Consumer values have changed, and companies that don’t adapt will be left behind. People care about where their products come from, how they were made, and how the company treats its employees. One study found that 91% of global consumers reported they would buy from a different brand that has similar price and quality if the company supported a good cause. Traditional business principles aren’t effective anymore. You will benefit from more loyal customers when you follow conscious capitalistic principles. Continue reading to learn more about conscious capitalism is and how it can help your company flourish.
What Is Conscious Capitalism?
Conscious capitalism is based on four principles: purpose, stakeholder, leadership, and culture. A business should have a purpose beyond making money. Without argument, it’s necessary for a company to generate profit in order to exist, and conscious capitalism acknowledges this fact. However, it’s possible to make money while having a good purpose behind the business that involves improving the world in some way.
As explained on Consciouscapitalism.org, “By focusing on its deeper Purpose, a conscious business inspires, engages and energizes its stakeholders. Employees, customers and others trust and even love companies that have an inspiring purpose.”
Engaged stakeholders help create a sustainable business. Some traditional companies focused on maximizing ROI for their shareholders. Conscious capitalism, in contrast, values all stakeholders and focuses on optimizing value for stakeholders. A conscious business understands that a business can’t exist without customers, employees, funders, suppliers, and supportive communities.
Leadership, the third principle of conscious capitalism, states that leaders should focus on “we” and not “me”. A good leader encourages creating value for all stakeholders, supports people within the organization, and acts on the organization’s purpose. Conscious leaders also bring out the best in others.
Company culture is important for unifying and guiding employees for achieving the company’s purpose. A conscious culture helps build trust and love between employees and stakeholders. Good culture also increases employee productivity and happiness.
Consciouscapitalism.org defines culture as, “the embodied values, principles and practices underlying the social fabric of a business, which permeate its actions and connects the stakeholders to each other and to the company’s purpose, people and processes.”
7 Tips on Applying Conscious Capitalism
1. Act Morally and Ethically
One of the easiest ways to apply conscious capitalism when doing business is to act morally and ethically. Each business decision you make should be moral and ethical. Ask yourself what the difference is between right and wrong. Only do things that are right.
2. Shift Your Mindset from Pleasing Shareholders to Pleasing Stakeholders
The nice thing about shifting your mindset from pleasing shareholders to pleasing stakeholders is shareholders are still included. They count as stakeholders. Thus, no one loses out when you focus on them because they consist of everyone who’s affected by your organization from the employees to customers to creditors.
3. Be a Good Leader
As an entrepreneur or business executive, you are in a leadership position. People aren’t born with leadership skills, so you must deliberately build this skill. To become a good leader, read some of the best books on leadership and implement what you learn. Some traits of good leaders are consistency, self-control, and discipline. Good leaders listen to those around them even when they disagree, communicate effectively, and practice what they preach. They embrace self-improvement to improve their performance as a leader.
4. Define and Enforce a Culture for Your Business
Every company should define the business culture they want and enforce it. This keeps everyone in the organization on the same page with similar values. When you know what your company culture is, hiring the right people becomes easier as well. Stone Brewing Co. is an example of a company that implemented conscious culture and saw success as a result. Greg Koch, the CEO of Stone Brewing Co., explained that he would leave a position unfilled until a qualified applicant would fit in with their culture. Before hiring someone, he would ask himself whether or not their values were aligned with the business’s values and mission.
5. Clarify Your Business’s Higher Purpose
Staying true to the first principle of conscious capitalism, you should define what your business’s higher purpose is. Even if your company is already large and difficult to change, it’s necessary to find its higher purpose. Ask yourself questions like: Why did I start the business? What keeps me going during the tough times? What impact would I like to make in people’s lives? Your answers to these questions will help you determine what your higher purpose is. You should also consider how your company is already impacting the lives of others.
6. Choose 5-7 Company Values
If your company is already established, have a discussion with your team members on values they think the company should operate on. After letting everyone share their opinions, work together to narrow down the list of possible values to 5-7. Another way to get ideas on which values to use or to know how customers see your business is to poll customers on what they think your company’s values are.
7. Stakeholder Relationship Building
Another way to apply the principles of conscious capitalism is to build and nurture relationships with stakeholders. When you put effort into relationship building, it causes the other to feel valued. Relationship building helps develop trust on both sides and form a stronger connection. Moreover, when you go above and beyond for a supplier or other stakeholder, by nature they feel the desire to reciprocate. They will have a more positive view of your company too.
Conscious capitalism is a way of doing business that’s purpose-driven, ethical, and considerate of all entities involved. Few people like businesses that operate based on filling the pockets of their shareholders. While investors are important to a business, the customers and employees shouldn’t be neglected. All stakeholders matter.
Implementing conscious capitalism is fairly simple because it largely involves a mindset shift, making the right decisions based on company values and ethics, and striving to be a good leader. It may be challenging at first if you’re used to the traditional business mindset or have a large company, but with practice, it will become effortless.
Do you love the concept of conscious capitalism and think more people should follow these principles? Share this article with friends and coworkers to raise awareness on what conscious capitalism is and how easily it can be applied in business.