How can highlighting your company’s sense of meaning and purpose increase sales? The consumer market is increasingly driven by the demand for meaning and purpose in product sales—witness the explosion of consumer goods branded and marketed as “green.”
Less widely discussed is the extent to which employees gravitate to those companies whose products are perceived as “making the world a better place.” Kip Tendell and John Mackey, founders and CEOs of The Container Store and Whole Foods Market, respectively, have both created companies that have been listed on Fortune’s list of the 100 Best Companies to Work For every year since the list ”has been created. Curiously, they were roommates in a college dormitory at UT-Austin in the 1970s – was there something in the water?
Both CEOs agree on two key business principles, which they describe as “Conscious Capitalism:”
1. The business should be driven by a deeper purpose which is at least sense, if not known, by all stakeholders—customers, employees, suppliers, and investors.
2. The business should deliberately and openly support the well-being of all stakeholders by means of win-win business decisions whenever possible.
They both believe that their companies’ long-term success is due to their commitment to these principles. Both companies are known for unusual customer loyalty and unusual employee tenure; if stakeholders love a company then they are more likely to stay with it, whether as a customer or an employee.
Interestingly, Mackey claims that not everyone agrees on the “deeper purpose” of Whole Foods:
“I always thought before I started (asking employees) that Whole Foods deepest purpose was service to others,” Mackey said. “But the team members tell me that’s not right. Consistently, about 75 percent say it’s the heroic. To help change and improve the world and make it a better place.”
John recommends the following steps to becoming a “conscious capitalist” company:
1. Determine your deeper purpose and organize everything around fulfilling that purpose.
2. Move from the traditional model of increasing shareholder value to a broader model of increasing value for all your organization’s stakeholders (customers, employees, suppliers, investors, the community, and the environment).
3. Move towards a team model with empowerment replacing hierarchical command and control. The key elements of the team model are: empowerment and self responsibility, accountability and trust, continual learning, and appreciation of efforts.
4. Ensure that your company is upholding its responsibilities to communities and the environment.