The Magazine of Corporate Responsibility

John Mackey’s ‘Conscious Capitalism’: ‘Simply a Better Way to Do Business’

by Michael Connor

In a profile of him in the New Yorker magazine three years ago, John Mackey was described as a “right wing hippie” who is probably not well understood by most of the upscale shoppers at Whole Foods Market, the hugely successful business he co-founded and has headed since 1980.

Whole Foods Market practically created the large-scale market for organic foods in the U.S.  With some 342 stores, last year it boasted more than $11 billion in annual sales.  The company is often included in lists of most ethical/sustainable businesses.  It supports and distributes Fair Trade goods.  And it has a reputation as a responsible employer, one of only 13 companies included in FORTUNE magazine’s list of “100 Best Places to Work For” every year since the list was created in 1998.

Yet Mackey clearly doesn’t fit the typically progressive political stereotype of an executive focused on corporate social responsibility.  A self-described libertarian, he acknowledges having been heavily influenced by free-enterprise thinkers including Friedrich Hayek, Ludwig von Mises, Milton Friedman and Ayn Rand.  Fiercely anti-union, he has successfully resisted labor organizers at Whole Foods Markets.  And just this month he amended a previous criticism of Barack Obama’s health care law, volunteering to an NPR interviewer that it was not “socialism” but, instead, more like facism.” (Mackey later said his characterization was a “poor use of an emotionally charged word.”)

In a new book, Conscious Capitalism:  Liberating the Heroic Spirit of Business, Mackey takes shots at multiple targets on the left and right.  While he worships free-market capitalism as “unquestionably the greatest system for innovation and social cooperation that has ever existed,” he also challenges the “myth of profit maximization” as espoused by Milton Friedman and embraced by many to justify short-term financial goals for American business.  While he opposes unnecessary regulation – a favored mantra of American business – he also attacks “the cancer of crony capitalism” in which “crony capitalists and governments have become locked in an unholy embrace, elevating the narrow, self-serving interests of the few over the well-being of the many.”

Whole Foods Market is Mackey’s day job, but for him conscious capitalism is a serious avocation.  He has been involved in several organizations dealing with related subjects and is a director of Conscious Capitalism Inc., a non-profit organization headed by his co-author, Raj Sisodia, who is also a professor at Bentley University.

According to the authors:

Conscious Capitalism is not about being virtuous or doing well by doing good.  It is a way of thinking about business that is more conscious of its higher purpose, its impact on the world, and the relationships it has with its various constituencies and stakeholders.  It reflects a deeper consciousness about why businesses exist and how they can create more value…

Our dream for the Conscious Capitalism movement is simple: one day, virtually every business will operate with a sense of higher purpose, integrate the interests of all stakeholders, elevate conscious leaders, and build a culture of trust, accountability and caring.

And the aspirations are enormously high:

Picture a business built on love and care rather than stress and fear…Think of a business that cares profoundly about the well-being of its customers…Envision a business that embraces outsiders as insiders, inviting its suppliers into the family circle…Imagine a business that exercises great care in whom it hires, where hardly anyone ever leaves once he or she joins…Imagine a business that exists in a virtuous cycle of multifaceted value creation, generating social, intellectual, emotional, spiritual, cultural, physical and ecological wealth and well-being for everyone it touches…”

In addition to Whole Foods Market, companies currently practicing conscious capitalism, according to the authors, are The Container Store, Patagonia, Eaton, the Tata Group, Google, Costco, Amazon.com, Panera Bread, Southwest Airlines, Bright Horizons, Starbucks, UPS, Wegmans, Nordstrom, Trader Joe’s, REI, Zappos, Twitter, POSCO (a South Korean steelmaker) and  “many others.”

Notably absent from that list are most Fortune 500 companies and a number of firms that regularly appear on lists of those exceling in sustainability and corporate responsibility.  In fact, Mackey and Sisodia include an Appendix to their narrative which attempts to explain how conscious capitalism is different – and, in their view, superior - to “corporate social responsibility,” the “triple bottom line,” “shared value,” and other popular terms used to describe most long-term corporate citizenship and corporate responsibility practices.

While the book’s narrative alternates between “I” and “we,” the voice heard most clearly is Mackey’s and the examples used are by far those of Whole Foods Market.   The tenets of conscious capitalism seem to suit new ventures and entrepreneurs far more than mature businesses with decades of corporate cultural baggage.  And it’s often difficult to sort out what’s critical to the practice of conscious capitalism and what’s particular to John Mackey.

For example, according to the book, in addition to contemplative practices such as meditation and Tai Chi, it is “imperative” for an executive interested in becoming a “conscious leader” to eat a wholesome diet which includes being “plant-strong,” eating “primarily foods such as raw and cooked vegetables, fruits, whole grains, legumes, and nuts and seeds, with no more than about 10 percent of calories coming from animal foods.”  (That would presumably eliminate many martini-drinking meat-loving candidates for CEO positions, even if they are skilled in strategies to save the planet.)

If you can filter out that kind of practical and philosophical arrogance, Conscious Capitalism contains a bold statement of optimism about the role of business in society in an age when cynicism often merits out-sized rewards. In fact, Mackey and Sisodia are certain their dream will come true. “One day,” they write,” Conscious Capitalism will no doubt become the dominant business paradigm for one simple reason: it is simply a better way to do business.  It just works better, and over the long term it will outcompete other business philosophies.”

 

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2 Responses »

  1. It's always refreshing to hear the perspective of one who doesn't fit neatly into traditional Right or Left. The more people like Mackey explain the way they see the world, the more people will recognize their own unique perspectives and stand up for what they believe, not what they're told to believe.

  2. Sounds like an interesting person. I like the fact that he's challenging the myth of profit maximization, and his vision for Conscious Captialism is powerful. I'll definitely check out the book, thanks for the review.

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