Creating Success in Your Business, Beyond Just the Bottom Line

A FUNDAMENTAL NEW AWAKENING IN BUSINESS:

CONSCIOUS CAPITALISM

By David Zuza

Workplace Leadership Council,Troy Chamber

October 4, 2012

Background and Context Trends of Capitalism Conscious Capitalism Explained Successful Conscious Businesses Practical Applications

OUTLINE

BS (Health Planning & Administration) Penn State, MBA (Hospital Administration) Cornell

30+ years in Healthcare Administration

Strategic planning and business development

Joined LifeVantage, Troy Chamber in early 2012

Personal mission – Helping others improve their health by reducing oxidative stress (Protandim)

Initial awareness of conscious business concepts – Conscious Business, How to Build Value Through Values (Fred Kofman, 2006)

PERSONAL BACKGROUND

“A conscious business fosters peace and happiness in the individual,

respect and solidarity in the community, and mission

accomplishment in the organization.”

FRED KOFMAN, CONSCIOUS BUSINESS

Consciousness is NOT religiousConscious Capitalism is NOT an oxymoronConscious Capitalism is NOT political

Every business has a mission, vision, and purposeEvery business needs profits to surviveEvery business is composed of peopleEvery business depends on its environment

CONTEXT

"Conscious Capitalism is a new way of thinking about business that goes

considerably beyond the approach that most executives and business teachers

take in thinking about business."

Raj Sisodia, Firms of Endearment

BUSINESS

7

TRADITIONAL CAPITALISM

1. Private ownership of property2. No legal limit on accumulation of

property3. Free Market – no government

intervention in the economy4. Profit motive as driving force5. Profit as measure of efficiency

8

ADAM SMITH (1723-1790)

Intellectual Father of Capitalism who said:1. Humans motivated by self interest2. Should be free to pursue profits

Result: “The Invisible Hand” – Efficient economic system; all will benefit because goods will be produced and sold cheaply

CAPITALISM HAS HELPED MANY

Improvements in:

• Standard of living

• Education

• Life expectancy

• Democratic governments

Growing mistrust of businesses

75% of our forests are gone

30% of arable land is gone

Large mammals are down 90% in the last century

Large fish are down 95%

Half of all species alive today likely to disappear in 50 years

Toxic burden on humans is rising Oil supply is decreasing as demand is rapidly risingSource: Raj Sisodia, author Firms of Endearment, How World Class Companies Profit from Passion and Purpose

BUT THE TIMES THEY ARE A-CHANGIN’

WIDENING DISPARITY IN INCOME

Source: John Mackey, CEO, Whole Foods Market

Performance of Conscious Businesses

Purpose, Stakeholders, Sustainable Performance

Towers Perrin 25 “Stakeholder Superstars” beat the S&P 500 by 126% (15 years).

The Fortune “100 Best Companies” up 176% vs 39% for the S&P 500 (7 years).

Firms of Endearment (2007) 28 firms -- eBay, Toyota, J&J, Google up 1111% vs. 100% S&P 500 (10 years).

Conscious Capitalists beat Capitalists at their own game – making money

FinancialIntellectual

SocialEmotionalSpiritualCulturalPhysicalNatural

BUSINESSES CREATE (AND DEPLETE) MANY KINDS OF WEALTH

CONSCIOUS BUSINESS PARADIGM

Source:

PURPOSESTAKEHOLDERSLEADERSHIPCULTURE

GREAT COMPANIES HAVE GREAT PURPOSES

Service to Others: Expressing Love & Care The Good

Discovery & the Pursuit of Truth The True

Excellence & the Quest for Perfection The Beautiful

Changing & Improving the World The Heroic

Which of these great purposes are the core of your organization?

Source: Raj Sisodia, Firms of Endearment

S ocietyP artnersI nvestorsC ustomersE mployeesE nvironment

STAKEHOLDERS

LONG-TERM PROFITS ARE MAXIMIZED BY

NOT MAKING THEM THE PRIMARY GOAL

Business is not a machine, it is a complex adaptive system of interdependent stakeholders

Leadership’s job is to fulfill the deeper purpose of the business, optimize the health & value of the entire business system, be a servant leader to the business

Optimize entire interdependent system = highest long-term profits & shareholder value

The price system is a tool for leadership to use—a valuable source of information

Source: John Mackey, CEO, Whole Foods Market

T ransparencyA uthenticityC aringT rustI ntegrityL earningE mpowerment

BUILDING A CONSCIOUS CULTURE

BUSINESS FRAMEWORK AT WHOLE FOODS

OTHER CONSCIOUS BUSINESSES

These conscious

business have out-performed

the S&P by 9 to 1

over 10 years

TRADITIONAL CAPITALISM TO CONSCIOUS CAPITALISM

From This To ThisProfit-focus Purpose-focusOnly shareholders win                              All

stakeholders winShort-Term                                                       Long-TermZero Sum                                                       Win-Win-Win-

WinSelf-centered HolisticConflicts of interest                                         Harmony of

InterestsParasitic                                                          MutualisticExploitative                                                       Creating ValueTrade-offs                                                        SynergiesDisliked Valued/LovedNot Trusted Trusted

UNCONSCIOUS VS. CONSCIOUS

UNCONSCIOUS CONSCIOUSAttitudes

Unconditional BlameEssential SelfishnessOntological Arrogance

Unconditional ResponsibilityEssential Integrity

Ontological Humility

BehaviorsManipulative CommunicationNarcissistic NegotiationNegligent Coordination

Authentic CommunicationConstructive NegotiationImpeccable Coordination

Reactions Responses Emotional Incompetence Emotional Mastery

Source: Fred Kofman, Conscious Business

Recognize importance of Purpose, Stakeholders, Leadership, and Culture

Accept personal accountability and ownership Respect the realities of finite natural resources Embrace servant leadership principles

(everyone) Appreciate the value of cooperation vs.

competition Consider the wisdom of The Four Agreements

TRANSFORMATION

The Four Agreements , Don Miguel Ruiz Be impeccable with your word Don’t take anything personally Don’t make assumptions Always do your best

Man’s Search for Meaning , Viktor E. Frankl

“Happiness is the outcome of living a life that has

meaning and purpose. Happiness cannot be pursued; it

ensues from living a life of meaning and purpose.”

FINAL THOUGHTS