A new business concept is spreading around the world. You might know it under the labels “conscious”, “mission-driven”, “values-based”, “socially conscious”, or “benefit corporation.”

But it’s really not that new. In some ways, it’s a return to the days when businesses were an integral part of the community–not just treating them as consumers from which money is to be extracted.

Milton Friedman captured our current philosophy of business pretty well back in 1970:

“There is one and only one social responsibility of business–to use it resources and engage in activities designed to increase its profits.”

Don’t get me wrong: profit isn’t evil. As a matter of fact, that is exactly the way that businesses are sustainable. Which is a good thing for society.

But the problem with this is that phrase “one and only one.” Placing profit as the only responsibility of business leads us to a mindset where people only matter to the degree that they can be turned into dollar signs of revenue, expense, or profit.

I find that highly disrespectful. Companies should exist for the benefit of people.

As a result, I’ve been engaged heavily with this new thinking. I started writing about what I called “the Values Based Business” back in 2013, and became a director in the local Conscious Capitalism chapter.

It’s an exciting and inspiring space. It’s amazing how many leaders are truly understanding that benefiting people turns into benefiting the business. When you have inspired customers and employees, they’re more loyal and productive and your profits go up.

It’s not rocket science.

We talk with other Conscious Capitalism chapters around the globe, and something odd has emerged. Many leaders in Colorado question why this is anything special: “Don’t all companies realize that their community matters and they should be doing good?”

They’re right, of course. If all businesses developed a balanced view of decision making, there would be no need for this new thinking.

Unfortunately, most companies are stuck back in Milton Friedman’s mindset.

I’m grateful that Colorado seems to be further ahead, and there are spots of light in places like Austin and Portland. And surprisingly, huge advances are being made in South America and Africa.

New thinkers are emerging all the time, in every industry. It’s much easier, of course, for those who aren’t embedded in the traditional way of doing things. That’s always the nature of innovation.

If you’re not the innovator in your industry, someone else is. Quite likely that kid fresh out of school who is questioning the rules.

This is especially true of business models and practices. We focus so much on innovative products that we forget to question our assumptions about HOW and WHY we do business.

Appropriately, my message has a triple bottom line:

  • If you’re working that balance between doing well and doing good, congratulations! You’re on the leading edge of a powerful wave.
  • If you’re in a more traditional company and industry, you’d better find out what this movement is about. Evidence is starting to show that stakeholder-focused businesses are actually MORE profitable than their competitors.
  • It’s a long term journey. Continue learning, growing, and incorporating whatever new ideas which will add value to you, your company, and society at large.

Business is becoming a positive force in creating a better world!


This article was first published in BizWest.

Advertisements