Conscious capitalism

Management students study the eras of their discipline including classical, human relations, scientific management etc. What is emerging for me is a more epochal change in management – the transition from self-serving capitalism to conscious capitalism.

It is always hard to define a starting point for massive change, but, as will be explained, I will go with 1962. Here’s John Mackey, CEO of Whole Foods explaining the basics of conscious capitalism.

Self-serving capitalism

Self-serving capitalism is based on greed. Altruistic motives are also there, but they are subjugated by the profit motive. Some underlying assumptions, revealed in business discourse, frame its mode of operation:

  • “business is business” – tells us that business operates by its own rules. It somehow decouples from universal moral values and creates its own world-view and playing arena. Another telling discursive phrase is “its nothing personal, its just business”.
  • “the bottom line” is code for, among other things, profit is the dominant consideration.

U.S. company Enron has come to personify the worst of self-serving capitalism. If you are unfamiliar with the Enron story here is a link to the documentary trailer.

Before determining the origins of conscious capitalism consider that the father of capitalism, Adam Smith, wrote two books about economic philosophy, The Wealth of Nations, but also A Theory of Moral Sentiments. The latter argued that sympathy, a proper regard for others, is the basis of a civilised society. Conscious capitalism was still-born as business focused more on the “invisible hand” of the marketplace.

The dawn of conscious capitalism

Dr Paul Ray has identified an emerging sub-culture – the cultural creative. He defines them in this video.

In the U.S. cultural creative are fast becoming a dominant segment of society. In his extensive research quantifying this demographic, Dr Paul Ray noted that they are to found in many other countries, but they often under-estimate the size of the demographic, as they are mostly invisible in the media.

Cultural Creatives

The growth of the cultural creative demographic in the U.S. [1]

Dr Ray identifies 1962 as the dawn of the demographic. Rachel Carson published Silent Spring and Betty Friedan The Feminine Mystique – the former signaling the start of environmentalism and the latter reframing women’s role in society.

In Megatrends 2010, Patricia Aburdene identifies cultural creative a the demographic that drives conscious capitalism.

The engagement connection

A significant milestone along the road towards conscious capitalism was Edward Freeman’s articulation of stakeholder theory in Strategic Management: A Stakeholder Approach.

conscious capitalism

From self-interested capitalism to conscious capitalism

 The concept of the stakeholder displaced the singular focus on returning profits to a businesses financiers, to the more balanced and sustainable stakeholder approach.

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Mobilizing the Response | The Regeneration Roadmap

There are a lot of wise people advocating pathways to sustainability. The Regeneration Roadmap is a project of Globescan and SustainAbility and aims to promote engagement and collaboration between NGOs promoting sustainability, and the private sector.

This video, from the Regeneration Roadmap website, features an impressive array of sustainability champions, including David Suzuki, Gro Harlem Brundtland and Rajendra Pachauri advocating for change.

Mobilizing the Response | The Regeneration Roadmap.

Great companies embrace social media

While many are wary of employees spending too much time on social media, some great businesses are showing us how social media can enhance business. This video features Erin Lieberman-Moran from the Great Place to Work Institute.

Note that Erin recognises a high level of trust as the enabler for businesses to use social media effectively.

Social media and crisis communication

Ethical Corporation’s July 2012 report researches how companies respond to consumers and activists in a crisis. While the full report, with a price tag of £695 targets corporate customers, the Ethical Corporation provides some great information along with this excellent infographic.

Social media crisis Infographic

Engagement and the Regeneration Roadmap

Engagement processes are at the leading edge of sustainability. The Regeneration Roadmap is an initiative of Globescan and SustainAbility aiming to achieve sustainable development within the next generation. Their focus is on the private sector to drive a lot of change.  This video features global thought leaders articulating the road to sustainability. As you watch, notice how pivotal engagement is a agency for change.

Mobilizing the Response from The Regeneration Roadmap on Vimeo.

Gro Harlem Brundtland, a past Norwegian Prime Minister and Director General of the World Health Organisation. She is currently a Special Envoy on Climate Change for the United Nations. She places engagement at the heart of change.

Personal engagement, personal commitment and building confidence with other people and other nations is the only way to move forward.

The video reinforces the need to generate positive discourse around sustainability, articulate a vision of a sustainable planet and create a culture to embed sustainability as a way of life.

For more videos by these gifted thinkers go to the Regeneration Roadmap website.

A policeman’s lot is more engaged – national | Stuff.co.nz

A policeman’s lot is more engaged – national | Stuff.co.nz.

Improvements in staff engagement in the Police can partially be attributed to technology innovations. The New Zealand Police have introduced technology that enables police to report incidents remotely. That information is then processed by administrative staff enabling the police to focus on their front-line work.

This is an example of how job design can improve engagement. Based on Hackman and Oldham’s job enrichment model we can ask questions such as:

  • How can we create more skill variety?
  • How strongly do our people identify with their work?
  • What makes work meaningful for our most engaged?
  • Do our people have the autonomy they need to do a good job?
  • Do they get appropriate feedback about their performance?

Job enrichment model (Hackman & Oldham

A tribute to Stephen Covey (1932 – 2012)

Stephen Covey made an enduring contribution to both business thinking and personal development. His book The 7 Habits of Highly Effective People published in 1989 has sold over 25 million copies. Time Magazine rated The 7 Habits as one of the 25 most influential business management books. He has featured in all of the Thinkers 50 lists from 2001 to 2011. But rather than continuing to list his achievements, I would like to focus on what Stephen Covey means to me – just one of his millions of readers.

Working at the boundaries

Stephen Covey wasn’t just a business writer. His books crossed over into the realm of personal development. He bridged these two spaces in a manner rivalled by few. One of his other stand out books Principled Centered Leadership offered guidance relevant to both worlds.

A member of the Latter Day Saints church, Stephen Covey was a deeply religious man. For me, his integration of business and religious thinking has been inspirational. No one has done it better with that level of success. His model of intelligence exemplifies this integration. In the 7 Habits, well before emotional intelligence was popularised, he identified four dimensions of the self, the intellectual, physical, emotional and spiritual.

Later, in The 8th Habit, Stephen Covey applied this model to the business world. He advocates a “whole person in a whole job” where each of the four dimensions of the self are expressed:

  • use me creatively (mind)
  • pay me fairly (body)
  • treat me kindly (heart)
  • in serving human needs in principled ways (spirit).

The big picture

With his skills of integration Stephen Covey masterfully sketches out the big picture. His “five economic eras”, from The 8th Habit encapsulates human economy from the hunter/gatherer age, beyond the current information age, to his envisioned “age of wisdom”. He draws on Peter Drucker’s thinking on the massive leaps in productivity from age to age.

The great value in this concept is in understanding the limitations of legacy industrial age management processes when they are applied to information age contexts.    

“Its no longer a world of controlling people, it’s a world of unleashing people”.

 

The engagement connection

Stephen Covey’s clear articulation of the requisite leadership capabilities of the knowledge age focus heavily on communication. He offers lots of great communication tools and concepts such as the “emotional bank account”, but his greatest contribution in the communication realm is “voice”. When I first encountered The 8th Habit, I was a little cynical, thinking “how many other habits will be generated for future books?” But my cynicism evaporated with his masterful articulation of voice – the 8th habit is “find your voice and inspire others to find theirs”. This is an emancipating concept beautifully aligned with the needs of the age. For me, enabling voice, is central to the engagement process. Ideally, the loudest, or most powerful, or best resourced voice is not the only one heard.

Because he painted conceptually with such a broad brush, Stephen Covey’s work will remain relevant and will inspire for years to come. The concepts he articulates work at the level of principle and character and are therefore of universal application. May he continue to inspire!

Narcissism: The Difference Between High Achievers and Leaders – Justin Menkes – Harvard Business Review

This HBR post from Justin Menkes is another contribution to the ever-growing body of evidence that effective leaders are good people that care for others. As Justin Menkes states:

Only an individual who feels genuinely invigorated by the growth, development, and success of others can become an effective leader of an enterprise.

When reading this article you will find a strong correlation between effective leadership and engagement.

Narcissism: The Difference Between High Achievers and Leaders – Justin Menkes – Harvard Business Review.