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Highlights from our Interview with Raj Sisodia

By Rajendra S. Sisodia
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We recently sat down with Raj Sisodia, Axialent Advisory Board member and co-author of “Firms of Endearment” and “Conscious Capitalism“. We spoke with Raj about different topics and you can find a first selection of five questions below.

How do you think conscious businesses will adapt to a future driven by disruption, speed, and acceleration?

How are conscious businesses thriving in the VUCA world?

How will new technologies, such as artificial intelligence impact business?

How do you see most leaders today?

Are you hopeful about the future of business?

Transcription

How do you think conscious businesses will adapt to a future driven by disruption, speed, and acceleration?

Yeah, so conscious businesses are still businesses, so they face all the challenges that a traditional business will face, and there are changes in the environment, technological changes, changes in customer preferences, or other things as well. So I think all businesses have to adapt and evolve as the conditions change.

I do believe that conscious businesses, and I use that interchangeably with firms of endearment, they do tend to have a greater ability to adapt and respond, I think, because they are more decentralized. They do use everybody’s intuition and everybody’s capacities. It’s not that a few people at the top have to have all the answers, so I do think that these companies are better positioned in the future to really adapt and keep up with the trends and the changes that are happening in general.

How are conscious businesses thriving in the VUCA world?

I think any kind of organization, if it rigid, if it is bureaucratic, if it is centralized where all decisions flow from the top, where it’s a hierarchy, I think those become more static targets when you have enormous change in the world. When you have organizations that are organized in a decentralized way, and they are closer to the customer, and they have fewer layers between senior management and the front lines, I think they are better able to adapt. I think a part of why we have more funds of endearment and conscious companies is a response to all the changes that have happened. The world didn’t just start changing. The world has been changing for a long time especially in the last 30 years.

We talk about 1989 being a turning point and many things changing very rapidly in the world since. I would say traditional businesses simply haven’t adapted to that reality. When the rate of change outside an organization exceeds the rate of change inside the organization, then sooner or later there’s a divergence. That’s what we’ve seen with traditional business. We’ve seen the amount of confidence and trust that people have in business as an institution has gone down dramatically in the last 40 years according to Gallop. We’ve always seen the employee engagement remain very low, generally, across the world, in fact, 13%. Clearly, the way that traditional companies are operating doesn’t work. The way we work isn’t working.

I do think conscious companies are more in harmony with the way the world is and where people are. In that sense they’ve already shown their ability to adapt. They are ahead of the curve relative to other companies. They’ve got an operating system that is more attuned to the modern world where many companies are still using an operating system that was developed in the industrial age with the military as the organizing metaphor, the command and control, the hierarchy, the centralized decision making, even the language of strategy, and tactics, and operations, and front lines, and headquarters and staff. Those are all military terms. That mindset still remains. I don’t think that traditional mindset works very well.

I do believe that conscious companies where people are more empowered, where decision making is more decentralized, where we in fact are using the collective intelligence of the organism. The organization consists of organisms. The whole thing itself is like an organism. It has distributed intelligence. If you empower people to be able to make decisions, Whole Foods is a good example. They’ve always been organized as a very decentralized company where every store is treated as an experiment. No two stores are alike. Every new store is seen as an opportunity to try some new things. A recent example is when they launched the Brooklyn store, for example. They had the rooftop of the store was converted into a garden. They have vegetables and other produce that are growing on the roof. Their parking lot is covered with solar panels.

How will new technologies, such as artificial intelligence impact business?

Well you know, every time there’s a great technological change, people have this kind of fear. It happened in the industrial revolution, we have the Luddites who were breaking the machines because they were displacing the workers. I think we had it at the PC Revolution as well because that caused a lot of white collar work to get automated. So this kind of fear has always existed.

Typically, in a dynamic system, we adapt, and we figure out new ways of creating value, that require human beings. But that’s number one. The second is the consciousness behind the deployment of these technologies also matters. So any tool, and every new technology is a new tool. Any tool can be used to do great harm or to actual also do great good, based on the consciousness of who’s using it. So a scalpel can be used by a surgeon to save your life, but also can be used by somebody to kill. And I think these technologies can be used in a way that dehumanizes and victimizes people, and destroys jobs, and so forth.

If the driving motivation is simply to maximize my profit from that technology, then I might do those kind of things. But if my driving motivation is to say how can we serve people better, now using these additional capacities, then I think if would be two different outcomes. So if people are the center still, in the business, I think you’ll use these to add and create further value in the world.

\And I think there will be displacements still, even with that consciousness. But what I think will be a growth area, if you look in the last few hundred years, everyone from agrarian to industrial, manufacturing of products. We learn from products to services, and we learn from services to experiences. And every time you go, … so coffee can be consumed as a commodity, you can just buy the coffee and make it at home, or you can buy it as product, you make coffee, or you can buy it as a service, you go to the gas store, gas station and you can get coffee there, or you can have it as an experience, you go to a Starbucks or high-end coffee shop. I think it moves up in the value in what people are willing to pay, and what they get out of it. So I think in the future, more of our consumption will be in experiences, services and experiences.

Services is already 80, 85 percent of the economy. It used to be 10 percent. And experiences has become more and more, so I think we’ll find new ways of adding value. And finding ways for people to remain employed, but beyond that, it’s hard to see the future, and how it’s going to unfold. But I think the consciousness of how we use these new technologies is very important.

How do you see most leaders today?

I think there’s a lot of leadership malpractice out there. It’s the leader’s responsibility and duty to know the best way to think about and run a business, and I don’t think most leaders are doing that. Most leaders are not leaders because leaders, somebody who is using other people to serve their own personal goals, that’s not a leader, that’s a tyrant. That’s a definition of a tyrant, most leaders are tyrants.

They’re using people to achieve their own personal goals. A true leader is one who’s there to take people to a better place, to create a shared vision and then develop a strategy of how you get there. We don’t have enough true leaders. We’ve got tyrants and then we have managers, more like small parents. That’s the unfortunate reality of business I think, today, for the most part.

Are you hopeful about the future of business?

I am hopeful because we have movements like ours and there are many others that are out there in the world. I think there is a rising consciousness in people generally. People are better informed, better connected, more intelligent, more conscious, more caring, more all of those kinds of things. I think the broad trends are in the right direction. As Bill Clinton said, “Don’t mistake the headlines for the trendlines.” The headline might tell you something, but the trendline is in the opposite direction.

There are many small companies that are starting out operating this way. Most entrepreneurial ventures with millennials, et cetera start out with purpose and stakeholder orientation. I do feel that over time those large companies that are not operating in this way will actually not succeed anymore. They will be out-competed by new companies that come along with a better way of doing things.

I think in the longterm, but in the meantime there’s a lot of unnecessary suffering. If we can change the hearts and consciousness of the leaders of those large companies today, then we will prevent a lot of unnecessary suffering, and we will expedite the transition. I do think that that transition will happen and it’s inevitable, but it’s a matter of how long it takes and how much suffering there has to be in the interim.

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