Capitalism Expanded Virtual Conference with Rebecca Henderson, Harvard professor and author of Reimagining Capitalism in a World on Fire, I learned of numerous multi-national corporations that are embracing a more humanistic approach to business. Unilever, Aetna, Tesla all employ equitable, purpose-driven, sustainable capitalism principles and all are absolutely outperforming their competitors with tremendous financial success.
Ms. Henderson reinforced that inequality is driving instability in our political system and that perhaps through COVID-19, we are reclassifying those “in the shadows” as they emerge as essential to our existence; bringing newfound appreciation for so many we’ve never appreciated! She noted how big business continues to pump obscene dollars into our political system resulting in policies that harm people and the environment for the benefit exclusively of big business. Ms. Henderson offers one of the most powerful voices I’ve heard yet on the need to reclaim and rebuild capitalism around our sense of community.
An ardent advocate for stakeholder capitalism, Alan Murray Fortune Media CEO and author of ‘CEO Daily’, recently noted that 63% of CEO’s today no longer agree with Milton Friedman’s dated definition of business as being profit driven. Only 4% of CEO’s believe the purpose of a corporation is to produce profit. That is an enormous, positive shift from 10 years ago!
Sorry Mr. Friedman – this ain’t true anymore!!
Mr. Murray notes “The current pandemic is likely to widen the rifts that have plagued Western society in recent years—between knowledge workers and manual workers, the well-educated and the less-well educated, top tier cities and the rest. Businesses will need to play a bigger role in healing those rifts.” Indeed!
My quest to increase awareness of the need to redefine free enterprise started in 2019 when I learned about conscious capitalism, a movement founded in 2013. I was trying to find an explanation for why the company I started from a spare bedroom in 2006, Innovative Commercial Environments (ICE), was increasing revenues at such an explosive rate. As an independent furniture dealership, ICE has developed a reputation of being San Diego’s most community engaged and creative office and hospitality furniture dealership. In an industry that averages single digit growth, ICE continues to grow in the 40-80% range every year, landing us on the Inc. 5000 for 7 years in a row; a feat accomplished by only 1.5% of U.S. companies.
When ICE was founded, conscious capitalism had yet to hit the business zeitgeist. I didn’t consciously apply the tenets of conscious capitalism; I just knew I had to lead differently than I had ever experienced. I instinctively knew that a more modern and human-centered approach was the only way forward. Through research, reading and attending countless virtual webinars, I’ve realized how critical this methodology of leading is to the stability of our country and for future generations.
In the last two years and especially through the business challenges of COVID-19, I’ve come to realize that many business leaders are questioning the purpose of business and looking to make systemic changes in how organizations are managed. Perhaps the direst warning came from the notorious vulture capitalist Michael Milken at the May 2019 Milken conference: “reform capitalism or face revolution”.
Capitalism has and always will be, deeply flawed; nothing is ever perfect however, in the last 2000 years of government, history has clearly evidenced that:
Capitalism is the only form of government PROVEN to elevate more people from poverty than any other form of government. It’s not a theory, it’s a reality.
According to the Deloitte Global Millennial Survey 2019, both Gen Z and Millennials feel ‘government has the most responsibility for improving social mobility’—the unfortunate truth is that government has never been able to provide sustainable income equality. In all instances, advanced economies develop as a result of free markets, which in turn reduces poverty and expands opportunity for all people of all socio-economic classes. The alternatives have failed spectacularly, and it is concerning that so many under 40 are laying their hopes in such failed strategies; historically demonstrated and verified to be consistently failed strategies!
The values and perspectives of the Millennial generation are as much a factor in the emergence of conscious social enterprises as those identified in Firms of Endearment or Conscious Capitalism. Mentoring our next generation of leaders through an enhanced dialogue of social capitalism buttresses free markets against the counter winds of bad economic ideologies.
It is time to focus on our commonalties, less on our differences, it’s time to reshape, reimagine capitalism as a constructive social vehicle and free markets as a social good in-themselves. The overlap of Millennial values and the tenets of conscious capitalism are remarkable and are also fueling this positive revolution.
It's time we all started thinking less about ourselves and more about our children, our grandchildren, the future of our great nation.
The purpose of business has evolved and we have the opportunity, perhaps the duty, to understand how we can positively influence future generations and affect significant transformation.
Our hope is that something positive will emerge from the destruction inflicted by COVID-19; we are hopeful that this disaster offers us the potential to accelerate the shift that was started 10 years ago. It is our belief that business, the private sector, not government, can save the world. This is a call to act; to make these practices conscious by implementing them in your businesses and educating others, especially your employees.
The conscious capitalism movement offers the brightest hope for the future of America. Free and fair markets are good, very good; this was capitalism originally imagined by our forefathers! We have strayed from the intent of our founding fathers, it’s time to reembrace these fundamental principles and reclaim what is rightly our heritage.
Capitalism’s power to positively change lives has been absolutely proven; it’s the misuse of capitalism’s power that has led to misconduct and exclusion.
Let me quote Ms. Henderson once again, “Capitalism is the greatest innovation of the human race”—amen sister.
I believe business can save the world, one employee, one company, one community at a time and certainly may be our brightest hope for a more prosperous, equitable future for all.