Why Conscious Economics Is the Leadership Style of the Future The pandemic reinforced the truth that consumers have the power. It's now up to leaders to understand the impact their decisions have on others.
By Raj Girn Edited by Ryan Droste
Opinions expressed by Entrepreneur contributors are their own.
Despite the worldwide impact that the pandemic has had on our lives (personally and professionally), it — like most things in life — is not without a silver lining of sorts. For instance, as the coronavirus spread across the globe, people in every country became more aware of their own health and the impact their personal lives could have on others. That awareness also brought about multiple shifts in the way that businesses the world over conduct themselves, their teams and their daily operations. Customers began to realize that they could receive the same sense of fulfillment from spending simply by being more aware of where and why they spend their money.
When our society was suddenly forced into extended periods of distancing, isolation and quarantine, it forced us as a whole to turn inward and reflect on ourselves, our individual values and how these factors could help improve our social circumstances. This is the philosophy at the foundation of conscious economics — the view of what a human economy would be if it were based on self-reflection and realization, rather than self-assertion.
Related: It's Time We Support Our Communities Through Conscious Consumerism and Wise Investment
Conscious consumerism and conscious investment are not new philosophies. Conscious investment, often referred to as "impact investing," is a market worth more than $700 billion annually with 20% projected yearly growth.
As its name implies, impact or conscious investing is practiced for the intent of benefiting from better investment decisions for the good of companies, customers and society as a whole. Conscious consumerism has likewise been on the rise in recent years with more consumers choosing to shop at local smaller businesses rather than retail giants.
When we combine both of these together to encompass the "conscious" aspect for investors, businesses and consumers alike, it creates the dynamic referred to as "conscious economics." I was first introduced to this term two years ago when I attended an event by the Economic Club of Canada in Toronto. The event was headlined by a conversation between former President Barack Obama and Rhiannon Rosalind, the club's president, CEO and owner.
In other words, as aspects of our societies change and evolve around us, so too does our own inherent psychology — particularly our motivations for making changes to our way of life. Conscious consumerism and investment are but two notions of this psychological change, but these psychological shifts inevitably impact leaders and the organizations they head as well.
Related: Conscious Consumerism Is Taking Roots: Shopify President
As soon as the Covid-19 crisis was declared a global pandemic by the World Health Organization (WHO), leaders were forced into a difficult position that forced them to place the health and well-being of the collective over short-term benefits or profits. Suddenly, the thought of an objective human economy was thrown out the window as the collective consciousness of society was flipped on its head virtually overnight.
While many business leaders doubled-down on the bottom line of their traditional P&L models, others shifted into a way of thinking that focused on a newer "triple-bottom-line" model that could potentially see people, profit and planet (i.e., sustainability) working in tandem with one another. In doing so, many leaders became aware of the global impact that their choices could have, not only within their own organization and its structure, but also throughout the world outside of their company walls.
For instance, when stores such as Whole Foods began offering organic and vegan-friendly food options, few consumers or businesses understood what it was or why it was important as a more conscious and sustainable choice for many. Nowadays, however, you are more likely to find yourself in a grocery store or restaurant that offers these options simply because more consumers and business leaders alike became aware of the importance and impact those choices have.
Just as many consumers have been conscious in recent years as to the true value and impact their spending can have on others, the onset of a pandemic brought with it a wave of awareness many leaders utilized to reflect on their own beliefs and values, as well as those of their organizations.
Related: Conscious capitalism, will it change the future of your business?
Conscious economics, like most things, does not occur overnight — it begins with one small step, which is then followed by another small step, and so on ad infinitum until society has collectively evolved to become more aware and conscious of the impact our decisions have. Decisions made by leaders everywhere are a crucial first step in that process. But these small steps are just as important as big decisions when it comes to being more aware of our choices, especially as leaders, and even the smallest step forward will achieve more progress towards a better future than not taking any steps at all.
When we as leaders understand that it is the consumer and the collective who hold the power, we can become more conscious of the impact our actions have on others. It is up to us whether or not we choose to take part in the evolution of our societies' evolving consciousness, just as it is up to us to make the decisions that will help shape the future of that consciousness. As Charles Darwin said in The Voyage of the Beagle, "If the misery of the poor be caused not by laws of nature, but by our institutions, great is our sin."
