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A preachy book about management, not capitalism
on 10 March 2014
I'm frustrated by what's been happening with capitalism. I'm old enough to remember the times when some of us had to defend capitalism against what many believed to be sensible alternatives and it makes me sick to the stomach to watch a cabal of no more than ten thousand big money investors and their CEO puppets do some truly nasty things in the name of capitalism.
Other than call today's state of capitalism by its name (crony capitalism) this book does not address any of the issues I have with the system. It does not even try to discuss why businesses today have stopped reinvesting their profits, why business today carries so much debt, why business these days spends record high amounts on lobbying and record-low amounts on pay.
Conscious Capitalism is, instead, a manual on how to manage retail businesses.
The most important point the authors make is that first you need to honestly and wholeheartedly embrace a purpose, a set of core values, and then the rest will flow, profitability included.
The second most important point the authors make is that you should look after all stakeholders of a business: clients, suppliers, employees, communities, the environment, even the competition, activists and unions, and then the shareholders will reap their dues, because taking care of all stakeholders will result in the excellence that will be essential for profits.
The third and fourth big points I could not tell apart, they concern "conscious" management, leadership and culture. That's where the going got a bit heavy with me. Like, a good manager should meditate, allegedly. I suppose if he's got the spare time it's a free country go ahead and meditate, but I would not list it in my top ten thousand priorities when I used to run my company. Hell, I skipped going to the dentist, I seem to remember.
Here's my big problem with the book: it sets out to refute some paper that was apparently written by Milton Friedman which said a business answers to its shareholders and nobody else. The authors say "no, it should do all these other things first and what's good for the shareholder will follow." Perhaps. But I was not convinced. I was never sold on why Milton Friedman is wrong (practically or morally) and I was never sold on why a cigarette company, for example, will deliver better results to its shareholders if it goes all moral on us, when its very purpose is not what I would consider moral.
On the other hand, the book did actually convince me that a company that buys from many suppliers and sells to the wider public can benefit from being all crunchy like the authors of the book seem to be. So if you're in that type business, do read the book, you'll get some good pointers.
And be prepared to deal with long strings of adjectives. Under this scheme, lives become" long, healthy, vibrant, productive and meaningful," for example. The scheme itself entails "living a life of meaning and purpose, service to others, striving for excellence, growing as an individual, friendship, partnering, love, and generosity." Hope you get the idea.
Oh, and prepare to LOVE Whole Foods, the Container Store, Medtronic and a few more companies that the authors like, while other companies you might actually have heard of (I'm thinking Google and Amazon, for example) only get brought into the discussion when it suits.
That said, if you have a good stomach for this type of hype, this is not a bad book about how to win in retailing. It's probably a very good book on that narrow topic. And it's got nothing to do with reforming capitalism, I'm afraid. That entails change to tax laws, regulations, property rights, intellectual property rights in particular, immigration laws, world trade agreements, foreign policy etc. Meditation? Not so sure.
And one last thought: a bit like I left that Howard Stern movie some fifteen years ago thinking he made a movie to apologize to his wife, or at least defend his actions to her, the thought crossed my mind many times that the Whole Foods CEO co-wrote this book with one of his gurus to feel better about having anonymously blogged about his competitors. I'm probably wrong about this. But I could not kick the feeling, it did color my reading of the book.