Are You Sure It’s Conscious Capitalism?

The latest buzz word to hit the internet  and web sites is conscious capitalism, a term Whole Foods CEO John Mackey has been promoting and, in fact, has helped to create an organization called Conscious Capitalism.  The problem with this word and with a lot of buzz words is it can mean different things or people don’t always practice what they preach.

Conscious capitalism sounds great!  According to its website, the  non-profit organization, Conscious Capitalism, has identified four major components that help to define this latest buzz word.   The first component is a Higher Purpose which means organizations should have a specific reason for existing and that will excite employees and other stakeholders to be more enthusiastic for the organization.  A second component is Stakeholder Orientation.  This one says the more engaged stakeholders are to the organization it helps to sustain the organization.  They compare that to an ecosystem and the commitment people have to sustaining nature.  The third component is Conscious Culture and relates to a trusting and caring environment within an organization.  Finally, the fourth component is Conscious Leadership.  Conscious leaders are to encourage, create enthusiasm and express a “we” attitude instead of an “I” attitude.

The components really make Conscious Capitalism sound even better but there’s some irony to this that really contradicts these principles, especially the principle, Conscious Culture.   Last year, Whole Foods decided to eliminate jobs so the food chain could concentrate more on cheaper products.  More than 1,000 jobs were impacted.  If you want to create a trusting and caring culture, putting people’s jobs at risk is not the way to do it.  Because Whole Foods threw some of their stakeholders under the bus to restructure operations, also impacted other principles such as Higher Purpose and Stakeholder Orientation which are to encourage enthusiasm for the organization.  Laying people off does not create enthusiasm.

It’s understandable Whole Foods is concerned about their operations.  They should be looking at making the business more profitable but there are other ways to do that without eliminating jobs AND maintaining the principles of Conscious Capitalism.  As we have blogged before, one labor-management group we worked with looked at alternatives to lay-offs.  Their operation was small and management said they could no longer afford to exist and eliminate more jobs.   Labor also agreed and said employees were already having difficulty completing their work because they were taking on jobs from those positions that had been eliminated.  That group decided on voluntary furloughs as an alternative to layoffs.  Although the furlough process was not initially popular with workers, it was better than the alternative.  Some, though, did find taking an additional day off, even if it did mean without pay, wasn’t as bad as they thought.  That organization demonstrated the Conscious Capitalism principles.

John Mackey has been quite vocal in his contempt for unions but the example above demonstrates how unions are very willing to work with management when changes need to be made in operations. In addition,  a book entitled Conscious Capitalism by David A. Schwerin, the author provides some great examples that help validate the principles despite his book is not related to the Conscious Capitalism website.  Schwerin talks about open book management as a good way to engage employees in the financial aspects of the workplace.  He explains it’s not always easy for either labor or management to do open book management because it requires a great deal of trust but he highlights an organization that had great success with the process.  Schwerin also highlights GM and UAW working together to create Saturn.  Although Saturn no longer exists, it has been a great example of how labor and management worked together.

The other irony with the website organization, Conscious Capitalism, all the directors are CEOs or managing partners.  If an organization truly believes in involving stakeholders, why aren’t regular employees included with the directors.  Whole Foods has a few employees.  All those CEOs  lead organizations with employees.  As Conscious Capitalism proclaims, employees are stakeholders.  Adding employees as directors would definitely make a stronger impression on the mission of the organization.

In the end, it’s important to watch buzz words.  Buzz words can really represent some great ideas.  But those ideas aren’t so great if the principles behind them aren’t followed.  In other words, buzz words need to walk the talk.

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About CALMC Blog

Columbus Area Labor-Management Committee is a not-for-profit organization dedicated to involving employers and employees to preserve jobs, resolve workplace issues, and promote labor-management cooperation. Visit our website at http://calmc.org
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