For more than a century, some in the industrialized business world followed an all-too-familiar pattern. Capitalists often chased wealth, power and accomplishment without balanced regard for their employees or the environment.
Running beneath this historic status quo, however, there has been a slow but steady undercurrent of change that is being adopted by some of the world’s biggest companies: conscious capitalism. Widely believed to have been pioneered by The Body Shop founder Anita Roddick back in the 1970’s, the business philosophy has since been popularized by global business leaders like Whole Foods CEO and co-founder John Mackey and LinkedIn CEO Jeff Weiner.
Conscious capitalism is the idea that a business can be run – and run successfully – with a focus beyond the bottom line. Whether that means greater consideration of a company’s employees, its shareholders, manufacturing processes, the larger environment or a combination of these factors, a conscious capitalist works to solidify a company’s reputation and help the world, while also turning a profit.
Mackey, whose Whole Foods brand did more than $15 billion in sales in 2014, literally wrote the book on the topic back in 2013. Where his baby boomer generation failed to deliver on the triple bottom line – profit, people, and planet – Mackey encourages millennials not to miss the mark this time around. As a result of Mackey’s push to make Whole Foods as nice a place to work as it is to shop in, Whole Foods is consistently ranked one of the best places to work in the U.S.
Weiner, meanwhile, is a trailblazer in the area of compassionate leadership. Put simply, compassionate leadership indicates an ability to think intelligently, objectively and kindly about a business decision, an employee’s behavior, or any of the other matters a business leader faces.
Of course, conscious capitalism and compassionate leadership sound great in theory. But do they perform in reality?
In a word, yes. While researching for Mackey’s book, co-author Raj Sisodia analyzed 28 conscious companies, honing in on the 18 that were publicly traded. Those firms performed 10 times better than the S&P 500 over a period of 15 years, from 1996-2011.
Of course, the study included only large, established firms that had the advantage of name recognition, but what about small businesses with even smaller profit margins?
Jeff Klein, an author who has written extensively about the topic, said small businesses can practice conscious capitalism by making sure they are constantly creating value for their stakeholders, from employees to customers to vendors and suppliers. By focusing on creating value and looking for “win-win-win solutions, rather than trade-offs,” small businesses may invest more in the short-term but eventually reap big benefits.
Weiner is a firm believer that compassion can be taught, both in schools as well as in office seminars. But even without implementing costly programs, Stanford psychologist Emma Seppala argues you can cultivate compassion by simply choosing a different path. Where you would normally reprimand an employee for an error, approach them with compassion. Doing so will build trust, reduce stress and keep that employee’s productivity and creativity flowing.
While it may sound unlikely at first, bringing compassion and consciousness to capitalism is a more natural marriage than it seems. And, perhaps counterintuitively, it’s more profitable, too. All you need is awareness, kindness and the willingness to invest in the ethical foundations of your business for major gains down the line.comments powered by Disqus