In conscious business, giving is the new receiving. At face value it appears to make no sense at all to spend more money on your employees and your suppliers, and less on your advertising, your marketing and your own pay packet as an executive. Nevertheless, the results show that companies that practise generosity of pocket and of spirit have employee turnover that is far lower than their industry average (therefore costing less). They are more positively regarded by their customers (therefore earning more). They enjoy a culture that people want to belong to because they love what they do and feel like they are contributing to making the world a better place. This culture is more resistant to short-term pressures and can also adapt easily to challenges. And – most importantly for the skeptics – these conscious companies earn more money. Somehow, by focusing on creating a balanced, interconnected and satisfied whole, orientated around a higher purpose, conscious businesses enjoy more success than their more traditionally-minded contemporaries who aim directly for profit.
If you were looking for a blueprint of how a conscious company is constructed and how it operates then, with the help of Raj Sisodia and his colleagues, amongst others, here are some of the practices you would adopt to transform your company into a conscious one.
- Identify, become connected to and align yourself, your employees, your suppliers and your shareholders with your higher purpose, essentially by asking: ‘What does this company exist to do/contribute?’
- Pursue a mindset that considers all stakeholders in your business to be equally important to the superior functioning of the whole of your business, aim to maximise the benefits for all of these stakeholders and, with every decision you make, be guided by what would constitute a balanced, win-win outcome for all involved (no trade-offs). Your stakeholders include: employees, customers, suppliers, shareholders and the community/society either in which you operate, or even more broadly than that – society at large.
- Hire people who are passionate about your central higher purpose – when they are aligned with why your business exists, the whole thing works better.
- Regard your suppliers as long-term partners, collaborate with them and help them to become more profitable (rather than putting pressure on them to cost you less). If your suppliers are also conscious companies, even better.
- Make a conscious effort to humanize the experience of your company for your employees and your customers. This means taking a relational not a transactional stance to your stakeholders.
- Radically close the gap between executives’ salary and employees’ salary. John Mackey of Whole Foods Market, and one of the leaders of the conscious capitalism movement, famously capped executive salary at 19 times the average wage. This meant that the only way he could earn more money would be if everyone earned more money. This focuses the mind on the whole and on creating ways for everyone to win. (This is probably also where most leaders falter at the starting gates of conscious business because here, where the rubber meets the road, is where your commitment to being a conscious leader is tested).
- Decentralize and empower leadership as far down the organisation as possible. Empower employees to make decisions that leave the customer fully satisfied. (For example, in Wegmans Food Markets every employee has wide latitude to do whatever is necessary to ensure that a customer leaves the store fully satisfied, without consulting a manager).
- Practice an executive level open door policy.
- Be open and transparent with company information, including financial information. Some conscious companies keep books in store, for viewing freely, that indicate what every employee earns. Counter-intuitively to what our habits and fears would have us believe, this practice actually engenders trust and connection with management.
- Pay your employees more than industry standard and increase their benefits too. The rationale is that freeing people up so that they don’t have to worry about their survival makes them a whole lot more productive.
- Devote more time and money to employees’ training and development. (The Container Store gives its employees 241 hours of training and development as opposed to the industry standard of 7 hours).
- Be generous with the amount of time you give your employees to put towards paid community or volunteering services. Patagonia has an Environmental Internship Programme that gives employees up to eight weeks of paid leave to volunteer for an environmental organisation of their choice. Despite all that time off, the company still managed to turn a 2010 revenue of $400 million. Timberland employees get 40 hours paid time off per year to volunteer for community service and a six-month, paid sabbatical is offered to employees who want to ‘pursue a dream that benefits the community in a meaningful way.’
So, in some ways, it seems easy: know the higher purpose your business stands for, work to balance and benefit all of your stakeholders, and manage your employees in such a way that they are inspired by your purpose, can act autonomously, are well-rewarded, enjoy good benefits, are trained well, and are allowed time to contribute what matters most to them outside of the company, while you stay accessible to all your stakeholders by being open, managing relationships and not doing things that create a distance between yourselves and your employees.
Why do more companies not practise this approach to doing business? Like the proverb goes, the more you give, the more you receive. This includes money: the financial generosity of conscious companies towards their stakeholders is far outweighed by the profit, the success and the positive branding they enjoy in return.
Perhaps it will take a jolting paradigm shift to shock us out of our habitual, survival-and-fear driven ways of doing business, garnering as much of the pie for ourselves as we can possibly hold. And, looking at some of the trailblazers out there of conscious business, perhaps we are already changing.