Getting Back to Banking’s Higher Purpose
What banker wouldn’t love to have the enthusiastic and friendly employees typically found at Whole Foods Market?
Building such a committed service and sales culture can be done but it certainly doesn’t happen overnight, according to Whole Foods co-founder and co-CEO John Mackey. Specific steps described by Mackey in a recent interview with BAI Banking Strategies include caring about the welfare of employees so that they, in turn, care about customers; emphasizing the societal benefits of whatever business you happen to be in; and infusing ordinary transactions with a sense of higher purpose.
Mackey is scheduled to explain these principles in more depth during his November 13 appearance onstage at BAI Retail Delivery 2014. As he explains in the interview below, many of these concepts derive from his philosophy of socially-conscious capitalism, which he outlines in his new book Conscious Capitalism: Liberating the Heroic Spirit of Business. And yes, even banks can benefit from adopting this philosophy, Mackey says.
“Banks train people on how to do their job but they haven’t done much to communicate why they’re doing this job. Today, people want to know more than just the how; they want to know why. They want to think that their work is making a difference.”
Q: One thing that Whole Foods is noted for is its friendly, enthusiastic employees. Many banks, on the other hand, struggle to improve their service culture. What advice would you have for bankers on instilling a Whole Foods culture in their workplaces?
Mackey: There are a few principles which, if followed, generally work. The most important one is that you can’t expect your employees to care about their work if you don’t care about them. At Whole Foods, we care about our people and we show that and prove that every day. And when people feel cared about, they care; when they don’t feel cared for, they tend to be apathetic.
The second principle is: get back to purpose. Very few businesses do a good job of communicating to their employees exactly what value the business is creating in the world. In some ways, Whole Foods is a very ordinary business – we’re just a grocery store. But our team members have more of a sense of mission because we tie what we’re doing to helping improve people’s health, helping people to live a more vital lifestyle and doing good things in the realms of sustainable agriculture and environmental protection. So, the people who work for us feel like their work is making the world a better place.
And guess what? Banks are also making the world a better place. But I don’t think the average teller understands that because the bank has not done a good job of communicating it. Banks train people on how to do their job but they haven’t done much to communicate why they’re doing this job. Today, people want to know more than just the how; they want to know why. They want to think that their work is making a difference.
If you’re just a teller, you’re cashing checks and giving out money, which is boring. Well, working in a grocery store is kind of boring too. But when that work is infused with meaning, when it’s infused with the idea that this is actually making the world a better place, you get a much higher level of engagement. I think banks are making the world a better place, I just don’t think they know how to tell that story.
Q: You’ve got to infuse the transaction with a higher purpose …
Mackey: Exactly. Also, people are tribal animals. They do better when they feel part of the community. So, you need to do everything you can in an organization to help people feel that they’re part of the team. The one-for-all-and-all-for-one attitude creates a sense of comaraderie; it helps to make the work a lot more enjoyable and pleasurable and I don’t think enough organizations pay enough attention to that.
Q: A lot of the business philosophy at Whole Foods derives from principles outlined in your book Conscious Capitalism: Liberating the Heroic Spirit of Business. Can you explain what you mean by “conscious capitalism?”
Mackey: Conscious Capitalism is just doing business in a more conscious way – being more aware of what the business is about. In the book, we go into four key principles. The first is that every business has the potential of a higher purpose besides just making money, as we’ve already discussed. Doctors, for example, make a lot of money but their primary purpose is to heal people. In the same way, teachers educate, architects design buildings and engineers construct things. All professions ultimately involve some type of service to other people. Every business has this potential for a higher purpose.
The stakeholder principle is second. Business never creates value for its customers in a vacuum; it always does that by combining all the different stakeholders together to create that value. The primary stakeholders most businesses work with are customers, employees, suppliers and investors. They also do business within a community so communities are stakeholders too. Since all these stakeholders are somewhat interdependent on each other, you need to create value for all of them, not just the investors. For example, in the grocery business, happy employees mean happy customers, which translates into more business and, therefore, happy investors.
The third key tenet is leadership. The leaders of a conscious business are really servants to the business. They aren’t in it necessarily to line their own pockets, although they can be well compensated, but rather to serve that higher purpose of the business and create value for the stakeholders. We all like to work for that type of leader, as opposed to one whom we think is just using us, so we need to have leaders who care about the people they work with and are conscious of the higher purpose of the business.
Finally, there’s culture. The conscious business creates an environment that allows human beings to flourish. Some businesses have cultures that energize people and really get them engaged in their work. Other cultures don’t. A recent Gallup poll showed that only 30% of American workers are actually engaged in their work, leaving 70% who are not. That means we are failing to create cultures that really help our people to reach their higher potential.
Q: The conscious capitalism that you have just described would seem to me to work well in a system where you really did have free market capitalism, where companies were free to conduct their activities without much hindrance. Can it be applied to a heavily regulated industry such as banking?
Mackey: Of course, absolutely. One of the reasons banking has become so highly regulated is because it hasn’t followed the principles of conscious capitalism and increased regulation is one of the consequences. The only change you really have to make is to recognize the regulators, or the government, as a stakeholder and factor them into all of your decision making.
So, you have to ask this question: How do we create value for all of our stakeholders, including the regulators? How do we partner with the regulators in such a way that we are still able to create value for all of our other stakeholders? It’s a challenge and an additional hurdle but I don’t see any intrinsic reason why it can’t be overcome.
Every business is regulated; banking just happens to be more regulated than others. My business is regulated, after all. We’re selling food and we’ve got health departments, labor regulations and Obamacare to deal with. Banking is still less regulated than education or healthcare.