Conscious Capitalism – Does your business practice it?

Conscious Capitalism is all about the heart and soul of a business.  It is a movement that is gaining momentum and excitement in the business community, and should be foremost on the minds of family business leaders.  Conscious Capitalism contrasts with traditional capitalism, whose sole purpose is to maximize shareholder (or owner) wealth.  In Conscious Capitalism, the purpose of business is to advance the common good and to make decisions that benefit not just the owners or shareholders, but all the stakeholders of the business: employees, customers, shareholders/owners, suppliers & vendors, society and any other constituents that are affected by the business.  

If you think that talk about heart and soul of business is mushy, feel-good pablum, get this: Conscious businesses outperform the overall stock market by a ratio of more than 10:1 (Mackey, J. & Sosodia, R., 2014, p. 36). That means that Conscious Capitalism is a serious competitive advantage.  It is a tough, business-minded, holistic approach to business that results in better financial performance.

Here are the four tenets of Conscious Capitalism.  Read them to see how close your family-owned company is to being conscious: 

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• Conscious Leadership: Conscious Capitalism starts with leaders.  Leaders must have a high degree of self-awareness – of both their strengths and their foibles – in order to set the emotional tone for the rest of the group.  Always remember that the leader casts a long shadow, meaning that all eyes are on the leader to set the behavioral example for the rest of the group.  For example, if the leader yells at a marketing person for making a mistake, that marketing associate is likely to treat the web designer in a similar fashion.  In many of the small to mid-size family companies I work with, the leaders are the founders and have a high level of passion for their business but not so high self-awareness.  They would benefit from bringing in outside consultants and coaches to help them learn ways to be more effective, both in their business structure and their interpersonal interactions.
  

• Higher Purpose: Conscious businesses have a purpose that is bigger than just making money, and they make sure that everyone involved with the business knows what that is.  Whole Foods’ purpose is “helping to support the health, well-being, and healing of both people — customers, Team Members, and business organizations in general — and the planet.”  The leaders in this company embed their purpose and their core values in everything they do – from the hiring and people practices they follow  to strategic decisions they make.  If you don’t have a punchy purpose, listen to your founder or leaders to see what they repeatedly say.  For example, in one family-owned company that I work with, the president would often say, “We keep a lid on criminal behavior.”  We turned that phrase into their purpose statement.  The “litmus paper” question that determines if you have a compelling purpose is, “If I were the shipping clerk, what would get me out of bed on Monday morning to come into work?”  Your purpose must have passion and appeal.
  

• Conscious Culture: Culture is the soul of a company.  It manifests in the way people (insiders and external suppliers) are treated, the way decisions are made and the emotional norms that may be unspoken but expected.  Culture is the result of how an organization lives its values.  In conscious family businesses, values most often in evidence include trust, compassion, integrity, accountability, fairness and transparency.  Are people treated fairly in your company?  Are they held accountable to reasonable and well-communicated expectations?  Is the culture emotionally intelligent or chaotic?
  

• Stakeholder Integration:  Stakeholders, as we stated above, are all the people affected by your business, including employees, customers, shareholders/owners, suppliers, vendors, and the community or society.  When a company practices stakeholder integration, no single stakeholder group is more important than another.  In traditional capitalism, decisions are made to benefit the shareholders or owners, while all other constituents take a back seat.  In Conscious Capitalism, leaders build a synergistic relationship among the stakeholders, and seek win-win-win-win solutions to any problem.  For example, a supplier may announce a price increase to you.  Instead of simply passing on that price hike to your customers, you might initiate a dialogue with multiple stakeholders, both internal and external to your company, to find an innovative solution that is neither black nor white, but a third option.  In this example, you can see that mitigating a price increase is very good for business – your customers may curtail spending with you if your price isn’t competitive - which again illustrates that Conscious Capitalism is a competitive advantage.
  

Brio Leadership is committed to helping our clients become Conscious Capitalists.  We work with family-owned companies that have a passion for what they are doing, and want to get better at it.

For more information on Conscious Capitalism, here are several resources:

• Two podcasts are available from McCuistion TV called “Conscious Capitalism: Liberating the Heroic Spirit of Business.”  You can find these informative videos at http://www.frtv.org/2013/11/conscious-capitalism-liberating-the-heroic-spirit-of-business-part-one/ 
  

          and http://www.frtv.org/2013/11/conscious-capitalism-liberating-the-heroic-spirit-of-business-part-two/    My colleague, Whitney Johns Martin of Texas Women Ventures, is featured in this segment.

• Visit the Conscious Capitalism, Inc. website for many resources: http://www.consciouscapitalism.org/
  

• Buy the book: Conscious Capitalism: Liberating the Heroic Spirit of Business by John Mackey, co-CEO, Whole Foods Market, and Raj Sisodia, professor of Global Business at Babson College.  http://www.amazon.com/Conscious-Capitalism-New-Preface-Authors/dp/1625271751/ref=sr_1_1?s=books&ie=UTF8&qid=1390342291&sr=1-1&keywords=conscious+capitalism
  

References:

Mackey, J., & Sisodia, R. (2013). Conscious capitalism: Liberating the heroic spirit of business. Boston, Mass: Harvard Business Review Press