There is a growing movement for companies to be seen as being part of conscious capitalism movement. "Conscious capitalism" is a term that was coined by Whole Foods co-founder John Mackey and marketing professor Raj Sisodia. The simple definition is businesses should operate ethically while they pursue profits. This means they should consider all stakeholders, including their employees, humanity, and the environment—not just their management teams and shareholders.
When employees know the company’s leadership takes into consideration more than just profits, it changes how employees connect to the organization. And though this is important for everyone in the workforce, research has clearly shown that in particular, Millennials and Gen Zers, want to feel a sense of purpose in their work. This is especially true coming out of the pandemic. People want to work for organizations doing good and making a difference beyond the working environment.
As a comparison:
Capitalism: 1. division of labor; 2. impersonal exchange based on prices; and 3. economies of scale based on knowledge.
"Conscious" Capitalism: 1. a higher purpose, 2. stakeholder orientation, 3. conscious leadership, and 4. a conscious culture.
Like anything in business, the leadership in a company needs to understand where they are, a baseline, and whether initiatives are moving the company closer or farther away from the goals that have been set. This is also true, if the company wants to be seen as adhering to the tenants of conscious capitalism. The good news is that the founders of the movement have created a self-assessment called “The Conscious Business Summary Audit.” The audit allows you to score your company on very specific principles within each of the four tenants.
For HR, having specific examples of how your organization has or is in the process of adopting conscious initiatives can be a useful tool to attract and retain talent. This approach is already being used by many companies.
A good example is L’Oréal. The company has been recognized for their commitment to conscience capitalism and publicly shares their approach. This is just part of what they have posted on their website: “We seek to ensure that the fundamental rights of every man and woman in the supply chain around the world are respected. This includes abiding by the ethical principles supported by L’Oréal and, in particular, respecting human rights in terms of the health, safety and protection of workers.”
Of course, it is not enough to make a statement, but to also have the data to back it up. That takes time to gather if your organization is just starting to look at this challenge. As an HR professional, finding out what is already being done is important. The next question is how this message is being communicated to your workforce. It is also something that should be highlighted during the onboarding process, not just in recruiting materials and the website.
What You Can Do
We know that statements are meaningless unless there are actions backing them up. Talking about environmental sustainability, as an example, is not the same as employees visibly seeing a policy in action. From a health and well-being perspective, leaders need to be visibly modeling those behaviors. Acknowledging a new focus by the company and communicating what first steps will be taken sends a very powerful message. Once first steps are taken, the results should be shared across the organization.
A focus on Conscious Capitalism is something that can be aligned to all we do for our workforce. It encompasses employee engagement, the ability to better recruit the talent that is needed, and it is beneficial to leadership in how the company is perceived by clients and consumers of your company’s products and services. It also aligns with better workforce health and well-being. More and more employees want to know that their company is a successful business doing good in the world and that leadership values their health and well-being. Making conscious capitalism core to your 2024 strategy can help your organization thrive.