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Dr Raj Sisodia, the conscious capitalist

A majority of companies are spending more on marketing than they used to, but getting less out of it, says Dr Raj Sisodia, author and academic.

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Dr Raj Sisodia, the Indian-born thinker, academic and author of management books, believes the conscious capitalist is not an oxymoron.

Dr Raj Sisodia, the Indian-born thinker, academic and author of management books, believes the conscious capitalist is not an oxymoron.

In his bestselling book, Firms of Endearment: How Wo rld Class Companies Profit from Passion and Purpose, Dr Raj (along with co-authors David Wolfe and Jag Sheth) talks about the social transformation of capitalism.

His book studied 35 companies, none of which are New Agey boutique operations, but rather international conglomerates that believe in doing the right thing.

It's a heart-warming surge of positivity in big business where great companies are redefined as stakeholder value builders, not just shareholder agents.

Dr Raj was in Dubai earlier this year to conduct a special workshop on high performance marketing at the S P Jain Institute of Management, Academic City.

"It turns out that in addition to their business model there is a prevalent culture in these great companies which comes from a mindset of abundance, integrity, caring and trust. It was a tremendously enjoyable and rewarding experience writing this book," says the father of three, who also applies the principles of value-based leadership to his parenting approach.

A professor of marketing at Bentley College, Boston, Dr Raj has a PhD in marketing from Columbia University. In 2003 he was cited as one of 50 Leading Marketing Thinkers by the Chartered Institute of Marketing.

His book The Rule of Three (with Jag Sheth) was a finalist for the 2004 Best Marketing Book Award from the American Marketing Association. Other published works include Does Marketing Need Reform?, Tectonic Shift: The Coming Realignment of Nations and The 4As of Marketing (all with Jag Sheth).


I remember admiring Robert F Kennedy (John F Kennedy's brother) when I was a 11 years old in California. He was an inspirational leader. Other leaders I greatly admire are Nelson Mandela and J P Narayain who protested the imposing of Emergency rule in India. On the business side, Peter Drucker has been a big influence.

I have always been a voracious reader, and am a big P G Wodehouse fan. I also enjoy music. We started a Hindi music group in Boston, where we meet every month or so to have music parties.


My father and me

Our ancestral home is near Indore, in Northern India.

My father was born to a landowning family in a village in pre-Independence India.

At a time when education was not much of a priority, my father went ahead to earn a good education.

He became the first person in his family to go to college.

He was an exceptionally bright student, winning a gold medal at both his graduation and postgraduation.

I didn't see much of him because when I was born he was a postgraduate student in Delhi.

When I was two, my father went to Canada to complete his doctoral studies, and he was away for four years.

So I never really got to know him until I was about six. People make a lot of sacrifices for education, but I haven't heard many stories like ours.

Me, moving and schooling

After completing his education as a genetic scientist my father decided to work overseas.

We left for Barbados in the West Indies, one of the world's most attractive tourist destinations.

We lived there for two years, then moved to California in the mid '60s.

It was a turbulent time in America: the Vietnam war was on, Dr Martin Luther King and Kennedy had been shot, man had landed on the moon. These made for vivid memories.

We also spent a year in Winnipeg, Canada, before my parents decided to return to India in January 1970.

For me, it was a reverse culture shock. We moved to Jabalpur, Madhya Pradesh, where my father became a professor at the university. It was quite a transition from ultra-liberal California to a very regimented and conservative town.

The teachers berated me for not standing up to answer questions or forgetting to add "sir" at the end of my answer.

My sister and I cried at night – we hated the place and wanted to go back to the US. It took me about three years to immerse myself in the culture and learn the language again.

In hindsight I'm so glad my parents decided to return to India. It was tough: professionally, the Government university job couldn't have been very satisfying for my father.

His income was about five per cent of what he was making in America. It was a sacrifice all around, but they did it for us.

It gave me a chance to understand my culture, heritage and family. The other aspect of my childhood was that by the time I had finished high school, I had attended eight schools in five countries.

I think that made me very adaptable to different places.

I finished schooling in Indore, and got my undergraduate degree in engineering at BITS Pilani. After engineering, I started working at Larsen & Toubro. Meanwhile, I applied for admission to management schools and was accepted at the Jamnalal Bajaj Institute of Management Science.

In business school, I gravitated towards marketing. It was creative and interesting and I ended up specialising in it.

Me and my return to America

One day I accompanied my friends who were going to the US Information Service office to find out about higher studies in America.

They were considering applying for a PhD in business studies. On a lark I filled out the forms and appeared for the tests. It turned out that I was the only one out of the group of seven or eight who ended up qualifying!

In 1981, I moved to America to do my PhD in marketing. Returning wasn't a big shock; I had lived there before and New York felt like a milder version of Mumbai. I felt quite at home.

Me and my family

I tied the knot in Boston in March 1986. I had met my wife (who is from Nepal) in New York in December 1984. We met through a few mutual friends who were studying with me at Columbia University and who had grown up with her in Nepal.

We have three children: Alok, 18, Priya, 15 and Maya, 13. They all love writing and have a passion for music – interests that I share with them. Alok has strong interests in history, politics and video games.

Priya is loves dancing and is a good softball player. Maya seems to be the most academically inclined of the three. But she also has a strong interest in fashion design.

In the last few years, I have become increasingly interested in personal growth and development, and in creative leadership, and have consciously tried to infuse it into my parenting.

I have talked extensively about values-based leadership and practices like meditation and yoga. Family support is certainly very important.

Me and teaching

I started teaching in January 1995 at Boston University. I have tried not to be a "pure academic" in the traditional sense – one who does highly theoretical research that's very specialised.

I've always had broader interests. I am driven by relevance. If I don't see what I do as useful and relevant,

I won't do it. Secondly, I am driven by the intuition that marketing needs to exist to serve the interests of the customer first, not the company.

When I looked around in the '80s, most academic articles were about how we could get customers to behave in a way that would be beneficial to the company.

We should have asked, "How can we do things as a company that are truly going to enhance our customers' quality of life and their well-being?" Classic marketing writings say that it is supposed to start with the customer.

But in practice that doesn't happen. For the first 10 years or more of my career, while I was earning my tenure, I wasn't able to do much about that. (American universities employ a tenure system whereby academics must earn their academic standing.)

In the beginning, I had to conform and publish in a more traditional vein.

Me, tenure and the marketing makeover

In the '90s, after earning my tenure, I met Jag Sheth at a conference in New Delhi.

I have been privileged to work with him since 1991; he has a tremendous reputation and breadth of perspective. We are aligned in terms of our values, and what we think marketing should be.

We did a lot of work over a seven- to eight-year period about marketing performance and productivity.

We found, to our frustration, that marketing had a very bad image. It was not viewed very positively by consumers or business professionals.

If you are devoting your life to a profession, you want it to be positive and meaningful. There are many professions like those of doctors, policemen or firefighters, that are self-justifying.

With marketing, you must first overcome a level of cynicism because you're seen as the one who tricks people into buying junk.

I organised a conference: Does Marketing Need Reform? a few years ago.

Marketing exists so that the forces of capitalism and free enterprise, which are extremely powerful forces, are aligned with the interests of individual people.

Are they doing things that actually meet the needs of society at a fundamental level as opposed to simply catering to desire?

My co-author David B. Wolfe uses the metaphor of marketing as healing, which I believe in.

Marketing needs to be about making people better, improving their quality of life, reducing their stress … healing them in some fashion. I now think of marketing as a positive force in society.

Me and my search for marketing excellence

I worked on marketing productivity for a long time and documented the reality that most companies are spending more on marketing than they used to, but getting less out of it in terms of customer satisfaction, customer loyalty, and return on investment.

But there are some companies that are obviously getting it right.

We started a project in search of marketing excellence. We started identifying companies that spend less on marketing than their peers, but have much better results, in terms of satisfaction and loyalty.

We found that these companies have satisfied and delighted customers, but they also have a strong emotional bond with their customers, who don't just like the company's products but love the company itself.

The second thing we found about these companies was that their employees are equally passionate and loyal about them.

It seemed to us you could not have one without the other. As we started looking at these companies, we found they also have stable supplier relationships; their suppliers are generally profitable and were viewed as partners.

Initially, we were only looking at the human performance of these companies.

The only financial criterion was that the companies should be economically viable.

Because they were paying their employees so well, paying their taxes and investing in the communities, we expected the returns to be good, but not great.

But when we did look at financial performance, we found these companies yield returns that are nine times greater than the average company over a 10-year period.

Over a five-year period, they were 10 times greater! The companies featured in Firms of Endearment were from all over the world, including Toyota, Honda, BMW and IKEA.


How easy is it to get corporate leaders interested in an alternative values-based leadership style?

It's an uphill battle! There are many capitalist fundamentalists who say any penny spent that doesn't maximise profits is a penny that belongs in the shareholders' pockets. That's a traditional mindset.

John Mackey, the CEO of Whole Foods, one of the companies cited in Firms of Endearment, says that if I pay my employees and suppliers better, my business will do better and bring my shareholders more money. But he says that he would do that even if that were not true, because it's the right thing to do. This is really ... about companies doing the right thing, the right action without focusing on the reward.

One of the results of the book was the formation of The Conscious Capitalism Club (CCC) whose idea is to bring together people who take a broad view of business and the purpose of companies.

We are starting off with a core group of a dozen people.

The organisation will try to change the hearts and minds of policy makers, students, business leaders and business professors.

"With marketing, you must first overcome a level of cynicism because you're seen as the ones who trick people into buying junk," says Dr Raj Sisodia.