Comments and observations on social and political trends and events.

Wednesday, November 19, 2008

Conscious Capitalism

During the election we heard a lot about change as it applies to politics. I think it’s likely that the change we’ll see will consist of reverting back to previously tried liberal policies. I suspect that the Obamacrat’s four years are up and things aren’t any better than they are now they will argue that they need another four years to fix the sad state due to the alleged deregulation and rampant capitalism. Since I have addressed these claims in an earlier post I’d like to spend a little time talking about potential change as it applies to business. I recommend an interesting site named Flow Idealism for ideas on how businesses can evolve beyond the current model. (More on this below.) This web site was co-founded by John Mackey, CEO of Whole Foods Market. The title FLOW is described in their About Us section.

The FLOW Vision is based on the principles of economic freedom, voluntary exchange, and individual initiative, combined with social and environmental consciousness, and embodies FLOW Principles, which include commitments to human flourishing, non-violence, and radical tolerance.

The name “FLOW” has two primary roots:

1. An optimal state of human experience in which individuals are fully engaged in creative endeavors, experiencing fulfillment, happiness, and well-being. This state is articulated by psychologist Mihaly Csikszentmihalyi in Flow: The Psychology of Optimal Experience.

2. The means by which increases in the free global flow of goods, services, capital, people, and information will accelerate human progress and well-being.

Csikszentmihalyi’s book continues to be one of my favorites. His research found that we achieve a “flow” state when we take on a task that is challenging but not too challenging. It needs to test our talents enough to prevent boredom but not so much that we feel overwhelmed and therefore become anxious.

The Flow Idealism web site also provides a copy of Mackey’s Conscious Capitalism, a 16 page free download that explains Mackey’s ideas on how the current business model needs to be updated to reflect the evolution that has occurred in our cultural in the last 200 hundred years.

Although economic theory has evolved since Adam Smith wrote The Wealth of Nations in 1776, many economists continue using industrial and machine metaphors to explain how the economy works. Now that we are well into the post-industrial Information Age, these metaphors have become outdated and mislead our thinking about business.

The world has become much more complex since those simple machine metaphors were first developed. Unfortunately, current business thinking does not easily grasp systems interdependencies.

[H]appiness is a by-product of pursuing those other goals and I think that analogy applies to business as well. In my business experience, profits are best achieved by not making them the primary goal of the business. Rather, long-term profits are the result of having a deeper business purpose, great products, customer satisfaction, employee happiness, excellent suppliers, community and environmental responsibility – these are the keys to maximizing long-term profits. The paradox of profits is that, like happiness, they are best achieved by not aiming directly for them.

I encourage you to check out Mackey’s ideas.

On a different but somewhat related subject, I have concluded after having worked within the corporate world for 35 years that the bureaucracy and pecking order we see in the business (and in other hierarchical organizations like government) represent remnants of the feudal era (and probably earlier). Instead of obeying kings and princes we obey managers. Communication typically flows from the top down while the minions dutifully carry out their marching orders. I’m exaggerating a bit to make a point. I’m not arguing against hierarchical organizations. Some form of hierarchy is probably needed to organize human activity. However there are unhealthy (or obsolete) forms of hierarchies that stifle creativity and upward communication of the workers/participants and there are healthy forms of hierarchies that honor the worth of each member. I think Mackey’s ideas give us a glimpse of an evolving model that is healthier than the one it will eventually replace.

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