Megatrends in Business: The Rise of Conscious Capitalism

I just finished reading the book Freefall: America, Free Markets, and the Sinking of the World Economy by Joseph Stiglitz, a Nobel-prize winning economist and former Chief Economist of the World Bank. This book provides a comprehensive overview for marketers who want to better understand the economic, legislative, and political issues that ultimately created the social problems which led to the inevitable economic freefall and global recession that we are currently experiencing today.

As a byproduct of this unraveling, purchasing power was affected globally and corporations took a massive hit in terms of consumer trust. This is why there has perhaps never been a better time for marketers to be focusing their energies on fostering relationships and rebuilding trust through conversation, education initiatives, and transparency. It is therefore not surprising that the discipline of marketing has shifted from primarily a product-pushing model to now a relationship-centric one.

In two recent posts I have written about underlying trends in business affecting the discipline of marketing. In the first, I talked about the “The Greening of Global Brands,” which was a survey about companies who are capitalizing on the trend of becoming more socially responsible. Shortly thereafter I noted the emergence of the Cultural Creatives, a 50-million person strong demographic subset within the U.S. economy who shares a new and unique set of core values marked by trust, social justice, and environmental consciousness. It is time to now talk about a third trend: Conscious Capitalism.  Below is a video from Whole Foods CEO John Mackey elaborating on this concept:

As alluded to the video, the three main tenets of Conscious Capitalism include that businesses must 1) subscribe to a higher purpose other than profit maximization alone, 2) have a stakeholder vs. shareholder orientation, and 3) subscribe to servant or conscious leadership as opposed to command and control  leadership. The implications this has for marketing are vast.

The official term for this shift in business consciousness was referenced by world-renowned speaker, author, and architect of corporate transformation Patricia Aburdene in her 2007 book, Megatrends 2010: The Rise of Conscious Capitalism. From a more recent article in Green Money Journal entitled “Sustainable Investing: Putting the Economy Back Together,” Aburdene elaborates on companies that are exemplifying this trend:

Many top U.S. firms, companies like Medtronic, 3M, P&G, General Mills, Timberland, Whole Foods Market, Starbucks and others – the kind of firms that make the Business Ethics “100 Best Corporate Citizens” and/or the Fortune “100 Best Companies to Work For” lists might be called Conscious Capitalists. Perhaps half of the S&P 500 embrace one or more aspects of Conscious Capitalism.

Fine, you might say if you’re an investor, but how successful can they be if they are so devoted to these stakeholders?  The answer if often “very.” Towers Perrin, the global consulting giant, reviewed the results of 25 firms (including Coca Cola, Southwest Airlines and P&G) that excel in relationships with employees, customers and communities. Over a 15 year period, the “Stakeholder Superstars,” as they might be dubbed, beat the S&P 500 by 126 percent.  In Megatrends 2010, I cite several studies that illustrate the same point — Conscious Capitalists often outperform the market.

So how can marketers take advantage of such trends? Here are seven ways that marketing managers or marketing personnel can become more conscious marketers:

  1. Don’t assume you know your customer, engage in conversations and research
  2. Leverage social media as a platform for interaction with customers and gathering business intelligence
  3. Focus on long-term goals rather than short-sighted ones
  4. Create value in your messaging – no more media waste
  5. Be authentic; limit marketing automation
  6. Measure what you value and value what you measure
  7. Use analytics as baselines rather than guidelines

Remember:  Conscious Capitalism is more practical and comprehensive than other corporate philosophies that are based on virtuous behavior and philanthropy, like Corporate Social Responsibility. It is meant to create an entirely new structure for businesses whose financial integrity rests upon a variety of factors rooted in trust, value creation, transparency, purpose, and empowerment.

Conscious Capitalism Resources

For more information on this movement please visit www.consciouscapitalism.org or take a look at their Vimeo channel by clicking here.

13 comments

  1. Do you think marketers such as Seth Godin are at the forefront of this “relationship marketing?” It would seem to me that the large corporations have learned from smaller, independent guys like Godin.

    • Hi Ben – thanks for stopping by! I certainly think that thought leaders such as Seth Godin are at the forefront of this trend. In fact, Seth Godin recently posted a rant on his blog about “The Forever Recession” where he wrote: “… The future feels a lot more like marketing–it’s impromptu, it’s based on innovation and inspiration, and it involves connections between and among people.” (You can read the full blog post here: http://sethgodin.typepad.com/seths_blog/2011/09/the-forever-recession.html) While he may be an independent thought leader, he’s not necessarily “smaller.” His web site says: “His blog is perhaps the most popular in the world written by a single individual.”

      • I meant smaller in the sense that he is in fact “a single individual.” And I guess that makes sense, given that innovation in any field usually comes from a singular or a small group of rebels. I wasn’t aware that bigger corporations are actually embracing some of Godin’s idea, however, so that’s pretty cool 🙂

  2. Tiffany,

    I loved your article that is until I got to the list of the 7 things marketing can do to become more conscious in their marketing effort. Not that those are no all important activities, but that is precisely the concern I have, they are “Activities”. As you know in my book “The Living Organization” (http://amzn.to/vuFBo0) I distinguish between Activity, Relationship and Context energy.

    What I am discovering is how many people are talking about conscious capitalism but fall into the trap of reducing it to another set of Activities. Doing for dong sake is what a machine does and it is the machine paradigm that has dominated our thinking and our world. TO truly shift to a Conscious Capitalism we must move from a machine to a living organization. Machines have no consciousness, machines have no morality (hence cannot be socially responsible), machines do not have relationships (they only have transactions). And the only outcome of a machine is what is produced and hence the only thing of value is money (the measure of its production).

    Living entities are always building relationships, in fact they are in relationship with all elements of its ecosystem (all its stakeholders). Living organizations understand it has to be part of an ecosystem and this is what triggers its moral responsibilities, its social responsibility. Living entities create and innovate. Living entities are driven by a deep desire to contribute, to learn and grow and to belong. And living entities have a unique purpose, a soulful purpose that sets the context for everything they do.

    Living entities follow a path of conscious evolution (whether you use Maslow or any other model of development). Living entities are drawn to be of service, to see their contribution have meaning. Value is created by offering something that makes others lives better.

    Companies are Living Organizations.

    How can this be translated to what marketers can do to take advantage of the new trend towards conscious capitalism. Here are my suggestion do are
    1. Start with the Soulful Purpose. Clearly understand it and frame. It is not a statement but a deeply felt story of why we exist. Why do we exist, why do we make the world a better place.
    2. Translate that purpose into the products and services we offer. Think of them as the characters in the story.
    3. Build a community. You are not just trying to get people to buy things you are engaging people in participating in your story. In fact all the stakeholders are part of the story. Yes here is where social media can play a role but as a tool for enhanced communication not as a process onto itself.

    If you come from this Context perspective, then what you do and what you measure will have a deep sense of purpose and meaning and the rest of the actions you suggest will take their natural role in creating results.

    • Norman – First of all, thank you for your extremely thoughtful reply. I really, really like your translation of how Conscious Capitalism can be applied to marketing. Your suggestions provide a very strategic approach for applying these ideas to the discipline of marketing from a “C-Suite” perspective. I’m wondering if we’re still on the same page but just talking about two different types of marketing activities?

      The suggestions I put forth are a bit more tactical and perhaps geared to individuals working within a marketing department or maybe marketing managers as opposed to CMOs or CEOs who may be more focused on big-picture strategy. Oftentimes in large corporations (I’ve now worked in three), marketing strategy comes from the top and the people in middle management or marketing services are essentially just adapting a broader strategy at the local level without having too much say in the larger process other than having to adapt to standards and then implementing.

      With the tips I provided, I’m trying to drive home the point that marketers at this level don’t have to be just another cog in the wheel: there are ways to take a proactive approach to adapting marketing strategy locally that can foster relationship building and engagement with customers at such a level that results in creating connections and making a difference as opposed to just pushing out empty words that scream “buy, buy, buy.”

      As for social media, I just finished reading Social Media ROI by Olivier Blanchard. He talks a lot about differentiating between building a social business vs. a social marketing strategy. I am referring to the former in my tip #2 above. Social media is not and end in and of itself, rather it’s simply an evolution of communication. When leveraged properly, social media can result in a higher degree of organizational transparency and interdepartmental communication while at the same time revealing real-time customer insights that can be adapted and used as business intelligence. In other words, social media becomes an organizational tool for the “marketing organization” who realizes that every aspect of its business, every interaction with a stakeholder, is a form of marketing. The “old school” businesses who think that marketing is still limited to a function or a department don’t get this, and continue to use social media as a marketing channel rather than a dynamic organization-wide tool for fostering business growth, transparency and customer relationship building.

      Finally, a lot of marketers automate their content regularly, i.e. sending thousands of direct emails or direct mail pieces based on the information in their large contact databases. While this type of marketing activity certainly has its place, by and large this type of marketing does not work to build relationships by creating two-way communication; rather, it results in media waste and it lacks authenticity. (Did you know that a 1% response rate is considered “good” for a direct marketing campaign, or that a 20% view rate or a 3% open rate on a sent email campaign?) It’s also typically very short-sighted or short-term.

      • Tiffany, you are right my focus is typically strategic in nature. ANd I understand you were addressing a more “tactical” marketing audience. What I will ask you to consider is whether you are in fact propagating the machine paradigm. In the machine paradigm the “leaders” do the strategic thinking, while the worked are simply the tacticians who execute what the bosses say.

        I contend this paradigm hasn’t really worked well for a couple of decades now but it is really showing its shortcomings of late. A different paradigm is to think of the organization as a living being (yes The Living Organization paradigm).

        One of the attributes about a living system (organization) is that it is comprised of other living organizations. The human body is made up of organs which are made up of cells. Each are acting independently while also working for the good of the next level living system they are part of.
        The same applies to the corporate body with its sub – living systems the department and the individual.

        THe point is that each living system is an entity unto themselves. And as such they have their own strategic direction and their own need to think strategically.

        I will contend that this way of framing how an organization operates will bring about a more creative energy at all levels of the organization and the separation of thinking (the top guys) and doing (us tactical grunts) will be a thing of the past.

  3. Norman – I like the framework you suggest. I suppose I’m not clear on what an individual from within the organization would need to do in order to create change, or should I say change from the bottom up … or inside out.

    Have you heard of Bruce Lipton who wrote the book, The Biology of Belief? Some of what you stated above reminds me of concepts I read about in his book and I think his description of the human organism can be compared to the business organization in the way you state.

    He writes: “Every cell is intelligent and can survive outside of your body by living and growing in a tissue culture dish. However, when in the body, each cell is becomes an integral part of a community, working with the other cells that share the common vision of the community. The nervous system acts as a government that controls and coordinates the functions of the body’s cells. When the mind serves as a “good” government, the cellular community is in harmony and expresses health. If the mind is confused, angered, in fear or disturbed, it can destroy the harmony of the cellular community and lead to dis-ease or even death.”

    If this excerpt can be properly applied to the concept of a living organzation, then it seems to me that the “mind” within the body would be parallel to that of the “leadership” within the organization. My question is this: if a business is the sum of its parts and if those parts have the ability to survive and thrive independently of the system, but yet if the mind/leadership controls the ultimate health of those independent parts when they are contained as part of a functioning, interdependent system, then how do you manipulate that top level in order to influence the quality of the entire organism/organization in such a way that promotes systemic health?

  4. Yes I have heard of Bruce and in fact have quoted his work in my book (the exact same portion you quoted above). You are correct that leadership is to the organization what “mind” is to the body. However we often give too much credence to the “mind” specifically what I would call the rational, thinking “mind” (and hence the same holds true for leadership).

    Let me explain by way of a couple of examples. When driving a car (or riding a bicycle) there is very little impact the mind has on our decisions. Somehow, while our mind is preoccupied with all sorts of extraneous thoughts (the latest conversation with my wife, or the upcoming meeting I am about to have) our body manages to get us to the right place without getting us killed. But think about the thousands of decisions that the body is making. No “leadership” deciding when to change lanes, how hard to press on the peddles, how far back to be from the car ahead, and yet we get there.

    another example. Think about All the New Years resolutions that will be made in a few weeks. The “leadership team” will decide on what the “strategy” will be for the coming year and feel really good about the results of their “off-site retreat”. But after only a few weeks (if that long) the “body” (the organization) is off doing what it has always done.

    So yes the analogue that you (and Bruce makes is very, very accurate. But to try to find a way to “manipulate the top level in order to influence the quality of the organization” is going about it the wrong way.

    Like the human body where there is a relationship between our thoughts and our cell behavior, there is a relationship between the “thoughts” of the leadership team and the individuals. But it is not the rational thought, it is not logic and reason that creates the “cells” to behave differently. If it were that easy all we would have to do is tell our cells to eliminate a disease and it would do so and we would have total health and well-being.

    No it is not a simple logical process. But understanding the relationship between thought and the well being of our cells and our body, is a great place to start to understand the new role of leadership and how they can impact the well being of the organization.

    This dynamic is explained much more in my book. Here I will simply say that the body effects the mind as much as the mind effects the body (departments impact the leadership team and even one individual can change a whole organization). And that there is more than one “mind” within the human body (there are in fact three different processing centers in my model) and the logical mind (the leadership team in our traditional way of thinking of it) is the least impact-full of the three.

  5. Norman – you are brilliant! I have never heard of what you are proposing before … that there are three processing centers wtihin the human body, and that the logical mind (or the leadership team in the case of the business organization) has the least amount of impact. I have very much enjoyed this exchange. Thanks for spelling this all out for me. I plan to read your book so I can understand your concepts better.

    • Thank you Tiffany, I am glad that I can add a little more to your insight into a very complex dynamic.

      One thing I do want to express a little more fully, is the power that a marketing manager even three levels from the CEO has to change the whole organization. We all too often feel the only way to change an organization is to change the CEO. WHile the CEO can have a significant impact, it is not the only path towards change. In fact a really great CEO is one who recognizes her/his power comes from the organization and supports the “body’s” need to fully express its Soulful Purpose. That is why I look at even the departments as Living Organization and the department head is the CEO of that living system.

      I too have enjoyed this discourse and feel free to explore any of the other ideas about transforming from the machine paradigm to a creative living organization.

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