Capitalism is not so much an engineered system with sequenced steps but more of a concept of social interaction requiring trust, respect, and a higher purpose integrating all stakeholders. The free markets ebb and flow as demands, resources, and logistics evolve and react to the marketplace and world events. The credo of Conscious Capitalism does not outline a prescribed, mechanized system, but rather principles centered on humanity.2
- We believe that business is good because it creates value, it is ethical because it is based on voluntary exchange, it is noble because it can elevate our existence, and it is heroic because it lifts people out of poverty and creates prosperity.
- Free enterprise capitalism is the most powerful system for social cooperation and human progress ever conceived. Conscious Capitalism is a way of thinking about business that better reflects where we are in the human journey, the state of our world today, and the innate potential of business to make a positive impact.
The Conscious Capitalism effort is centered on elevating humanity. As the Coronavirus continues to spread, the private sector, led by conscious businesses, is intervening. In the midst of this global crisis, businesses are stepping up, leaders from international corporations to small local businesses, are transforming their companies to produce goods/services needed to support society. Innovative businesses are pivoting production lines to healthcare items and cleaning supplies.3 New Balance (running shoes) just announced they will transform their efforts to produce hospital facial masks.4 Distilleries around the country are turning their high-proof raw alcohol into hand sanitizer, an item that has become both high demand and in short supply during the fight against the coronavirus.5
Stephen Denny wrote “Shareholder Capitalism isn’t dead, it just changed its name to Stakeholder Capitalism.”6 He mentioned that as long as brands stay close to their core mission regarding social causes, they increase brand strength and loyalty. A large consumer base of millennials want to work for and align with brands that share their values and that make them feel like an authentic stakeholder of that company founded on purpose. How a business responds to COVID-19 will go a long way in determining its future, from a purpose perspective and taking care of stakeholders.
Larry Fink, Founder, Chairman, and CEO of Blackrock, made a clear case for purpose with this defining statement in January 2018:
Without a sense of purpose, no company, either public or private, can achieve its full potential. It will ultimately lose the license to operate from key stakeholders.7
Then in January 2019, Fink highlighted the role of business and social impact, as well as the strength of millennials.
This dynamic is becoming increasingly apparent as the public holds companies to more exacting standards…And it will continue to accelerate as millennials – who today represent 35 percent of the workforce – express new expectations of the companies they work for, buy from, and invest in. Attracting and retaining the best talent increasingly requires a clear expression of purpose.8
Just recently in January 2020, Fink referred to his approach as Accountable and Transparent Capitalism with the bolded statement:
Ultimately, purpose is the engine of long-term profitability.9
Fink’s statements describe how conscious businesses aim to serve stakeholders with their higher purpose, such as employees, vendors, contractors, and customers, as well as the community, neighborhood, and environment.
Marc Benioff, CEO of Salesforce, in an interview with the NY Times, reflected on his company’s role in society and then asked two powerful questions.10
A company like ours can’t be successful in an unsuccessful economy or in an unsuccessful environment or where the school system doesn’t work. We have to take responsibility for all of those things… We need to have a more enlightened view about the role of companies. This company is not somehow separate from everything else. Are we not all connected? Are we not all one?