Witnessing drastic market crashes and social changes in the past couple of decades has shown us how most businesses function and how they sustain themselves through hard times.
While many businesses cut down on their production and laid off many employees without providing them a safety net, causing drastic difficulties for many families and communities, some companies have not only been able to keep their business alive, but they have also managed to grow and thrive despite many challenges. Why were development and growth possible for these businesses while most well-known companies were even forced into scandal or bankruptcy?
As one of the most prominent thinkers in the industry, Dr. Randy Gibb explains that these successful companies have more in mind than just profit and keeping their heads above water – they are committed to conscious capitalism, with business leaders oriented toward a higher purpose and a healthy employee culture exhibiting strong human foundations.
Although conscious capitalism is still capitalism, it substantially differs in how running a company and connecting with customers and communities is approached. In this article, we give a summary of conscious capitalism to illuminate the aims and sustainability of conscious capitalism, giving examples of which companies are following this business paradigm successfully.
Why is conscious capitalism important?
Conscious capitalism has developed out of necessity. Businesses need to take responsibility for the impact they have on society – how they treat their workers, customers, surrounding communities, stakeholders, the environment, and our planet in general.
In the past, it was enough to have a strong corporate identity and highly developed hierarchical system, which kept the “machine” going to produce more profit every year. Their mantra, “More! More! More!” As we have seen, this type of business structure is a house of cards, bound to fall because it doesn’t shape itself for the things that matter, which would ensure that it is healthy and has a long future ahead.
What does it mean for a business to be healthy and set up for long-term success? The most important characteristic of a conscious business is that it has a soul and a giving, warm heart, with conscious culture as a priority. This means that what matters the most is how the organization impacts its stakeholders, and the world in general, with its culture and products/services.
Conscious capitalism also inspires future entrepreneurs to look deeply into what is really important in this world and to choose a business that really resonates with their talents, values, and purpose – one that they can put their heart and soul into and commit to the best possible practices. Once the founders and CEOs start to lead with passion and higher purpose, the whole outlook and structure of capitalism will follow suit. A question to ponder is, will this still be capitalism, or will the definition of capitalism change altogether?
How does a leading figure in the conscious business world, Dr. Randy Gibb, define conscious capitalism?
Dr. Randy Gibb has been an incredibly important figure in spreading the notion that capitalism can indeed be conscious. As a leading business educator at the Grand Canyon University in Phoenix, AZ, Dr. Gibb and his colleagues have developed a popular and very successful business program committed to a conscious capitalism mind-set. Through his years of teaching and presenting, Dr. Gibb has developed four principles of conscious capitalism to make it clear to the outside world what his vision of conscious businesses is all about.
His first principle focuses on inspiring entrepreneurs to develop businesses that have a higher purpose. Having a higher purpose drives business owners to create a beautiful and powerful vision for their business, backing it with the energy and enthusiasm they need to stick to their plan.
Once an entrepreneur has a clear vision of what kind of business they want to create, the second principle is to be a conscious leader. Conscious leaders use their passion for their work and their strong ethical values to fuel, motivate and inspire the people that they are leading. They strive to create a welcoming, nurturing, and creative environment where their employees look forward to learning and getting better at their work, not feeling resentful for giving their vital energy and time into their job.
Developing and cultivating this heart-centered conscious culture in the workplace is the third principle of conscious capitalism.
The fourth principle focuses on stakeholder orientation – how the employees, customers, suppliers, investors, business stakeholders, and other collaborators are benefitting from the conscious business.
Without precious stakeholders, there would be little reason for the company to exist, let alone grow consciously and sustainably. Making sure that the stakeholders are happy with the company’s products or services and that they are well-taken care of through competitive compensation, excellent benefits, and a healthy work environment, is essential for conscious capitalism to work in the long run.
What companies practice conscious capitalism?
One of the most compelling success stories of conscious capitalism is the Container Store. The company has some of the happiest employees, with a 10% average turnover rate. This is almost unheard of for such a large company. How did the Container Store do it?
According to Kip Tindell, the store’s co-founder and former CEO, a business model focused on conscious leadership, stakeholder orientation where employees come first, and creating value for customers and communities ensures a healthy and thriving organization.
Every new employee at the Container Store is trained for 200 hours in a well-rounded selection of skills needed for success at the company. This means that new employees develop a deep relationship with the business and can really gauge their best placement in the company according to their talents. The company’s workers are paid well, and the sales employees receive higher than the industry’s average pay rate.
But the benefits don’t end there – the Container Store is committed to environmental health and sustainability through recycling programs and installing more efficient lighting and air conditioning. The company also donates a substantial amount of its profits to non-profit organizations and provides containers to people who really need them. The education sector is also of big importance to the company as it sponsors mentorship programs for women in business and gives educators significant discounts in the store.
Another leader in the conscious capitalism movement is Southwest Airlines. With its very progressive culture and commitment to create value for its stakeholders and customers, the airline goes by the motto “employees come first” and the idea that a “motivated employee treats the customer well.”
Southwest Airlines employees get a generous salary, complemented with profit-sharing bonuses and stock options. In addition, Southwest Airlines, unlike many other airlines, takes protecting the environment very seriously by making fuel efficiency a priority, and, through their Revolve program, is committed to using environmentally friendly products.
Whole Foods Market and Trader Joe’s grocery stores have also been at the forefront of the conscious capitalism movement. Whole Foods has done this very differently than most, demoting profit to a place of secondary importance in their business plan. Not only has it opened stores in less-privileged neighborhoods and has committed to educating people about healthier food choices, but it also has consistently given 5 – 10% of its profits from “community giving days” to local non-profit organizations.
In their book called Conscious Capitalism: Liberating the Heroic Spirit of Business, co-CEO and co-founder of Whole Foods Market John Mackey and his thought partner Bentley University professor Raj Sisodia further explore conscious capitalism as a successful and sustainable business model with a positive impact on the world.
Just like Whole Foods, Trader Joe’s is famous for its very progressive and conscious culture. It offers starting salaries higher than the average industry standard, the potential for a raise twice a year, and overstaffing so that the employees aren’t overworked and have an opportunity for more hours of work only if they desire them. Furthermore, each new employee goes through TJ University, which teaches team-building and leadership skills that are transferable to many other life situations.
Is conscious capitalism sustainable?
As we have seen, the old kind of capitalist business system has failed the working people, the environment, and society as a whole. Therefore, we are in desperate need of an alternative way to establish and run business ventures so that they are compatible with the needs of a more conscious society.
Conscious capitalism has proven to have major advantages. It has demonstrated that it can support the creation of very profitable businesses that provide excellent products and services to society while meeting the needs of their employees and caring for the well-being of nature, all life forms, and the planet at large.
We currently don’t have a choice but to embrace the new paradigm of conscious capitalism, where conscious leaders focus on value creation, even if this means that our economic structure ceases to be capitalism as we think of it today.
As businesses embracing conscious capitalism navigate the waters of ever-changing world events, they are learning more about how to maintain profit and make “work” something that is not a dirty word but a fulfilling, safe, healthy, and overall positive experience for all parties involved. As human consciousness soars, so will the benefits and longevity of conscious capitalism.
The Bottom Line
Ready to create or transform a business into one with conscious leadership, healthy culture, and a purpose directed at creating a better society? Then look no further than BigImpactHQ mentoring programs, which are geared at finding the great purpose behind your business and ways to bring it into the conscious business framework.