What's the problem with capitalism as we know it? Why is it demagogued and villainized so much? Capitalism is based on profits--so what's wrong with profits? Capitalism is the ultimate value creator and inherently good, but the perception has been distorted. The narrative about business is that it only cares about profits.
As a result too many people view businesses as greedy, dishonest, profit-driven machines that can't be trusted. They need to be highly regulated and watched with a careful eye. Highly publicized corporate scandals, the financial fallout on Wall Street and other instances of unethical behavior have created tremendous mistrust and cast business in a negative light.
We've come to judge business by its worst characters and that needs to change. There's nothing wrong with making profits--all businesses need to be profitable--but making money shouldn't be the primary purpose of a business. Instead, business needs to begin to see itself as a great value creator in the world--creating value for customers, employees, suppliers and communities, as well as investors.
What in your opinion should change to make "traditional" capitalism work better?
We believe the time has come to rewrite the narrative for capitalism. Under the conscious capitalism model, business is inherently good because it creates value; it is ethical because it is based on voluntary exchange; it is noble because it can elevate our existence; and it is heroic because it lifts people out of poverty and creates prosperity.
Businesses that are only about maximizing profits usually sub-optimize over the long term. When businesses operate with purpose beyond profits and create value for all stakeholders, tradeoffs are largely eliminated, performance is elevated and the entire system flourishes.
Will you elaborate on conscious capitalism (the title of your book)--what are its main components and can you give examples of how this works, in "real-world" companies?
The four principles of conscious capitalism include:
* Higher Purpose. Why do we exist? What is our role in improving society? What would happen if we ceased to exist?
* Stakeholder Integration. This involves working to create value for all of the company's stakeholders.
* Conscious Leadership; and
* Conscious Culture. These go hand in hand. Conscious leaders have a passion to make a positive impact on the world through their organization and they use that passion to motivate and engage colleagues. They lead...