Tears of Joy

It had been 19 years since I had shed tears of any kind: the last time was when I had been moved by the sadness of the movie Ordinary People, to my wife's consternation. I had developed a seemingly impenetrable shell around my heart. On June 12, 2005, that shell was cracked in the most unlikely of ways.

I was sitting at one end of a rustic wooden dining table, across from David Wolfe, my coauthor on the book that would become Firms of Endearment: How World‐Class Companies Profit from Passion and Purpose. We were in the Poconos, a hilly region in eastern Pennsylvania. David and I had just returned from a vigorous walk up and down the hills of the ski resort we had come to for a writing retreat. After a hearty breakfast of oatmeal with raisins, we sat down to work on our assigned chapters. I was reviewing a story we had selected for the book and suddenly found myself choked up. It was about a UPS employee named Christine Virelli, a ninth‐grade drop‐out who had been out of the workforce for 16 years. She started with UPS as a part‐time package sorter after her husband was injured and could no longer work. UPS paid for her to get a general equivalency diploma (GED) and then for her to attend college. She said, “I can't leave UPS. They've done so much for me that I can't imagine not working for them. UPS helped me turn my life around, and I'm still growing.” UPS gave Christine hope for the future, and it gave me hope for the future of business.

I said to David, “This is the first time I have ever experienced tears of joy connected to my work. I think my body is sending me a message. This is the story of business that I wanted to learn more about and spread in the world.”

In that instance, I felt like I had discovered my purpose. Or perhaps more accurately, my purpose had found me.¹

Elizabeth Gilbert has written, “Ideas spend eternity swirling around us, searching for available and willing human partners. When an idea thinks it has found somebody who might be able to bring it into the world, the idea will pay you a visit.”² This happened to me that day.

Metamorphosis

Without being fully conscious of it, I had been going through a gradual transformation over the preceding years, showing small signs of awakening, tiny green shoots of hope and renewal in the otherwise barren soil of my life. I increasingly questioned prevailing corporate values and belief systems about business. Repeatedly, “experts” had told me that human considerations did not and should not factor into business decision making, other than as a way to achieve higher profits. It was never about doing the right thing for people or the planet or communities; it was always about doing the economically savvy thing for owners and shareholders. Under that logic, it was acceptable to sell a dangerous car that would predictably kill a certain number of people if the financial consequences of doing so were less than what it would cost to redesign the car.

My business education unquestioningly advocated filtering every business decision through the lens of EVA: economic value added. If a decision was additive to EVA, it was the right decision. If not, it was the wrong decision. It was as simple and as cold‐blooded as that. At first, I experienced a kind of moral injury when asked to adopt and teach this value system to my students, but gradually learned to live with it as just a fact of life – until I no longer could.

I started thinking about a word I had always hated: boss. It has its roots in slavery, deriving from the Dutch word baas, meaning “master.” The question arose in my mind, “Does BOSS = SSOB?” (meaning “Super SOB”). At the next dinner party I attended, I asked some friends who were corporate executives that question. They were unequivocal: “Of course it does. That's how bosses are supposed to behave.”

Adrift in this sea of cynicism, something in me resisted. The pilot light of my idealism and my belief in the fundamental goodness of human beings had sputtered over the years but was not yet extinguished. I knew there had to be a better way to think about business. I noticed that the world of business had enthusiastically embraced military principles and frameworks, routinely using military terms like strategy, tactics, operations, the front line, headquarters. Employees were like soldiers, customers were targets or territory to be captured, and competitors were enemies to be vanquished. But business is not war, and companies are not armies. Some people treated business like a machine, while others viewed it as a game. My academic colleagues mostly treated it as a math problem. I knew that it was none of those things. To me, business was about serving people and enriching their lives.

People routinely bandied about the phrase “It's not personal, it's business.” I found it offensive. Business involves and impacts persons; that makes it inherently personal.

Becoming an Instrument of Evolution

Firms of Endearment was a cat with more than nine lives, an idea that simply would not die. I wrote 13 versions of the proposal before a publisher finally agreed to take it on. Something in me sensed its importance and kept fighting to keep it alive. At the end of every meeting with Jag, after we had completed all our other tasks, I would say, “Can we talk about that book idea again?”

Synchronicity was at work here. Ram Dass said, “Seek to be an instrument of the universe rather than to be a master of it.” I was being called by unseen forces – the “implicate universe,” in Joseph Jaworski's words – to help birth something that needed to come into being in the world, something that was part of a necessary evolutionary unfolding.

After running into several conceptual dead ends, I asked David Wolfe to join us as a third author to give the project new life. I had met David eight years earlier when I was at George Mason University. A self‐educated polymath, David had endured an extremely strict Catholic upbringing with a harsh, miserly father on a farm in rural Maryland, and become a successful entrepreneur and author. By the time I met him, he was in his 70s, a respected expert on relationship marketing, developmental psychology, and the societal and business implications of an aging population. He had developed a particular expertise guiding people through midlife crises – and I met him just as I was getting ready to have my own! He soon became a cherished friend and guide. I was now attempting to write a book with two men who had both become father figures in my life.

My initial research question had been simple: Can companies become successful and be loved and trusted by their customers without spending much money on marketing? After discovering a few companies that spent virtually nothing on marketing and were loved by all their stakeholders (not just customers), we decided to make that our focus. We surveyed 2,000 people and asked them to identify companies they loved. From the 400 companies nominated, we picked 60 to study in more depth. In the end, 28 companies best exemplified the pattern we had discovered early in our research: they had a heroic, inspiring purpose; they sought serve and to create multiple kinds of value for all their stakeholders; their leaders were motivated by service to people and purpose rather than by power and money; and their cultures were built on trust, caring, authenticity, and joy.³

We did not know the financial consequences of this way of being in business. The leaders of the companies we selected never talked about maximizing profits; rather, these companies focused on living their purpose and having a positive impact on the lives of all their stakeholders.

Before doing the financial analysis, we wrote down our hypotheses. We expected that these companies did well for investors, but not exceptionally so, since that wasn't their core focus. We were prepared to argue that it was okay if their profits were lower than those of their peers because these companies paid their frontline people better, provided generous benefits such as health care, invested in the customer experience and had a positive impact on their customers’ well‐being, paid their suppliers well, supported their communities, and took care of the environment. The companies even paid taxes at a far higher rate than their competitors. They created a lot of value that does not show up on income statements or balance sheets.

It stunned us when our analysis revealed that the 18 public companies in our sample had collectively outperformed the S&P500 stock market index 9:1 over a 10‐year period. How was this possible? My business education had taught me that there is no free lunch, that business is a “zero sum” game with unavoidable trade‐offs. If these companies spent more on other stakeholders, surely their investors would suffer. But the numbers were undeniable.

We came to the life‐affirming, joyful realization that companies built on purpose and love are stronger, more resilient, and more successful in the long run than companies only concerned with profits. I had been taught that business is about the cold‐blooded pursuit of profits, that “only the paranoid survive,” that it's a “dog‐eat‐dog” world, that emotions have no place in the numbers‐driven world of business. But we had produced powerful evidence to the contrary.

This was the holy grail that I had been unconsciously seeking. It gave me faith that my idealism, my trusting nature, my belief in cooperation weren't liabilities in the rough‐and‐tumble world of business, contrary to what my father had told me.

Firms of Endearment started my healing. It showed me that what came naturally to me and many others was not inconsistent with achieving success and “winning” in the world. It confirmed that being caring and collaborative are strengths, not weaknesses. After the book was published in early 2007, I started hearing from people all over the world about the impact it had on their lives. Writing that book was not only the beginning of my journey toward purpose but also toward personal fulfillment and eventual healing.

Renegotiating a Relationship

Jag Sheth had become a revered father figure to me by this time. He had rescued me from obscurity and irrelevance in my career. But as with all father‐son relationships, there comes a time when the son must individuate and step away from the father's shadow.

As we were getting ready to submit the final manuscript to the publisher, David said to me, “We need to discuss the order of authorship.” He said it would not be fair for Jag's name to appear first, since his involvement in the project had been less than David's or mine. I had always put Jag's name first on the dozens of papers and five books we had previously written together. In most of those papers and books, his intellectual contributions had exceeded mine, even if I did all the writing. Given the academic convention of listing authors alphabetically, his name preceded mine even if our contributions were equal.

Had David not raised the issue, I would have stayed with the original order of authorship: Sheth, Sisodia, and Wolfe. I had no appetite for rocking the boat, because I avoided conflict and feared that Jag would not respond well. David said, “Don't worry about it. I will take it up with Jag. You don't need to be involved.” That was a relief; I would be shielded from the unpleasantness!

David wrote to Jag, making the case that the order of authorship should be Sisodia, Wolfe, and Sheth. He did not copy me on his email. Jag immediately forwarded David's email to me, appending the question, “What are we going to do about David?”

I responded that the book idea and title had been mine, I had done the research, and David and I had split the writing. I also wrote that the project meant a great deal to me personally because it reflected my sensibilities far more than anything else Jag and I had done together. Jag became irate, and I spent several sleepless nights agonizing over the situation. I asked academic friends what I should do; the consensus was, “Don't make an issue of this. If you do, he has the power to destroy your career.”

Finally, I wrote a note to Jag reiterating my case for being the first author. At the end, I left it up to him; I said I would accept whatever decision he came to. I felt that this was a way for me to stand up for what I believed to be right while also being respectful of the role he had played in my life. After a delay of several days, he wrote back, grudgingly accepting the order of authorship David had proposed.

In hindsight, this was a necessary conflict. I needed to shed my fear of confronting a father figure, to be steadfast when I believed fairness was at stake, and to stand up for my values. The experience contributed to my maturation and individuation, but it cast a shadow over my relationship with Jag that lingered for several years.

During the writing of this book, I asked Jag if we could have a conversation to reflect on what we had learned from the experience and how we saw it 15 years later. He told me that a major factor in how he had reacted was his perception that David and I had “ganged up” on him – which we had. He said, “It would have been much better if you had approached me directly to discuss the issue.” I did not have the courage to do so and “hid” behind David, which resulted in a fractured relationship. The lessons for me are clear: Don't shy away from hard conversations, and speak directly to people rather than about them.

Doubling Down

A few months before Firms of Endearment was published, I was in New Jersey teaching an executive program for a group of Siemens executives based on my book The Rule of Three. Over lunch, one participant asked me what I was working on currently. I replied, “I'm really excited about a new book that I have coming out in February called Firms of Endearment: How World‐Class Companies Profit from Passion and Purpose.” Without skipping a beat, he said, “Oh, I would never read that.” Surprised at his response, I asked him why. “I would be embarrassed if somebody I knew walked by while I was sitting in an airplane reading a book with that title. I bet you have a heart on the cover.”

“Well, we haven't finalized the cover yet, but that may not be a bad idea!” I replied.

I made light of it, but this exchange illustrated what we were up against: the aggressive, hyper‐masculine approach to business that permeates our world. We had run into that mindset at several publishers. Only after we did the financial analysis and showed that these companies outperformed the market dramatically did publishers become excited about the book. Before that, they saw it as a “touchy‐feely, be nice and be kind” story. Everybody knew that “nice guys finish last” – except that we had shown that they could finish first – and by a wide margin.

Soon after that incident in New Jersey, I went to India for the 25th reunion of my MBA class. Before heading to the resort town of Lonavala where my classmates were gathering over Christmas, I went to see my former professor, Dr. Shrikant, who had been pivotal in helping me get into the PhD program at Columbia. I met him in the late afternoon and gave him a pre‐publication version of Firms of Endearment: “Dr. Shrikant, I would love to know what you think about this book. Everything else that I have written came from the head; this book also comes from my heart.”

The next morning, he greeted me warmly. “You know, Raj, I normally go to bed at 8 p.m. because I wake up at 4 a.m. to meditate. But last night I was up until 11 reading your book.”

“Thank you, Dr. Shrikant! That means a lot to me, coming from you.”

“Yes, I am enjoying it. But as I read it, I realize that it is nothing new.”

I was surprised. “What do you mean? This was very new to me. It was unlike anything I learned in my PhD or MBA programs.”

“Everything that you have written here was written 4,000 years ago,” he replied.

“What management book was that? Nobody told me about it.”

He smiled at me. “It's all there in the Gita. So much of what we think we are discovering for the first time was actually thought about deeply by the sages of old and written about in the Gita.”

The Bhagavad Gita is one of the primary texts of Hinduism. Embedded in the spiritual epic Mahabharata, it is a 701‐verse poem about the interaction between the God Krishna and the warrior Arjuna on the battlefield of Kurukshetra. It is about knowledge, purpose, love, duty, selfless action, and many other spiritual themes. I had heard about it but hadn't read it. In fact, I was completely ignorant of the vast wisdom in the oldest spiritual tradition in the world. I resolved to educate myself right away, starting with reading the Gita.

Sliding Doors

After I returned to Boston, David Wolfe called. “You won't believe what happened,” he told me. “I was sitting next to a woman on the plane. We got talking, and I told her about our book. She said, ‘My friend John Mackey would really love that. Can you send it to me?’” David had replied, “The book hasn't been published yet. It is still a Word document.” “It doesn't matter. Just send it to me.” He emailed her the 300‐page Word document, which she forwarded to John, the cofounder and CEO of Whole Foods Market. David had just heard from John, who was effusive about the book: “I read all the major new business books, and this is the best one I've read in a long time. I love and agree with everything you guys have written.”

A few months later, John invited me to spend a day with him in Austin, Texas. When I arrived, he pointed out that he was wearing a Whole Foods cap, a Patagonia fleece, and New Balance sneakers – all firms of endearment! We toured the flagship Whole Foods store, located under the company's headquarters. It was exciting; for food lovers, visiting that store is like being in Disneyland. It had eight restaurants scattered throughout the store and a cornucopia of abundance everywhere. John had created something truly special, a sumptuous treat for the senses and nourishing for the body.

We went up to his office and talked for hours about life and business. As we stood at a window, he pointed across the street to an ad agency called GSD&M Idea City. “That is one of the best ad agencies in the country, run by my friend Roy Spence,” he said.

“Is it your ad agency?” I asked.

“Oh no. We don't have an ad agency. We don't have a chief marketing officer. In fact, we barely have a marketing department. We spend 90% less on marketing than our competitors, and 90% of what we spend is at the store level, not at headquarters. Most of that has to do with community outreach.”

This was music to my ears, of course. After all, Firms of Endearment had started out asking precisely that question: How could companies be loved by their customers without spending much on marketing? Whole Foods and the other companies in the book were living proof that if you genuinely care for all your stakeholders, including your customers, and treat them with respect and deep attention to their well‐being, you don't need to waste money on marketing gimmicks. You get the benefit of the best kind of marketing there is: free marketing from loyal and delighted customers, as well as from other stakeholders.

Over bottles of Kingfisher beer at an Indian restaurant that evening, John and I shared more about our personal journeys. I then reached into my jacket pocket and pulled out a mind map of my vision for the “Institute for New Capitalism,” or INC (I am a charter member of Acronyms Anonymous). I unfolded it and handed it to him. “John, this is what I want to do with the rest of my life.” My vision included working with established companies to change their approach to business, with entrepreneurs starting new businesses, and with business schools to get them to research and teach this new paradigm. John looked over the mind map and handed it back to me. “That is exactly my vision, Raj. But I like the name Conscious Capitalism.”

Something about the phrase instantly appealed to me. I liked the alliteration and the unexpected juxtaposition of two words that normally don't go together. I learned later that Mohammad Yunus, the micro‐lending pioneer and Nobel Peace laureate, had coined the phrase years before. He had used it to describe what we now refer to as social businesses, which reinvest all their profits towards achieving their social purpose. We would use it to describe all businesses operating with higher consciousness that include society as a key stakeholder.

By the end of the dinner, John and I agreed on a plan. We would each invite about a half‐dozen people who would be excited to help realize this vision to a retreat at John's ranch, about an hour outside Austin. We set a date in February 2008.

Birthing a Movement

In retrospect, the gathering at John's ranch was a historic event. An eclectic group of a dozen of us spent four life‐changing days together eating organic vegan food, drinking red wine, going on long hikes, playing Frisbee golf and ping‐pong, soaking in the hot tub, lounging in hammocks, and sharing our life stories, our hopes and dreams, and our vision for the future of business and capitalism. We saw ourselves as the vanguard of a movement to elevate a story of capitalism that had been over 200 years in the making. We were all passionate believers in the power and beauty of business when done right. We believed in freedom, in voluntary exchange, and most important, in bringing a higher consciousness to business and leadership.

By the end of our four days together, we had conceived of three separate entities: the Conscious Capitalism Alliance (focused on CEOs and other business leaders), the Conscious Capitalism Institute (which would work within business academia), and the Society for Conscious Capitalism (which would bring these ideas to the mainstream). We decided that our first activity would be to organize a gathering later that year, at which we would bring together thinkers and practitioners of conscious business. I left the retreat feeling exhilarated and hopeful that we were about to write a new chapter in the evolution of business and society.

The theme of the event was Catalyzing Conscious Capitalism. It was at the Crossings, a beautiful retreat center on the outskirts of Austin. Here is how we described it in our brochure:

This is not a seminar, nor a conference. It is an event. It is like a cornerstone laying. In fact, it is a cornerstone laying. From Nov. 6 through Nov. 9, 2008, in Austin, TX, a gathering of business professionals will lay the foundation for turning the idea of “Conscious Capitalism” into a global movement shaped by the conscious intent of companies everywhere to make the world a better place for all.

Those were the three most exhilarating and enriching days of my life – a sentiment shared by virtually everyone who attended. It was an extraordinary gathering of visionary thinkers and leaders like education pioneer Sir Ken Robinson, strategy guru Gary Hamel, Ed Freeman (the “father” of stakeholder management), the founders of the Blue Man Group, and many CEOs.

Sadly, David Wolfe could not be with us. He had battled leukemia for years and had recently been diagnosed with lung cancer. But his spirit was very much present at the event, which he had worked hard to codesign over the preceding months. Defying medical odds, David lived for several more years and continued his passionate advocacy for this way of being in business. He was in hospice care at his home in Reston, Virginia, when I saw him for the last time. To his last breath, he spoke animatedly about the beautiful things that were possible with this way of doing business. I marveled at his excitement about the future while transitioning out of this life.

Coincidentally, that first Conscious Capitalism conference unfolded with the global financial crisis as a backdrop. Lehman Brothers had gone bankrupt a few weeks earlier, leading to one of the biggest‐ever drops in the stock market. Economic devastation was all around us. Whole Foods stock had been as high as $70; it hovered around $6 when we had our conference. But through it all, John Mackey was remarkably unperturbed. I asked him how he could be so calm when his stock was down over 90%; most public company CEOs would have been in full crisis mode. “I don't know why the market is freaking out,” he said. “We're still the same company we were before. Our sales are down a little, but they'll come back. I'm not worried.” Sure enough, Whole Foods stock rebounded dramatically after the financial crisis, reaching $120 within a few years.

Growing the Movement

Over the next several years, the Conscious Capitalism movement took root, not only in the United States but around the world. But within academia, new ideas like Conscious Capitalism were subject to a level of skepticism bordering on cynicism, even hostility. I realized that most academics do not aspire to be thought leaders; they are content to be “practice followers.” They are also deeply wedded to their theories and frameworks. Rather than trying to convince academics to embrace this new mindset, I decided we should focus on spreading it in the world of practice, with the belief and expectation that once it got established there, academics would become interested in it. If we could show that it works in practice, perhaps academics would become interested in exploring whether it could work in theory!

In March 2010, my friend Shubhro Sen and I organized a two‐day Conscious Capitalism conference in Mumbai (the new name for Bombay). We believed that the consciousness part of Conscious Capitalism was deeply rooted in Indian wisdom, as Dr. Shrikant had pointed out to me a few years earlier. At the event, we had the CEOs of the most conscious businesses in India, a minister from the central government, and a prominent spiritual leader named Jaggi Vasudev, known as Sadhguru. I knew nothing about him, so I Googled him. Thinking that I had made a spelling mistake, Google asked me, “Do you mean sad guru?” He turned out to be anything but sad, delivering an inspiring talk on conscious leadership.

This conference launched our movement in India. Forbes India created a “Conscious Capitalist of the Year” award and CNBC India aired a three‐part series about Conscious Capitalism. My mother was thrilled, while my father was mystified.

In 2011, John Mackey and I decided to write a book on Conscious Capitalism. John suggested I read a couple of books before we got started: The Rational Optimist by Matt Ridley and In Defense of Global Capitalism by Johan Norberg. Both were quite eye‐opening for me, and I gained a deeper appreciation for how much capitalism had elevated humanity.

This set the stage for a deep learning experience while writing the book. John, introduced me to ideas I had not been exposed to before. The book that resulted from our collaboration was a synergistic blending of our perspectives and became quite impactful for many people.

The Conscious Capitalism philosophy has great appeal across the political spectrum. Conservatives love it because it is rooted in freedom and voluntary exchange and generates superior financial returns. Progressives love it because it puts people and human dignity at the center of business and treats the environment and society as important stakeholders. To me, it was a philosophical holy grail for business and capitalism.

***

My life in those years was intellectually challenging, purposeful, and extremely busy. I served on two public company boards. I gave 70–90 talks a year all over the world, accumulating hundreds of thousands of frequent flier miles. I helped launch dozens of Conscious Capitalism chapters around the United States and in many other countries. I was invited to meetings at the White House, the United Nations, the World Bank, and the Vatican on the future of business and capitalism.

But through it all, an emptiness remained at my core, a sense of not being firmly centered and grounded. I neglected my physical, emotional, and mental well‐being. I did not feel at home anywhere except in airline lounges. I was part of a movement to bring healing to a broken system, but a lot that was still unhealed within me was now bubbling to the surface. I was learning how deep my wounds were. I had found purpose, but not peace. My next quest would be for healing.

Reflections

Significant discoveries often happen by accident. I discovered a different way of being in business because I asked a very elementary question, the answer to which touched upon much larger considerations than I was aware of. But I followed my curiosity to where it led me: to uncover and articulate the tenets of Conscious Capitalism.

How can you cultivate a “beginner's mind”? Can you ask simple questions that can help you discover fundamental truths?

In my reluctance to raise the order of authorship with Jag, I showed that I valued harmony over fairness. I thought I could avoid the conflict with Jag by “outsourcing” it to David. But that only made the conflict grow larger. Had I raised it with Jag directly, we could have resolved it quickly and with less lasting damage.

Ignoring a conflict you have with someone doesn't make it go away; it just gets bigger. Asking someone else to handle it for you doesn't work. Are there any “necessary conflicts” you need to engage in? How can you be clear, polite, and direct in your communication? Are you prepared to deal with the consequences?

I was struck by the way David Wolfe transitioned from this life. To his last breath, he was channeling wisdom that would help make the world of work and business better, though he would not be around to experience it.

Think ahead to your own last moments in this lifetime. Will you be filled with regrets and bitterness, or will you transition with love and ease? What can you start doing today to ensure that it is the latter?