What is Conscious Business?

I was having lunch with my friend Jason, talking about the idea of conscious business. I was throwing the term around as commonly as supply chain, net profit, or email marketing. He was interested, but a little perplexed, and through bites of his sandwich, said “Wait, what exactly does that mean?” I paused, making sure he was not punking me, and realized perhaps the term wasn’t as common as I thought. Like many things that are new and slightly ambiguous, I’m sure it means different things to different people. At Changing Work, here’s how we think of it. 

Defining a Conscious Business

A conscious business is a company that aims to have a positive impact on all of its stakeholders. It’s interested in providing value for the customers it serves. It’s focused on providing a positive and healthy environment for its employees, so they can do their best work. It’s focused on providing value for its shareholders, who have invested their finances and trust. It’s also aware of the broader community, both locally and globally, that it exists within. 

In short, it’s a company that intends to serve the whole. It’s a company that is moving from Me to We. 

Why Conscious Businesses are more successful

It turns out, thankfully, this is also good for business. Raj Sisodia, and the team that wrote Firms of Endearment, and later, Conscious Capitalism, found that companies that operated this way were 14X (1400%!!) more profitable than the S&P average.

When we dig into it, this makes sense. 

It starts with people. In the Information Economy, it’s clear that employees are by far a company’s biggest resource, their biggest competitive advantage. It makes sense that companies who provide a great environment for employees will attract the best talent, help keep them engaged, and hold onto them longer. This doesn’t happen by accident. It requires a purposeful focus on a positive company culture.  

During the pandemic, we experienced (are still experiencing?) The Great Reshuffle. In the face of great change and challenge in the world, many employees reevaluated their lives and decided they wanted something different from their work experience, and it usually wasn’t financial. It turns out, company culture is 12X a bigger factor vs. compensation in determining whether someone stays or leaves a company. 

Creating value for everybody

One of the things employees want is more meaning, more purpose, in their work lives. The simple transaction of time for money leaves us feeling unsatisfied over the long run. In fact, according to Harvard Business Review, 9 out of 10 American workers said they’d work for less money if they had more meaning in their jobs. 

Within a conscious company, leaders can point to the work that the company is doing in the world. How they’re creating value for customers. How they’re creating value for the whole. They can connect the dots between the work each person is doing and how they’re helping make the world a better place. Employees are more engaged, more creative, more loyal, and more committed to the mission of the company. That’s hard to do when the company is only concerned about the bottom line. 

This employee commitment leads to deeper value creation for customers. This level of care from employees leads to a deepening understanding of customers’ needs. This makes sense, because it all comes down to people. I imagine doing a chore for a neighbor next door. If I’ve never met that neighbor, or if I’m not really investing in my community, my level of care for that chore might be pretty low. It might be the bare minimum. 

If I’m really invested in the idea of community, I’m going to put a lot more care into the task I’m doing for my neighbor. Instead of viewing it as a chore, I might even view it as a service to the community, to our friendship. I might even come away from the task feeling lighter, maybe even more fulfilled. 

When employees are fully engaged and delivering amazing value for customers, another group of people benefit – shareholders. Remember - they benefit 14X more from conscious companies than the S&P average! And…this is often where the challenge lies when attempting to operate as a conscious company. The cycle of business is highly dictated by quarterly earnings reports and the financial expectations that go with them. This impulse for short-term gain often gets in the way of some longer-term efforts to provide value for employees and customers. 

I yearn for the day when shareholders become activists towards C-Suites that aren’t creating great employee environments.  

What can get in the way of operating as a Conscious Business

Companies are collections of people. The habits required of building a conscious business are simple, but sometimes not easy, just like in our personal lives. We all know that if we exercise, sleep well, and eat a nutritious diet, we’ll likely be healthier. But eating potato chips and binge-watching our favorite shows until late at night is very tempting. 

In business it’s easier to be a command-and-control manager than it is to be a compassionate one. It’s easier to get sucked into to “profit at all costs” than it is to stand up to shareholders and talk about long term value. 

For the companies that get it right, everybody wins. 

Jason was amused at my arm waving and wide-eyed excitement. He finished his cookie, smiled and nodded. “Yeah man. I want that.” He took a deep breath that had a lifetime of knowing experience behind it and said it again. 

“I want that.”