Raj Sisodia is a founding member of the Conscious Capitalism movement, and the FW Olin Distinguished Professor of Global Business and Whole Foods Market Research Scholar in Conscious Capitalism at Babson College. He is also the Co-Founder and Co-Chairman of Conscious Capitalism Inc. His latest book, co-authored with Michael Gelb, is The Healing Organization: Awakening the Conscience of Business to Help Save the World.
What is a Healing Organization? And what made you and Michael Gelb write this book?
The Healing Organization says that done right, business can alleviate suffering and elevate joy in our lives – while still delivering extraordinary performance. For us, writing this book was a sacred undertaking. It was something we had to do. We want to alleviate the unnecessary suffering caused by the way in which business is done. It doesn’t have to be this way.
The book is about the business as healing. The scope of our concern goes well beyond employees and their families. It includes all those whose lives are touched by your company, including the environment and indeed all life on the planet.
In our view, business can become a place of healing for employees and their families, a source of healing for customers, communities, and ecosystems, and a force for healing in society, helping alleviate cultural, economic, and political divides.
What’s the difference between a traditional business and a Healing Organization?
A traditional business might say: “Here is an opportunity to make money by exploiting a need or gap in the marketplace.”
A business with a slightly more advanced mindset says, “Here is an opportunity to make money by exploiting a need or gap in the marketplace, and we will initiate some corporate social responsibility initiatives and employee wellness programs to help mitigate the suffering we cause. And we will throw some money at a few charities.”
A more evolved conscious business leader says, “Here’s an opportunity to make a profit while serving customer needs and the needs of all stakeholders, including our communities and the environment.”
A Healing Organization says, ” Our quest is to alleviate suffering and elevate joy. We serve the needs of all our stakeholders, including our employees, customers, communities, and the environment. We seek to continually improve the lives of all stakeholders while making a profit so that we can continue to grow and bring healing to the world.”
Wow. So how does a company become a Healing Organization?
Sometimes businesses actually begin with this kind of noble healing purpose. In the book we talk about LifeGuides, a Public Benefit Corporation and how it was founded. Just as Match.com pairs people for love, LifeGuides connects people in need with those who can help.
In other cases, companies are transformed into Healing Organizations when the leader experiences an awakening.
Modern democracy and capitalism took root in the United States, evolved here, and then spread to other parts of the world. But now we are at an inflection point. This is a critical juncture in history. We must awaken our conscience and consciousness to meet the crises of our time.
This book is about how business is not only the cause, but also the solution of many of the world’s problems.
How did we get to this point? We have been told that the purpose of business is profit. Is this narrative obsolete?
What is the purpose of business? It is not, as Peter Drucker wrote, “to create and keep a customer,”‘ and it is not, as Milton Friedman proclaimed, to make a profit. Creating and keeping customers and making profit are important measurements of success that are often mistaken for purpose. The purpose of business, now more than ever, must be to alleviate suffering and elevate joy by serving the needs of all stakeholders, including employees, customers, communities, and the environment.
We have to make a distinction between bad people and bad ideas.
The realms of business and corporate governance have been under the sway of many bad ideas for a long time, or at least ideas that are now obsolete. A short list of these bad ideas includes:
- Human beings are driven only by self-interest and are purely rational economic value maximizers.
- Business exists only to maximize profits for its owners.
- Work only matters in people’s lives to the extent that it generates income.
- The best way to motivate people is to use a combination of carrots and sticks.
- The job of the leader is to motivate, pressure or coerce people into behaving in ways that achieve the leader’s objectives.
- The world of work is separate and distinct from the world of our personal lives.
- The best way to increase profits is to squeeze employees and suppliers.
- It’s acceptable to mistreat people and foul the environment if you donate lots of money to charity.
These ideas have been crystallized into theories and have become dogma for many business leaders. But when money-centric robots aren’t programmed with moral responsibility, the result is often evil.
In the book you introduce three principles that define the Healing Organization. Can you mention them briefly? What is the Healing Organization?
The three principles are:
- Primum non nocere– first do no harm
- Malus eradicare– root out evil
- Amor vincit omnia– love conquers all
The premise of the Healing Organization is simple: when we understand and meet people’s real needs, we help to heal them, while healing ourselves and generating abundance. Conversely, when we uncover and prey on their cravings, desires, fears, and addictions, we hurt them, and ultimately we hurt ourselves, our children, and our planet.
Let’s go deeper – a specific example. Can you tell us about a specific Healing Organization?
Sure. In the book we highlight many companies that are making the transition.
Incorporated in the little Costa Rican town of La Florida in 1908, The Florida Ice and Farm Company (FIFCO) started as an agricultural and ice manufacturing business. Over time, the company evolved to focus primarily on brewing beer. It not only stopped polluting this natural treasure, but is now actively protecting it, while also showing other businesses around the world how to make more money by being better stewards of Pachamama, Mother Earth.
How did this transformation happen? It wasn’t a sudden enlightenment but rather a gradual process that began with CEO Ramon Mendiola listening to his stakeholders, and eventually bridging the gap between business-as-usual and applying the values he learned from his parents.
What do we learn from FIFCO’s experience in not only mitigating but in many ways reversing its environmental impact?
Here are six lessons:
- Listening to and honoring all stakeholders to better understand the problem as well as participate in the solution.
- Having a higher purpose that encompasses flourishing in all dimensions.
- Taking a holistic approach to business, which looks at social, environmental, and financial performance simultaneously rather than sequentially.
- Linking measurements and compensation to holistic goals. Forty percent of compensation for FIFCO leaders is linked to environmental and social goals, likely headed to 50 percent in the future.
- Maintaining a visible, public commitment to tangible goals. This creates pride, enthusiasm, and optimism among employees and other stakeholders.
- Collaborating widely. None of these challenges can be solved alone, especially the more significant ones. You need to partner with academia, civil society, and the government-not just locally but in many cases globally.
When he started listening to stakeholders’ concerns around the company’s footprints, Mendiola’s consciousness was still very much rooted in fear. But after he started engaging with them, he began to see that the company could have a tremendous positive impact. Fear dissipated and was replaced by excitement and then joy.
He made a series of bold public social commitments, having to do with water, carbon, and solid waste. The company delivered on all of them on schedule, leading to a surge of pride in its employees. This was a great insight for the CEO: doing the right things makes people happy.
Even though the company’s environmental and social initiatives were all externally directed, they found that the biggest impact was on people: “The engagement and commitment of my most important stakeholders, which are my employees, went up tremendously.”
That creates a virtuous cycle: doing the right things leads to greater employee commitment and engagement, which leads the company to be even more effective at doing the right things.
We definitely need more Healing Organizations. In fact, all businesses must become Healing Organizations. Thanks so much for writing this book for all of us.
INTERVIEW by Christian Sarkar