According to the Conscious Capitalism Institute, “Conscious Capitalism is a philosophy based on the belief that a more complex form of capitalism is emerging that holds the potential for enhancing corporate performance while simultaneously continuing to advance the quality of life for billions of people.
The Conscious Capitalism movement challenges business leaders to re-think why their organisations exist and to acknowledge their companies’ roles in the interdependent marketplace.
Today’s best companies get it. From a Zappos to Whole Food, Southwest Airlines to Patagonia, the Container Store to Google, they’re generating every form of value that matters: emotional, social, and financial. And they’re doing it for all their stakeholders. Not because it is politically correct but because it’s the ultimate path to long-term competitive advantage.
Conscious Capitalism differs from Corporate Social Responsibility (CSR) by virtue of its origins from within the company as an expression of an overall perspective on how to conceive and build a business, rather as a response to external notions of what counts as “socially responsible” or external pressure.
Conscious Capitalists are unapologetic advocates for free markets, entrepreneurship, competition, freedom to trade, property rights, and the rule of law. They recognise that these are essential elements of a healthy, functioning economy, as are trust, compassion, collaboration, and value-creation.”
Conscious Capitalism is the system-level effect of a substantial number of companies practicing the four tenets of a Conscious Business as defined below.
1. Higher Purpose
Conscious Businesses are highly profitable but they generate above average profits in part because they don’t set “maximizing profits” as their primary purpose. Instead they have a higher purpose that generally reflects the desire to make the world, their community, their sector better in some tangible way. It is this higher purpose that attracts and inspires dedicated, passionate employees and loyal customers.
2. A Holistic Approach to Stakeholders
Instead of focussing exclusively on the rights and needs of investors, conscious businesses take a holistic view that encompasses all the stakeholders affected by the business (guests, employees, suppliers, investors and the host community of people and environment) and endeavours to ensure a “win win” result that generates value (be it emotional, financial, spiritual or physical) to each stakeholder.
3. Conscious Leadership
Leaders of Conscious Businesses are highly self aware and conscious themselves – they know who they are; what they value; have a clear sense of purpose and can inpsire and align all stakeholders around that purpose. Conscious Leadership is an alternative term to Servant Leadership. Such leaders recognize that their role is not to line their pockets but to serve all their interdependent stakeholders.
4. Conscious Culture
The most important task of a Conscious Leader is to create and sustain a healthy corporate culture that allows the interdependent stakeholders to flourish; that informs and shapes the unique brand proposition of the company and that enables the enterprise to achieve its greatest potential and benefit the most. This involves developing strategies, structures and processes that are in alignment with the firm’s purpose and core values.
John Mackey, CEO of Whole Foods, and one of the founding trustees of the Conscious Capital Institute explains these principles in the following video: