by Michel Koopman
The wealth of the Fortune 100 has the potential to solve the world’s greatest challenges: hunger, climate change, disease, and more. But capitalism, at its core, was never about giving back. It would have “defeated” the point of the system, which was defined by competition and profit.
Most for-profit companies see philanthropy as a yearly checkmark on their to-do list, rather than a priority built into their business structure. Conscious capitalism is an important new trend worth embracing. It’s a model for a profitable, growing company that supports successful business and a better world future.
The Changing Tide of Global Consciousness
Over the last century, America’s priorities evolved and capitalism underwent a significant change as a result. The 1980s ushered in a wave of change; globalization altered the international economy, and the Cold War ended. Likewise, the recent global financial crisis forced large companies to analyze the essential function of economies.
Right now, a cultural shift is occurring within companies and around the world. This is good news because it has provided an opportunity for wealth and technological advancements to not only make a difference, but to also solve some of the world’s most pressing problems.
Businesses Can Be Profitable and Socially Conscious
The first step to developing a business model with a philanthropic bent is to throw out the preconceived notion that “giving back” is fundamentally at odds with making money. A globally responsible and profitable company is not a myth.
In 2001, Peter Thum founded a bottled water company called Ethos Water. Every time a water bottle was sold, a portion of the revenue went to rural communities in Africa to provide clean water. Eventually, Starbucks bought the company.
Ethos Water qualifies as a well-documented story of conscious capitalism because it’s profitable, repeatable, and scalable. It’s an excellent example of a successful blend between social entrepreneurism and conscious capitalism. Each bottle of water sold today still contributes as much as 10 cents to charity.
Thum pioneered another profitable endeavor called Fonderie 47. The company acquires AK-47s in conflict-ridden and post-conflict regions of Africa and turns them into high-end jewelry, watches, and accessories.
“Each Fonderie 47 piece sold funds the destruction of a specific number of small arms in Africa. Our programs in the Democratic Republic of Congo and Burundi have destroyed over 30,000 assault rifles since 2011. But, just as important, we are making this issue personal for people for the first time ever,” Thum explained.
Align Everyone with Your Purpose
Getting everyone personally involved in your company’s purpose is vital to making conscious capitalism work. I have the privilege of working with some of the best businesses in the world, and I can sense the differences between good and great company cultures. Often, the perceptible difference is how connected the company’s leadership and employees are to the company’s purpose.
For instance, InterContinental Hotels Group, or IHG, is a purpose-driven company. It aims to create a great experience for its guests and employees.
“We believe that when we have great brands delivered by great people who share great values with great ways of working, we will become one of the world’s great companies and create great hotels guests love,” says Gary Whitney, vice president of Global Hotel Learning at IHG.
The key to the company’s success is its shared common purpose and values. They call them their “Winning Ways.” IHG effectively links its social behavior to stakeholder value. Whitney explains the efforts to do business responsibly are aligned with the company’s core purpose of creating great hotels. This is seamlessly connected to what it does, which is simply “to do good.” IHG’s brand is a promise kept by everyone.
“We believe we can be even more competitive and inspire greater trust and confidence from our guests and business partners while advancing our environmental and socioeconomic causes,” says Whitney.
You can replicate IHG’s “Winning Ways” by finding your business’ purpose and making it the driving motivation behind every action. By reinforcing company values and a shared purpose every day, you can ensure you cultivate a team of people who will be crusaders for your mission.
Recognizing the Mission
Each company that chooses to focus on conscious capitalism must be clear on its mission so its pursuit is dogged and successful. For example, my business, getAbstract, is highly focused on our purpose: to help people develop as professionals. We summarize business content, which allows people to make smarter, better business decisions. getAbstract is profitable and sustainable, and it is focused on providing learning solutions that benefit everyone, tackling the real problems our customers face: minimal free time, competing obligations, and access to learning materials.
When a company’s leadership and employees have a strong connection to a mission — one focused on giving back to the world, rather than simply making shareholders happy — the company’s employees are more fulfilled, its clients have better experiences, and vendors live up to their purpose and ethics.
What would happen if all corporations focused less on profit and more on purpose? It’s time to find out.
Michel Koopman is the CEO of getAbstract Inc. getAbstract’s mission is to find, expertly compress, and provide universal access to critical business knowledge in a format that learners can absorb quickly and easily. This allows customers to stay current and competitive and to become leaders who can make better decisions. Today, our solutions include a library of more than 9,000 business book summaries, in text and audio format, which more than 10 million subscribers use, including 20 percent of Fortune 500 companies.