Have you heard of Conscious Capitalism? It is a movement that emerged from the theory of corporate social responsibility…business enterprises and people that choose to follow a business strategy that benefits both human beings and the environment. It goes by many names — the aforementioned term Corporate Social Responsibility, Triple Bottom Line, Sustainability, Impact Investing, Social Entrepreneurship, and many more. In 2007, professor Raj Sisodia published research about what set companies like Google, Wegmans, Southwest Airlines and Whole Foods apart. His book, Firms of Endearment, outlined 4 key tenets:
- Higher Purpose: We need red blood cells to live, but the purpose of life is more than to make red blood cells. Similarly, a company needs profits to survive, but the purpose of the company should be more than to make profits. Architects aspire to build awe-inspiring structures and doctors aspire to save lives. Yet too often, business leaders don’t articulate aspirations beyond profits. Conscious businesses have a higher purpose baked in to their business plan. Having a guiding purpose engages employees and invigorates communities.
- Conscious Leadership: Gone are the days of command-and- control, hierarchical leadership. Employees today, especially millennials, want to be engaged and inspired by their leaders. Conscious leaders embody the purpose of the organization and are servant leaders that empower employees. They don’t get caught up in short-term thinking, but instead make decisions that are best for the long-term flourishing of the company and its stakeholders.
- Conscious Culture: Most organizations create a mission and values statements and enshrine them proudly on their website or on plaques in their offices. Yet how many of them truly live it? Firms of endearment have truly values-driven cultures, invest in the development of their people and actively seek to create environments where employees find fulfillment in their work.
- Stakeholder Orientation: Many companies have a win-lose mentality. Typically, they prioritize stockholder returns over the needs of other stakeholders. Instead of making tradeoffs, conscious companies seek to build win-win relationships that balance the needs of all stakeholders: customers, employees, suppliers, the community, the environment AND stockholders.
Best of all, Sisodia’s research showed that by not focusing just on the bottom line, Firms of Endearment ended up being far more successful in the long term, beating the S&P500 by 8x over 10 years! Since the book was published, Conscious Capitalism has grown into an international movement with an annual conference and dozens of chapters not only in the United States but also in Australia, Brazil and Israel, just to name a few. The Conscious Capitalism ROC chapter was formed in 2012. Although Wegmans was mentioned in the original Firms of Endearment book, there are many more conscious companies around Rochester that might not ever get national recognition. Our chapter was started to share their stories and to build a community of conscious leaders to learn from each other and cultivate the movement locally.
Conscious companies use a variety of tools to “measure what matters” such as Fortune’s Great Places to Work, the D&C’s Top Workplaces, B-corps Assessments, Cultural Values Assessments or the Rochester Area Business Ethics Foundation’s ETHIE Award. No matter what terms you use or measurement tools you prefer, join us in “evolving the future of business” in Rochester! It’s good for business, good for employees, good for the community, good for our economy and good for the planet too!
Conscious Capitalism ROC meets each month (usually on third Tuesdays from 5:30-7pm) to tour a local business with a purpose-driven culture or to learn about a local social entrepreneurship initiative. We also have an annual conference, this year to be held on May 22nd and focusing on creating opportunities for inclusive entrepreneurship and inclusive prosperity for all in Rochester.
Check out our website, get on our newsletter, or find us on Facebook to hear about our latest events! Or if you know a local social entrepreneur or a local company that is a great example of Conscious Capitalism, let us know so that we can check them out and share their story!
Andrew Brady is the President & CEO of The XLR8 Team and works with leaders to build purpose-driven cultures into a source of competitive advantage for their organizations at the intersection of Positive Psychology and Conscious Capitalism.