What conscious capitalism means to me

Sep
4
2013
by
Lynne McTaggart
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I’ve begun to take my message about the Bond to corporations and leadership groups, and what I’m asking for is nothing less than a restructuring of the corporate mission.

We have a few examples of this. Over the generations, as modern society has progressively pulled apart, certain far-sighted individualists have acted as change agents for holism.

I’ve begun to take my message about the Bond to corporations and leadership groups, and what I’m asking for is nothing less than a restructuring of the corporate mission.


We have a few examples of this. Over the generations, as modern society has progressively pulled apart, certain far-sighted individualists have acted as change agents for holism. Even during the midst of the Great Depression’s banking crisis in 1929, John Spedan Lewis, who became the head of department stores in Britain after the sudden death of his father, believed that the “present state of affairs” — by which he meant outside shareholders who separate the providing of capital and its use —was a “perversion of the proper working of capitalism.” 

“Capitalism has done enormous good,” he wrote. “But the perversion has given us too unstable a society. It is all wrong to have millionaires before you have ceased to have slums.” 

By nature, Lewis had a sense of the power of reciprocation – that when you’re fair, both your employees and your customers treat you in kind. In this extraordinary statement for its time, he was saying that too many people owning stock in a company, but far removed from its operation, were freeloaders.  He did not believe in socialism, but in a brand of capitalism where a person’s financial reward should be commensurate with his contribution. He also understood that lack of fairness in a society was highly toxic to all, rich and poor. 

“Differences of reward must be large enough to induce people to do their best,” he wrote. “But the present differences are far too great.” 

Lewis came upon the idea of creating a superordinate goal of his business.  He turned his department store into a partnership, with each and every employee a part owner. No matter how menial a person’s contribution, each employee would receive an array of perks, including excellent pension schemes and country-club membership for weekends away. 

But the most radical idea of all was that profits would be split among all employees. Although the workers would receive differential salaries, according to their contribution, to this day, each employee, from the lowest shelf-stacker to the chairman, receives the same percentage payout of his own salary as a bonus. 

In early March 2010, when Marks and Spencers, Britain’s No 1 retailer, made profits of just 5 per cent, John Lewis distributed  £151 million in profits, with every one of the store chain’s 70,000 employees receiving 15 per cent of their basic salary — the equivalent of 10 weeks’ pay. 

“It was tough,” said one employee about the 2009 recession, “but we all pulled together.” 

Lewis understood that he could create a resonance effect among all of his employees if they were all working for the good of the whole.  The power of working together raised everybody’s game. 

In the midst of the continuing crises in our current way of life, however, we need to take measures far more radical than individual instances of benign capitalism. We now require nothing less than a revolution in our corporate thinking. 

The belief common to most corporations—that winning equals winning over someone else—is the greatest cancer of our time, accounting for every single one of the financial crises we face in the West. Indeed the competitive mind-set is probably the greatest impediment to progress. 

The latest research shows that students, employees, managers, business owners and customers are happier, healthier, and far more productive when they work together in collaborative ways. 

In fact, collaborative solutions at work consistently outperform those in which companies rate individual performances against each other. 

As a success coach hired by Microsoft, the best-selling author and Chicken Soup franchise founder Jack Canfield observed that Microsoft’s practice of creating small internal competitive “silos,” vying against each other for performance and rewarded or punished for their individual success or failure, created such a climate of fear that it actually hampered innovation and lost the company market share. 

This company policy stood in stark contrast to the corporate climate at Google, one of its major competitors, where individuals were encouraged to work as a team, were offered the time and space for collective brainstorming, and were rewarded for the entire group’s effort. 

By removing a culture of naked-claw competition, Google made use of the Bond—and not only created happier employees but ultimately began to produce better results than its rival. 

The most forward-thinking corporations also  look beyond usual dollars-and-cents issues such as product development and R&D and include in their own corporation interests everyone who is hurt or helped by what they make or do. 

Most companies deal with thorny environmental or consumer issues through damage-limitation exercises in the belief that, if such a disclosure gets out, the company will be ruined. However, when McNeil recalled an estimated 31 million bottles of Tylenol because around six bottles had been tampered with, its reputation and its share price soared. 

Examining the ripple effect of a company’s actions on everyone involved – from employees, and customers to anyone affected by the manufacturer or sale of its products, is the simple tool that will transform not only the corporate mission but also the bottom line of every business. 

Doing good and responsibly will make you do well. It’s that simple.

 

Lynne McTaggart

Lynne McTaggart is an award-winning journalist and the author of seven books, including the worldwide international bestsellers The Power of Eight, The Field, The Intention Experiment and The Bond, all considered seminal books of the New Science and now translated into some 30 languages.

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