The 4 Principles of 'Conscious Capitalism'
If you had a chance to implement a system that would bring in 10 times more profit than similar firms in your market, would your first thought be about what you’d have to give up to do so? What part of your soul you’d have to sell?
The truth is that by doing business the right way -- being truly authentic, sticking wholeheartedly to your ethics and morals, and caring more about your customers and employees than your shareholders -- you can achieve that gain without losing your soul.
Conscious Capitalism is the system that lets you do this. I know, because we launched Conscious Capitalism San Diego last week (disclosure: I’m president of the board of directors). As the 20th local chapter worldwide, the results are clear: Conscious Capitalism companies don’t only outperform the market by 10.5 times, they even outperformed the Good to Great companies such as Fannie Mae and Walgreens by 300 percent -- by doing business the “right way.”
Imagine that: you don’t have to give anything up to become a market leader.
In fact, you can be the good guy.
There are four principles of Conscious Capitalism.
1. Conscious leadership
Organizations mirror the actions and personality of the individual at the top. This is the kind of person people want to follow. The authentic, open person. Conscious Leaders are the ones who inspire loyalty and consistent high performance in their teams.
2. Stakeholder orientation
Conscious leaders know the importance of taking into account all of their stakeholders. You’re never going to become a premium brand by only focusing on the shareholders. The really important factors for long-term business success are the employees and customers, and often the vendors and community as well. Take care of them and they will take care of you.
3. Conscious culture
A values-based culture is one that is intentional about how people act and perform. When a culture is not defined and enforced, your people aren’t all moving in the same direction.
For example, Greg Koch, the CEO of Stone Brewing Co. and one of the speakers at our inaugural event, talked about how he would rather leave a key position unfilled then bring in someone not 100 percent aligned with his firm’s values and mission. He explained that not having that position filled hurt, but it was better than the alternative. Stone Brewing Co. is now one of the top micro-brewing house in the U.S. -- it’s even expanding into Germany.
4. Higher purpose
Finally, the company should be in business to do more than just make money. Great leaders realize that in order to become successful over the long term, you must provide true value. That comes from passionate people getting inspired about their work. How inspiring is your company’s purpose? For example, would you want to work for a company whose mission it is to “deliver maximum value to the shareholders”?
I wouldn’t either.
Coach John Wooden famously never talked about winning. He talked about doing your best. And you know what? He won. More than anyone.
That’s what we’re talking about with Conscious Capitalism. Quit trying to play someone else’s game. Be true to yourself, your customers, your employees. And you will be rewarded.
Those who chase the almighty dollar never find it.
Andrew Hewitt of Game Changers 500, another speaker at the launch, puts it in perspective: “A 2013 Cone Communications-Echo study found that only 20 percent of brands worldwide are seen to meaningfully and positively impact people’s lives, yet 91 percent of global consumers would switch brands if a different brand of similar price and quality supported a good cause.
“With this huge gap between societal values and corporate values it’s no wonder that purpose-driven organizations are far outperforming the pack. Doing good has become good business, not only because of changing consumer values but also because good companies are attracting the top talent, particularly millennials who are estimated to make up 75 percent of the global workforce by 2025.”
The fact is, many business leaders are already living these principles without even knowing it. If you’re one of them, now you know you’re not alone.
It isn’t just the “right” thing to do.
It’s also the profitable thing to do.