In the current issue of Conscious Company Magazine I wrote an article laying out the case for how conscious companies can and do have an outsized economic and social justice impact on our cities. My essential premise is that companies and executives can play a significant role in curing some of the ills that plague many of our once and hopefully future great centers of industry and commerce, but in order to do so they must first recognize the purpose of business is not simply to create value for shareholders, but to first create value for society. It seems that by default we continue to look to government to solve problems like income inequality, middle class job loss due to globalization, climate change and a slew of other issues being bandied about in this current political season, without also recognizing that many of these issues are inextricably tied to business and the way we choose to practice capitalism.
While we at once complain about how big business has left behind the middle class, is killing the planet and decimated local economies, at the same time we put the blame on government policy for “letting” these things happen, instead of asking critical questions of our entrepreneurs and executives so that they may step up and take responsibility. And why? Because we continue to think of business as a zero sum game of financial gain. In our collective zeitgeist we seem to not only adhere to the notion that business will do only that which is in it’s short term financial interest to do, we in fact hold this notion as so engrained and absolute that we never even consider that the theory we’ve adopted of capitalism might itself be part of the problem. It’s almost like we’re saying collectively, that given the opportunity to make greater profits and screw the rest of society, not only do we know that is what business will do, we hold that the only way to counteract this “basic rule of economics” is to have government impose laws to protect us. While the talking heads on CNBC (or the “comedy channel” as some of my friends on Wall Street have dubbed it for the lack of real insight and analysis) talk about the rules of the economy as if they were laws of physics, what is becoming increasingly clear is that humans are complex beings and our decision making processes are not simply based on rules of supply and demand, ROI and economic self interest. They are in fact, choices that we make about how we think the world works and more importantly how we think the world ought to work.
We as a society have been conditioned to believe that, because business is only about financial returns for shareholders, the fact that people, executives, who have the power to make decisions to move jobs or not, to squeeze suppliers or not, to pay decent salaries salaries or not, simply can’t be held accountable for decisions that put shareholders before society. As the narrative goes: If labor is cheaper in (name the foreign country), and the politicians set in place global trade deals that allow businesses to move jobs overseas, well of course American’s will lose jobs because CEOs have no choice but to move those jobs. But of course there is always a choice. In general, I believe, when we see executives making decisions pitting shareholders against other stakeholders (employees, customers, suppliers, communities, the environment) what we see isn’t math or physics at play but a lack of imagination on the part of management. If they were of the mind to find both societal and financial value the chance is that they indeed could do so. And, increasingly, if they do use that imagination and find new paths to value that increase the returns for all stakeholders, their customers, employees and communities will in fact increase their sales and help them create even more substantial financial returns. This is the paradox of Conscious Capitalism: The less you focus myopically on money, and instead focus on creating societal value in the form of stakeholder interdependency, the more long-term financial value you end up creating for shareholders.
I truly believe this is the type of mindset that can turn our most challenged cities into engines of economic development, individual prosperity and more joyful communities. If we are able to create 100s or even 1000s of new businesses that focus on society first, in cities like Baltimore, Cleveland, Columbus and Detroit, I believe we will see a shift in our ability to improve the lives of neighborhoods that have been so long forgotten and neglected. Groups around the country like our friends at SHIFT in Baltimore believe the same and I’m so humbled to be able to help them along this path.
This is our goal at the Conscious Venture Lab. To create thousands of new businesses that use purpose as a competitive advantage and path to societal as well as financial value. With our new program, Boot Camp / Powered by Conscious Venture Lab we’re extending our impact to cities around the country, working with emerging female entrepreneurs and entrepreneurs of color. In each city — starting with Baltimore this past June and happening in Chicago on September 8, Cleveland in October, Northern Virginia this fall and with plans for multiple boot camps in 2017 — we hope to help a greater number of entrepreneurs create local businesses, focused on purpose and community, with the ability to scale, grow and create all manner of financial and societal wealth for themselves and their communities. Working with Conscious Capitalism chapters around the country, and partnering with others in the local innovation ecosystem, the day-long workshop is an investigation into a new way to think about business and capitalism. We arm the companies in the boot camp with the ability to articulate a deep sense of purpose, better understand their entire stakeholder system, develop new leadership skills and build compelling corporate cultures of high engagement.
At the end of each program we bring together local executives and investors to celebrate the companies, give them feedback on their business models and integration of the ideals of Conscious Capitalism in our “Pitch Conscious Venture Lab” competition. We award one of those companies a $10,000 grant to help them continue to grow their business. (Click the links here for Chicago and Cleveland if you’d like to join the audience for the upcoming competitions). Next year we will gather all of the winners for the Conscious Venture Lab Entrepreneurship Cup competition and conference where we will award a larger prize to the regional conscious entrepreneur who has continued on the path to a more conscious company.
If we can change the narrative about the purpose of business and make a new form of capitalism the norm in society, I believe we can change the way we all live together. Entrepreneurship is the backbone of a robust economy. Conscious entrepreneurship can be the backbone of a more just, joyous, prosperous and sustainable society. The manner in which we start new businesses — and train them to engage in society — is essential to the survival of many of our cities. And perhaps, one of the most important missions of our time.
(This story was previously published on LinkedIn here)