Investing in Companies with Soul:
” Soul is
when you have the ability to make other people feel better about being alive,
regardless of their condition”
Wynton
Marsalis:
In his
book, The Executive's Compass: Business and the Good Society, James O’Toole of the Aspen Institute posits a concept of
“The good society.” It is a place where the citizenry feels at Liberty to pursue their own goals, where there is guaranteed Equality of opportunity, where efficient markets drive wealth creation and constantly increasing
standards of living and where we care for our natural resources and engage in
human interconnectedness so that Communities can flourish and create an ever improving quality of life.
In other words, O'Toole's concept of the good society requires a state of
"concinnity" among Liberty, Equality, Efficiency, and Community.
Concinnity is an ancient English noun, rarely used today, that means "a
skillful blending of the parts achieving an elegant harmony."
We
firmly believe that capitalism has the greatest potential to breathe life into
O’Toole’s concept of the good society. Capitalism is the engine of wealth
creation and personal opportunity. It provides us with the resources to pursue
our own goals, and affords us the ability and time to devote to community. Absent
capitalism, the good society is unattainable. However traditional capitalism
has historically levied what were seen as unavoidable ills on society as
well. Pollution and the depletion
of resources, exploitation of workers and an ever increasing gap between the
very wealthy and the poor even in countries with the most efficient private
market economies has been seen as inevitable and justifiable for the sake of
shareholder wealth creation. For capitalism to take root, basic conditions such
as the rule of law, property rights, financial infrastructure, economic freedom
and political freedom must exist. Admittedly, our ability to convince or
influence countries to adopt these basic conditions is very limited. (Though we
will strive to support individual organizations with a stated mission to do
so.) However, what we can influence is
the way capitalism is practiced within environments where the right conditions
exist. We believe a new form of Conscious Capitalism, one that smooths
the rough edges of traditional capitalism, is required for capitalism to
flourish, spread and create the good society.
We
believe strongly that in the era of Conscious Capitalism, great companies will be those that strive to create value
for all stakeholders by operating in a state of concinnity in which
stakeholders (customers, employees, communities, suppliers, investors) are sustained
by the sublime experience of interacting with each other in elegant harmony. In
their book, Firms of Endearment, authors
Raj Sisodia, David Wolfe and Jag Seth, offer stark evidence that operating from
this more holistic perspective can do more to increase shareholder value than
operating from a more self-focused (i.e., shareholder dominant) operating
model. These companies have accepted responsibility for becoming “instruments
of service to society” in addition to their obligation to make returns for
their owners. We believe this view of capitalism will be more readily and
globally embraced and thus increase the likelihood of achieving the good
society for more and more citizens of the world.
Peter Drucker surmised that
profit is not the goal of a business enterprise, merely a measure of the
validity of its business model. Profits are a lagging indicator of what is in
the hearts and minds of customers. We believe the hearts and minds of customers
are yearning for companies that understand doing good and doing well are equal
partners in capitalism. We believe in a model of evolutionary capitalism which
aims to be an engine of value creation and service by tending to the
interdependent needs of all stakeholders as a means of achieving the good
society.
