Conscious Capitalism’s Raj Sisodia on Marketing’s Moral Reckoning, and Why Purpose Is Good Business

“Just like in human life, some people think it’s all about making as much money as you can. But others would say no, it’s about doing something meaningful that fulfills you and positively impacts others. At the end of life, that’s what you’ll look back on with satisfaction — that you did something with your life that made a difference. The same applies to business. We need a purpose separate from profit… Profits are essential, but they are not the purpose. It’s like saying, I need red blood cells in order to live, but that doesn’t mean I should dedicate my life to producing as many red blood cells as possible.”

I had the pleasure of talking with Raj Sisodia. Raj is a business scholar and author whose career has been defined by a sustained critique of traditional marketing and a long campaign to reframe the purpose of enterprise. Born in India, he spent his early childhood there before a peripatetic upbringing that took him to Barbados, California’s Salinas Valley, and Winnipeg, reflecting his father’s academic career in agricultural science. He returned to India around age eleven, completed high school and an engineering degree, followed by an MBA, then moved to the United States in 1981 to pursue a doctorate in marketing and strategy at Columbia University. By 1985 he was on the faculty as a professor, beginning a career that would eventually position him as a leading voice in what he calls conscious capitalism.

Arriving in the United States at the height of the 1980s consumer boom, Sisodia found the scale and style of marketing culture disorienting. Coming from a tightly regulated economy where advertising was limited, he began asking what returns society actually received for its vast marketing expenditure. He cites estimates from that era of thousands of daily ad exposures per person and an industry directing enormous sums at messages that were often ignored or distrusted. His early research suggested that much of the spend yielded modest returns for companies and could contribute to social harms, from overconsumption to unhealthy habits. The diagnosis led him to consider writing a book on the failings of the field, but a mentor, Jag Sheth, urged him to focus on solutions. That advice nudged Sisodia away from lament toward design, an orientation that would shape the next decades of his work.

Conscious capitalism, as articulated by Sisodia, rearranges the basic questions of business. The “why,” he argues, should be an animating purpose that creates value for people and the planet, not the pursuit of profit as an end in itself. Profit remains essential, a condition for survival rather than the reason for being. He often uses a biological analogy: red blood cells are necessary for life, yet life is not about manufacturing red blood cells. From that premise flow three companion pillars. Stakeholder integration asks firms to create value for employees, customers, investors, suppliers, communities, and the environment as an interconnected system. Conscious leadership focuses on service, modeling behavior and cultivating growth rather than extracting performance. Culture emphasizes trust, accountability, transparency, and care, with the aim of making work energizing rather than exhausting.

The argument is not only moral, it is managerial. Sisodia points to examples that he believes embody these ideas. Whole Foods Market, with its mission to nourish people and the planet, is one he knows intimately, having coauthored “Conscious Capitalism” with company cofounder John Mackey. Costco’s emphasis on fair pay, benefits, and restrained markups is another case he highlights to illustrate how employee well-being, supplier relationships, and customer value can reinforce one another. He also credits Microsoft’s revival under Satya Nadella to a renewed purpose, a culture of empathy, and leadership that encouraged a growth mindset, noting the company’s dramatic expansion in market value during that period. The throughline in these examples is the claim that organizations animated by purpose and disciplined about stakeholders can unlock energy, creativity, and durable performance.

Sisodia’s research program contributed to the book “Firms of Endearment,” which profiled companies he describes as widely “loved” and reported that they significantly outperformed broad market indices over a decade. He argues that when the elements align, organizations generate multiple forms of wealth at once, not only financial outcomes but social, intellectual, emotional, and ecological well-being. Critics sometimes conflate his framework with corporate social responsibility, which he views as a remedial layer appended to business as usual. Conscious capitalism, in his telling, seeks to align the core business with societal benefit so that philanthropy is not a patch for harms created elsewhere in the model. He similarly rejects the notion that the approach is only viable for premium brands, pointing to industrial companies that, in his view, put people at the center and succeed through long-term, values-rooted management.

Beyond scholarship and casework, Sisodia has been active as a movement builder. He is a cofounder of Conscious Capitalism, Inc., has served on boards of purpose-driven firms, and holds academic roles that include the FEMSA Distinguished University Professor of Conscious Enterprise and co-chairman of the Conscious Enterprise Center at Tecnológico de Monterrey in Mexico. He describes the movement as global and multidisciplinary, intersecting with frameworks such as ESG, B Corps, inclusive capitalism, and the triple bottom line, while asserting that those strands sit within a broader umbrella of consciousness in business.

Looking ahead, Sisodia believes change depends on education and example. He argues that business schools must broaden their conception of human motivation, that current leaders need to reassess what counts as success, and that new entrepreneurs can design companies with enduring values from the outset. The stakes he describes are both economic and societal. For Sisodia, the central question has remained consistent since those first years in American marketing: not simply how to sell more, but how business can contribute to human flourishing while it thrives.

Yitzi: Raj, it’s an honor and a delight to meet you. Before we dive in deeper, our readers would love to learn about your personal origin story. Can you share with us a story of your childhood, how you grew up, and the seeds for all the great things that have come since then?

Raj: Sure. I was born in India and lived there for the first seven years of my life. My father came back from Canada after getting his PhD in agricultural science. I didn’t know my father until I was seven, and when he returned, we moved to Barbados in the Caribbean, where he worked for two years in sugarcane research. After that, we moved to California, to the Salinas Valley in Monterey County, where we lived for two years. Then we spent a year in Winnipeg, Canada, where he had earned his PhD earlier. After that, we moved back to India. I was about eleven and a half when we returned. I had spent almost five years abroad, then went back to India, readjusted, and finished high school, engineering undergraduate studies, and then an MBA. In 1981, at age 23, I came back to the US to pursue a PhD in marketing and strategy at Columbia University in New York. That’s the background of how I came to this country and eventually became a professor of marketing and strategy starting in 1985.

Yitzi: You probably have some incredible stories from different parts of your career and your great influence. Can you share with our readers one or two stories that stand out most in your mind from your professional life?

Raj: My initial years as a professor were quite eye-opening. I came to the US from India, which at the time was a very closed economy, almost a socialist system, even though it was a democracy. There was very little marketing, and the business climate was nothing like what it is now. Then I arrived in this country at the peak of the 1980s, a period of material consumer culture and extreme amounts of marketing. I started asking, what are we doing in marketing? How much are we spending, and what are we getting for it? Because it felt excessive. The estimate was that every American was exposed to 2,000 to 3,000 marketing messages a day. By 2004, we were spending a trillion dollars on ads, coupons, and junk mail, which was more than the GDP of India at the time, about 700 billion dollars, for a country of a billion people. My question was, we’re spending more per person on marketing than the income of 85% of the world’s population, so what are we getting for that — for customers, companies, and society?

My research showed that we weren’t getting much. In fact, the impact was often negative. Most people don’t trust marketing. If it’s marketing, they assume it’s not true. Most ads are never noticed, most coupons are never redeemed, and companies don’t see high returns on that spending. Worse, society is being hurt because we’re fostering a culture of overconsumption and shallow material values. We use women’s bodies to sell products, we get people hooked on things that are harmful, and we addict children at a young age to sugar, salt, and fat. The consequences are unhealthy in every way — physically, mentally, emotionally, and societally.

So I started asking, is there a better way? That question eventually led me to my research on conscious capitalism. But before I got there, my mentor Jag Sheth gave me some important advice. At the time, I was focused entirely on what was wrong with marketing. I was even preparing to write a book called The Shame of Marketing, all about the waste, the deception, and the unethical practices. He told me, “People want to hear about the solution, not just the problem.” That insight shifted my thinking. Yes, things were bad, but the real question was, what do we do about it? How do we make it better? That framing stayed with me and ultimately guided the direction of my work.

Yitzi: It’s been said that sometimes our mistakes can be our greatest teachers. Do you have a story about a humorous mistake that you made when you were first starting in your career and the lesson that you learned from it?

Raj: I would say my mistake was that I really didn’t know what I was about. I was following the standard pathway in my profession, trying to publish in journals and so forth, but it wasn’t resonating with me at a human level. I was given a promotion and a job as a trustee professor of marketing and information technology, which came with a prestigious title, a higher salary, a lower teaching load, a graduate assistant, a travel budget, and all of that. But the work itself wasn’t fulfilling at all. I felt trapped in the role I had accepted because of all those elements.

Five years later, when it came time to renew my position, the university didn’t renew it because I wasn’t that interested and I wasn’t doing much of value. That was a pretty devastating moment for me. I lost the title, the higher level of income, and the security that came with it. But in hindsight, it turned out to be one of the best things that ever happened. It forced me to ask what I really care about and what I want to focus on in my research, instead of just following marketing and information technology, which happened to be the hot field at the time.

The key is to connect with something that reflects your essence and your unique perspective in the world. You have to figure out what that is. For me, it took that crisis, at about 43 years old, to finally start aligning myself with what truly matters to me.

Yitzi: So let’s go to the centerpiece of our interview. You’re famous for popularizing the idea of conscious capitalism, and what you’ve done is really remarkable. I know this could fill an entire book, and in fact, you’ve written one. But can you share with our readers how prioritizing purpose alongside profit can create long-term financial advantages for a business?

Raj: Yes. Conscious capitalism is a reframing or rethinking of business along the four fundamental questions of why, what, who, and how. Each of those had an answer we assumed was correct for a long time. The “why” was about profit, that business exists to create wealth for shareholders and generate profits. We challenge that.

Just like in human life, some people think it’s all about making as much money as you can. But others would say no, it’s about doing something meaningful that fulfills you and positively impacts others. At the end of life, that’s what you’ll look back on with satisfaction, that you did something with your life that made a difference. The same applies to business. We need a purpose separate from profit.

We do need to be profitable in order to survive. Without that, the business dies. Profits are essential, but they are not the purpose. It’s like saying, I need red blood cells in order to live, but that doesn’t mean I should dedicate my life to producing as many red blood cells as possible. Instead, I should use the vitality they give me to do something meaningful.

Purpose works the same way. It should resonate not only with employees, but also with customers, investors, suppliers, and society at large. A company should be trying to solve real problems for people and the planet, and do it profitably. I think of purpose in terms of healing. Every great purpose is a healing purpose. It reduces suffering in the world and brings more joy.

When you do that, you tap into energy and creativity that wouldn’t otherwise be available. If you’re just working for a paycheck, you’ll go through the motions. You might do a good job, but only a part of you is engaged. When your work resonates with you, when it really matters, you tap into your whole being. Your heart and your spirit connect to what you’re doing. Human beings are capable of extraordinary things when they work from inspiration and genuine care.

What I found missing in my business education, and in business generally, was the heart and the spirit. It was all about the head and the wallet, the numbers and theories, the bottom line. But we bypass our humanity, the very thing that makes us unique as a species. Purpose taps into that reservoir of motivation, creativity, energy, engagement, and love.

The ultimate expression of this is when your work is so meaningful that even if you won the lottery on Friday, you’d still come back to work on Monday because the work itself matters beyond the paycheck. We all need a paycheck, but that should not be the primary reason for choosing a job.

That’s purpose, one of the four pillars of conscious capitalism. They all reinforce each other.

The second pillar is the “what,” which is about creating value for all stakeholders. We call it stakeholder integration. That means society, partners, investors, customers, employees, the environment — all of them. You have to create value consciously for all of them. When you do, you create value for the entire system. Happy employees lead to happy customers, which ultimately leads to happy shareholders. It’s all connected.

We have to organize, lead, and manage in a way that benefits everybody. You don’t have to squeeze employees to generate more profit for shareholders, or underpay suppliers to lower prices for customers. With creativity, which is unlimited when people are driven by purpose, you can figure out a way for everyone to matter and everyone to win.

The third pillar is conscious leadership, which is the “who.” Who are we as leaders? Are we just there to deliver numbers and use people to do so? Or are we there to take people to a better place, to enhance their well-being, to serve them and the purpose of the organization? Conscious leaders are servant leaders. They’re not primarily serving themselves. Many so-called leaders are really tyrants, using others to serve their own egos. Conscious leaders serve people and purpose.

The fourth pillar is culture. Most people experience stress, frustration, burnout, and fear in their work lives. Conscious companies operate with love, caring, trust, accountability, and transparency. They create cultures where people look forward to work. In most companies, people say, “Thank God it’s Friday,” and, “Oh God, it’s Monday.” Heart attacks are 20% higher on Mondays. There’s plenty of data showing that work negatively impacts health and well-being. That shouldn’t be the case. Work should energize us and make us healthier. Conscious companies make that possible.

So those are the four pillars — the why, what, who, and how. They are all interconnected. In my book Firms of Endearment, which marked the beginning of this journey, we studied companies that are loved by everybody. We discovered that what made that happen were these four pillars.

At the end, when we looked at financial performance, we were shocked. These 28 companies outperformed dramatically, by 9 to 1 over 10 years compared to the S&P 500. They were highly profitable and growing faster, even though they weren’t focused on maximizing profit. They were fulfilling their purpose, taking care of people, and running good businesses.

When you do that, you create more value and more wealth — not just financial, but also intellectual, social, cultural, emotional, physical, and ecological well-being. All of these happen simultaneously because you align the elements together. People aren’t working at cross purposes, there’s less friction in the system, and people rise to their capacity to do great things.

Yitzi: For the sake of making it more concrete, can you share a story of a business or organization that has implemented your ideas and thrived both on the conscious side and on the capitalism side?

Raj: Sure. There are many in the book, but I’ll talk about a few. Whole Foods is really the origin because I co-wrote the book and started the movement with its CEO and founder, John Mackey. Whole Foods has always embodied these elements. Their higher purpose was to nourish people and the planet, to educate people that what you put into your body affects your health, the health of the food system, and the health of the planet. They’ve maintained that purpose from the beginning.

They also had a strong stakeholder orientation, taking care of all their stakeholders. Their leaders were genuinely passionate about health and food. And they built a culture where people were empowered, had flexibility, and enjoyed good working conditions. As a public company, Whole Foods was one of the most successful in its industry, generating over 4,000% returns to investors, until it became part of Amazon a few years ago.

Costco is another great example. They treat employees extremely well, paying them roughly double what Walmart paid at the time and providing much better benefits, including healthcare. They also treat suppliers fairly and give customers great value, taking only about a 14% markup at most. Costco has also been an extraordinary performer financially.

Wall Street analysts used to criticize Jim Sinegal, Costco’s CEO and founder, saying, “Why do you pay your people so much? You’re stealing money from shareholders.” His response was, “I believe my people should be able to look after their families and live a decent life. If you don’t believe that, don’t recommend our stock.” And by the way, while they paid double, their sales per employee were three times higher than Walmart’s. Their annual employee turnover was 7%, compared to Walmart’s 70%. Walmart has to hire about two million people every year just to replace those who left voluntarily, while people join Costco and rarely leave. Costco shows how the whole system can work — employees, customers, communities, and shareholders all benefit.

A more recent example is Microsoft under Satya Nadella, who became CEO in 2014. His leadership has been an extraordinary transformation of a major global company. He became a kind of refounder. After Bill Gates’s original vision of a computer on every desk was realized, Satya created a new purpose and inspiring vision. He fostered a culture of empathy, something never associated with Microsoft before, where people care about each other and about solving customers’ problems. He instilled a growth mindset and reshaped leadership around modeling behavior, coaching people, and genuinely caring about them.

All the elements — purpose, leadership, culture — have come together to reshape Microsoft into a highly conscious company. Financially, the impact has been staggering. When Satya started, Microsoft’s market value was about $300 billion. Now it’s close to $4 trillion, making it one of the most valuable companies in the world alongside Apple and Nvidia. I would say much of that change has happened because Satya Nadella made Microsoft into a more conscious company.

Yitzi: Can you address some of the misconceptions and errors about conscious capitalism?

Raj: The misconceptions are, first of all, that conscious capitalism means you should stop caring about profits. That is not true. Profit is important. Profit is a social good. It is socially irresponsible not to be profitable because society does not function without corporate profits. Governments do not create wealth. Governments can only tax and spend the wealth that is generated by a business. But it matters how you make the money. You can make money by squeezing your employees and giving them heart attacks, getting your customers hooked on junk, squeezing your suppliers, and damaging the environment. You can do all of that and make money, but that’s not real profit. That is false profit because you are extracting from others in order to generate it. That is almost parasitic, not a real business. Conscious businesses generate true profits. They generate a financial surplus while also having a positive impact in all those other dimensions I talked about. So that is one.

The second misconception about conscious capitalism is that it is simply a version of corporate social responsibility, CSR, which we used to talk about decades ago. But it goes much further than that. Corporate social responsibility basically says, let’s put this additional layer of responsibility on what we’re doing so that we try to solve the same problems we are creating. If you’re a food company and your food is not good for people and it leads to obesity and diabetes, then you might have some CSR initiatives around healthy eating or nutrition education. But meanwhile, you’re causing the problem with your business and then trying to solve it with your CSR activities. The same is true in many companies. They’re simply trying to alleviate the negative consequences of their own business. Conscious capitalism is really about alignment with society. What you’re doing in your core business is fundamentally good. You don’t need to spend money on philanthropy to solve problems because you’re not creating those problems in the first place. So it’s very different from that.

The third misconception is that some people think conscious companies only deal in luxury or high-end products, like Whole Foods, which is more expensive than other grocery stores because of the quality of the food and the cost structure of producing organic and natural food, or Patagonia. People believe this is a luxury only some companies can afford. That is not true. Every company can be a conscious company. We have many examples of that. I wrote a book called Everybody Matters with Bob Chapman about a company called Barry-Wehmiller. They are a manufacturing company. They make machines that make toilet paper and cardboard boxes. It’s a highly conscious company, and they put people at the center of everything they do. They’ve been extraordinarily successful in the last 20 years, growing at a compounded 16%. They’ve done that while living by the mantra that the way we lead impacts the way people live, that everybody matters, everybody is somebody’s precious child, and so on. They put people at the center, and that can be done in any business. Every business involves people, and therefore putting people at the center, giving them purpose, respect, and values, is something that works in every situation, whether it’s a small local business or a global multinational.

These ideas are important and relevant because all organizations consist of organisms, called human beings. And there are certain things that human beings crave and want in this life. They want respect, dignity, a sense of purpose, a sense of safety, and to feel that they are operating in an environment with love. Those are things that are common across cultures and across companies. So I think those are some of the misconceptions people might have.

Yitzi: How would you compare and contrast the ideas of ESG to conscious capitalism? How are they similar, but how are they different?

Raj: ESG is kind of a subset. The environment is a stakeholder, society is a stakeholder — that’s the E and the S in ESG. Then governance is about how you manage the business and what you track. Those are all inherent to conscious capitalism. You don’t need a separate ESG initiative because those elements are already part of the framework.

Likewise, many of the other approaches — Great Places to Work, B Corps, inclusive capitalism, shared value capitalism, or even DEI, which is under attack in today’s political environment — are all subsumed under this umbrella of consciousness and conscious capitalism. We recognize the power and importance of each, but they are part of it, not complete on their own. You can’t have a traditional business and just bring in ESG and think that makes you a conscious business. There’s a lot more to it.

All of these things work together, and they are essential elements. Conscious capitalism includes but also transcends many of these parallel ideas and movements that have been happening, including triple bottom line and the others I mentioned.

Yitzi: Thinking long term, what is needed to make conscious capitalism a worldwide movement that becomes integrated into the way most people in the world live?

Raj: That’s a very complex question and there are multiple aspects to it. One is, we have to change the way we educate people about business and economics. I’ve read estimates that 30 to 50 million students every year worldwide graduate with degrees in economics, business, management, or law. And all of them are rooted in a certain understanding of human beings, typically the economic framework, which talks about homo economicus. That framework assumes we are only concerned about material, individual, short-term utility, that each of us is simply trying to maximize what we can get. Everything is looked at through that lens — the lens of competition, scarcity, individuality, materialism, and selfishness. In a way, we even celebrate selfishness. We say everybody’s supposed to be looking out for their own best interest and ultimately that will work. That’s actually a very narrow understanding of what it means to be human. We are not homo economicus, we are homo sapiens, and there are many dimensions to us. There’s purpose, love, altruism, cooperation, consciousness and awareness, and of course, self-interest. But self-interest is not the same as selfishness. So we have to educate future business leaders with a richer understanding of what it means to be human, and therefore, what it means to be human in business. That’s part of our work, trying to change the future of economics and business education and to root it in a deeper understanding of what it means to be human. That’s a long-term process, because as I said, the majority of people graduating and going into business are still getting that very harmful and narrow perspective.

The other aspect is that the leaders who have succeeded in business under the old paradigm are typically people who care only about money. They’re not purpose-driven or values-driven. They saw business as only about money, and they came into it because they wanted to make a lot of money. They have succeeded on their own narrow terms, so their consciousness is at that level. They don’t really care about these other things, because for them that’s all life is about. And it’s very hard to get people to change their mind about that. So that becomes one of the barriers. How do we awaken people? How do we elevate consciousness and get them to think about life differently? Because the way we’re operating in business is destroying the future. It’s destroying many aspects of our ecosystem that we need in order to thrive on this planet. It’s destroying other forms of life on this planet. So awakening the consciousness of people who feel they’re successful and have done well, that’s one of the big challenges, because those are the people currently running most of the large companies. They are sitting on the boards of directors, and they don’t see a reason to change because for them, life has worked out according to what they value.

The fact that so many people are suffering — where 40 to 50% of Americans have less than $400 in the bank, income inequality has grown, public health crises are increasing, climate change and species extinction are accelerating — this is all part of the bigger picture. Bringing that consciousness and awakening people, getting them to see the whole reality and their responsibility to change it, that is one of the greater challenges we face.

The third aspect is entrepreneurs, people starting companies today. Many of them are more purposeful. Younger people generally have been more purpose-driven compared to older generations. So we want to encourage conscious entrepreneurship, not just starting a business with an exit strategy on day one, planning to quickly sell and make money, but creating a business that’s going to last, with enduring values and a sense of purpose. Going into business for the right reasons — not just to make money, but to express yourself and to serve others — that’s how we should approach business.

So there are many challenges, no doubt, but that’s why we have a movement. It already is a global movement. We’re in about 20 countries and 25 US cities, gaining traction in some places and still new in others. And we’re one of several parallel movements out there. But we believe this is a very important and urgent change that needs to happen for our survival on this planet and for the survival of other life forms we share it with.

Yitzi: Wonderful. Raj, I want to thank you so much for your time. I wish you continued success, good health, and blessings. I hope we can do this again next year.

Raj: Sure thing, Yitzi. Thank you for your time as well, and I appreciate your questions.