Capitalism and Social Responsibility

By Danielle Doza

The history of purpose-driven companies is storied and complex. In The Enlightened Capitalists, author James O’Toole takes readers on a journey through time to help us understand the state of business practices today and predictions for future successes of enlightened approaches to business. He provides an intriguing insight into some of the greatest entrepreneurs and business people in history, portraying their successes and failures and highlighting why values-driven practices withstand the test of time.

O’Toole features giants like Carnegie and Ford, American staples like Levi Strauss and Milton Hershey, and today’s popular brands like Ben & Jerry’s and Patagonia. I especially connected to the chapter focused on a cornerstone in our hometown, Lincoln Electric.

Nearly every story detailed why a business was built around values and purpose, how those values contributed to success, and what caused the deterioration of those values. What is clear is that nearly every company was doing well when it was led with purpose; and they suffered when purpose was no longer a priority after a company was sold, acquired, or led by an outside CEO who did not align with company values. Some of those companies recovered to again integrate value into their operations and strategy, but most are still struggling to regain their founding values.

The Enlightened Capitalists By James O'Toole Book Cover

There is a great example of the rise, fall, and rise again of a purpose-driven company, and an example of why being socially responsible is the best route for business. Marks & Spencer is one of the most ethical companies in Great Britain with a rich history of social responsibility. It suffered greatly when the company strayed from its values due to outside pressures. When current CEO Stuart Rose took over, he re-instilled the long-held Marks & Spencer values, committing to “long-term goals of working with its customers and suppliers to combat climate change, reduce waste, safeguard natural resources, trade ethically, and build a healthier nation.” These actions returned the company to full profitability and it became a leader in social and environmental policies.

The biggest and most glaring issue with this book is the lack of inclusion of African-American and female leaders. Anita Roddick of The Body Shop gets a section, but that’s about it. An opportunity was missed to include some of the world’s greatest business leaders who put purpose first. For example, Madame CJ Walker deserves her own chapter as a pioneer in entrepreneurship and scaling a company that built up and supported other black female entrepreneurs.

The key takeaway from the book is that each approach to leading with values was unique and specific to a particular company’s structure and culture. There is no perfect model that can apply to every company. To ensure success when building a leading socially responsible organization, one must utilize best practices and tailor the approach to best fit their needs.

The Enlightened Capitalists is an enjoyable read and should be on the list of every business leader and entrepreneur. The time is ripe to lead with purpose and be a more valuable asset to your communities.

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