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Conscious Capitalism

Every business has the potential to either discover or create a deeper purpose for itself, which goes beyond maximizing profits or shareholder value. The most ethical and conscious businesses over the long-term consciously create value for all of their interdependent stakeholders—customers, employees, investors, suppliers, community, and the environment. Paradoxically, this principle also creates the most long-term value for investors.

Everything we do can be done consciously or unconsciously. Capitalism, the process whereby capital is mobilized on behalf of realizing some projects instead of others to produce goods and services for people, can be practiced either consciously or unconsciously. We believe that the price system should be a guide, not a master – capital should be mobilized on behalf of making the world a better place, and we work to support those who aspire to do so, as well as discuss the extent to which existing mobilizations of capital contribute to the greater good.

Highlights from the 2009 C3 Summit in Austin, Texas

FLOW co-founder John Mackey, CEO of Whole Foods market, articulates an understanding of "Conscious Capitalism," as it pertains to the functioning of a corporation, based on two fundamental principles:

The Power of Purpose

Purpose is the heart-felt essential reason for a company to exist beyond its profit-making objective. It creates meaning for all stakeholders. It also contributes to profitability by attracting customers, motivating employees and inspiring investors who share a belief in a common purpose. Every company must find, articulate and continually renew its unique purpose. The four most common deeper purposes of business are “The Good,” “The True,” “The Beautiful” and “The Heroic.”

A Stakeholder Orientation

The multiple stakeholder model of capitalism utilizes a systems approach that recognizes the multiple constituencies who have a stake in corporate success: shareholders, customers, employees, suppliers, communities and the environment. A stakeholder orientation is becoming a necessity today because companies increasingly realize that they can no longer treat other participants in their ecosystem as “resources” to be exploited to serve the well-being of investors.

To effectively implement this approach to management, companies must learn how to align and synergize stakeholder interests, not just balance them. They must strive to meet the needs of all stakeholders at multiple levels, from basic needs to those at the highest level, such as self actualization.

The multiple stakeholder relationship (MSR) business model is the organizational foundation of conscious capitalism. This model enlists all stakeholders in co-creating value for everyone’s benefit, and typically leads to higher productivity, profitability and growth for a company. Employees work with greater satisfaction. Suppliers feel like they are true partners for the long haul. And untold benefits flow to communities and to society at-large. Companies guided by stakeholder pluralism have shown themselves to be efficient instruments of social change, while generally outperforming competitors in creating shareholder value over the long term. Conscious Capitalism illustrates the “Paradox of Profits” -- the counter-intuitive insight that profits are optimized, not by focusing exclusively on the bottom line, but by taking into account and aligning the interests of various stakeholders in making business decisions.

Note: The Whole Foods Market Stakeholder model provides a good illustration of looking at a business as a system of interdependent stakeholders.



"Vision without action is a dream. Action without vision is simply passing the time. Action with Vision is making a positive difference." ~ Joel Barker

FLOW programs bring ideas to life by engaging people with FLOW-related Ideas, Community and Action.


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