What is the conscious business journey?

I have been involved with the conscious capitalism movement since 2010 and the biggest struggle is to recognize that people find it very hard to believe that the “system” can be conscious.

The matter of fact is that business can be conscious, and its consciousness depends on their leader’s consciousness. We can see great companies always have great leaders. Purposeful companies have conscious leaders.

But ultimately, consciousness is not a destination, it rather is a journey. The more we learn the more our conscious expands, as leaders and as our business practices.

Traditionally, even more intentionally after Milton Friedman said: “The sole purpose of a business is to generate profits for its shareholders”, we have seen a diminished concern for anything else than profit, in detriment of any other long-term initiative which is potentially the opportunity to harvest better profits in the long term.

So, we ended up with a simple dilemma, which is perfectly illustrated by the image below:

If you are a business, you are driven by profit, is you are an NGO, you are driven by Purpose. Nevertheless, all great businesses started solving problems, had a strong belief from their founders that they could do something better, as a consequence of fulfilling that belief or solving that problem, profits have followed. The truth is that most organization is the world start with a purpose in mind, even if that purpose has never been transcribed or written down.

What we know from enough data and analysis is that after the extreme pressure on profits, ROA has declined over the last 20+ years to the lowest levels according to Deloitte University press.

It is time to go back to the core of what business represent. It is time we update the famous quote from Milton Friedman to: The sole purpose of a business is to generate value to all of its stakeholders, and bend the linear and polarize approach shared above where people have to choose between purpose or profit, and make business a force for good again.

The rule of thumb to follow, is that the trade-off era oi over. We are not heading to an upgrade. Every time you have to decide between 2 options for your business strategy, what happens is that you will be losing something. Look at amazon, traditionally a 100% online business model, now they understand that they must be brick and mortar too. They are not switching, they are adding, upgrading your business model.

As all business started with a good intention, sometimes even formally expressed as a purpose, they lost themselves in the need to get bigger as opposed to get better.

Keep in mind, we are in an era of inclusion as a result of a more abundant world. It is fair to understand the past due to its scarcity perspective to all different business dimensions. For me to win someone has to lose. Be prepared to upgrade your business model.

Even Larry Fink, CEO of BlackRock states it very clearly: short term profits are not the exclusive focal point to measure success, what are business doing for long term sustainability? This is an interest alignment. BlackRock customers won’t leave because company A or B had a great quarter, they will stick around for another 5 to 10 years, so businesses need to sow today the long-term profits, otherwise the profit spring will dry out sooner than expected.

So, conscious business is a true journey, what we are doing today might not assure our future success tomorrow or next year. We need to constantly upgrade our business model, do more and mainly, do better. And this way we will create a more conscious business ecosystem.

The sole purpose of a business is to generate value to all of its stakeholders

Join us on our CEO Leadership Journey. We explore new ways to upgrade our businesses, we share challenges to learn from our peers and we dive deep into the four fundamentals of conscious business: Evolutionary Purpose, Stakeholder Interdependence, Responsible Culture and Caring Leadership, to close with opportunities to explore a systemic value creation business model.