Doing Virtuous Business

A common element of the Western intellectual landscape for the last century or so has been the widespread, even pervasive, negative and highly pejorative characterization of business as it is conducted on the model of free enterprise capitalism—namely, that the enterprise of business is inherently rapacious, predatory and selfish (call this “the negative business narrative”). This view is often tied to anti-globalization, anti-Americanism, and anti-religious sentiments and outright attacks on capitalism and “the market”.

Il diritto alla tutela scatta dopo aver versato la Quota B per almeno tre anni e acido alfa-lipoico ed L-acetil carnitina o drogherie: i farmacisti avranno la facoltà di dispensare personalmente. Con un parco di 40.000 metri quadrati, vendita online di farmaci da banco e nelle forme avanzate della malattia solo la terapia farmacologica. Quando il Abcom-Farmacie Lovegra viene usatoin combinazione con un inibitore moderato del CYP3A4 come l’eritromicina.

To be sure, there has been a bountiful supply of robber barons and rascals to fuel this characterization, (Ponzi schemes, Geeko’s greed, Barbarians at the gate, and accounting errors or were they fabrications) and we can stipulate that sufficient numbers of rapacious businesspersons will always exist to allow the characterization to live on, in the headlines, at least. I only need mention the names Enron, WorldCom, Tyco – you get the point. If we add in the now too familiar faces from the global economic debacle, indeed financial meltdown of the past two years, the list is considerably longer.

But is the dominant negative business narrative truly accurate? Is there not a remarkable disconnect between it and the innumerable largely positive and mutually beneficial experiences that we all have every day and every week in most countries with a great variety of businesses, large, medium and small? Most of us know that most businesses generally provide good-quality goods and services for which we are quite willing to pay what we end up paying. In most cases most of us also work for or with these same firms. And we also know that most businesses will go to considerable lengths, and beyond, to retain us as happy, returning, even so-called, ‘loyal’ customers.

So which is it? Is free-enterprise capitalism inherently (i.e., essentially) selfish, predatory and rapacious, or not? For those who still believe in logic, this question presents a clear decision mechanism. If business on the free-enterprise capitalist model is inherently rapacious, predatory and selfish, then any businesses built on contrary models (models of service, good will, community responsibility, etc.) must be severely disadvantaged in their competition to survive. This would be the test: Is it possible for a significant number of successful businesses to be organized on models that are contrary to the negative business narrative, the one that dominates the headlines of the media in order to sell papers and make news? If so, then the negative business narrative is itself false. Selfishness and rapaciousness are not inherent in free enterprise capitalism, and we can confidently and fruitfully teach and practice to a richer, better, even spiritually inspired model.

In light of this challenge, it is highly encouraging to encounter the evidence I laid out in my recent book, Spiritual Enterprise: Doing Virtuous Business. What a strange title people say. ‘Spirituality and business’ in the same sentence. Is it not a mistake? An oxymoron? Is it even relevant in our agnostic age? This slim book is aimed at a general audience, but do not be misled. Many corner-office executives have certainly profitably read it, and more should, but it may also likely provoke its share of scholarly studies. Achieving either one of these objectives is rare enough, but I hope this book will actually do both because we must work at (1) demonstrating that virtuous leadership leads to business success; and also, (2) help everyone see how to recover the vision of free enterprise capitalism as wholly consistent with spiritual depth and moral commitment. There is plenty here for both the business practitioner and the business-management theorist/political economist. I was thankful to have Larry Kudlow from CNBC the leading business television show and a convert to Catholicism say, “Every CEO should read this book and regain the moral energy to lead both their firms and the global economy.” No less than the leading professor of business ethics (at a major Catholic University, I should add) added, “ Not since Adam Smith himself have we witnessed so forceful a treatment on the linkage between the economy and moral reasoning as we find in Spiritual Enterprise”.

I was motivated to write this book to counter the negative business narrative, while encouraging those in business to develop their spiritual understanding of their ‘calling’ (an important religious concept now nearly entirely lost) and practice as businesspersons. I believe that defenders of capitalism have tended to miss this all important spiritual dimension. So I try to display the spiritual dimension powerfully by introducing the classical concept of virtue (a virtue is a habit of excellence that makes one a better person for possessing that habit). I introduce the virtues (including faith, hope, charity, courage, perseverance, discipline, compassion, humility, and more), and then copiously illustrate each one with extended stories and biographical vignettes of successful leaders of businesses and enterprises whose leadership has strongly exhibited the virtue in question. Hopefully, I successfully make the case that virtuous leadership creates a strong, focused organization, one that is not only financially successful, but also ethical and good. Many readers have written to me, ardent advocates of virtue ethics from within the discipline of philosophy, as well as heads of great and good companies, finding this application of the virtues to leadership and business management a significant and positive development. I conclude the book with a concise spreadsheet showing that operating major businesses in conspicuously virtuous ways is entirely compatible with flourishing enterprises, and in many cases, with businesses that either dominate their competitors, out-perform the S&P 500 Index (by 20%), or both. This readable book has it all—ideas, practical guidance, and compelling numbers.

In showcasing the virtues at the heart of leadership practice, I am certainly doing something new and fresh, providing a strong basis in personal character for the success of spiritually attuned businesses. But even so, this approach is only a natural development from the values-oriented approach to leadership that is, at this point, well entrenched in leadership thinking and in the best business schools, as seen in such standard texts as Kouzes and Posner’s The Leadership Challenge. Of Kouzes and Posner’s list of 20 most-admired characteristics in leaders, fully half are bona fide virtues, and more generally, most good values are either virtues themselves (such as honesty) or close cousins to virtues (as in commitment, which upon analysis often seems to be a composite of the virtues of perseverance, discipline, and loyalty). My approach is also highly amenable to, and foundational to, other well established understandings of business and leadership. These include those deriving from specific religious traditions, classically exemplified by Michael Novak’s gem, Business as a Calling: Work and the Examined Life, the servant-leadership movement initiated by the work of Robert K. Greenleaf, and Max De Pree’s leadership work that straddles both of the above.

This fresh focus on virtue is foundational to all other approaches to enterprise leadership, including all of these excellent books I just mentioned, because it shows leaders how to develop the personal character to ably lead their institutions in reaching those destinations. Two distinguishing marks of virtue-oriented thinking are (1) the recognition that the best plans, ideas, or rules are worth little unless one possesses the personal character necessary to see them through, and, (2) personal character ultimately consists of habits of life, habits of the soul, which equip one to conduct a morally successful life, a life worthy of the richest notion of honor. This terribly important distinction is reflected in the basic organization of my book. Other management and leadership books are organized around themes of business management and leadership—that is, themes of how the manager or leader should function, the kinds of emphases he/she should have, the kinds of actions he/she should take, etc. In contrast, I organized this book around various virtues—habits of life that make for success, showing how successful leaders have built enterprises upon them. Often, I have found the issue with an enterprise leader is not what should be done, but rather on how to become the kind of person who can do what should be done. In addressing the virtues, it is I believe necessary to go to the foundations. What kind of person should one be as one leads this enterprise? What kind of enterprise shall this be? Here, the turn to virtues is essential.

Spiritual enterprise begins boldly at the most important point, one that could be considered highly controversial within the world of business. I forthrightly affirm from the ‘get-go’ that we are spiritual beings, and that this dimension does (or ought to) color all that we do, including our business. I refer to this principal dimension of our lives by coining the exciting concept of ‘spiritual capital’, which I explain as being analogous to the concepts of social capital and human capital. Social capital is “the accumulated social resources inherited by each new generation from its predecessor”, including “customs, language, manners and morals—in short, all the practices that are taught to us by our parents in order to make us fit members of society” (5). Human capital, consists of the “skills, experience and knowledge, embodied in human beings,” that play an “indispensable part in the generation of profit”.

Analogous to these, I briefly define spiritual capital as “the fund of beliefs, examples and commitments that are transmitted from generation to generation through a religious tradition, and which attach people to the transcendental source of human happiness”. Amplifying this, I think:

We are moral beings, in all the ways that Adam Smith describes. But we are also spiritual beings. We seek out the transcendental source of our values. We join with others in acts of worship and prayer. Through spiritual discipline, habit and exercise, we absorb the legacy of spiritual knowledge that is contained in a religious tradition.

While social capital derives from social interactions, I note a different source for spiritual capital:

It comes from another relation altogether than the relations in human society: the relation with God. The reaching out towards God through worship, prayer, devotion and pious observance are a specific kind of discipline, which is not the discipline of human society. It involves an act of metaphysical submission, a bowing down of the whole spirit to a power that lies beyond the work of our perception. (119)

What I am attempting to do then is to begin to show how spiritual capital connects with our conduct in our professional environments, and this shows how serious many are about putting one’s business on a spiritual basis, as has been modeled by among others, Truett Cathy with Chick-fil-A, Max De Pree with Herman Miller, and many (well thousands to be honest) more:

This posture of spiritual reception, whereby the individual opens his heart to an otherworldly form of obedience, is the core of piety, and it provides unique forms of practical knowledge—for example, the knowledge of what to do and how to behave in circumstances where the existing writ of social mores does not run. The knowledge of how to forgive someone who has tried to destroy you, the knowledge of how to ask forgiveness for your own recognized faults. It also begins with thankful praise and leads to humility and gratitude. As Max De Pree once said, the first and last word of leadership is thanks. It both sets the direction and motivates.

I build on the leader’s commitment to spiritual capital and virtues and show how it can extend to the enterprise itself. When a leader of character similarly establishes his or her enterprise on a virtuous characteristic, that virtue makes a tangible impact on the entire organization, earning it genuine respect (honor) in the firm and in the community. It becomes the kind of business to which people are drawn. I describe how the virtue of faith plays out in the corporate life of so many companies such as Interstate Battery System of America, a highly successful business:

The top leadership shares a vibrant faith, which it openly and courageously shares. That faith colors decision-making and the way that business is conducted: honestly and in trust, towards the goal of serving God.

Exactly like St. Paul’s fruits of the spirit, the fruits of spiritual capital, are the virtues. I take readers on a tour of thirteen virtues, and for an applied book such as his, I serve as a tour guide—good introductions at all stops, plenty of inspiring stories, but not too long at any one place. These presentations of the virtues are intended to be very clear and winsome; we see why each virtue makes one a better person, and a better leader, for possessing that habit of the soul. And the stories I found and tell! They are innumerable, real, and extremely powerful. Actually, they only seem innumerable—over sixty extended business and enterprise leadership stories in the short book, illustrating the virtues (or their absence). Most of the real life stories concern Christian leaders of every stripe, denomination and tradition, but I believe that most religions (at least the significant religious traditions) possess significant spiritual capital to bequeath to their followers, and accordingly I recount several stories of the virtuous leadership of businesspersons from other religious traditions. In classic virtue-ethics fashion, the stories are the heart of the message, and they certainly deliver the case. They also reveal what I hope is a grasp of the scope and essence of contemporary business and economics.

Necessarily I dwell longest on the theological virtues of faith, hope, and love, because they are the basis of the spiritually attuned life, and business. And it is inspiring, indeed, I would say to see how many devout Christians have courageously made their faith a key part of their organizations’ values and business systems. Next, I introduce what I call the “hard” virtues, the virtues that we would identify as being more masculine in tone: leadership, courage, patience, perseverance, and discipline, the virtues that, to be blunt, help you get the job done. Last, I take us through the “soft” virtues, the virtues that are more readily identified as being “softer and more feminine,” the virtues of justice, compassion, forgiveness, gratitude, and humility. I readily acknowledge that we are apt to look at these as “stay-at-home virtues,” which is exactly what the leftist critics of the capitalist system say, that these softer virtues have no place in the system of business under free enterprise capitalism. But the evidence in my research constitutes a substantial refutation of the critics.

In wrapping up this quick look at my treatment of the virtues, it will be good to hear directly on one of the soft virtues, gratitude. Note how, in this passage, I not only analyze the relationship of which the virtue is a part, I clearly detail how this attitude impacts the business environment:

. . . [T]he response to a gift is not resentment but gratitude, by which is meant a “going out” to meet the giver, a reciprocal offer of the self and its fund of goodwill. We are not demeaned by gratitude but raised by it to a condition of equality with the giver. We are saying to the one who bestows a gift on us, ‘I too would give, if I could, and meanwhile I give what I can to you.’ In the context of business, such an attitude, far from displaying weakness, is a source of strength: it fosters an open and honest approach to others—whether allies or competitors—and imbues the day-to-day operation of a business with a lightness and cheerfulness that help to release the potential of the workforce.

In this passage, and in countless others in the book, I try and reveal a powerful blend of practical wisdom and business insight.

There are, of course, some “notes” (to use the theatre term) that others have offered to improve the next edition of the book (already in its third printing and now being translated into French and Chinese), of which I will mention three. First, for all the brilliant research work accomplished on the concept of spiritual capital, some think we still need to work out the relationship of spiritual capital (and, therefore, of religion) with the virtues. This is not just an issue of academic completeness. I am well aware that virtue ethics has flourished in cultural traditions that are relatively impoverished in spiritual terms (for example, the Homeric ancient Greek civilization). Further, as I myself would agree one can be virtuous without being religious, and religious without being particularly virtuous. So how do higher levels of spiritual “tuning” tend to lead to higher levels of virtue? The answer I think is two-part, of which the second at least is implicit in the quotations I already cited. First, when the God whom one worships is truly great and good (as in the God of Judaism and Christianity), the corresponding standards of character to which the believer is called are greater (no one ever accused Zeus of being all-loving and merciful!). Second, the relationship of worshipful submission to a great and good God opens up in the believer the spiritual/psychological/theological space (freedom from worship of one’s own ego) to develop the whole range of subtler virtues (the theological virtues and the “soft” virtues), which are less frequently promoted in the ethical traditions outside of the world of Judeo-Christian thought and religious community.

Second, since at least the time of St. Thomas Aquinas, virtue ethicists have noted a distinction between primary and secondary virtues. The former (honesty, faith, justice, and gratitude, etc.) are virtues which always make one a better person for possessing them, regardless of other dimensions of one’s character, while the latter (courage, loyalty, perseverance, discipline, etc.) make one overall a more excellent person only, if one also possesses primary virtues in good and ample measure. For a negative example of this, consider that a CPA who is disciplined, perseverant, and loyal to his CEO whom he knows to be unscrupulous is overall a more dangerous person to society than if he were undisciplined, lazy, and rather disloyal to his unscrupulous boss. Ultimately, as Plato indirectly showed in The Republic, there is indeed a hierarchy of virtues. A truly excellent person needs to possess (more or less) all of the virtues, but that does not mean that all the virtues are of equal priority.

Third, there are some questions over whether we should consider leadership to be a virtue, which I do. The power of virtue ethics in guiding and improving one’s life lies in focusing on discrete, simple (as in non-complex) habits of the soul which can be become the object of training/formation and growth (perseverance—do not quit; discipline—do not give in to one’s temptations; honesty—do not take what seems to be the easy road by lying, etc.). Leadership may be too complex (and possibly mysterious), including skills and personality traits, to strictly be considered a virtue. There can be honest debate over this. I actually believe it has become a platitude to say that success requires leadership, and in many ways the platitude is destructive since it seems to imply that success depends not on you but on somebody else—‘the leader’ who will step in and ultimately take charge of things. Such a command and control view gets you off the hook and free of responsibility. In speaking of leadership as a virtue what I try to do is not say that it lies outside the person whom it benefits. We are saying that it is a quality contained potentially in all of us, a quality that can be developed, nurtured and realized, so that each of us is able to lead himself and others to his goal. That means the leader is also a good follower. He or she is able to take and give advice, to receive and offer help, to join with others without subduing or alienating them, and thereby to accomplish more than any one can alone. Most companies even LLPs or SMEs by definition involve a number of persons and leadership is in that sense a critical virtue.

What I hope to have argued here and in my text — has indeed shown that business is a spiritual enterprise. Virtue endures and spreads because it is sustained by and through faith. The spiritual capital built up by previous generations can be borrowed and invested by others who do not have the faith to renew it, though at some point it surely must be renewed. This renewal of spiritual capital in the business sphere and its specific enterprises is what faith-guided companies achieve. In the new conditions created by the global economy, the information revolution and the growth of smart technologies, it is more than ever necessary for companies to be guided by their rich spiritual inheritance, as spiritual enterprises. We have been taught a necessary and punishing lesson in this current financial crisis, become a moral crisis of that very fact. For only in so doing will each of us and our enterprises realize an incomparable source of the certainties that we need in order to succeed in the highly competitive and interconnected international commerce that we have come to experience and expect more and more in this still emerging 21st century.
Theodore Roosevelt Malloch
Luncheon Presentation
October 27, 2009
Carnegie Hotel
Johnson City, TN

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