What does it mean to be a Conscious Capitalist? Being a soft leader? Worrying more about the trees than you do about your bottom line? Being committed to yoga and meditation at your next sales retreat? Ensuring the foosball table is maintained and that you never run out of ping pong balls? Hardly!
At its root, Conscious Capitalism is about understanding the impact you and your organization are having on the community and the world. It is crucial for leaders if they want to be conscious, to approach the management of their business from the mentality of abundant thinking as opposed to a zero-sum mentality. Zero-sum thinking is standard “business” thinking — there are winners and losers in all transactions. This theory of abundance can be summed up this way: in all decisions, everyone walks away whole or in better shape. The theory of abundance is typically explained as the stakeholder model within Conscious Capitalism, meaning you have to make sure that one stakeholder is not sacrificed over another and that every decision considers each stakeholder. What are the six stakeholders that every business must consider: employees, customers, vendors, shareholders, the community, & the environment. Traditionally, from the Milton Friedman school of thinking, the role of management in any business was to maximize shareholder value as long as you stood within the letter of the law. Milton Friedman’s theory is dying a slow death. At some point, adding one more increment of value to a balance sheet has to be considered greed. You buy your 16-year-old a $50k car as an employee works two jobs while her kids don’t have winter coats that fit and haven’t been to the dentist in three years because we don’t offer dental insurance. Milton Friedman’s theory is far too limited in scope. As leaders, we need to be better than that, and Conscious Capitalism gives us a framework to do so.
What does one additional unit of profit at the expense of the community fabric look like? Would it be one additional unit of profit at the expense of pure, clean water running in the babbling brook on the south side of town? Would it be one additional unit of profit at the expense of a vendor going bankrupt and not being able to put her kids through college? Would it be one additional unit of profit at the expense of the mental health of one of your employees? Would it be short term profit and quarterly performance over the viability of our planet?
In my circle, I don’t know a single leader who would answer yes to any of the questions listed above. Leaders want strong communities. Leaders want clean brooks, healthy vendor relationships, and vibrant employees. Leaders want the planet to be around for their great-grandchildren. The problem is we don’t know what to do. As leaders, we have been raised in an environment that promotes the idea that profit will solve all issues. If we provide jobs that pay market rates, we are doing our duty. If we stay within the confines of the law, we are passable ecologically. If we let the market set the price for goods, it is up to each leader to ensure the long-term viability of their business. We, as leaders, are wiser, and we know better.
Let me be very clear on one thing about leading as a conscious leader; it is not partisan in any way. I have presented my arguments to leaders from all walks of life and have yet to come across anybody who argues against the underlying principals of conscious capitalism. It is simply a strong, healthy framework to apply to your decision making. A way to assess the impact your organization is having on all stakeholders and trying to make sure you are leaving everything with whom you interact in a healthier state, post engagement.
Let’s get focused and go from theory to practice. When my partner Bob and I go about our business, we work hard to ensure we are considering all stakeholders, and for some, simply respecting all stakeholders and making balanced choices will be sufficient and a beautiful improvement. But for most, I believe we need to go farther. We need to go beyond the minimum bar set by the stakeholder model. We need to drive harder and demonstrate how, by dramatically improving our engagement with one stakeholder will not only have the obvious impact of improving the position of that stakeholder but will get our organizations focused and improve the overall performance of our businesses.
So, pick one stakeholder and go deep while respecting the other five. Which stakeholder are you most passionate about? If you could make one significant change to one stakeholder in your career and have that be your legacy, the thing presented during your eulogy, what would it be? I.E., she was a loving mom, she built an amazing and powerful company, or she was a leader in the community who spent her career bringing different people together to solve some of our most challenging problems? (focused on the community stakeholder). What will get you charged up to leap out of bed every morning to engage and tackle with every ounce of your soul?
We spent almost two years figuring out our purpose and our associated ten-year vision. When we wrapped it up, we agreed that our vision was to improve workplace culture in America. We want to make significant improvements for the ’employee’ stakeholder. We won’t forget about the other five stakeholders, but how we are going to lead, where we are going to have a dramatic impact, and where we are going to change the world is going to be within the realm of the relationship between our organization/business and our employee.
Why does this matter? Why is this worthy of our commitment and time? Quite simply because the leading cause of chronic illness and disease is stress. The number one contributor to stress is the workplace. For instance, the health website WebMD reported that work was the number one source of stress. The American Psychological Association’s 2015 Report, Stress in America, noted that the top two sources of stress were money and work, with almost one-quarter of all adults reporting extreme stress levels.
When stress is encountered, a chain reaction occurs in the body that releases a surge of hormones. In an ideal world, after stress has passed, hormone levels drop to normal, and body functions return to baseline levels. But when stress becomes chronic, the fight-or-flight process remains activated, and the effects of long-term activation of the stress-response system can be crippling. Chronic stress weakens the immune system and can lead to a myriad of problems like chronic disease, weight gain, and heart disease. (https://www.novanthealth.org/home/services/family-medicine–primary-care/remarkable-you/your-wellness/stress-and-chronic-disease-a-toxic-relationship.aspx)
In addition to this direct link between stress and chronic disease, there is also the causal link between stress and unhealthy behaviors like drinking, smoking, and drug use — all of which are leading contributors to chronic disease. When you add these factors together, it leads to the overlooked conclusion that unhealthy workplace cultures, which lead to stress are the leading cause of death in the United States as chronic disease is the leading killer in our country. Pretty dramatic, right? We thought so too, and we decided to take it on. I can’t imagine a more worthy cause. This is something that gets me fired up every day. This is something toward which I can throw my soul.
The next logical question is, how are we planning on improving workplace culture in America? First, we will employ a curriculum within our company that is in line with our purpose. Our purpose is ‘to support you in building a life that you love.’ Our curriculum does not pretend to prescribe or guarantee a life that you love, but it does engage a series of classes that will help you make sure some fundamentals are in place to pursue a life that you love. We believe there is some baseline stuff that needs to be in place before somebody can fully engage in the thinking around what your life would look like if you woke up every day and said, “I love my life today.”
The curriculum we have put together focuses on four foundational elements to pursuing a life that you love. They are:
After completing these classes, employees emerge with a different understanding and perspective. They begin to tackle their life more thoughtfully and healthily. I conclude there is only one outcome for the business; employees will feel secure in themselves and will love the culture we are building together at BIGGBY Coffee. When they work in a loving and caring culture, they have less stress, and when they go home to their family, they are a better spouse, mother, father, brother, sister, in addition to a healthier and happier self?
But, will we impact workplace culture if we do all of this and remain a small regional chain of coffee shops in the Great Lakes? Not to the extent we aspire. We have to move forward with our cultural improvement focused on supporting all stakeholders while focusing acutely on the employee stakeholder and improving workplace culture while growing an enormous brand and company. People will pay attention. They will want to know how we built an extraordinary company and we will have the opportunity to tell our story, people will listen and start to employ a similar strategy. We will indeed see workplace culture in America improve.
In summary, we went through the long, arduous process of first finding our purpose. What was it that got us revved up and ready to commit our lives to the effort? We settled on, ‘supporting you in building a life that you love.’ Then we grabbed ahold of workplace culture as the problem we were going to solve to have a broad-based impact on the world. We believe that if we can get a significant majority of people in America saying that their employer is supporting them in building a life that they love, we will have gone a long way toward solving the leading killer in the United States — chronic disease from the stress of workplace culture.
Before engaging our purpose four years ago, we were waking up every day trying to sell one more cup of coffee, and we focused on being profitable as we grew. We recognize that while building a company is a worthy endeavor in and of itself; it was losing some charge for Bob and me. Frankly, whether we sold 10% more, or 50%, or 2,000% more, it wasn’t going to improve our lives in any material way. Once we settled on our purpose and completed our vision, we were no longer waking up selling cups of coffee; we were waking up to expand a business to solve the leading killer in our country. If that won’t get you charged up, I don’t know what will.
My challenge to you is to understand your stakeholders, consider one significant change that will define your purpose, and that excites you. What are you going to throw your soul into today?
Stated differently, when you are done and preparing to take your final bow, what is it that you will have accomplished so you can rest easy and say, my life was worthwhile, my commitment to this cause was time well spent, and I made a difference in the world?
As one pure-blooded capitalist to another — are you going to choose the number of gold nuggets recorded on your personal balance sheet, or will you pick an initiative that improves the human condition AND bolsters your net worth? You can do both, and frankly, many would argue you need to do both to be viable in our future economy. We will save this topic for a future article. The consumer has increasing insight into your business practices, and if you are not “good people,” they will spend their hard-earned dollars elsewhere.
If you need help getting started, let me know, I am happy to share all of the resources I have.