The Ethics of Loyalty: Lessons From Conscious Capitalism

A mother, who had a few young children with her, was trying unsuccessfully to placate a crying child at the register of a Trader Joe’s food store while a clerk tallied her purchases. When she reached for her wallet to pay, it wasn’t in her purse. The clerk – or more correctly “crew member” as the company calls its employees – immediately told her he would pay for the groceries and she could pay him back.

He didn’t know her. His offer wasn’t part of Trader Joe’s policy or practice; he just quietly did it, he said later, because he felt it was the right thing to do in that circumstance. The mother returned with her wallet to pay him back, and is quick to pass the word now that Trader Joe’s is a wonderful store.

The story illustrates that if a company, like Trader Joe’s, puts a high priority on creating outstanding customer experience, with the expectation that crew members will “look through customer’s eyes;” and at the same time, the company also gives crew members a voice, listens to their opinions and looks out for their advancement, that company can reap the benefits of both engaged people who work for them and loyal people who buy from them.  This is a pretty good definition of win-win.

Trader Joe’s, a specialty grocery, sells preservative-free, organic and regular foods it buys in bulk so it can offer lower prices. By the end of 2010 it will have almost 340 stores in 27 states, according to Doug Rauch, its former president. As Trader Joe’s is privately held, Rauch said he wouldn’t give details about the chain’s profitability except to say it is very successful, enjoys double-digit growth, and is more profitable than Whole Foods. Rauch calls Trader Joe’s a “purpose-driven business”

Rauch’s remarks came recently at a conference on conscious capitalism. Companies that practice conscious capitalism aspire to more than just turning profits; Trader Joe’s, Whole Foods, the Container Store and Stonyfield Farms are examples of successful companies that have a higher purpose. Their definition of stakeholder reaches beyond those who benefit directly from the company, to larger social and environmental purposes affecting society.

Profit is essential. But we’ve seen what has happened when good intentions aren’t acted on and profit is the driver that overrides safety issues, customer interests, and the welfare and ecological environment of a region. Crisis ensues. Toyota, Goldman Sachs, and BP have become capitalism’s fallen angels. Going forward, putting ethical behavior at the center of how they do business might be something to consider when – as we’ve seen all too often lately – all else fails.

Gael O’Brien   July 4, 2010

The Week in Ethics


2 thoughts on “The Ethics of Loyalty: Lessons From Conscious Capitalism

  1. Pingback: Pilant's Business Ethics Blog

  2. Pingback: Business Ethics Blogging Roundup, The Best of the Web – 7/6/10 - Pilant's Business Ethics | Pilant's Business Ethics

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s