Conscious capitalism is considered a new operating system for entrepreneurs and companies alike. But what exactly is conscious capitalism and what are the four principles of it?
Let's dive in — here's everything you need to know about conscious capitalism.
What does conscious capitalism mean?
Conscious capitalism is a rather simple concept: It's essentially capitalism with a social good aspect.
"Conscious capitalism is a philosophy based on a simple idea that, when practiced consciously, business elevates humanity," according to the Conscious Capitalism Movement. "This philosophy is rooted in the four tenets of Conscious Capitalism: higher purpose, stakeholder orientation, conscious leadership and conscious culture."
Why is there a need for conscious capitalism?
Conscious capitalism differs from capitalism, and it arguably often works because it makes up for capitalism's faults.
According to the Conscious Capitalism Movement: "Capitalism works. Period. Its power to positively change lives is unparalleled. But misuse of capitalism’s power by some has led to negative stereotypes such as greed, misconduct and exclusion. This inaccurate way of thinking about business seemed destined to be an unshakable narrative — until now. There is a better way to be a capitalist. A way that will create a better world for everyone. A way forward for humankind to liberate the heroic spirit of business and our collective entrepreneurial creativity so we can be free to solve the many challenges we face. Conscious capitalism provides that path."
Conscious capitalism refers to ethical business that elevates our overall existence, creates opportunities and prosperity and works toward a higher purpose that serves, aligns and integrates the interests of all of a business' major stakeholders, including the environment. Conscious capitalists, therefore, are leaders who are driven by their company's purpose and the help it'll offer all the people whom the company affects, as well as the planet that we all share.
In other words, capitalism is often stereotyped as a negative way of doing business due to misguided priorities (i.e. earning the big bucks for those on top). Many argue that capitalism can lead to inequality, a lack of opportunities, worker exploitation and worse. But conscious capitalism intends to benefit everyone.
What is an example of a conscious capitalist?
Founder and co-CEO of Whole Foods Market, John Mackey, is largely touted as a conscious capitalist. He founded Whole Foods Market in 1980 in Austin Texas and, today, his $13 billion Fortune 500 company has expanded to almost 400 stores across the United States and the United Kingdom — and for good reason. He embodies conscious capitalism, which is why Whole Foods Market has been listed as one of Fortune magazine’s "100 Best Companies to Work For” and was ranked as having one of the world's best corporate reputations by The Wall Street Journal.
So how does Mackey practice conscious capitalism? For one, he was the visionary behind the Whole Planet Foundation that strives to end poverty in developing nations, the Local Producer Loan Program that helps local food producers build their businesses, the Global Animal Partnership’s rating scale for humane farm animal treatment, as well as the Health Starts Here initiative that intends to promote health and wellness.
In fact, Mackey went so far as to co-found the nonprofit organization Conscious Capitalism, Inc., which has local chapters in 26 United States cities and 12 other countries, and co-author a New York Times and Wall Street Journal best-seller aptly titled, Conscious Capitalism, Liberating the Heroic Spirit of Business, to boldly reimagine capitalism and encourage others to also do business ethically.
Tons of businesses have adopted the principles of conscious capitalism, following in Mackey's footsteps. These include Starbucks, The Container Store, Unilever, Zappos and Trader Joe's, for examples.
What are the four principles of conscious capitalism?
There are four key principles of conscious capitalism.
1. Higher Purpose
Higher purpose refers to every business' bigger purpose, beyond making money. Sure, money is essential for vitality and sustainability, but it's neither the only nor the most important reason for the business to exist. The higher purpose can inspire, engage and energize stakeholders.
According to Mackey's Conscious Capitalism, Inc. glossary, a purpose statement is "a statement made by a person or organization about why they exist, and about the difference they seek to make in the world."
2. Stakeholder Orientation
According to Mackey's glossary, a stakeholder is "a person, group or organization that has a direct or indirect stake in an organization because it can affect or be affected by the organization’s actions, objectives and policies."
Conscious companies practice considering and weighing the interests of all of their stakeholders, which includes customers, investors/shareholders, employees, suppliers, society and the overall environment. These conscious companies look for win-for-all solutions when making business decisions.
3. Conscious Leadership
Conscious leaders truly grasp and cherish the higher purpose of the business, and they understand the value of all of the stakeholders and the environment, as well. As such, conscious leaders are driven to serve the company's bigger purpose and inspire others to do the same, bringing out the best in everyone around them.
According to Mackey's glossary, conscious leadership refers to "the practice of guiding a group from a heightened state of internal and external awareness." As such, "conscious leaders observe and master their own thoughts, feelings, beliefs, assumptions and tendencies while simultaneously noticing the effects and results of their choices and actions."
4. Conscious Culture
According to the glossary, "the norms, behaviors and routines that add up to 'how we do things around here' within a workplace," makeup a company culture.
A conscious company culture is one that's built on the acronym TACTILE: trust, authenticity, caring, transparency, integrity, learning and empowerment.
AnnaMarie Houlis is a feminist, a freelance journalist and an adventure aficionado with an affinity for impulsive solo travel. She spends her days writing about women’s empowerment from around the world. You can follow her work on her blog, HerReport.org, and follow her journeys on Instagram @her_report, Twitter @herreport and Facebook.