What is conscious capitalism
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Differentiating factor of the future
In a troubled time, when public funds are being squandered irrationally, when new cases of corruption are in the press and when a CEO earns 500 times as much as a normal employee in the same company, it is not easy to get on with it believe that capitalism can be "conscious".
But the simple answer is: yes, it works! Examples of companies that practice more conscious capitalism are more common than we think. Successful organizations that are committed to doing good and that work for a higher purpose are everywhere. Conscious Capitalism is not just highly profitable; conscious capitalism will also be a differentiator in terms of success and profitability in the near future.
Gone are the days when we debated whether capitalism or socialism is better for humanity. We can summarize that capitalism is good at creating wealth but fails to distribute wealth, while socialism is good at distributing wealth but unable to create wealth. We see that capitalism and socialism are in a sense pieces of the same puzzle - or parts of the solution at issue here.
Four basic principles for a "silent revolution"
We saw many movements coming at the beginning of this century: B Corp, Circular Economy, B Team, Sharing Economy, Collaborative Economy, Creative Capitalism, and a number of others; only the three-pillar model is a bit older. These are all ideas that are part of the solution, and they all carry, in one way or another, the four basic principles that we are about to discuss.
I am sure that in ten or 20 years we will look back on this time and sum up that we have witnessed a silent revolution. And then humanity will give a much better name to the new economic system that is emerging.
Conscious Capitalism is one of those ideas and has since grown into a global movement. Conscious capitalism is a corporate philosophy that generates wealth in a humane way and is based on four principles:
Conscious leadership: It is not a revolution within the organization, but a top-down transformation - away from Ego system.
Generating wealth through a higher purpose: The purpose of a business is not to make a profit, but to create value for society - and the financial result is a consequence of this approach.
Involvement of all interest groups: The realization that all participants in the corporate ecosystem are interdependent points the way to real win-win-win models.
Creating a culture of responsibility: Collective behaviors, driven by higher values and purpose, help keep the company going and prevent the model from being copied by competitors.
A worldwide growing movement
This movement was launched in the United States in 2007. Scientist Raj Sisodia and co-founder and CEO of Whole Foods Markets John Mackey laid the foundations. In Europe, Conscious Capitalism was formally launched with the founding of the Spanish Conscious Capitalism Chapters in 2016, which hosted the European Conscious Capitalism Conference in 2018.
There is also a strong conscious capitalism community in Germany. It is organizing this year's European Conscious Capitalism Conference in Berlin on September 23.
In the local chapters all over the world (according to ConsciousCapitalism.org there are more than 50) mostly managing directors and entrepreneurs are involved. They share the belief that their companies can generate more than just profit and that it is within their power to transform the communities to which they belong. The aim and purpose of this movement is to promote humanity through companies and to inspire those responsible for companies through success stories.
Success as a natural consequence
At this point I find it important to emphasize that Conscious Capitalism should not be confused with approaches such as corporate social responsibility or cause marketing. These two concepts may be integral components of a more conscious capitalism, but they are only individual steps in the transformation process of the corporate world.
In 2006 Professor Raj Sisodia published the book "Firms of Endearment". In it he works out that people who are guided by a purpose can achieve exceptional performance. It also shows that organizations that follow these corporate principles create value for society as a whole based on an overarching purpose and the integration of all stakeholders, while performing well above the market average.
In an analysis of the companies he considers in this book, he shows that these organizations achieve performances of 1,600 percent compared to 168 percent of the historical market average (variation of the S & P500 index over a period of 15 years). Another benchmark for performance comes from Jim Collins. The companies in his book "Good to Great" show performances of 178 percent over the same period, which is also well below the efficiency of conscious capitalism organizations.
More and more conscious companies are taking responsibility for the impact of their activities on society and for the development of their community and the environment. One example is Howard Schultz, the CEO of Starbucks with over 21,000 stores and 140,000 employees, who took part in the study with all of his employees.
Conscious companies appear everywhere. Some of them were included in a publication from April 2018. The Conscious Capitalism Field Guide provides a simple, step-by-step approach to implementing the above principles, backed up with real world examples and testimonials from modern day leaders about their journey towards becoming a conscious company.
Second European Conscious Capitalism Conference on September 23. in Berlin
The path to conscious organization is no longer an option, but a necessity in order to survive in the emerging new economy. This is a path of no return: Today's companies that want to survive this century are adapting to ensure their presence in the world they are helping to create - regardless of legislative initiatives or pressure from NGOs or political creed.
What is your organization doing for its long-term sustainability? As a leader, what are you working on today to create a positive legacy in your community?
At the Conscious Capitalism Conference on September 23, 2019 in Berlin, you will have the opportunity to share experiences and delve deep into the ideas of thought leaders and scientists about the changes that Conscious Capitalism is promoting. This is the second conference of its kind in Europe. It pursues the goal of bringing conscious entrepreneurs together, inspiring them through haunting success stories and driving the change to a more humane corporate world.
You can find all the details about the conference here:
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Thomas Eckschmidt is co-founder and managing director of CBJ - Conscious Business Journey, a global organization that was founded to initiate change. It offers certification programs for consultants and other educational initiatives that help implement the four principles of Conscious Capitalism. Thomas started the Conscious Capitalism movement in Brazil and supported start-ups in various other countries such as Spain, Germany and Argentina. He is co-author of the books "Fundamentals of Conscious Capitalism" (2016) and "Conscious Capitalism Field Guide" (2018). His professional journey through the corporate world (ten years), as a consultant (ten years) and most recently as a conscious capitalism entrepreneur has taken him to 20 countries and earned him twelve awards, four patents and 14 book publications. Based on this experience, he offers a worldwide Conscious Business Change Agent-Certification program with 550 certified professionals in six countries. More information: www.CBJourney.com.
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