Trend-watcher sees moral transformation of capitalism
It's a turbulent time in the business world. Prestigious firms are under scrutiny for their practices, and corporate high-fliers are going to court and sometimes to jail. Yet it's also a time when people are seeking new ways to incorporate spiritual practices and moral values into their workaday lives.
The focus on spirituality has become so pervasive, says Patricia Aburdene, one of the foremost trend trackers in the United States, that it stands as "today's greatest megatrend." Its impact on personal lives is spreading into institutions. And spirituality in business, she contends, is converging with other socioeconomic trends to foster a moral transformation in capitalism.
More businesses, for instance, are taking seriously their responsibility to communities as well as to shareholders. Some 70 million Americans are making choices in the marketplace as "values-driven consumers." Many CEOs are repudiating the corporate myth of "lean and mean" and the "profits at all costs" path to prosperity.
In a poll of 25,000 people in 23 countries by the Conference Board, a marketplace research group, two-thirds said they want business to "expand beyond the traditional emphasis on profits and contribute to broader social objectives."
Ms. Aburdene has a track record in deciphering the signs of significant long-term change. In the first "Megatrends" book more than 20 years ago, she and John Naisbitt described the birth of the "Information Economy," an idea scoffed at by many. In another bestseller a decade later, they predicted a networked, technology-driven era in business.
Now in her new book, "Megatrends 2010," Aburdene shares stories of business in transition and marshals facts and figures to show how transcendent values are beginning to reshape capitalism.
In a recent interview, she discussed the prospects for a sea change in corporate life. Here are some excerpts:
You speak of social, economic, and spiritual trends converging to foster a moral transformation of capitalism. Given the scandals of recent years, why is such a rosy outlook justified?
Social transformation happens only when there is a combination of economic necessity and new values. We are exactly at that point now in society. The accounting scandals, the tech bubble, the market crash are compelling capitalism to take a look at itself. But there must also be a positive sense of new options, and those exist in the form of rising interest in spirituality in business, the dynamic growth of socially responsible investing, shareholder activism, and the power of values-driven consumers in the marketplace.
Many people say they've felt a clash between their personal values and those of the corporate world. How is that changing?
There are two manifestations. People no longer want that spiritual part of themselves to be abandoned when they work and are searching for meaning and morals in the workplace. And corporate leaders now recognize that we live in a technologically based society where, in order to be consistently innovative, a corporation has to draw on the creativity of its employees.
Even the old-fashioned business types have to grudgingly agree that we find creativity, inspiration, and innovation within, from that deep spiritual part of ourselves.
What's the most significant evidence that spirituality is a force in business today?
First, the trend is developing in businesses all across the country, not just in certain geographic areas. Second, many employees have long been interested in the moral aspects of business, but when you see large numbers of CEOs getting interested in spirituality, you can be sure its influence is accelerating. And you have a diversity [in approach] - one CEO may start conference calls with prayer, for instance, while another may engage in meditation programs.
What do you say to those who question the practicality of spirituality in the business world?
My answer is it's very practical. Look at the parade of fallen corporate heroes who march across our TV screens. What was the reason for their downfall? A lack of self-mastery in their leadership. The quickest route to self-mastery is through personal, spiritual practice. This is what many leaders are learning.
Some people will say, well, it's good to help people feel better about their work, but business exists to make a profit and benefit shareholders.
That's the old-fashioned definition of capitalism; economist Milton Friedman wrote that the social responsibility of capitalism is to increase shareholder profit. But we've since faced the worst economic crisis since the Depression and begun to experience the consequences of a system that honored profits at all costs. The result of such a philosophy was trillions of dollars in shareholder value being lost.
You've subtitled your book "The Rise of Conscious Capitalism." Would you explain that?
We've now become conscious of the uncalculated social, economic, and environmental costs of that kind of "unconscious" capitalism. And many are beginning to practice a form of "conscious capitalism," which involves integrity and higher standards, and in which companies are responsible not just to shareholders, but also to employees, consumers, suppliers, and communities. Some call it "stakeholder capitalism."
Can such businesses remain competitive and keep shareholders happy?
Shareholders might have cause to quibble if companies were losing money; in fact, the opposite is true. Studies show that corporate finances flourish when social responsibility and stakeholder concerns are taken into account. A 2005 study of public firms on Fortune's list of the "100 Best Companies to Work for" examined how well they rewarded shareholders: Between 1998 and 2004, they returned 176 percent, compared to only 39 percent for the Standard & Poor's 500. Another study of 25 firms that excel in stakeholder relationships - by Towers Perrin - showed they returned 43 percent in total shareholder value compared with 19 percent by S&P 500.
There is a reason for these results: A business is a whole, and systems work better when all their organic parts are honored.
Who's in the best position to bring this moral transformation about?
A theme in "Megatrends 2010" is that we the people have the power as investors, employees, and consumers to heal capitalism. As a manager, for instance, you may not be the CEO, but you have moral power in your division and can introduce small initiatives. As an investor, you can move your IRA into a socially responsible mutual fund. As a consumer, you can recognize your power to change capitalism every day by every vote you take with your wallet or pocketbook.
As an entrepreneur, it's within your power to shape the values of a small business. Just yesterday I saw Starbucks' CEO on CNBC. His firm is famous for offering health benefits to all, including part-time, employees. They pointed out that Starbucks pays more on health insurance than it does for coffee.
This is a far cry from the idea in the 1987 film, "Wall Street," that the bedrock of capitalism is greed.
We need to graduate from the ridiculous notion that greed is some kind of elixir for capitalism - it's the downfall of capitalism. Self-interest, maybe, but self-interest run amok does not serve anyone. The core value of conscious capitalism is enlightened self-interest. As Jim Cramer on CNBC says, "Bulls make money, bears make money, pigs get slaughtered."
The major social trends identified by Patricia Aburdene in her book "Megatrends 2010" (Hampton Roads) are:
1. The Power of Spirituality
2. The Dawn of Conscious Capitalism
3. Leading from the Middle [Management]
4. Spirituality in Business
5. The Values-Driven Consumer
6. The Wave of Conscious Solutions
7. The Socially Responsible Investment Boom.