To be conscious means to be awake, mindful. To live consciously means to be open to perceiving the world around and within us, to understand our circumstances, and to decide how to respond to them in ways that honor our needs, values, and goals…. A conscious business fosters peace and happiness in the individual, respect and solidarity in the community, and mission accomplishment in the organization.
Fred Kofman, Conscious Business
The above excerpt is taken from the Conscious Capitalism Institute’s website, which states that the notion consists of three key elements:
1. Each company should have a purpose that transcends profit maximization.
2. Companies should be managed for the benefit of all stakeholders in their ecosystem, not just shareholders.
3. Companies should be led by evolved, conscious servant leaders who are dedicated to the company’s higher purpose.
The Economic Times featured a few articles on conscious capitalism over the last couple of days. One was an interview with Dr Rajendra S Sisodia, chairman, Conscious Capitalism Institute, and co-author of the book ‘Firms of Endearment’. Few highlights from the interview:
Companies that embrace conscious capitalism are transformed at a deep level. They redefine their purpose away from profit maximisation to something that is deeply resonant with the needs of the world and the passions of their stakeholders. They give up on the false premise of shareholder primacy and focus instead on win-win value creation for all — an approach that ultimately rewards shareholders with superior financial returns as well as the satisfaction of knowing that they are helping to impact the world for the better in multifaceted ways.
Companies that are truly conscious don’t need a separate CSR function, as they are responsible to society by definition. In our framework, the stakeholders are represented by the acronym SPICE: society, partners, investors, customers and employees. Society should be treated as the first stakeholder of any business, and every business must ensure that it is on the right side of society.
Also check out this feature on Indian companies that are pursuing conscious capitalism.
Finally, do watch this thought-provoking video. Slightly controversial, but it delivers a very strong message.
Thought for the day: As a lot of our left-leanings friends might ask, isn’t the term conscious capitalism an oxymoron?