Conscious Capitalism. John Mackey

customers, suppliers, and investors—to the business and aligns them. No matter its specific intent (see the sidebar “Examples of Higher Purpose”), a compelling purpose reduces friction within the organization and its ecosystem because it gets everybody pointed in the same direction and moving together in harmony.

      EXAMPLES OF HIGHER PURPOSE

       Disney: To use our imaginations to bring happiness to millions.

       Johnson & Johnson: To alleviate pain and suffering.

       Southwest Airlines: To give people the freedom to fly.

       Pivot Leadership: Better Leaders = Better World.

       Charles Schwab: A relentless ally for the individual investor.

       BMW: To enable people to experience the joy of driving.

       Humane Society US: Celebrating animals, confronting cruelty.

       American Red Cross: Enabling Americans to perform extraordinary acts in the face of emergencies.

      An excellent guide for discovering or rediscovering your higher purpose is It’s Not What You Sell, It’s What You Stand For, by Roy Spence and Haley Rushing, cofounders of the Purpose Institute. As they put it, “What is a purpose? Simply put, it’s a definitive statement about the difference that you are trying to make. If you have a purpose and can articulate it with clarity and passion, everything makes sense, everything flows. You feel good about what you’re doing and clear about how to get there. The more constituents that you have the more important it is to have a simple and clearly defined purpose that everyone and everything can report up to and a set of Core Values that animates the way people interact with one another.”²

      Purpose is most powerful when it taps into a “universal human truth.” In other words, it is fully aligned with the higher aspects of what it means to be human (or as Abraham Lincoln elegantly put it, with “the better angels of our nature”). Such a purpose has an uplifting moral quality, appealing to people’s highest ideals and motives and transcending narrow personal concerns.³

      Purpose must come before formulating a strategy. It seems so obvious today, but it wasn’t always so. Business academics and executives long ago bought into the notion that the purpose of all business is to maximize profits and shareholder value. In fact, most business school courses on strategy hardly mention the word purpose in any other context.

      Purpose, mission, and vision are often used interchangeably. However, it is important to maintain a distinction among the three. Purpose refers to the difference you’re trying to make in the world, mission is the core strategy that must be undertaken to fulfill that purpose, and vision is a vivid, imaginative conception or view of how the world will look once your purpose has been largely realized.⁴

      Why Purpose Matters

      A higher purpose gives great energy and relevance to a company and its brand. Google’s original purpose was to organize the world’s information and make it easily accessible and useful. As founders Larry Page and Sergey Brin said, “How can that not get you excited?”⁵ REI’s purpose is to reconnect people with nature. The Container Store helps people get organized so they can be happier.

      Consider Southwest Airlines, perhaps the most successful airline in the history of the world. Southwest’s animating purpose from day one was to democratize the skies, that is, to make air travel accessible to the average person. When Southwest came into being in the early 1970s, only 15 percent of Americans had flown on an airplane; today, more than 85 percent have flown, due largely to Southwest’s pioneering efforts to offer low fares, bring air service to smaller markets, and market it in a fun way. Southwest has been consistently profitable since it started operations. It provides a great experience for customers. Team members love working there. The company is founded on having fun and radiating love (its stock symbol is LUV).

      Whole Foods Market is passionate about helping people to eat well, improve the quality of their lives, and increase their lifespan. Our purpose is to teach people that what they put into their bodies makes a difference, not only to their health and to that of the people who supply the food, but also to the health of the planet as a whole. From our start in 1978 as Safer Way, Whole Foods Market has promoted organic food and the agricultural systems from which it derives. By helping to develop markets, customers, distribution networks, and even the national standards for labeling for organic foods, Whole Foods has also promoted the environmental benefits that accompany the increasing number of organic farms, dairies, ranches, and sustainable agricultural practices. For example, because organic farms utilize no synthetic fertilizers or pesticides, there is reduced usage of fossil fuels and less chemical contamination entering food chains and water supplies.

      Purpose and meaning are now being embraced by large mainstream companies such as Unilever, PepsiCo, Inc., and Procter & Gamble which touch the lives of billions. At PepsiCo, Inc., CEO Indra Nooyi has been emphasizing “Performance with Purpose” by investing heavily in drinks and food products that are healthier for customers. P&G CEO and chairman Robert McDonald is seeking “purpose-inspired growth.” He has articulated the company’s purpose as “touching and improving more lives, in more parts of the world, more completely.”⁶ Unilever CEO Paul Polman recognizes the importance of connecting the company to a purpose beyond profits and growth. “Having a deeper purpose to what we do as people makes our lives more complete, which is a tremendous force and motivator. What people want in life is to be recognized, to grow and to have made a difference. That difference can come in many forms; by touching someone, by helping others, by creating something that was not there before. To work for an organization where you can leverage this and be seen to be making a difference, that is rewarding.”⁷

      Purpose is something we can never take for granted; the moment we do, it starts to be forgotten and soon disappears. It has to be at the forefront of consciousness (and therefore decision making) literally all the time. When the purpose is clear, leadership teams can make quicker and better decisions. Clarity of purpose also leads to bolder decisions. Rather than adjusting decisions according to the winds of public opinion or changes in the competitive environment, decisions in a purpose-driven company take those things into consideration while also being informed by something more soulful and sturdy. This leads to superior overall performance. Purpose-informed decision making is a critical connection point between clarity of purpose and superior performance, financially and otherwise.⁸

      Losing a Sense of Purpose

      Every major profession has a higher purpose as its reason for being. This is true of medicine, which is about healing. It is also true for education, architecture, engineering, and the legal profession. Each is animated by service to a higher purpose, one that is aligned with the needs of society and that gives the profession legitimacy and value in the eyes of others. Each of these professions, of course, is also partly about making a profit and earning a living. However, when any profession becomes primarily about making money, it starts to lose its true identity and its interests start to diverge from what is good for society as a whole. As Einstein said, such a loss of higher purpose is not uncommon today: “Perfection of means and confusion of ends seem to characterize our age.”

      Consider two industries that have lately fallen in public regard. The pharmaceutical industry’s drop in public esteem has been precipitous. It used to be a greatly admired industry with a clear sense of higher purpose; companies invested heavily to develop miracle drugs that saved, improved, and extended lives, and developed vaccines to prevent devastating diseases such as polio and cholera. As recently as 1997, 80 percent of Americans had a positive view of the industry; this plummeted to less than 40 percent by 2004.⁹ The industry has long been extraordinarily profitable, but its relentless obsession with ever higher revenues and profits has obscured its essential purpose of preventing, curing, and containing diseases. The industry’s loss of purpose has coincided with its declining reputation and a major increase in ethical lapses. In recent years, many drug companies have been spending much more on aggressive, often misleading advertising and less on R&D targeted at the serious illnesses that most afflict humankind.

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