In a troubled time, where public money spent irrationally, cases of corruption with government-controlled companies are cloaked in the world's leading newspapers, and corporate CEO salaries are 500 times greater than the lowest salary within the same organization, it is difficult to believe that capitalism can be "conscious".
On 23 September 2019, The Conscious Capitalism Conference in Berlin offers an opportunity to share experiences, listen to thought leaders and academics about the change conscious capitalism is promoting. This is the second conference in Europe and it has the intention to connect conscious capitalists, inspire through powerful stories and accelerate the change to elevate humanity through business.
But the simple answer to the question of “Can capitalism be conscious?” is YES. Cases of companies that practice more conscious capitalism are more frequent than we imagine. Successful companies dedicated to doing good, which are working for a higher purpose are everywhere. Conscious capitalism, in addition to being highly profitable, will be one of the differential factors for success and profit in the near future.
The time to discuss whether capitalism or socialism is better for humanity is over. We can recognize that capitalism has been great at producing wealth, but has failed to distribute it, and socialism has been great at distributing wealth but failed to produce it. It is right in front of our eyes that capitalism and socialism are pieces of the same puzzle, or part of the solution to resolve the problems that are appearing. We see that many movements emerged at the beginning of this century, such as B Corp, Circular economy, B Team, Sharing Economy, Collaborative Economy, Creative Capitalism and many others. Only the Triple-Bottom-Line emerged last century. These are all ideas that contribute to the solutions and they carry, in some way, the four fundamentals that I will share next. Certainly, 10 or 20 years from now, we will look back and recognize that this was a silent revolution, and future humanity will name the new economic system that is emerging with a much more appropriate name.
Conscious capitalism is one of the ideas out there, and it has become a global movement. It is a business philosophy, which generates prosperity in a humanized way and it is based on four fundamentals:
- Leading for a cause: It is not a revolution within the organization, it is a top-down transformation, away from the ego-system;
- Generating prosperity through a higher purpose: The purpose of a business is not to generate profit, but to generate value for society and the financial result is a consequence of accomplishing its purpose;
- Integrating stakeholders: Recognizing the interdependence of all participants in the business ecosystem, and migrating to genuine win-win-win models; and
- Creating a responsible culture: One which is a form of collective behavior driven by a higher purpose and values, which contributes to the perpetuation of the business, preventing the model from being copied by the competition.
This movement was launched in 2007 in the United States, started by the academic Raj Sisodia and the co-founder and CEO of Whole Foods Markets John Mackey. In Europe it was formally introduced with the launch of the Spanish Conscious Capitalism Chapter in 2016, which hosted the 2018 European Conscious Capitalism Conference. In Germany, we have a strong conscious capitalism community which is hosting this year’s European Conscious Capitalism Conference in Berlin, on 23 September. The chapters around the world (over 50 according to ConsciousCapitalism.org), involve mostly CEOs and entrepreneurs who believe that their business can generate more than profit, that they have the power to transform the community that they are part of. The purpose of the movement is to elevate humanity through business, and seeks to inspire business executives through the sharing of success stories.
It is important to emphasize that conscious capitalism should not be confused with corporate social responsibility or cause marketing. These two may form an integral part of more conscious capitalism, but they are only steps in this process of transforming the business world.
Professor Raj Sisodia wrote about this subject in 2006 in "Firms of Endearment". He shares that “people with purpose can reach extraordinary performance" and demonstrates that organizations that follow these business principles, creating value for all of society based on the superior purpose and the integration of its stakeholders, perform way above the market average.
While analyzing the companies highlighted in this book, he found their performance reached 1600% versus 168% which was the historical market average - the variation of the S&P 500 index over a period of 15 years. Another performance benchmark was made with the companies mentioned by Jim Collins in "Good to Great", where he noted the companies performed at 178% over the same period, which is also well below the performance of conscious capitalist companies.
Conscious businesses are increasingly taking responsibility for the impact of their operations on society as well as for the development of their communities and the environment. Take Howard Schultz, CEO of Starbucks, with more than 21,000 stores and more than 140,000 employees: he chose to support his employees by covering their education costs.
There are cases of conscious businesses popping up everywhere and some of them have been included in a publication released in April 2018: The “Conscious Capitalism Field Guide” (www.CCFieldGuide.com) offers a step-by-step approach to the implementation of these fundamentals, sharing examples of practices and testimonials of servant leaders in the conscious business journey. The path to becoming a conscious company is no longer one of many options to choose from, but is now a necessity to remain operational in the new economy that is emerging. This is a path of no return: today's companies that want to survive and thrive in this century are adjusting right now to secure their presence in the world that they are creating, regardless of government initiatives, pressure from NGOs and political credo.
What is your organization doing for its long-term sustainability?
What are you, as a leader, working on today to make a positive legacy impact in your community?
Thomas Eckschmidt, cofounder and CEO of CBJ – Conscious Business Journey, a global organization created to accelerate change, delivers certification programs for consultants and other educational initiatives to accelerate the implementation of the four fundamentals of conscious capitalism around the world.
Thomas has launched the conscious capitalism movement in Brazil and supported similar launches in many different countries, including Spain, Germany, Argentina and others. He has co-authored “Fundamentals of Conscious Capitalism” (2016) and “Conscious Capitalism Field Guide” (Harvard 2018).
His professional journey of 10 years in the corporate world, an additional 10 years of consulting in 20 different countries, and more recently, being a conscious capitalist entrepreneur with 12 awards, 4 patents filed, and 14 books published, demonstrates that he has the best capacity to deliver the Conscious Business Change Agent Certification program around the world, which now has 550 certified professionals in 6 countries. Learn more at www.CBJourney.com