“Capitalism needs a reality check”.
“Screw business as usual”.
“The Capitalist system is under siege”.
These are just some of the headline grenades that have captured my attention in recent months.
Because as we emerge from one of the darkest periods in our economic history, we need to open our minds and re-cast our ideas about the fundamental purpose of business.
That’s a biggy right? Feels like the biggest question of all – the purpose of business!!!
At the very core of this concept we are asking business leaders to forget everything they’ve been taught about “Profit Capitalism” and replace it with a new model based on “Conscious Capitalism”.
It’s like asking Pirates to join the Navy or Bankers to be Community Workers.
It’s disruptive, thought provoking and its consequences far reaching.
This is exactly the kind of shake-up we need in boardrooms across the globe.
But before we get carried away, what does “Conscious Capitalism” mean?
My definition goes something like this:
“An economic business model that at its very core introduces a social conscience or “do good” aspect to every part of running a business. Profits are generated and redistributed in a traditional manner, but with greater emphasis being placed on category improvements and social and environmental impact”.
This is far more than ‘Feel Good’ Corporate Social responsibility. It’s far more than giving airtime to social causes, not-for-profits or ethical causes. This is about boardrooms and leadership teams recognising that ‘business as usual’ just won’t cut it anymore.
It asks leaders to re-engineer modern organisations built on solid values and a shared responsibility to ‘do good’ for their employees, their customers, their communities, their supply chains and the planet at large i.e. profits with purpose.
Pretty toxic stuff in most boardrooms and shareholder meetings I’m sure, but this trend / movement is happening and growing at an alarming rate.
Empowered customers (right on)
In a 2011 global survey by Cone Research of 10,000 consumers in 10 countries, the following findings came out very strongly.
Consumers are demanding that businesses get in-touch with their moral compass. Smart brands are already grasping this as a huge opportunity to ‘do good’ for society and do good business at the same time.
Social Media as a catalyst
In recent times, social media has been a game changer and catalyst to help consumers voice their opinions on a public and global stage.
No longer can companies hide behind mediocrity. Those that create ‘average’ products/services and experiences (90% of companies on the planet) will die a slow and painful death.
Those that “Dare to be remarkable” will prosper and win.
They will live by a set of shared values. They will deliver profits with purpose. They will take the opportunity to create amazing products and services, deliver remarkable customer experiences and build highly engaged workforces and supply chains.
The role of marketing
Of course, not all customers will expect brands to care about values and purpose but those who do can tap into the social consciousness of their employees and customers and engage them in ways that drive real engagement, loyalty and sustained profitability.
A recent report by Nielsen titled “The Global, socially-conscious consumer” March 2012 painted the picture of these individuals as under 40, green and willing to pay more for values driven products (see diagram below). Does this look like your target demographic?
I’m only scratching the surface with this blog post. Lots more investigating to do and people to chat with.
Anybody want to spar with me on this topic?
Michael Porter – “Rethinking Capitalism”. Harvard Blog. Jan 2011 http://hbr.org/2011/01/the-big-idea-creating-shared-value/ar/
Paul Cash – “Conscious Capitalism”. September 2012. LinkedIn Group discussion on the Chief Marketing Officer (CMO) Network: http://tinyurl.com/93j7nv9
The Naked Brand – http://thenakedbrand.com/
Elisabeth Murdoch talking about the lack of values at News Corp being partly responsible for its demise: http://www.guardian.co.uk/media/2012/aug/23/elisabeth-murdoch-mactaggart-lecture?fb=native.
Cone research. Global research (2011) that talks about a massive shift towards empowered consumers who unequivocally believe that the role of business in society needs to shift from Friendman’s Profit capitalism to Values capitalism. http://www.coneinc.com/2011globalcrreport
Steve Jobs, back in 1997 prior to the launch of the ‘Think Different” advertising campaign. He talks about Values being the only thing to market on. Ditch speeds and feeds. http://www.youtube.com/watch?v=vmG9jzCHtSQ
Salal Boukadoum – “Good Returns” TedTalks – Interesting business spin called “Good Returns” where investor Salal Boukadoum says waiting an extra year for your investor returns can kick-start a social enterprise model that’s good for business and good for society. http://tedxtalks.ted.com/video/TEDxGrandRapids-Salah-Boukadoum
Andrea Edwards – “Are Corporate values important?” Blog: http://sajeideas.wordpress.com/2011/12/22/are-corporate-values-important/
Nielsen research: The Globally Socially-Conscious-Consumer, March 2012. http://tinyurl.com/c6mxup6
Umair Haque (book) – The New Capitalist Manifesto http://tinyurl.com/avylgxs (a stunning read!!)
Raj Sisodia Tedx talk (24/10/12) “Re-imagining capitalism” http://www.youtube.com/watch?v=O8faXr6WhCM