We recently asked the OPEN Forum community about their views on conscious capitalism, and for those operating under this model to share their insights.
For OPEN Forum community member Jeff Motter, CEO and chief marketing officer of East Bay Marketing Group, using the conscious capitalism approach is the only way to conduct business.
“We operate under the conscious capitalism model every day,” Motter says. “Our employees all know why we exist and that our purpose is to serve others. We are aware that we can and do make differences in people’s lives and that people are important. Conscious capitalism is simply a matter of doing the right thing because it’s the right thing to do.”
A Growing Trend
Communication coach Roshini Rajkumar of the Roshini Performance Group has found that the primary motivation for business has moved beyond the profit-at-all-costs model.
“Nearly every small-business owner with whom I work has a passion for making the world a better place,” Rajkumar says. “People really want their lives to mean something today, and conscious capitalism provides the platform for business owners to create something authentic that not only generates money but contributes to the greater good.”
“People like Bill Gates and Warren Buffet have led the way in showing that doing things that are good for the community contribute to the bottom line as well. We started seeing a real move toward this type of business model in the ’90s with companies like Patagonia, and when CEOs talked about the social bottom line or the triple bottom line.”
Given the fact that this business model has been around for more than two decades, the younger generation of consumers and workers now coming of age generally demand that brands asking for their loyalty feature a philanthropic bent, Rajkumar says. “Millennials in particular want to see that a business contributes to the greater good and is grounded in a higher purpose.”
Fundamentals of Conscious Capitalism
If you want to make the world a better place, it helps to understand what consciousness means. “Being conscious is not an esoteric excuse for not earning profits,” Motter says. “Business leaders have a responsibility to stakeholders to earn a good profit, because profits are the lifeblood of a successful company. Without profits, a company is unable to serve.”
Profits alone are not the end result with the conscious capitalism model, though. “It’s what profits enable businesses to do that really matters,” Motter adds. “Successful companies can have greater impact on people’s lives and conscious companies are able to make meaningful differences every day. This is accomplished by realizing that everyone is important and should benefit—from customers to employees to vendors.”
Conscious business means ensuring that workers are well paid and, as a result, motivated, providing customers with valuable and superior goods and services, and treating vendors with respect. “Companies that treat their vendors as long-term partners develop relationships that are based on trust and an understanding that both sides must receive value from the relationship,” Motter explains. “With this approach, everyone wins.”
Benefits of This Business Model
When you embrace the conscious capitalism model, the benefits of doing so are exponential.
Organizations that have a strong, authentic purpose thrive, says Rajkumar. “People can get behind the company, from the employees to the stakeholders to the consumers,” she says. “The conscious capitalism movement really puts those ideas of social responsibility that have always been around into a framework that even the smallest business can adopt. But it’s not enough to just do it. You have to communicate it as well.”
Doing good socially is really good for business, because at the end of the day there will be more profits, Motter adds. “Conscious companies earn profits and are better able to attract capital when needed, and oftentimes at better rates. Investors trust them and are willing to fund their growth. Conscious capitalism actually reduces challenges by creating clarity and purpose for everyone. There’s no confusion about whether we should earn a better profit or serve our clients, vendors, employees and our communities better. The answer is always yes to both.”
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