I’ve been following John Mackey of Whole Foods for several years. I can’t say enough about this guy. I’ve spent the weekend reading his new book Conscious Capitalism. (2013, Harvard Business School Publishing Corporation)
Originally I wrote about Mackey back in 2011. (John Mackey and Entrepreneurship) In a long interview about his new book before members of the Inc Business Owner’s Council at NASDAQ last Thursday, he spoke eloquently about his new book and his beliefs.
For Mackey, capitalist enterprise should be based on three ideas:
- Conscious Capitalism exists for a higher purpose beyond just making money. He says, “When any profession becomes primarily about making money, it starts to lose its true identity and its interests start to diverge form what is good for society as a whole.”
- Conscious Capitalism creates value for all stakeholders, including employees, suppliers, customers, the communities they serve, as well as investors. (To cite but one example, Mackey believes in complete compensation transparency. He operates his large operation with what sounds like a version of Jack Stack’s Open Book Management. He walks the walk of his talk very personally. For example, Mackey caps his own and his top executive’ compensation at 19 times the average Whole Food wage. The average in most companies is over 100 times the average.)
- Conscious Capitalism requires “servant” leaders—that is, leaders who are “not primarily motivated by the pursuit of power and personal enrichment.”
Mackey urgently proselytizes that capitalism is not a rapacious, sociopathic institution. He preaches the belief that simple goodness and higher purpose is also a wise policy for creating shareholder value. He harshly castigates American business schools for their blinders-vision focus on money and profit rather than on creation of long-term value. (I couldn’t agree more with this.) He passionately rejects the notion of capitalism as a zero-sum game and he feels MBA programs need to let go the war metaphors and darwinian tonality that couches much of business management language and pedagogy.
Mackey believes that business needs to be grounded in a new kind of ethical trope. He is alarmed that a recent poll shows only a 17% approval rating for big business and 34% for small business. He believes this attitude must change for the good of the world. He believes that capitalism should be lifted up not denigrated, since much of the astounding progress of the modern world has come about through capitalism. In his first chapter, Mackey and his co-author Raj Sisodia state:
“This is what we know to be true. Business is good because it creates value, it is ethical because it is based on voluntary exchange, it is noble because it lifts people out of poverty and creates prosperity. Free enterprise capitalism is one of the most powerful ideas we humans have ever had.” (P. 21)
Mackey is remarkable in that he is a self-taught practical intellectual. Though he never graduated from college, his conversation is fluidly peppered with references to thinkers like Friedrich Hayek, Milton Friedman, Ludwig Von Mises, Adam Smith, and many others. His argument for conscious capitalism is richly buttressed by his immersive understanding of these classical economic thinkers.
I could go on about Mackey, but entrepreneurs should simply read his new book. He has a missionary zeal for defending basic goodness as a bedrock principle of effective capitalist enterprise. He passionately believes in the importance of the entrepreneur as the purest modern practitioner of capitalism at its best. He writes:
“With few exceptions, entrepreneurs who start successful businesses don’t do so to maximize profits. Of course they want to make money, but that is not what drives most of them. They are inspired to do something that they believe needs doing. The heroic story of free-enterprise capitalism is one of entrepreneurs using their dreams and passion as fuel to create extraordinary value for customers, team members, suppliers, society, and investors.”
So, thank you, John Mackey, for this thoughtful and compelling book. Also, much gratitude for the palpable love and support of our small business enterprise community offered by Conscious Capitalism.