Relationships key in new approaches to capitalism
Two of my “summer reads” are books that make the case that strong relationships with key stakeholders are driving financial performance and are central to how business is being reinvented. The first is Patricia Aburdene’s book: “Megatrends 2010: The Rise of Conscious Capitalism.” The second is “Good Company, Business Success in the Worthiness Era,” By Laurie Bassi, Ed Frauenheim, and Dan McMurrrer with Larry Costello.
Aburdene’s book follows the framework of her hugely successful megatrends books written with John Naisbett, and cites seven interrelated trends that encompass corporate social responsibility, spirituality in business and so-called “conscious capitalism.” The term conscious capitalism, which Aburdene used in speaking engagements for several years prior to the publication of the book, has been picked up by both academics and business people alike. A conscious business embraces three things:
- a strong sense of mission and purpose,
- a stakeholder perspective – which cultivates strong relationships with key stakeholders rather than prioritizing stockholders or profit as the sole directive, and
- conscious leadership.
“Conscious leadership” in this setting means leading holistically through the lens of relationship-oriented values. Recently, practitioners have also begun to articulate the cultural dynamics of conscious business as having these key values: Trust, Authenticity, Caring, Transparency, Integrity and Learning.
(Note: This definition of conscious capitalism is complimentary to but not the same as the conscious business model developed by Fred Koffman. That model emphasizes self-knowledge and self-awareness as the basis of conscious behaviors and choices.)
Both Aburdene’s and Bassi’s books look at the question of “why” businesses are changing their practices. Aburdene, while citing multiple drivers of economic necessity and changing values, shines a spotlight on the spiritual values and practices from which the conscious capitalism arises. Bassi and colleagues, who also cite a spectrum of drivers, highlight the changing values and expectations of stakeholders and their influence on company behaviors. They have created their own term – “worthiness”— which connotes the qualities that make a company worthy in the eyes of customers, employees and other stakeholders.
Good Company emphasizes the role of the employee in all three important “worthiness” areas: being an employer, seller and steward. I like the summary of one Amazon reviewer who said “Good Company shows how a strong leadership culture that’s serving all of its stakeholders and society pays off for everyone buying from, working for, investing in, and doing business with the company.” A worthy company does not choose one stakeholder over another. Everybody – including the community and environment – wins.
Both books include stories of real businesses and executives doing well as a result of a broader stakeholder perspective. One of the things I appreciate about Good Company is that the authors also point out when companies who are doing well in some areas stub their toes in others. This reads to me as imminently practical and realistic. The new paradigm is still emerging and all of us still in that transition will arrive at various degrees of consciousness – worthiness, goodness, sustainability, etc. — at different times.
(In another article, I will explore the updated business case for a stakeholder view .)
More about the books: