Conscious Capitalism

Key Highlights from the book by Mackey and Sisodia

1.     Free-enterprise capitalism is the most powerful system for social cooperation and human progress ever conceived.

1.1.   No human creation has had a greater positive impact on more people more rapidly than free-enterprise capitalism.

1.1.1. Afforded billions the opportunity to earn sustenance, improve quality of life, and find meaning by creating value for each other.  

1.1.2. Has lifted more people out of poverty than any other force in history, and has done so through voluntary exchange.  Hundreds of millions of poor people have been able to escape grinding poverty.

1.1.3. In 200 years, world’s population in extreme poverty from 85% to 16%.  Average income per capita has increased 1000% since 1800.

1.2.   Human creativity, partly individual but mostly collaborative and cumulative, is at the root of all economic progress.

1.2.1. The most important factors in free-enterprise capitalism’s success have been entrepreneurship and innovation, combined with freedom and dignity.

1.2.2. Entrepreneurs solve problems by creatively envisioning different ways the world could and should be.  They see new possibilities and enrich the lives of others by creating things that never existed before.

1.2.3. Capitalism is an extraordinarily powerful system for eliciting, harnessing, and multiplying ingenuity and industry to create value for others. 

1.3.   Profit maximization thinking (low-consciousness business) has created a terrible reputation for capitalism. 

1.3.1. Top executives at the helm of many major corporations have rigged the game to enrich themselves at the expense of the company and its stakeholders. 

1.3.2. Confidence in big business has declined steadily for the past 40 years, but is on the rebound.

1.3.3. The average level of engagement for American team members has remained at 30% or less for the past 10 years.

1.4.    Those who recognize and embrace the life-affirming power of free-enterprise capitalism must reclaim the intellectual and moral high ground.

1.4.1. Business is awakening to itself and becoming conscious.  It’s recognizing that it’s a force with enormous power and responsibility.  The Flynn effect shows that overall human analytical intelligence rises at an average rate of 4% every decade.  People are also far better educated worldwide, mostly due to greater access to higher education.  Many more of us are capable of comprehending and acting on greater complexity than ever before. 

1.4.2. People today care about different things and are more informed, educated, and connected than in the past, their expectations from businesses in their roles as customers, team members, suppliers, investors, and community members are rapidly changing.  It’s time for companies to evolve to keep pace.

1.4.3. Conscious firms outperformed in the stock market by a ratio of 10.5:1 over a 15-year period, delivering more than 1600% total returns when the market was up just 150% for the same period. 

2.     The Tenets of Conscious Capitalism

2.1.   Higher purpose and core values

2.1.1. Business has a much broader positive impact on the world when it’s based on a higher purpose that goes beyond generating profits and creating value for investors.

2.1.2. A compelling sense of higher purpose creates an extraordinary degree of engagement among all stakeholders and catalyzes creativity, innovation, and organizational commitment.  Once a person discovers their true purpose, the complexion of daily life and work changes.  They are able to draw on reservoirs of energy and inspiration that they didn’t know existed within.  Work becomes a fulfilling source of satisfaction and joy.

2.1.3. The way forward for humankind is to liberate the heroic spirit of business and our collective entrepreneurial creativity so we can be free to solve the many daunting challenges we face.  There are billions of people whose basic needs are not being adequately met.  We need to see these as opportunities, unlock the natural human creative spirit to address these challenges in a way that will allow us to flourish.  

2.2.   Stakeholder integration

2.2.1. All entities that impact or impacted by the business are important, connected, and interdependent.  The business must seek to optimize value creation for all of them. People must be honored first before treating them according to the role they are playing.   

2.2.2. The purpose of every business ultimately revolves around creating value for customers.  Businesses have to serve their customers by educating them to want what’s good for them, steering them toward better choices over time, and at the same time, giving them freedom to choose. 

2.2.3. In addition to creating social, cultural, intellectual, physical, ecological, emotional, and spiritual value for all stakeholders, conscious businesses also excel at delivering exceptional financial performance over the long-term.  Conscious businesses win, but in a way that is far richer and more multi-faceted than the traditional winning.  All boats rise versus zero-sum. 

2.3.   Conscious leadership

2.3.1. Conscious leaders are motivated primarily by service to the firm’s higher purpose and creating value for all stakeholders. 

2.3.2. In addition to high levels of analytical, emotional, and spiritual intelligence, leaders of conscious businesses have a finely developed systems intelligence that understands the relationships between all of the interdependent stakeholders.  Their fundamentally more sophisticated and complex way of thinking about business transcends the limitations of the analytical mind that focuses on differences, conflicts, and trade-offs.

2.3.3. The leaders of conscious businesses care about service to others because that is ultimately what leads to fulfillment and value creation.  The right actions taken for the right reasons lead to good outcomes over time.  Focus on things we can control, actions and reactions.

2.4.   Conscious culture and management

2.4.1. Conscious businesses use an approach to management that is consistent with their culture and is based on decentralization, empowerment, and collaboration. 

2.4.2. Conscious management seeks to focus creative energies in the most effective way by creating a virtuous cycle of reinforcing organizational practices.  This amplifies the organization’s ability to innovate continually and create multiple kinds of value for all stakeholders.

2.4.3. Businesses should lead the way in raising consciousness in the world.  The larger the company, the greater the footprint, and therefore its responsibility to the world.