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Approved and verified accurate by the academic program manager of the Colangelo College of Business on Oct. 7, 2024.
The views and opinions expressed in this article are those of the author’s and do not necessarily reflect the official policy or position of Grand Canyon University. Any sources cited were accurate as of the publish date.
Business leaders are driven to make the best choices for their companies. As you may explore new ways of growing profits, you will likely learn about the growing popularity of purpose-driven businesses — also referred to as conscious capitalism. What is conscious capitalism? Let’s explore a typical conscious capitalism definition and how this concept can serve as a force for good.
Many popular brands have evolved from leaders who follow conscious capitalism business philosophies.
Some well-known conscious capitalism companies include:3
Consider the following case studies surrounding conscious capitalism.
In 2006, when Blake Mycoskie took a vacation in Argentina, he met a few women who collected shoes to donate to schoolchildren in need. Blake, a serial entrepreneur, decided that he wanted to help. He started TOMS that same year and established its innovative One for One® model, which donates a pair of shoes to a person in need for every pair sold.5
Today, TOMS also donates a third of its profits to what the company calls “grassroots good” — facilitating positive change at the local level. In all, TOMS has impacted more than 105,463,000 lives to date.6
TOMS customers can feel good about their purchases. The company is fully accountable to all its stakeholders. In short, the company is an inspiring case study of conscious capitalism that other fashion entrepreneurs can strive to emulate.
Starbucks — the ubiquitous coffee chain — has long been committed to being a force for good. In addition to ensuring that their coffee beans and other products are sustainably sourced, the company also actively gives back to farmers by investing in their growth and donating millions of disease-resistant plants.7
Moreover, Starbucks is oriented toward all its stakeholders, with a focus on creating gainful opportunities for its workers. The company provides 100% college tuition coverage for a first-time bachelor's degree for all benefits-eligible employees — something virtually unheard of in the food industry.8 Plus, Starbucks has a program that hires U.S. veterans.9
All these initiatives demonstrate conscious capitalism — a purpose beyond only profits. Starbucks has proven itself to be a force for good for its employees, suppliers and for veterans.
Unlike most national chains, Trader Joe’s positions itself as a neighborhood grocery store that embodies a small-town community vibe. Known for its unique products, Trader Joe’s has committed to selling only products that were harvested, produced or manufactured sustainably. The company has also taken steps to significantly reduce food waste and composts and recycles millions of pounds of materials.10
Environmental sustainability isn’t Trader Joe’s only mission. As a leading example among conscious capitalism companies, Trader Joe’s donates millions of meals to communities in need through its Neighborhood Shares program. In fact, in 2022 alone, the Neighborhood Shares program donated more than $469 million dollars of food.11
Furthermore, Trader Joe’s actively nurtures an inclusive, welcoming environment for its employees. The company is committed to diversity and offers a generous scholarship fund to its workers, with additional scholarship opportunities available for minority employees.1,2
The traditional idea of capitalism is in order to be successful and profitable, a business leader must focus on profits above all else. Conscious capitalism focuses on people and the environment. Business leaders who practice the philosophy recognize that principal stakeholders need to be more involved and respected in business decisions.
In many cases, though, principal stakeholders might be customers who do not have representation at business meetings. Conscious capitalism leaders find ways to honor the voices of their stakeholders — from investors to customers — when making business decisions. They also consider community and environmental impact.
The business leaders who practice conscious capitalism put purpose at the center of their work. They herald programs and processes that bring more personal connection to the work.
Conscious capitalism deviates from traditional business practices by embracing a more holistic approach. This approach provides not only financial wealth to stakeholders but also intellectual, ecological, cultural, emotional and social wealth. Conscious capitalists consider their impact on the planet and their local community.
Indeed, many business leaders, executives and entrepreneurs are practicing conscious capitalism in an effort to change how business is conducted. Conscious Capitalism, Inc. is a nonprofit organization founded by the co-founder and co-CEO of Whole Foods, John Mackey and marketing professor, Raj Sisodia.1 Mackey and Sisodia wrote a book about what it means to find an intersection of capitalism and business that reflects humanity, the environment, current events and positive social impact.2 Conscious Capitalism, Inc. now promotes the work of Mackey, Sisodia and many other thought leaders.
To see how conscious capitalism business leaders have been so successful, it can be helpful to review the core components of the philosophy. There are four tenets of conscious capitalism.
Business leaders and organizations who commit to conscious capitalism follow these four guidelines:3
Leaders who follow the conscious capitalism philosophy think about why their business exists. Identifying a higher purpose allows them to stay focused on their mission.
A higher purpose acts as a compass and keeps the company headed in the right direction. For conscious capitalism businesses, the higher purpose exists for reasons beyond making a profit.
Conscious capitalism leaders think about all the humans involved in their organization. This can be anyone from customers, employees and investors to the communities where their businesses are located. Conscious capitalism practitioners ensure the ecosystem that supports and maintains their business is healthy and involved.
The leaders of conscious capitalism businesses guide others along a purposeful path. They inspire others with their passion and dedication to their purpose. They focus on creating harmony among stakeholders and valuing the role of each human in their organization. A conscious capitalist leader promotes a culture of social responsibility.
Conscious capitalism organizations thrive when there is intention around building a positive work culture. The values, principles and practices of these organizations uplift the business and benefit the stakeholders. Every person involved with a conscious company is tied together through the purpose and goals of the organization.
Conscious capitalism is an option for business leaders who feel called to be servant leaders who focus on making the world better for all. Servant leaders are those who want to serve the people around them as opposed to themselves. They are the leaders who also want to invest in greater social responsibility and bring those practices into mainstream business may adhere to the tenets of conscious capitalism as an alternative to focusing solely on profits.
Understanding your personal business philosophies and growing your organization around your beliefs is a major part of leadership. Asking yourself questions like, what is conscious capitalism? and how can I be the best leader for my employees and customers? may be a starting place for future business leaders.
Future leaders who are set on making a difference in the world may consider enrolling in the Master of Science in Leadership program at Grand Canyon University. You will be taught about how business philosophies, like conscious capitalism, can impact not only your profit but also the world in which we all live and are charged with protecting.
There are some major benefits to practicing conscious capitalism. Leaders who commit their passion to their purpose find that employees are more satisfied in their jobs. Employees who believe that the company is motivated by more than just money are more likely to commit to the mission. They then become strong voices for the brand.4
In addition, the advantages of conscious capitalism companies may include:4
