Conscious Leadership

I feel I need to apologize for offering you this book review of Conscious Leadership by John Mackey, formerly CEO of Whole Foods until he sold it to Amazon. The book so closely resembles a cliche of a fluffy, bromide-laden business book that I want to cringe along with you at the idea that it might be worth reading, reviewing, or knowing about.

It gets worse, because when I say it so closely resembles that cliche, what I actually mean to say is that it is that cliche. It is full of bromides. It seems to be completely devoid of recognition of any downsides of either Whole Foods or Amazon. It advocates win-win-win solutions that help all stakeholders without even acknowledging the name Whole Paycheck or the businesses that offered natural foods for cheaper that it proceeded to gobble up or outcompete. It argues that the Amazon leadership team is full of integrity without acknowledging any of the myriad criticisms that could be laid at their feet.

But here's the unfortunate thing. In our society, anyone making their career within the context of large, for-profit enterprises is fighting an uphill battle against our broad expectations that businesspeople will behave as admirably as cockroaches. We live in a cynical age, and we are particularly cynical of for-profit enterprise. When a CEO is introduced in a police procedural, good chance they're the villain. When companies are mentioned in movies, it's probably because they are evil polluters. Many of the most popular stories about business are satires like Glass Onion, The Office, or Silicon Valley. "It's just business" is second only to "I was only following orders" for excusing bad behavior. Mackey has written this book to try to change that tide:

Unfortunately, too much of our culture believes in the win-lose paradigm. It’s hard to convince people of another possibility. In fact, that’s how business is too often portrayed in contemporary discourse: as greedy, selfish, and exploitative—a win-lose, winner-take-all process whereby the “rich get richer and the poor get poorer.

But the idea that business is all about exploitation, and simply redistributes wealth to the top of the social hierarchy, is an unfortunate and inaccurate myth. The percentage of the world population living in poverty has fallen dramatically in the past two centuries, and business has been the major contributor to that trend. Global incomes have increased at an unprecedented rate over the same period, even as global poverty rates have fallen—a process that has accelerated in recent decades.

I once had an extended argument with a teacher about the state of the school system. When I brought up the fundamental incentive problems of letting teachers grade their own students and then rewarding teachers for high grades or grade growth, she shot back that I was misunderstanding teachers. Teachers, she said, aren't like businesspeople. They don't go into the profession for the money, or for the incentives generally. They're good hearted people with real ethics, unlike businesspeople who will do what you pay them to do.

Yes, this is built on a poor understanding of psychology and broad generalizations of people that can’t apply to all of the millions of either teachers or businesspeople. But it still has enough of a core of truth to it to be worth discussing. We speak about teaching and nursing and other similar careers as callings because we recognize that many people who choose these professions do so for altruistic reasons. This doesn't make all of them dedicated, perfect, or immune to the blandishments of incentives, but it does bias the overall profession. If you were to graph the level of selflessness and prosociality of teachers and marketers, you could probably distinguish the groups visually.

This reminds me of the concept in economics of a lemon market.  As (invisibly) low quality used cars – lemons – become common in the market, and customers expect they might get one, they demand lower prices for the risk, and those with good cars choose other options than selling, increasing the percentage of lemons in the market. The expectation of lemons works as a feedback loop to create more.

There is a feedback loop going on with prosociality and businesspeople. The most prosocial choose to pursue a calling, in part because they have heard that the least prosocial go into business. There are enough stories of businesspeople who would cheat you if they can get away with it, and enough general distrust of people who prioritize the pursuit of profit, that we come to assume that all businesspeople might well be lemons, at least ethically. This story is self-reinforcing. Those who don't want to be considered lemons either excuse their choice of career or minimize it, often with the phrase "I work to live, not live to work", or by citing their family or hobbies first. At some point many burn out and look for a different career path.

This book is trying to create the equivalent of the certified used car market by carving out a language around businesses and leaders that act more prosocially. Success for this book would mean many more businesspeople acting with integrity and some degree of altruistic intent in their business dealings. Mackey tells many stories of people who have done so, and also argues along the way that you'll be a better businessperson if you follow his ideas. It's unfortunate, but as a society dependent upon business to drive or contribute to much real progress, we need books like this (though I’d be delighted to learn of better ones).

This book will certainly not satisfy a data nerd who seeks within it compelling evidence that being ethical in business will make you succeed more than being unethical. There's very little in the way of solid evidence at all. Instead, Mackey makes his case the way most business books do: through anecdotes about prestigious people. He cites many commonly known businesspeople, from Jeff Bezos to Charlie Munger, and tells stories from well-known businesses.

The focus on prestige works to his advantage as a moral argument to other businesspeople. His fundamental claim, if you parse it carefully, isn't that being a Conscious Leader (a leader with integrity, purpose and love) is guaranteed to work for you in making a business succeed, but rather that it is possible to succeed as a Conscious Leader, and also that you'll be a better person and make the world better because of it. He appeals to the desire to be a good person, and highlights possibilities of how to do so within business. Citing stories of prestigious leaders who did so normalizes the idea and works to support the claim that it's possible, even though those stories can't much support the idea that it works better.

Can you accuse Mackey of hypocrisy or at least cluelessness? Easily. He spent twenty years building a brand as the most expensive purveyor of fine foods to yuppies by preying on the fear of GMOs and pesticides, competing with or buying out natural foods stores with long histories and much cheaper prices, before finally selling out to Amazon to avoid dealing with an activist investor who thought Whole Foods should be earning more profits. In this book he works both to justify his decision to abandon his original vegan principles in what the stores sold (his pragmatism) and his sale to Amazon (their executive team has deep integrity, he claims). Even if every bit of what he says is his honest truth, it's hard not to be skeptical.

At the same time, his sale to Amazon is tremendously helpful in selling his narrative. By all accounts including his own, Whole Foods set a high standard for caring for their employees, especially compared to other grocery stores. They brought access to fresh foods to more of the country and raised the profile of the concept of organic foods. Their ability to do so and still sell for billions of dollars to Amazon makes their story vastly more palatable to a business executive who has the devil of pure profit-seeking standing on one shoulder.

One key thing to consider with a business book is how it will be misinterpreted. Books aimed at how to make business operate better tend to be built around the idea of a social technology, which can be deployed with selfish or selfless intent, or usually some mixture of the two. For example, generations of salespeople have learned from Dale Carnegie's How to Win Friends and Influence People that they should attempt to sound interested in the problems of their marks prospects. Many fewer of them bothered to hear his exhortation to cultivate an actual interest and his warnings that faking interest wasn't enough.

Similarly, Radical Candor by Kim Scott is extremely popular right now. Its core demand of leaders is to learn to balance challenging directly with caring personally. Note that Kim Scott's FAQ on Radical Candor starts off the definition of challenging directly with:

This involves telling people when their work isn’t good enough - Radical Candor FAQ

Is it any wonder that some portion of leaders who've bought into this become assholes? Just like Carnegie, Scott warns people of misuse of her tool, but cannot prevent them from misinterpreting.

Conscious Leadership attempts to mitigate this by being, more than most business books, about who a businessperson should be as much or more than about tools they should use. In this, the book moralizes intensely, which can be kind of unpleasant, but is perhaps necessary. Just as a key strategy in defending Agile has been to suggest that anything unsuccessful must not truly be Agile, it's easy to imagine deflecting criticism of Conscious Leadership by suggesting particular leaders simply weren't truly Conscious. There's even a genuine nugget of truth to this, though it's worth looking to see how well Conscious Leadership works in practice to teach people integrity. There’s plenty of moralizing in the Bible, but we’ve seen how well it works in practice.

The obvious comparison here is to AI alignment, and not just because it’s the hot topic of the day. Businesspeople, whether because of corporate incentives or cultural expectations, pursue profit over purpose, ethics or integrity. Conscious Leadership attempts to beg, shame, inspire or RHLF them into alignment, and it’s fairly obvious that while it can reduce the gap between behavior and ethics, it cannot completely eliminate it.

What will you be told to do if you read this book? The first section is focused on being a good person: having a positive vision of what you want to achieve with your company, loving – genuinely caring for – your customers, community and employees, and having integrity. The second section gets into some more specifics with win-win-win (yes, Virginia, 3 of them!) solutions, focusing on innovation, and thinking about the long term. The third section is about prioritizing the people who work for you, through helping them grow, and taking breaks and changing things up.

You probably know from the above which executives you need to subtly find a way to encourage to read this book, but let me highlight a few quotes to help you get a flavor for the book. I’ll start with one of Mackey’s best arguments.

Mackey makes a good case that the stories we tell have a strong influence on our behavior, pointing to the constant use of battle and competition metaphors among businesspeople, and suggesting that these framings affects how we behave.

Who but a very brave or foolish person would climb into a tank full of hungry sharks? If business is truly a “survival of the fittest” world, what place does love have in it? If we are fighting for our very existence, surely love will need to wait until after we’ve vanquished the competition. Will that day ever actually come? Not if we are stuck in that metaphor!

In many ways, the language and imagery of games and sports is a great improvement over wars and jungles. They necessarily imply important constraints such as rules, sportsmanship, and fair play, as well as positive virtues such as challenge, fun, creativity, teamwork, and excellence. The game metaphor translates well to the competitive matchups between businesses striving to win market share through higher quality, lower prices, and better service.

Notably, this is not the case with business, which always has multiple winners. Indeed, when game metaphors are applied to business strategy, it is better to consider them in the context of win-win-win strategies whereby all the major stakeholders are “winning” in their voluntary exchanges with the business—otherwise they wouldn’t be making the exchange in the first place.

Ironically, the business of sports follows this win-win-win ethos, with communities, teams, owners, team members, advertisers, sponsors, and media companies all participating in a growing, mutually beneficial ecosystem.

I think he's right about this, and I outlined a similar argument above. His suggestion for how to reframe business is around community.

Instead of thinking of business as a battlefield or a jungle, what if we think of it as a community? The recognition that every enterprise is composed of a variety of stakeholders who are all voluntarily exchanging with the business for mutual gain and benefit is one of the foundational tenets of Conscious Capitalism. It follows that one of the higher purposes of a business is to create value for all of its primary stakeholders. When we do that, every stakeholder flourishes, the business flourishes, and our larger society flourishes.

It also helps us to appreciate how important liberating love is to the entire organization. Love helps us to do a better job of creating value for all those different stakeholders, because it enables us to better understand their needs and desires and care more about fulfilling them.

When stakeholders feel loved by a business, they will tend to love the business back and appreciate the value it is creating for them. That means more than a transaction—it builds the experience of a community. And authentic community is practically the holy grail of business brands in today’s world.

If customers feel like members of a community, they will become the biggest advocates and the best marketers of the business. Likewise, team members will stick around and work for the business for decades. Suppliers will give preferential treatment to the company and will work closely with the business to innovate new products and services.

As Mackey gets more into the technologies, it’s easy to see ways that this will be (is being!) faked by companies that aren’t Conscious enough.

Here's a decent taste of what I mean by moralizing about being a better person.

In light of the reality of suffering, isn’t the single best response we can have toward every living being compassion?

As the psychologist Lewis B. Smedes insightfully writes, “When we forgive, we set a prisoner free and then discover that the prisoner we set free was us.

Tell the truth. There are few more basic moral injunctions. As Thomas Jefferson wrote, “Honesty is the first chapter in the book of wisdom.

When leaders demonstrate the courage to act with integrity even under challenging circumstances—when they do the right thing in the face of complexity, temptation, or confusion—they earn a kind of natural authority and build trust among those they lead. That kind of authority is powerful. It inspires deep loyalty. It’s not easy to counterfeit.

But as we continue to mature, the realization comes upon us that adult integrity is about much more than not being evil. Difficult ethical issues rarely show up in black-and-white terms. Challenging decisions don’t often present themselves in cartoonish moral outlines.

Integrity, I’ve come to understand, is not an isolated, unmoving moral stance, but rather an authentic, ongoing commitment to integrate my own purpose, my behavior, my values, and what I continue to learn.

Conscious leaders work to integrate their shadows, which means bringing those disowned feelings, tendencies, and experiences out into the light of consciousness and “owning” them.

As Ray Dalio, former CEO of Bridgewater Associates, the largest hedge fund in the world, explains, they go from saying “I’m right” to asking “Why do I think I’m right?”13 A humble person wants to get it right more than they personally want to be right. As a leader, one has to model this, encourage it, and even insist upon it. Truth and good ideas come in many packages, some loud and strong, some quiet and unassuming.

Setting cynicism aside for a moment, I agree that I'd like to see more leaders adopt these beliefs. It’s a large part of why I think it’s important to review and discuss this book.

Mackey acknowledges that most of his lessons on morality aren't new:

Many of the core virtues we champion in this book are ancient. Love, integrity, and purpose, for example, are “evergreen,” and their relevance is hardly unique to our era—though we continue to develop in our understanding of how they are expressed in contemporary organizational settings. However, conscious leaders can’t just double down on timeless values; they must also embrace new truths.

And he regularly tempers his moralizing with some realism, so we get quotes like this:

Zappos may aspire to “deliver happiness,” but it had better deliver lots of shoes at the same time! If not, the company may begin to falter in its essential value-creating activity and lose its edge, even if it temporarily seems to gain an extra halo.

There are a few moments where he almost gets gritty, like when he acknowledges that the path of Conscious Leadership isn't easy.

And be warned: thinking long term might sound lofty and philosophical, but in today’s business context, where the financial markets drive so many of the decisions of leadership, it can be a dangerous, even subversive choice. It could endanger your job, your company, and more. But it’s a risk all conscious leaders must take if they are truly dedicated to building a more conscious capitalism.

Or when he rails against activist investors, like the ones who tried to take control of Whole Foods and drove him to sell to Amazon.

Shareholder activism is one of the greatest threats to the burgeoning Conscious Capitalism movement. It’s like a parasite that has dug its way into the very structure of financial capitalism, and if we don’t root it out, it could very well kill its host. Recognizing this, many people have proposed legal and structural changes to the market designed to disincentivize such thinking—from changes to the tax structure to reconsidering the quarterly schedule of reports to rethinking public and private markets altogether. Some businesses have adopted the relatively new but very successful Benefit Corporation (B Corp) certification standard, an alternative corporate organizational form, now legal in thirty-five states and several other countries.

Sometimes I wonder if he's trolling us deliberately, though that feeling doesn't last long.

But the deeper meaning of that value creation—the “higher” part of the purpose—is found in the general inherent improvement or betterment that the value creation helps bring about. There may be some cases where this betterment is obscure or barely exists, or is swamped by other problems. But all authentic forms of value make the world incrementally more beautiful, true, or good to some extent.

What a perfect No True Scotsman fallacy. What a massive oversimplification. How amazing that he can pretend that value is unidimensional for all people.

Or when he buys into company mission statements whole hog, he goes as far as to quote Unilever's: "Make sustainable living commonplace."

Maybe my favorite moment of almost-self-awareness is this quote:

In a society awash in high-minded platitudes, it’s easy to grow a bit weary or even cynical about one more claim that this or that product or technology is going to “change the world.”

But his self-awareness tends to look like Lampshading. Mackey acknowledges that the criticism exists, but ignores the meat of it.

There's also plenty that’s had the thinnest of thinking applied. For example, he advocates for ESG style efforts without talking about any downsides to avoid:

The company was accustomed to setting ambitious key performance indicators (KPIs) related to profit, customer satisfaction, and market share. Now they set equally ambitious objectives related to their environmental impacts. In 2008, he declared that FIFCO would generate zero solid waste by 2011, be water neutral by 2012, and be carbon neutral by the end of 2017. “I didn’t know how we were going to get there,” he says, “but I believed we could do it.”

He's an advocate of whistleblowing, little acknowledging that whistleblowers often get punished.

Our culture has a love-hate relationship with truth-tellers. We respect them. At times we revere them. History may even celebrate them. But they also make us uncomfortable. They don’t simply “get along and go along.” They confront us and challenge our assumptions. They bring to light cultural shadows. They ask us to look more closely at areas of our collective lives we don’t always want to examine.

He suggests that innovative companies must be innovative in their decisionmaking without grappling with the ways that companies who tried this have struggled:

There is much that a conscious leader can learn from the various approaches to new organizational design, regardless of whether or not you choose to adopt such a system wholesale. Any organization that wants to survive and thrive today and tomorrow will need to find new ways to be adaptive and innovative in its decision-making processes. And any leader who embraces a spirit of service must focus on empowering their teams rather than simply exercising authority over them. A decentralized approach to management can uncover and liberate creativity at all levels in an organization, encouraging people to make decisions and take initiative by removing bureaucracy and management bottlenecks.

He tells stories that really sound like luck and then attributes them to the person's moral qualities.

Halla and her colleague didn’t change Iceland’s boom-and-bust trajectory. When the crash came, it hit hard, and the hangover was disastrous. People lost everything. The social contract was strained to the breaking point. In 2008, the prime minister came on TV and asked God to bless the now bankrupt country. But Halla’s clients—many of them the nation’s wealthy women—already felt blessed. Their firm was a rare bright spot amid the carnage. Their funds had advised clients to seek safer waters well before the downturn. While everyone else had been obsessed with how to profit today, they had been thinking about how to build for tomorrow.

Now, finally, people were ready to listen to Halla. Her prescience and her values gave her new influence in Iceland’s business community, and beyond.

I was delighted to notice him casually making the case for shorter work days without noticing.

We can expect to be operating at our peak for about three intensive work cycles in a day. That’s around four and a half hours where we are functioning at our highest level of overall energy.

Given how entirely surface-level so much of this book is, I think the perfect ending for this review is this absolute gem.

Authenticity is especially important when it comes to leadership today. People can sniff out pretense quickly.

Yes, yes we can.