“In the midst of every crisis, lies great opportunity” – Albert Einstein
It’s safe to say that 2020 will be remembered as an extraordinary turn of the decade. Whilst the pandemic moved us from the outdoors into our homes for much of the year, important movements brought us back out into the streets to protest for better. From the environmental to the civil rights movement, these critically highlighted the need for real fundamental change – placing businesses under increased scrutiny to be and do better. With pressures now on an all-time high, many corporations are struggling to set things right in 2021 and beyond. But what if they do not have to reinvent the wheel to achieve and sustain positive change? What if what they are looking for is right below their noses – but they have yet to tap into its immense potential? Enter Conscious Capitalism.
In 2019, Forbes was probably right to declare that “there’s a new wave of businesses breaking into the zeitgeist — a profound breakthrough aligning and combining the power of capitalism with the global human consciousness movement.” Unbeknownst at the time, 2020 would come to accelerate the speed and intensity at which conversations around this new business wave made their way from our family dinner tables to online conference calls.
Popularised by John Mackey, founder of Whole Foods, and Raj Sisodia, professor of marketing at Bentley University, Conscious Capitalism is a socially responsible and political philosophy that recognises that businesses can and should operate ethically while pursuing profits. Conscious businesses see little issue in serving the interests of all major stakeholders including communities, employees, customers, the environment, suppliers and investors – guided by their greater purpose instead of mere profit.
To grasp the concept in its entirety, understanding its guiding principles is key:
- Higher purpose. Conscious Capitalists engage key stakeholders by focusing on purpose beyond pure profit. While making money remains essential, this is not the sole purpose or most important reason for a business’s existence. Instead, a sense of greater purpose is seen to create higher stakeholder engagement.
- Stakeholder orientation. Conscious businesses focus on the entire business ecosystem to create and optimise value for all stakeholders. This is represented by the acronym SPICE, which stands for society, partners, investors, customers and employees – a win-win formula for all.
- Conscious leadership. Conscious leaders opt for a collective “we” versus singular “me” mentality within businesses. Embracing their businesses higher purpose, leaders play a vital role in fostering a culture of Conscious Capitalism, as well as positive transformation.
- Conscious culture. This refers to the values, principles and practices that conceive corporate culture, including an organisation’s social and moral fabric. A conscious culture is one where Conscious Capitalist philosophy informs and fosters trust and cooperation between stakeholders. An idea captured by the acronym TACTILE: trust, authenticity, caring, transparency, integrity, learning and empowerment.
Today, a line-up of major brands have adopted these principles, including Whole Foods Market, Patagonia, Starbucks and Trader Joe’s – coming to redefine common beliefs that sustainable and ethical mean making less profit. Already back in 2013, Harvard Business Review demonstrated that Conscious businesses perform ten times better than their profit-focused counterparts.
But should this really come as a surprise?
More consumers are, after all, becoming increasingly wary about where they spend their money and time in the age of social media and Conscious Consumerism – voting with their virtual thumbs as much as they do with their wallets. Employees too, are voicing their concerns around companies’ sustainability practices, diversity statistics and leadership.
And let’s not forget, crises play a critical role in facilitating change. Much like the 2008 market crash, the pandemic is showing important signs of irreversible changes to people’s emotional values and buying behaviours. Today, you only need to scroll through your social media feeds to understand that doing and being good as a business is less of a choice but an expectation, with more attention being paid to businesses’ social, economic and environmental impacts. And this is where Conscious Capitalists will greatly outperform their peers – having adopted a holistic approach that seeks to benefit all.
With the pandemic now showing the first promising signs of a turnaround, this is the perfect opportunity for organisations to re-evaluate their values and consider taking a more conscious route. Those who will are likely to win in the long run, enjoying benefits beyond financial returns, including higher stakeholder trust, self-sufficient and value driven teams, increased employee engagement and morale, deeper customer understanding and lower turnover. Best of all, any and every business can make the move, regardless of size or revenue.
So, as we look ahead to 2021 and beyond – finding ourselves a little more resilient, appreciative and sensitive to everything around us – we must ask ourselves: if not now, when?