Conscious Capitalism: Building a Purpose-Driven Business

The ROI of placing your business model in the context of purpose is examined in Conscious Capitalism. Its objective is to use business to advance humanity. Businesses are finding that workers and clients are becoming more adamant in their demands to work for and transact business with organizations that share their values, or at the very least, can clearly state what those values are, as they continue to adapt to phenomena like "Working Remotely" or "The Great Resignation".

Why Conscious Capitalism? Why now?

More is being expected of the businesses by both employees and customers. People prefer to see more firms with a purpose that prioritizes customers before shareholders. According to Ipsos research, 78% of Americans concur that "a company's success should be measured not only by its profitability or growth but also by how well it serves customers and broader society." The emergence of innovative businesses such as hybrid L3Cs, social enterprises, B-Corps, and more has consequences for many industries. This exemplifies conscious capitalism, which allows companies to generate wealth for their shareholders without sacrificing their stakeholders to forge even closer ties with their clients and the community.

What is Conscious Capitalism?

The aim of conscious capitalism is to build a strong and long-lasting company that fulfills a purpose beyond the pursuit of short-term profit maximization. It is predicated on the idea that businesses can be agents of positive change in addition to being profitable enterprises. As its name implies, it is a form of capitalism, but not the one that has been prevalent historically. It's a new approach to business that prioritizes the needs of all parties involved—suppliers, customers, stakeholders, and employees—and views sustained success as the outcome of those decisions. For instance, a business based on conscious capitalism might provide benefits to workers that go above and beyond the minimum required by law, such as health insurance or tuition reimbursement, or it might train staff members for positions that they will need in the future in addition to their current ones. Alternatively, a business that values entrepreneurship could assist its suppliers in expanding their enterprises, thereby mitigating risks for the company.

The Conscious Capitalism organization offers organizations a framework, a community, and resources to implement what it refers to as the "4 Tenets of Conscious Capitalism":

1. Higher Purpose: An analysis of an organization's motivations for being

2. Stakeholder orientation adds value for all parties involved in a company by acknowledging the interdependence of life and business.

3. Conscious leadership is understanding how culture contributes to value creation and aligning stakeholder interests.

4. Companies that actively promote principles and purpose are said to have a conscious culture.

There are Conscious Capitalism chapters worldwide, as well as events, resources, and programs that allow leaders to become more knowledgeable and connect with others leading with purpose.

How Can We Build a More Conscious Business?

Creating a more conscious company is both an inside and outside job. The most successful companies have leaders who set a good example and are dedicated to this way of thinking. However, they also have employees who are free to act and think in ways that strengthen the bonds that bind the business to its clients and the community. The best companies collaborate across departments in this way. A few businesses that best represent this movement include Build-a-Bear, REI, Patagonia, Hyatt, and others. They show how conscious capitalism can be developed both within and outside. Patagonia's founder, Yvon Chouinard, recently donated his business instead of going public. Ownership of the $3 billion property was transferred to a nonprofit organization and trust, guaranteeing that all profits are used to battle climate change and safeguard undeveloped land worldwide.

How to Start Practicing Conscious Capitalism

Many tools, insights, and suggestions are available from the Conscious Capitalism organization to help leaders make their company more purposefully conscious. Here are some thoughts:

Think strategically about “consciousness” in your company

This isn't about creating cliche posters and all-day brainstorming sessions to craft clever catchphrases. When done right, being more intentional and conscious will result in more significant revenue or profitability (the business aspect of it all). Make your company's annual goals more purpose-driven. We've previously discussed how your objectives and plans should be "Some Impact We Want To Make," not just "Some Number Improved Over Last Year," with examples including increased market share, entering new markets, establishing yourself as a premier workplace, expanding your portfolio of goods and services, and more.

Establish quantifiable goals linked to culture, just as you would with other business areas. Conduct quarterly evaluations, analyses, and forecasts with your CFO and other leaders.

Dedicate resources to becoming an organization that practices conscious capitalism

Commit to taking some action. Truly evaluate all aspects of your organization, consider how stakeholders view their interactions with you, consider doing a culture audit of your business. Form groups to coordinate and plan approaches and measures to deal with or enhance the corporate culture.

Take Ownership as Leaders

In companies, culture is not created from the bottom up. Recognize that to build and improve a culture of conscious capitalism, your executive or leadership teams and your board must take the lead. As always, the best approach to staying out of trouble and choosing the right paths is to surround yourself with advisors who can help you build and traverse them.

Today’s best companies, and the companies that will thrive in the future, build programs that encourage people to think about how they are serving customers and communities, creating the kinds of experiences that help people to see the bigger picture and how their actions can have a real purpose and make a difference. Consider how conscious capitalism can help you build a stronger culture, broader connections and a thriving company.