The Risk of Valuing Profits Over Everything
In September 1970, influential economist Milton Friedman wrote a New York Times Magazine article entitled “The Social Responsibility of Business Is to Increase its Profits.” Friedman, along with many others, believed that the only purpose of business was to make money, not serve a greater good. John Mackey, Co-CEO of Whole Foods Market, sets out to challenge this theory.
In Conscious Capitalism he supports the notion that businesses have a larger responsibility than mere money making. The authors explain that as “people today care about different things and are better informed, better educated and better connected than in the past, their expectations from businesses in their roles as customers, team members, suppliers, investors and community members are rapidly changing.”
Unfortunately, most companies have not kept pace with this transition and are still using business practices that are no longer appropriate for today’s world.
Mackey and co-author Raj Sisodia present how and why organizations can and should become more aware of all stakeholders, including workers, customers, distributors, the environment, the community and, of course, shareholders. This philosophy will lead to financial success because profits are “the outcome when companies do business with a sense of higher purpose, build their businesses on love and caring instead of fear and stress, and grow from adversity.”
Sure, it sounds like fluffy anti-capitalist, pro-community propaganda, but in truth, it is an explanation of how capitalism is evolving to become a better system and why companies should embrace it. For proof, Mackey points to Google, Costco, Amazon and Southwest Airlines, among others. All are examples of how companies “do well by doing good,” and each embraces the four tenets of conscious capitalism: higher purpose, stakeholder integration, conscious leadership, and conscious culture and management.
The authors hope to inspire the creation of more socially conscious businesses and, in doing, so demonstrate that conscious capitalism is, in fact, no longer an oxymoron.