‘Conscious Capitalism,’ an age-old business concept taking the entrepreneurial industry by storm in 2017; each day increasing numbers of companies take steps towards a more conscious future. Conscious Capitalism is a business method that takes into account, and reflects, the current state of the world, and the potential a business has to have a positive impact on it. The environment and human impact a company, concept, or product has is an integral part of Conscious Capitalism, and is at the very heart of the notion.
What is Conscious Capitalism?
The term ‘Conscious Capitalist’ was officially coined in 2010, by the founder of Whole Foods – John Mackey, after years of studying and contemplating about the real benefits of business in today’s society. With a vision that says:
“We believe that free enterprise capitalism is the most powerful economic system for social cooperation and human progress ever conceived – when practiced consciously. Conscious Capitalism produces businesses that are good, ethical, noble and heroic. Our organisation helps companies become more conscious with transformational experiences that inspire, educate and empower them to elevate humanity through business. By joining or supporting Conscious Capitalism, Inc. you can help create a world in which business is both practiced and perceived as the greatest force for good.”
Conscious Capitalism acknowledges that while free market capitalism is the world’s strongest system for social cooperation and human advancement, entrepreneurs can aim to do even more by utilising Conscious Capitalism as a method of running a business.
Building on the core foundations of capitalism, including entrepreneurship, competition, freedom of trade, the rule of law, and voluntary exchange, as well as adding trust, compassion, and value creation into the mix, Conscious Capitalism allows businesses to be more and do more. Conscious capitalism isn’t about not producing profits; it’s about doing so in a manner that integrates the interests of all major contributors, in addition to the environment.
Tom Morley, Keynote Speaker and Co-founder of Instant Teamwork:
“Conscious Capitalism has always been around because people have commonly set up businesses with good intentions.
In their hearts, most bosses have values like Trust, Community, Justice, Family, Integrity, and Love. Without them, they wouldn’t get out of bed in the morning. It’s just that the ROI got a bit out of balance and, with expansion; it took over in many cases.
However, with Millennials citing their ‘desire to make an impact for the good’ as a way of retaining their energetic attention and commitment to a company, employers are being reminded of their idealistic beginnings, and welcoming it”.
What is conscious business practice to you?
“If you clap your hands in a shack, you’ll hear a simple ‘clack!’ If you step out into the valley and clap again, you’ll hear it echoing around the mountains. Conscious business practice is being aware of those reverberations and connections. Develop that clapping into a rhythm and some people will welcome it and dance, others will block their ears. If the feedback is over 80% favourable, then you turn the shack into the ‘Hands Up’ club, with the strap-line ‘Surrender’. But first, you research whether music and dancing measurably benefits the health of the whole valley.”
Conscious capitalism is based on four main principles, these are:
- Higher Purpose: A business that acts in a conscious way focuses on a purpose beyond its profits, and as part of that, inspires and engages its contributors.
- Stakeholder Orientation: Businesses have multiple contributors which include their employees, customers, suppliers, and investors. Some businesses choose to focus on providing high levels of return to them at the exclusion of everything else. While a conscious business focuses on the entire system of a business to create and utilise value for its stakeholders, not just on providing return for them.
- Conscious Leadership: To drive their business, conscious leaders put emphasis on the team behind their brand’s success rather than just themselves and their needs, and always strive to create a culture of consciousness in enterprise.
- Conscious Culture: Corporate culture is the values and principles that make up the social and ethical fabric of each business. A conscious culture is where the principles of conscious capitalism penetrate the business, creating a relationship of trust and cooperation between employees, customers, investors, and suppliers.
But is this behaviour viable and sustainable for long term business success?
In 2017 and decades prior, it has been notable that the perception around business resides an environment of hard- nosed, scrupulous behaviour. You just have to look at shows like Mad Men or Working Girl or more recently Empire, to see that the perception of business, regardless of sector, is that success comes to ones that are shrewder and cut throat.
However, in the growing world of mindfulness and heart centred business, is there an ability to be significantly more ethical in your business approach, while at the same time, providing a quality and ‘affordable’ service to your customers?
We spoke to a few businesses who are now navigating this space to receive their perspective.
Nicola Millington Founder of FP Comms:
“There is currently no prototype or blueprint of a ‘successful’ Conscious Capitalistic businesses on a mass scale There are pockets of examples, but as a general rule, success is still only measured by the bottom-line.
At the moment it is fair to say that most start out and are endeavouring to be businesses with every intention of working from a place of purpose, passion, and profit. However, when it comes to the nitty-gritty of providing simple things like fair pay, flexible working, equality of employment, … many companies fall short of the mark according to their stakeholders demands. Therefore, the question comes down to what are we measuring and how do we identify success?
Organisations like B Corp, have implemented a method of assessing your values and processes within your business. I think this is one way to measure.
To date, there is only one business I can remember that I would class as a ‘Conscious Capitalist Company’, and that is the Body Shop. I cite body shop as the only business that seemed to be defined by its strong ethics from the start, which I think makes a massive difference and believe that it is here to stay as a concept, as more and more people are rejecting the rigidity, the old capitalistic society has delivered.”
Conscious Capitalism – is it profitable?
The short, simple answer is yes; Conscious Capitalism is profitable, highly profitable in fact. During the past several decades, increasing numbers of companies have begun to commit to the greater good, and as a result, have become extremely successful. Lush, an all-natural, organic, eco-friendly, cruelty-free, and vegetarian and vegan cosmetics company, is a prime example of a company that has committed to Conscious Capitalism, and to the greater good, and has succeeded (in part) because of it.
Conscious businesses are not only currently more profitable than non-conscious companies, but are predicted to be hugely successful in the future, because Conscious Capitalism is set to be one of the defining mechanisms of the future of entrepreneurship.
There is an abundance of data that suggests that companies that are conscious capitalists are much successful now, (and will remain that way in the future) than brands that aren’t. According to Nielsen’s ‘Global Survey on Corporate Social Responsibility’, 43% of global consumers said they are willing to spend more for a product or service that supports a cause and is sustainable.
We asked Andrea Lawrence business owner and Founder of Toulou Organics her views and perspective on what conscious capitalism means and is it here to stay?
“Toulou Organics Skincare uses certified organic ingredients, where organic is not an option we will use cold pressed and wild-crafted ingredients to retain the therapeutic benefits of the plant in our products,” states Andrea.
“With the farming and harvesting of ingredients, it is necessary that they retain their fatty acids, vitamins, and minerals in the end ingredient. Therefore, it is vital that sustainable farming is achieved as this is key to the longevity of your brand and the effectiveness of your products. At the same time, protecting the planet by only seeking ingredients from sustainable farming, giving the consumer skincare that is safe and nutritious to their skin and their body.”
Andrea continues, “For me, conscious capitalism is here to stay. Consumers are becoming increasingly aware of the side effects that some of the ingredients in mainstream products can have on their bodies. The cocktail of chemicals daily can and contribute to ailments such as, cancer, fertility problems, allergic skin reactions to name a few. However, we also see that as a business our ethics should also look at the greater conversation around the impact of our business on the world and not just on our skin, through our product.”
Andrea concluded: “Our business is founded on caring for a community, which is important to us now as we are at the beginning of our growth phase.”
Conscious capitalism is a highly profitable business model in more ways than the financial and a model that more and more companies of all shapes and sizes are choosing to get on board with.