“People just want business to do good. It’s that simple.” - John Mackey, co-founder and co-CEO of Whole Foods Market.
This quote cuts to the core of what Conscious capitalism means. We are a society of heroes and villains, and business in America has earned a negative reputation over the years. Stories of big businesses steamrolling the little guy and operating on a “profits-at-all-costs” mentality abound. But don’t businesses need profit to be healthy? Isn’t aggressive competition healthy in a capitalist economy? Doesn’t the consumer win when businesses compete and fight for profit?
The answer to all these questions is a resounding yes, but there needs to be a balance. A Win-at-all-costs mindset is not sustainable for the long term. I believe that Conscious Capitalism is an idea for today’s world. It truly resonates with customers, employees and stakeholders. It’s more than company’s giving money to charity or sponsoring events. It’s truly a way of doing business every day. It’s treating the “business ecosystem” with respect. It sets the tone and creates the culture at healthy companies built for the long haul.
Here are the four key principles of Conscious Capitalism:
1. Higher purpose – there must be a compelling mission and purpose which drives the organization forward. When people feel that their efforts are making a difference in the world or their communities, they tend to provide extra effort and higher energy towards achievement.
2. Stakeholder orientation – businesses have traditionally been primarily focused on shareholder value – especially profit. Conscious Businesses focus on their whole business ecosystem, creating and optimizing value for all of their stakeholders. Understanding that strong and engaged stakeholders lead to a healthy, viable, robust business. Without employees, customers, vendors, supportive communities and a resilient ecosystem, there is no business. Conscious Business is a win-win-win proposition, which includes a healthy return to shareholders.
3. Conscious leadership – is focused on providing collaborative “servant leadership” to the organization. The best leaders provide support to their teammates and put others before themselves.
4. Conscious culture – an organization’s culture and environment makes all the difference. Consistently empowering teams and individuals to reach their potential. Connecting all stakeholders to each other and the purpose, as well as fostering caring and trust throughout the organization are critical.
From a practical standpoint, these are clearly idealistic principles, but very worthy and noble. Critics see these principles as utopian, unrealistic and unachievable.
Then how does conscious capitalism get executed?
• It really takes a unique mindset among management and ownership to put all four of these principles into place.
• It takes a mindset focused on what is really happening, instead of the traditional “command and control” approach to management.
• The approach must be an authentic caring, instead of propaganda and hype.
Collaboration is difficult, especially in larger organizations, where communications can seem impersonal and out of touch with what employees are feeling. It takes courage to go the extra mile for all stakeholders, but just as it is in nature, a healthy business ecosystem pays dividends over time.
Stay tuned...In Conscious Capitalism In Action – Part 2 we discuss the pitfalls and challenges...