The one sentence summary
Conscious capitalism can transform a business for the better – reconciling doing the right thing with making a healthy profit.
WHAT THE BOOK SAYS
- There are four principles of conscious capitalism:
- Higher purpose: every business should have one that transcends simply making money. You need to write a higher purpose statement – the difference the firm is trying to make in the world.Higher purpose comes from asking penetrating questions such as: do we fulfil a deep-seated need for our customers, rather than just wants or desires? Would they be genuinely distraught if we ceased to exist? This lies in the sweet spot of passion, mission, profession and vocation. What are you most passionate about? What are your core strengths? Where can you have the most meaningful impact? What would people reward you to do?Characteristics of it are heroic, evolving, aligning, loving, inspirational, natural, and galvanizing: acronym HEALING.
- Stakeholder orientation: recognising the interdependent nature of life, a business needs to consciously create value for all its stakeholders. The triple bottom line emphasises people, planet, and profit.The conscious capitalism stakeholder theory expands this list to six areas: customers, employees, suppliers, investors, society, and environment. This is the so-called sextet bottom line. Getting it right on all these fronts is a win-win-win approach – win6 (to the power of 6).
- Conscious leadership: conscious leaders need to transcend narrow self-interest and make sure they mentor, motivate, develop and inspire. Motivation must come from something more than mere money. You become a more powerful leader in service of something bigger than yourself. Characteristics of this are: strength, energy/enthusiasm, long-term orientation, flexibility, love and care, emotional intelligence, systems intelligence, and spiritual intelligence: acronym SELFLESS.
- Conscious culture: most businesses run on fear and unhealthy levels of stress. Conscious companies do not allow culture to develop on its own – they foster them with high levels of trust, authenticity, transparency and genuine caring. It is important to create a culture playbook for the company. Do your people have deep understanding of how your higher purpose translates into the tasks they do and the decisions they make every day? All this is called enculturation. Characteristics of it are trust, authenticity, caring, transparency, integrity, learning and empowerment: acronym TACTILE.
WHAT’S GOOD ABOUT IT
- The benefits of this approach are deeply engaged, inspired and healthy employees; highly, loyal, trusting customers; committed, innovative, profitable suppliers; thriving, welcoming communities; a healthier environment; and superior long-term financial performance.
- Don’t think different – think difference. What difference are you trying to make? Don’t get hung up on differentiation from competitors.
- All of this is an eco-centric approach. It is interdependent with partners, vendors and suppliers, based on core values and the higher purpose.
WHAT YOU HAVE TO WATCH
- As with so many business books, it all sounds so methodical but it must be hard to put into practice, otherwise everyone would be doing it.