Friday Freebie 5: conscious capitalism works both - short term and long term
Friday Freebie 5: conscious capitalism works both - short term and long term and not just for customers and employees but shareholders as well.
Great podcast between founder of Wholefoods, John Mackey and Joe Lonsdale below. They gets into Mackey attributing conscious capitalism and ethics / morals to his success.
Amazon acquired WholeFoods for 13.7 billion in 2017. About 26 million per shop.
CS Lewis said “Integrity is doing the right thing, even when no one is watching”.
Mackey believes capitalism is a force for good (yes theere are some bad actors but creates value) especially if done consciously and you can optimize that good via 4 pillars:
1. Every business can make money and have a huger purpsoe;
2. all stakeholders are interdependent;
3. Leadership needs to serve a higher purpose and stakeholders not just line their pockets, it shouldn’t be Hobbesian;
4. culture is critical. Trust care cooperation. Honest culture is improtamt because business involves relationships.
He gives a few examples:
1. a landlord that unreasonably took advantage - well Mackey says, ok, you won that round and pulled one over on us- and they’d never do business with them again but a good landlord they’d work together for years and all make money.
2. underpaying or mistreating employees - well it’d get harder and harder to get folks to work there and it would impact customer satisfaction too- so they wouldn’t do it. Hire great train em great - customers are happy and keep going back and makes investors happy.
3. Price gouge the customer ? It might work for a bit but eventually they’d go somewhere else. A health sustainable profit worked just fine.
Some folks do the ethical / honest right thing because a) it’s the right thing; b) others only if it’s the popular thing or won’t hurt them; c) only if it’s the profitable thing. Truth is integrity/moral/ethical is the profitable (long term), popular, and right thing to do-every time- it can just be uncomfortable or require creativity.
Capitalism doesn’t have to be trade offs like dividends or employee head count or shareholder value and customer price hikes. Mutual gain is possible. Treat people well and you’ll be treated wells
If you look into the founding principles of capitalism things like efficiencies, relationships, reputation, comepetion - all were necessary.
Capitalism+innovation require relationships, creativity, collaboration, healthy competition. When done right - capitalism is proven to work and sustainably / profitably: increase efficiencies, compete on price via supply and demand and service- but greed, however is bad short and long term.
We can create shareholder value, pay dividends, take care of employees, and not gouge or hurt customers or suppliers all possible- with conscious capitalism.
Cheers and good luck!
The One Vie Team
