Leveen: Conscious Capitalism, Think Different About Business
During the early years of Levenger, the company that my wife, Lori, and I founded in 1987, I would hear business executives speak at charity events about the importance of "giving back" to their communities. I chafed at this. It implied that business was taking and that we business people, like criminals, had a debt to repay.
Levenger creates high-quality products designed for reading, thinking, and creative expression.
Yet, I watched our own business employ people, help them grow in their careers, make our suppliers happy, keep our accountants busy, and give our customers something that—judging by the many heartfelt letters we received—they had been yearning for.
From profits to purpose
The book Conscious Capitalism: Liberating the Heroic Spirit of Business, released earlier this year, examined this issue. And if it succeeds in the way the authors hope, the next generation will just assume capitalism can do good in the world. They won't think they have to join a nonprofit to follow their hearts. They will understand that a for-profit company can just as easily be described as a for-purpose company, and that profits are one way, and sometimes the best way, to sustain noble work.
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At present, though, that future seems far off.
Part of the problem, explained the authors, John Mackey, the co-CEO of Whole Foods Market, and Raj Sisodia, a professor of marketing at Bentley University, is image. Corporate malfeasance, real and fictional, gets lots of play in the news and movies, while the goodness of business does not.
But most of the problem is more invidious.
Economist Milton Friedman, in his widely cited 1970s essay on social responsibility, claimed that profit was the only social responsibility businesses had. Too many people have interpreted his advice too narrowly—to everyone's detriment.
Mackey and Sisodia convincingly demonstrated that it simply isn't true. Businesses that focus first on purpose, and then expand their view widely to benefit all stakeholders—rather than just narrowly serving shareholders—are better businesses, and better by all financial measures.
Unfortunately, wrote the authors, capitalism "developed in a stunted way, missing the more human half of its identity."
The 70 percent solution
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One of the most serious consequences of this dwarfed manifestation of business is that the average engagement of workers in the United States hovers around 30 percent. Some 7 out of 10 workers just aren't that into their jobs. Think of the opportunities for everyone if those ratios were reversed.
It is the job of business leaders to help engage that lost 70 percent, and to help employees realize that in their hands—and hearts—lies the basis for the positive transformation of societies and communities.
Capitalism for a new generation
It's a different way of thinking about business. Instead of viewing situations as tradeoffs (high wages leads to lower profits), the authors advised that we think in terms of mutual wins: living wages lead to happier staff members, which creates happier customers, which generates higher sales, which results in satisfied shareholders.
Could Conscious Capitalism do for business what Silent Spring did for the environment?
The widespread view of capitalism as some sort of necessary evil is a kind of DDT to human potential. Breaking into an enlightened conception of capitalism could liberate human potential, leading to new levels of innovation and personal fulfillment.
Tearing down the Ivy Curtain
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More colleges are now focusing not only on entrepreneurism, but on social entrepreneurism. Students will do their own mashups to create businesses that feel like nonprofits, and nonprofits that are run like businesses. I'm hopeful that these young innovators will tear down the Ivy Curtain that for my generation separated the so-called impractical liberal arts from majors like business and accounting.
My own sons, college classes of 2010 and 2013, are reading Conscious Capitalism, so we can discuss it as a family. Already they've let me know it seems rather obvious to them.
And maybe that's our best hope—that young people setting off in business today will know that capitalism can do good in the world.
Steve Leveen is the co-founder and CEO of Levenger, WPO Miami/Fort Lauderdale and CNBC-YPO Chief Executive Network Member.
CNBC and YPO (Young Presidents' Organization) have an exclusive editorial partnership. A key component of this partnership is regional Chief Executive Networks in the Americas, EMEA and Asia-Pacific. These Networks are made up of cross-sections of YPO's unrivaled global membership of 20,000 top executives on the frontlines of the economy, running companies that collectively generate $6 trillion in annual revenues and employ 15 million people in more than 120 countries.