Conscious Capitalism is an emerging movement that works towards developing synergies across organisations entire value chains. Its built from an ideal that everyone can benefit from bringing core values back into business through trust and integrity which is a natural set of values that are normally instilled into people from childhood. However over the years traditional capitalism has seen a movement away from such values which has resulted in some catasporphic economic failures all in the name of getting ahead through greed. This ‘hack’ simply suggests that these core values are brought back into the business spotlight using Conscious Capitalism as its bearer of good will.
Trust and Integrity within the world are often words that are bantered around without too much meaning. As the business community saw from the collaspe of organisations such as Enron and the sub-prime mortage ordeal, the trust in the global economic system is faltering. People took to heart Gordon Gekko’s message from Wall Street: Money Never Sleeps that greed is a good thing and it should be celebrated thus there is a corporate mentality of the Rat Race and how people need to get ahead whatever the costs. The ability to trust someone is an important value that everyone can understand while having integrity helps to build such trust. Without these elements in capitalism it is unsustainable and will only lead to further hardship.
The idea that capitalism can be sustainable in that organisations can work towards minimising the zero-sum game while adding value to every step of the value chain is not as far fetched as first thought. Conscious Capitalism is an emerging movement towards this line of thinking that encourages the building of relationships throughout the value chain with trust and integrity being applied throughout the business practice. Conscious capitalism works off four very simple, yet large, principles that organisations need.
- Higher Purpose;
- Stakeholder Orientation;
- Conscious Leadership; and
- Conscious Culture.
Each one of these principles starts with the foundation of being honest about what the purpose of the business is for. The conscious capitalist accepts that making money is an important part of any organisation as it is a nescessity to the life of the business, however they believe that the business is designed and built around the idea that the organisation can achieve something larger than making money. Understanding this purpose allows for the second principle to be applied.
Stakeholder orientation has the view that the entire value chain needs to be developed in the way that adds value to each part. From suppliers to the consumers, each segment needs to have the understanding of what the organisations purpose really is through open and honest relationships which is built on trust. If every part of that value chain understands why the organisation exists and has the trust in the working relationship that allows them to work together towards it, all sides have the potential to benefit from the harmonious relationship.
In every book and historical account of true great leaders of people, they are able to motivate their people by giving them something to believe in. If an organisation has a purpose which allows this, coupled with the support from stakeholders, leaders are able motivate the people around them in all directions (higher, lower and sideways). If they lead with a meaningful and open purpose while displaying integrity, in return they will receive loyalty through trust. A conscious leader understands the purpose of an organisation and builds the relationship with stakeholders while forging the path towards the higher purpose for the culture of the organisation.
Conscious leaders develop cultures that work with synergy, and believe in what they do. They bring on members that have the same values as the other members of the teams and importantly who add value to the team environment. These cultures develop in unique ways and can be the difference between effective teams and non effective teams. Members need to have trust in each other as well as belief in what they are doing has meaning to the organisational value.
Using Conscious Capitalism as a bearer to bring back trust and integrity allows people to feel comfortable in the understanding that what they do has a greater meaning. As examples like Whole Foods Market and Google show, its not about scarificing profit for good will, its about believing that value can be added across the board.
Conscious Capitalism is a shift in the overall thinking of how business operates. Traditionally organisations are use to playing their cards close to the chest without letting too much information go. However with honesty amongst the stakeholders, this mentality of “Need to know” needs to change to “need to share”. This looks at thinking not how important information is to the individual but how important and of what benefit, could it be to other stakeholders. In achieving building the trust through integrity with all of the stakeholders, the organisation will have established the partnerships that enable the business to operate more effectivitly.
To bring conscious capitalism into any organisation, the first step is simple. Evaluate why the organisation exists. As a recommendation for a starting point, the 5 broad steps to strategic management (purpose, analyse, strategy formulation, implementation and output), goes through in detail on how to align strategy with the organisations purpose including the continual reevaluation of the purpose.
This process will help to develop a plan around how the idea of being a conscious business can be developed.
For more information on Conscious Capitalism check out www.consciouscapitalism.org.
Bernie Frey – Praxxis Group / Massey University.
John McKay – Whole Foods Market (Alot of inspriation for this came from his articles, interviews and experience)