[global hr forum 2011] conscious capitalism : toward shared & sustainable growth

CONSCIOUS CAPITALISMTOWARD SHARED & SUSTAINABLE GROWTH

Raj SisodiaProfessor of Marketing, Bentley University

Chairman, Conscious Capitalism Institute

Capitalism has done so much for so many in such a short time…many in such a short time…

Capitalism Has Created Prosperity &

Reduced Poverty

1950

1820

Percentage World Population Living on Less Than $1 per Day

• Capitalism is ending poverty on our planet

• The percentage of

0 50 100

2003

1980

1950 Less than $1Less than $2

• The percentage of people living on less than $1 per day has dropped from 85% in 1820 to 20% today

Source: World Bank (constant 2003 dollars) Source: World Bank (constant 2003 dollars) Source: World Bank (constant 2003 dollars) Source: World Bank (constant 2003 dollars)

Current trends indicate that world poverty will

be less than 1% by the end of the 21st century

Yet, Mistrust of Business is Pervasive

“The majority of the public...

believes that executives are

bent on destroying the

environment, cooking the books

and lining their own pockets.”

Only 2 percent of investors

believe that CEOs are “very

trustworthy”; 72 percent believe

that wrongdoing is

commonplace at companies.

90 percent of Americans

believe that big companies

have too much influence on

government, up from 83

percent in 2004.

80% believe

business is too

concerned about

making a profit and not enough

about responsibilities to workers,

consumers, and the environment.

According to Gallup (2009)

Big business was the societal institution least trusted by Americans at 16%

(Congress was at 17%)

Such cynicism and distrust have

high societal costs

WHY has this happened?

PEOPLE have evolved

BUSINESSES have not kept up

We are changing.AgingRising intelligence (Flynn Effect)Better educated (especially women)Better informed (WWW)More connected (WWW + Mobile)More CONSCIOUS.

Mindful and awake

Understand all the consequences of our actions

Commitment to the truth

A finer sense of right and wrong

Peter Senge

A Higher Consciousness

Appreciate the laws of nature

Balance action with non-action

To be successful in the future, companies will have to companies will have to

exemplify a more conscious way of being

“A conscious business fosters peace and happiness in the individual, respect and solidarity in the community, and mission

accomplishment in the organization.”Fred Kofman, Conscious Business

MEETINGS

LEADER IN ORGANICS

ANIMAL COMPASSION STANDARDS

REAL ESTATE

1800%

PURPOSE

19:1

DECLARATION OF INTERDEPENDENCE

REAL ESTATE

UNIONS

HARTFORD

AUTONOMY

TEAMS

MARKETING

FLOOD

93%

MASTERY

Tenets of Conscious Capitalism

Can you build a business on love?

Can you build a business on love?

TODAY!TODAY!TODAY!TODAY!

LOVECARING

COMPASSION

JOYAUTHENTICITY

CARINGSOULFUL

10.5-to-1

performance

“FoE”

(1646%)

Stock Returns over a 15 Year Period (’96-’11)

S&P 500

(157%)

15 Year 10 Year 5 Year 3 Year

Cumulative Annualized Cumulative Annualized Cumulative Annualized Cumulative Annualized

What is so “Great” About Good to Great?

FOE Return 1646.1% 21.0% 254.4% 13.5% 56.4% 9.4% 77.4% 21.1%

GTG Return 177.5% 7.0% 14.0% 1.3% -35.6% -8.4% -23.2% -8.4%

S&P 500 Return 157.0% 6.5% 30.7% 2.7% 15.6% 2.9% 10.3% 3.3%

What is a “Great” Business?

Maximizes “total value created” Enhances the overall health and wellbeing of societyBrings joy, fulfillment, and a sense of meaning to all its stakeholdersEnriches the world

Businesses Create, and Destroy, Many Kinds of Wealth

intellectualfinancial social emotional

spiritual cultural physical natural

Compensated engagement is going

down

Uncompensated effort is going up – volunteer

work is nourishing people in a way that paid isn’t

The

Pur

pose

Inst

itute

Businesses need to shift focus from Profit Maximization to

Purpose Maximization

The Purpose Institute

� The difference you're trying to make in the world

� Drives everything you do� Matters to all stakeholders

The Power of Purpose

� Matters to all stakeholders� Is your reason for being that goes beyond

making money� YET… typically results in making more

money than you thought possible

Roy Spence

Southwest AirlinesGive people the freedom to fly

GoogleOrganize the world’s information and make it easily accessible

REIReconnect people with nature

I C ES EP I

INVESTORS

C

CUSTOMERS

E

EMPLOYEES

S

SOCIETY

E

ENVIRONMENTPARTNERS

P

Conscious Business Must Have

Conscious Leaders

Purpose-drivenAuthentic

CaringSystems thinkers and “systems feelers”

Emotionally intelligent Spiritually evolved

Strong character and integrity Trustee oriented

“Culture eats strategy for breakfast!”breakfast!”

T

A

C

TCultures of

Trust

Authenticity

Caring

TransparencyT

I

L

E

Conscious BusinessTransparency

Integrity

Learning

Empowerment

Conscious Capitalism worksLower gross margins, higher net margins Greater employee retention, engagement, Much lower marketing, product return costsLower legal and administrative costsFar greater resilience in tough timesGreater well being and flourishingLower gross margins, higher net margins Greater employee retention, engagement, passion, and creativityMuch lower marketing, product return costsLower legal and administrative costsFar greater resilience in tough timesGreater well being and flourishing

The Opportunity� Those of us alive today have the

opportunity to lead the most meaningful lives ever lived

� Our challenges are great, but so is � Our challenges are great, but so is our consciousness and our ability to change things

� We have all the tools we need; we just need to unleash human ingenuity on our challenges in a holistic, conscious, caring way

Lynne Twist

We are all in the same boat.

35

“I would not give a fig for the simplicity “I would not give a fig for the simplicity on this side of complexity but I would give my life for the simplicity on the other side of complexity.”

Oliver Wendell Holmes, Jr.US Supreme Court Justice

Humanity is one spirit

Natural resources are

finite

Our inner resources are infinite

Ron Pompei

www.ConsciousCapitalism.org