Consciousness:
1. a. alert and awake; not sleeping or comatose
b. aware of one's surroundings, one's own thoughts and motivations, etc.
4. a. denoting or relating to a part of the human mind that is aware of a person's self, environment, and mental activity and that to a certain extent determines his choices of action
-- World English Dictionary
In the last several years, too many people have seemed unconscious -- or occasionally comatose -- to the economy-wrecking consequences of their actions. In life, individuals who don't realize how their behavior could hurt others are often dangerous. An entire marketplace contaminated with such self-centered and selfish obliviousness is infinitely more so. To prevent future economic catastrophes, and better address the damage remaining from the last one, it's high time that capitalism regained a little consciousness.
Comatose capitalism
Corporate managers' drive for short-term profit at all costs, with no regard for the needs of myriad stakeholders, has done considerable harm to the stock market, the economy, and the entire country. Corporate America's been only too happy to provide us with several recent examples:
- Define fair: Instead of demonstrating humility and grace, BP's (NYSE: BP) Tony Hayward responded to his ouster as CEO with this comment: "Life isn't fair. Sometimes you step off the pavement and get hit by a bus." Or, sometimes your company ignores safety regulations, one of your rigs blows up, 11 people die, and you befoul the Gulf of Mexico to an unprecedented degree. Same difference.
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Define s----y: Will Goldman Sachs (NYSE: GS) ever learn any lessons? A recent policy banning the use of naughty words in emails implies that Goldman still doesn't quite get what folks have been all worked up about. Hey, maybe the investments so colorfully described in the offending email really were s----y.
It seems to me that somebody's totally missing the point! We're not upset about Goldman's language. We're upset with the behavior that prompted it. (At least such terminology gave us a little comic relief, not to mention something to rewind on the DVR during the congressional hearings. Some things, you just never expect to hear on C-SPAN.) - Define think: Congressional hearings on the Lehman Brothers debacle in late 2008 revealed Dick Fuld's response to the idea of conciliatory pay cuts in light of failure. "Don't worry," he said about the folks calling for pay cuts, "they are only people who think about their own pockets." Say, Dick, are you sure you weren't talking about yourself there?
Your wake-up call is here
Unlike the denizens of the preceding walk of shame, some folks in charge can do the right thing, regardless of their pockets, their short-term profits, or anything else. Look at companies like Whole Foods Market (Nasdaq: WFMI), Costco (Nasdaq: COST), and Starbucks (Nasdaq: SBUX), all of which provide health-care benefits to workers in an industry that generally shirks that expense.
Conscious capitalism eschews the notion that "shareholder value" is the only thing that matters. Under this stakeholder-driven capitalism, employees, customers, and shareholders all matter.
My Foolish colleague Selena Maranjian recently quoted highly respected former General Electric (NYSE: GE) CEO Jack Welch's take on this concept:
On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy. Your main constituencies are your employees, your customers, and your products.
More and more companies increasingly comprehend that many different stakeholders all play crucial roles in a company's long-term success. Several businesses have even begun to pursue Benefit Corporation, or B Corporation, status, certifying that they "institutionalize stakeholder interests."
Don't hit the snooze button
A little more consciousness in our marketplace could help us tackle our society's serious trust deficit. And conscious capitalism has few advocates more ardent than Whole Foods' founder and co-CEO John Mackey.
Mackey even came to Fool HQ last year to share his philosophy, which could be a way to carve a positive future for capitalism. Last spring, he also spoke out about the need to create high-trust organizations.
Want to hear more about his ideas from the man himself, or ask him your own questions? Mackey is scheduled to participate in a chat right here on Fool.com on Tuesday, Aug. 10. Mark your calendars, and if you have queries for him, please share them in the comments box below.
I believe Mackey and his fellow corporate crusaders are right. We've all been asleep at the economic wheel for too long. A little more consciousness -- and conscientiousness -- would literally do our marketplace a world of good.
Check back at Fool.com every Wednesday and Friday for Alyce Lomax's columns on corporate governance.
