[global hr forum 2011] conscious capitalism : toward shared & sustainable growth
DESCRIPTION
“Coexistence" is currently the hottest topic among Korean conglomerates contrary to the fact that their management motto previously emphasized quality, technology or innovation. Current situation between the government and the business community in Korea has led to a considerable controversy. Korean companies, especially Korean conglomerates such as Samsung or Hyundai, claim that the government's regulatory policy gives them too much pressure, even on the issues they need to resolve spontaneously. In this session, top global business scholars will discuss on the coexistence and sustainable growth in next century's business ecology.TRANSCRIPT
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