Conscious Capitalism: The Basics.

What a "Conscious Capitalist" is.
Conscious capitalism is a mode of doing business that views profits as a result and not as a purpose. Conscious capitalist companies have been shown to be much more profitable over time than companies which focused solely on profit and efficiency. To be very clear, let me quickly note the difference between efficiency and productivity. Efficiency is about doing things right. The famous statement, "cheaper, better, and faster" is all about efficiency. It is very possible to be extremely efficient and yet not be as profitable. The reason for this is because productivity is about doing the right thing and doing it right.

You may want to read a deeper presentation here: "The Evolutionary Business Paradigm".

A great example of this is how conscious capitalist companies treat employees. Employees are generally paid above market wages, provided above market training, and made to feel like owners of the company. This may not seem efficient at first but when you look at the output over time these types of employees provide, even in low cost provider scenarios, you see it translate the bottom line profit. That is the right thing done in the right way.


Conscious capitalists companies are aware that they are part of a system of stakeholders. The right thing, to produce the right results, is to work cooperatively and for the benefit of all stakeholders. There are five easily recognized stakeholders in any business. These are not the only stakeholders but they are the core. Society is a stakeholder. Partners and suppliers are stakeholders. Investors are stakeholders. Customers are stakeholders. Employees are stakeholders. When each of these groups are selected and engaged with a long-term view in mind the business is not only profitable but sustainable.


Deeper purpose is a requirement for a conscious capitalist business. While most business schools are all about making profits, it is easy to miss the point that the good or service a business provides represents something meaningful to a person's life. Money is only valuable if it can be spent to provide something necessary, meaningful, or helpful to the spenders life. That is why people buy things. For example, companies buy corporate training so their employees can work together better, use technology more effectively, communicate more clearly, or a host of other improvements. The deeper purpose of corporate training then is to improve the work ability and related actions of all the people in the business. The deeper purpose of a physician might be said to improve or maintain the health and vitality of the patient. The deeper purpose of an investor might be to gain a return from investing in companies that make a positive impact on the community that buys their goods or services.

A conscious capitalist company realizes that when a choice must be made between profits and the deeper purpose, the deeper purpose must be paramount in the short and the long run. If profits undermine the deeper purpose, even in the short run, the business has chosen unprofitably.


Servant-leadership is the third requirement for a business. A leader is someone with a responsibility and position to guide others. A servant is someone who is aware of and responsive to the many factors involved in their role. There is no greater factor involved in the role of business than people. Business is a social science. Business is about people. Business is both analytical and emotional. Business involves things that are naturally occurring and things that are man-made. Business involves the entire life of each person involved. A servant leader is someone who helps others become what they need to be and this much is possible, what they want to be.

Examples of servant leadership can be seen in the likes of leaders such as Herb Kelleher of Southwest Airlines, John Mackey of Whole Foods Inc., and many others. They not only have a strong presence among the line workers and the customers, they also make sure that the benefits and pay are fairly allocated. Servant-leaders view those they lead as ends in themselves and not a means to an end. People are recognized and supported as whole beings rather than tools. The voluntary response of workers in such environments has been noted to be outstanding when it comes to adding value than for the company.