January 21, 2013

An Important New Book: “Conscious Capitalism” by John Mackey

Conscious Capitalism,” the stunning new look at how capitalism should work by Whole Foods Founder John Mackey and Raj Sisodia, hit the market this week.  The authors have completed a series of public interviews describing the book, which is certainly the most important book of the year and possibly the decade.

At Mackey’s request, I had the privilege of writing the foreword. I began: “This is the book I always wanted to write.”  This is the first book that puts capitalism, and how it can work effectively, in its full context.

It strikes me that Mackey’s goal is to return capitalism to its roots. He and co-author Sisodia make a compelling case for capitalism as the greatest wealth creator the world has ever known, even as he derides what he terms “crony capitalism.” Decrying companies focused solely on pleasing Wall Street, he believes CEOs and business leaders should focus on serving their customers, employees, suppliers, the environment, and communities as well as their owners and shareholders. He even highlights the importance of respecting the interests of the “outer circle of stakeholders” such as labor unions, consumer advocates, regulators and government officials.

Mackey is a strong believer in venerating the purpose of any business. In Whole Foods’ case, the company’s purpose promotes healthy eating that leads to improved health. He himself is a vegan who tries to avoids sugar, salt and oils. He supports coffee, wine, and cheese, but not diet sodas or sugar-based cereals.  His beliefs stand in sharp contrast to the late Nobel Prize-winning economist Milton Friedman, with whom Mackey had a widely publicized debate.  Whereas Friedman advocated that the only purpose of business is to serve its shareholders, Mackey believes “businesses make a profit in order to fulfill their missions,” not the reverse.

In “Conscious Capitalism” Mackey and Sisodia demonstrate unequivocally that leadership matters. They show us how to become conscious leaders, a notion that is virtually synonymous with Authentic Leadership. They recognize how essential it is for leaders to integrate their hearts with their heads by developing self-awareness and emotional intelligence, while empowering other people to do the same. With the enormous loss in confidence in our leaders in the past decade, developing conscious leaders is the best way to rebuild trust in our leaders and to ensure that they follow their True North.

“Conscious Capitalism” is an invaluable treatise on how to integrate all the company’s constituencies for the long-term benefit of creating sustainable organizations that serve society’s interests simultaneously with their own. Mackey refers to capitalism as a “heroic force” addressing society’s greatest challenges. In that sense his ideas dovetail perfectly with those of my Harvard Business School colleague Michael Porter, the pioneer of modern corporate strategy, who has called corporate leaders to contribute to society by “creating shared value.”

I sincerely hope that these ideas became a widely accepted and practiced mode of running corporations in the future, thereby enabling capitalism to flourish in the decades ahead as the dominant force contributing to a prosperous global society. Read it, tweet about it, share it with your friends, and most importantly: bring its principles into your business!