Question: What is Conscious Capitalism?
The short answer: The emerging integration between Conscious Awareness and Capitalism.
Last week I began an ongoing series of posts under the banner of Itâ€™s Just Good Business, intended to build a convincing case for the power of Conscious Capitalism and the practice of Working for Good â€“ doing good business by focusing on more than making money.
As promised, in this post I will explore the â€œConsciousâ€ and â€œCapitalismâ€ in Conscious Capitalism and outline the principles of Conscious Capitalism.
â€œTo be conscious means to be awake, mindfulâ€¦ A conscious business fosters peace and happiness in the individual, respect and solidarity in the community, and mission accomplishment in the organization.â€
~ Fred Kofman, Conscious Business
As reflected by the quote above from Fred Kofman, by Conscious I mean to be aware, awake, mindful, recognizing what we do, how we do it and the effects of our actions.
Capitalism is the socio-economic system based on the principles of property rights, rule of law, voluntary exchange, wealth creation, and entrepreneurial initiative, and the human activity and social organizations (called businesses) reflecting and embodying these principles.
It is fairly easy to see that these principles can manifest very different forms of Capitalism, informed in part by the way the principles are interpreted and applied.
Capitalism can manifest great benefit to many (such as an ongoing increase in basic material well-being for the majority of human beings over centuries) and it can lead to tremendous concentration in power and influence in the hands of a few and to possibly catastrophic impact on the life-sustaining systems of nature. It can foster collaboration and value-creation, and it can feed greed and abuse.
The individual and collective consciousness we bring to Capitalism will define its evolving expression over time.
The Principles of Conscious Capitalism â€“ Applied at the Level of the Firm
Conscious Capitalism can be seen as an evolutionary development â€“ a response to individual and collective recognition of the power of Capitalism (and Capitalists) to generate great benefit and to produce profound harm. As with all successful evolutionary adaptations, for Conscious Capitalism to take root, it will have to enhance our ability to survive, propagate and flourish in an increasingly populated planet and complex world.
As articulated by Conscious Capitalism, Inc. and represented on the graphic, the four core principles of Conscious Capitalism are:
1. Purpose: Recognizing that every business has a purpose that includes, but is more than, making money. As I suggested last week, business is a form of human social organization: people getting together for a purpose; to do something together; to deliver value to themselves and others.
2. Stakeholder Orientation: Recognizing the human and interdependent nature of business, we understand that we need to create value for and otherwise engage our various stakeholders (customers, employees, vendors etc.) who are people!
3. Conscious Leadership: Human social organizations are created and guided by leaders â€“ people who see a path and lead others on a journey along the path. Conscious Leaders understand and embrace the Higher Purpose of business and focus on creating value for and harmonizing the interests of the businessâ€™s stakeholders. They recognize the integral role of culture and purposefully cultivate Conscious Culture.
4. Conscious Culture: This is the ethos â€“ the values, principles, practices â€“ underlying the social fabric of a business, which permeates the atmosphere of a business and connects the stakeholders to each other and to the idea, the structure and the processes that comprise the company.
(Visit ConsciousCapitalism.org for more information about the four Principles)
The Bottom Line
As more and more businesses apply and embody these principles and function more consciously, which means their stakeholders are doing so as well â€“ since business and stakeholder are ultimately one and the same â€“ a system of Conscious Capitalism will emerge and ultimately become the predominant form of Capitalism.
In the next post in this series, I will explore in more depth the relevance of Conscious Awareness to business in the 21st century.