Can "Conscious Capitalism" Result in Greater Profit?
Whole Foods CEO John Mackey thinks companies that pay competitive wages and focus on "higher purpose" in customer interactions will ultimately create the most value for their shareholders.
Whole Foods CEO John Mackey is spearheading a business movement that calls for a more "conscious" capitalism. He believes that companies that focus on "higher purpose" will ultimately be the most profitable for shareholders.
His plan involves shifting priority from return on investment to practices that will benefit all of a company's stakeholders—including employees, customers, suppliers, and even the communities in which business is located. Mackey says businesses should create value for employees through better-than-industry-average wages, benefits, and opportunities. Employees will then be motivated to create value for the customers and suppliers through better service, and the company will, in turn, do more and better business—creating value for investors.
For Mackey, it’s the face-to-face interactions between employees and customers—and between buyers and suppliers—that form what he calls the "higher purpose" of increasing value. Customers will a pay a little more and drive the extra mile, and suppliers will work toward better deals, for better, more personal interactions.
"When you work from a higher purpose you unleash greater degrees of commitment, greater degrees of loyalty and greater creativity in the workplace and that gives competitive advantage," says Mackey.
Other proponents of this kind of "conscious" capitalism include CEO Kip Tindell of The Container Store, who echoes Mackey, saying: "People think that we’re just being altruistic. No. If all you wanted to do was to make as much money as possible, as rapidly as possible, I would submit to you that this methodology is the best way to get there.” Like Whole Foods, The Container Store has had sustained growth while consistently being listed among FORTUNE's 100 Best Companies to Work For.
— Big Think interview with Doug Rauch, former president of Trader Joe's.
— Big Think interview with Lawrence Koh, CEO of International Diversified Products.
— Mackey, J. "The Whole Foods Alternative to ObamaCare." Wall Street Journal.
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