Bringing Heart, Healing, Soul & Courage to Business with Raj Sisodia

Raj Sisodia is Distinguished University Professor of Conscious Enterprise, Tecnológico de Monterrey; co-founder of the Conscious Capitalism movement and co-author of The Healing Organisation. But what is conscious capitalism and how can it help us evolve to where we need to go?

10 min read


Episode 5

What is conscious capitalism?

Conscious capitalism, says Raj, is a philosophy of business, a different way of life. It’s an evolutionary imperative because we have been thinking about business and capitalism for a certain way for too long.

We’ve been looking at it through a narrow scope, with the purpose of business being the impact we seek to make in the world – it’s been all about products, services and employment, with a purely financial gaze.

And it’s time to change the narrative.

Conscious capitalism began as a movement in 2008, with four pillars defining the why, what, who, and how of business.

Traditionally, says Raj, the why has always been about profits, and shareholder value. But in conscious capitalism, there needs to be a higher purpose beyond profits.

“Profits are essential and necessary, but that’s not the reason for a company to exist. Companies trying to do something impactful and meaningful and solve some challenges that we face, there’s a higher purpose.”

Conscious capitalism is also about stakeholder integration, not just about shareholder value creation. It needs to simultaneously create value for employees, for their families, for customers, communities, suppliers, the environment, society as a whole, says Raj.

And in order to achieve purposeful value creation for all stakeholders, you need conscious leadership.

“You need leaders who are focused on people and the purpose, not just the money and self realisation. It’s self transcendence in a way, impacting other people through your leadership, taking people to a better place.”

Finally, conscious capitalism encourages a trusting and caring culture, where people feel valued and inspired.

“Those are the four pillars of conscious capitalism, and when they work together in a synergistic way, because you can adopt any one of those and make a difference. But if you adopt all of them, then they all reinforce each other.”

Increased employee engagement

Companies that adopt the conscious capitalism philosophy, says Raj, create more financial wealth and outperform those that put maximising profits at the expense of everything else

Raj’s research found a number of reasons to correlate the results. For example, when you prioritise employees and their wellbeing, employee engagement goes up.

According to research by Gallup, average global employee engagement is below 20%, with engagement in the US being one of the highest at 35%. Which, if you think about it, means two thirds of the workforce aren’t passionate about what they do.

However, in companies that adhere to conscious capitalism, the level of employee engagement is well above 90%.

“People are not just engaged, they’re passionate, they’re committed, they’re a lot more creative, innovative and collaborative. And that just makes all the difference, because ultimately, every business runs on human energy. It’s the creative and caring aspects of human energy.”

Less marketing spend

The second reason why these companies are more successful, says Raj, is they spend less on marketing. They delight customers naturally, they generate business through word of mouth, and all the stakeholders involved in the organisation become marketers.

“When you have a company like this, which is rooted in a higher purpose and has these core values that are shared across all stakeholders, everybody contributes to the flourishing of these companies. So marketing spending in many of these companies is 90%, sometimes even 95%, below the industry average.”

Reduced employee turnover

Because the business is a better place to work, people want to stay, lowering employee turnover rates. When you’re not constantly having to recruit new employees you save money, and the people who stick around become more effective, more productive, more collaborative etc.

“As a comparison, Costco and Walmart are competitors. But Walmart’s annual employee turnover when we looked at it was 70%. Costco was 7%. Walmart had to replace 2 million people every year just to replace those who left voluntarily. At Costco people join, and they never leave.”

The difference between traditional companies and conscious capitalism companies, says Raj, is the latter spends money where it will make a difference.

If you pay your people well, provide them good working conditions, and good benefits. If you do the same thing with your suppliers, and you invest in the customer experience, you’re going to save money on ads and marketing generally, and you’re going to reduce employee turnover, employee recruitment and training.

Building a better world that works for all

So what’s driving Raj to pursue his aim of building a better world through conscious capitalism?

“My purpose over time has evolved, but today I would express it as bringing heart, healing, soul and courage to business and leadership, so that we can build a better world that works for all.”

Too often business is mostly about the head and the wallet, says Raj. We leave the human side, the emotions, out of how we think about economics and business. Instead we focus on dispassionate thinking and making decisions to maximise what’s in your wallet.

But when you leave out the human side of business, you aren’t able to tap into the real source of power, which is us.

The difficulty of shifting mindsets

While it’s easy to see the benefits of adopting the model of conscious capitalism, it’s difficult to bring about a paradigm shift in people’s mindset, says Raj, simply because when you’ve been educated in business school, and you see how most businesses operate, you automatically conclude that that is how things are done.

“Unlearning what we’ve already learned is one of the big challenges. There’s a deeply ingrained mindset, we’ve got theories and frameworks that all of us have imbibed. The whole paradigm of economics is based upon this idea of homo-economics as this is how human beings behave.”

But the truth is the current system isn’t what motivates us as a whole; it’s a very narrow understanding of human behaviour and doesn’t reflect what human beings really are. It becomes a self fulfilling prophecy: we treat people as though they’re individualistic, selfish, and materialistic, and so people begin behaving that way, and we start celebrating greed.

And to make things worse, says Raj, we have an economic system where we’ve selected leaders based upon certain criteria i.e. their ability to deliver numbers, rather than how they got the results.

“Very often, it’s a result of people who are quite ruthless, and even sociopathic. Disturbing research shows the level of sociopathic behaviour is about 1% in the general population, but it’s about 20% in high security prisons, and it’s also 20% in leadership and executive roles.”

Examples of companies performing conscious capitalism

Unilever, says Raj, ever since Paul Polman became CEO, are doing amazing things, not only in terms of the sustainability side, but also in terms of the future of work. They’re giving all of their 160,000 employees the opportunity to discover their own purpose, and to live that purpose through their work.

They’ve also committed to providing a living wage, not only for their employees, but also all their suppliers will have to provide a living wage in over 180 countries by 2030.

Patagonia, a smaller company, is another great example. Microsoft has done amazing things. Frisco in Costa Rica. The Tatas in India.

Being the wise fool of tough love

In the past, our vision of a leader was General Patton, says Raj, someone who is decisive, gives focused orders, and is ruthless, etc. But today, the best leaders are the ones who bring the whole human to the role. In fact they go beyond the masculine and feminine: the best leader is a wise fool of tough love.

“If you are a leader, and you’re using other people to achieve your personal goals, that’s not a leader, that’s a tyrant. A true leader is there to take people to a better place. So how do we awaken in people the desire to serve?”

Servant leadership is a related concept to conscious leadership, says Raj, and it’s essential, because it all begins and ends with leadership. If you have leaders who are just about money, power and ego, they’re going to create that environment.

But if you select leaders for their emotional intelligence, maturity, spiritual intelligence, and their value system, you’re going to find ones who will transform the company and society for the better.

How can you switch your leadership to the new paradigm? How can you achieve this awakening? There are two essential elements, says Raj.

The first is to get yourself a mentor, guide or teacher, i.e. someone who inspires you in a certain way. The second is to have a dis-equilibriating experience that takes you out of your comfort zone.

Business as a place of healing

Most companies are not healing organisations, says Raj, they are in some way hurting organisations, because the level of stress that they create internally is extraordinary.

It’s not a given that work has to be incredibly stressful, to cause heart attacks, to shorten your life. In fact, it can be quite the opposite. Work can fill your life with joy, fulfilment and meaning. It can leave you physically, mentally, emotionally, spiritually and socially stronger than when you came in.

“Businesses can become a place of healing for those who work there. They can become a source of healing for those we serve: our customers, our communities, and they can become a force for healing and society.”

So, how do we come together despite our differences, and do great things? You can not have a healing organisation without a healing leader, says Raj. And you can’t be a healing leader until you work on your own healing. As Carl Jung said, ‘until you make the unconscious conscious, it will drive your life and you will call it fate.’

“A big element of this is for each leader, each of us to work on our own healing, and understand what needs to be healed in our psyches, so that we can be a healing influence on others.”

What the world needs most

The world needs awakened, cooperative, caring leadership, says Raj. For anyone currently thinking about choosing their life work, his advice is thus:

“Stay true to yourself. Understand who you are. Know yourself, love yourself, be yourself, figure that out, and then align that with your work. You will not discover your dream work right away. But as long as you stay connected to who you are, you’re going to gradually move towards your true calling in this life.”

We each of us have a unique role to play in our evolution. But too often, people fight about what that evolution wants, rather than trying to align with it. We need to be instruments of that which seeks to emerge in the next stage of our existence here, says Raj. As opposed to trying to go against it and move things back backwards.

So what can you do right now to contribute toward a better world?

Work on yourself, on your self awareness, your consciousness. Because this impacts all the people whose lives you touch. Align the different aspects of your life, i.e. your home life, work life etc. And then find your tribe.

Make the effort to shift your mindset, says Reynir, and we will have a much better society.

If the talk resonates with you, we’d recommend you listen to this episode in your favorite podcast player!


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