No Result
View All Result
SUBSCRIBE | NO FEES, NO PAYWALLS
MANAGE MY SUBSCRIPTION
NEWSLETTER
Corporate Compliance Insights
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe
No Result
View All Result
Corporate Compliance Insights

Optimize Business Performance by Becoming a “Conscious Capitalist”

by Jim Nortz
November 3, 2015
in Uncategorized
Optimize Business Performance by Becoming a “Conscious Capitalist”

I’ve got some really good news that may or may not surprise you: In business, good guys not only finish first, but way ahead of the pack.

In their book “Conscious Capitalism,” Raj Sisodia and John Mackey compare the financial performance of the S&P 500 and Jim Collins’ “Good to Great” companies with “firms of endearment,” whose distinguishing characteristic is that they practice “conscious capitalism.” The 15-year cumulative returns were 157 percent, 177 percent and 1,646 percent, respectively.

15-year comulative returnBefore I describe the four tenets of conscious capitalism, you should know that the firms practicing it are not mythical companies from another planet. They are corporations we know and interact with on a regular basis, including 3M, Starbucks, Wegmans, UPS, Honda, Costco, LL Bean, Southwest, CarMax, Trader Joe’s and Commerce Bank. You should also know that conscious capitalism is not “corporate social responsibility” and is distinguishable from related business models like “natural capitalism,” the “triple bottom line,” “shared-value capitalism” and “creative capitalism.”

According to Mackey and Sisodia, “A good business doesn’t need to do anything special to be socially responsible. When it creates value for its major stakeholders, it is acting in a socially responsible way. Collectively, ordinary business exchanges are the greatest creator of value in the entire world. This value creation is the most important aspect of business social responsibility.”

This way of looking at business is a significant departure from the many movements like corporate social responsibility, which start with the premise that the underlying structure of business is flawed and needs to be changed. Instead, conscious capitalism begins with the premise that free-enterprise capitalism is fundamentally good, but can and should evolve to fully realize its potential.

Conscious capitalism is grounded in four tenets: higher purpose, stakeholder integration, conscious leadership and conscious culture and management.

Higher Purpose

Conscious businesses have a higher purpose. This means they have taken the time to find answers to basic questions like “Why do we exist?” and “What is the contribution we want to make?” According to Mackey and Sisodia, a firm that does this well will create the “magnet” that holds the organization together; attracts the right team members, customers, suppliers and investors; and aligns them in a common cause.

Such a definitive statement about the difference your firm is trying to make in the world has the added advantage of giving energy and relevance to a company and its brand. Examples of “higher purpose” include:

  • Disney—to use our imaginations to bring happiness to millions.
  • Southwest Airlines—to give people the freedom to fly.
  • Charles Schwab—a relentless ally for the individual investor.

Stakeholder Integration

Instead of looking for trade-offs between stakeholders, conscious businesses look for synergies. They consciously look for ways to make all key stakeholders better off and get all of their interests aligned in the same direction.

This paradigm shift, from looking at business as a “zero-sum” game to a “positive-sum” game, recognizes that at its core, business is a highly collaborative activity. By consciously seeking ways to run a business in a manner that benefits employees, suppliers, customers, shareholders, the environment and the communities in which they operate, companies maximize the energy, creativity, loyalty and engagement of all those who are participating in the commercial activities and interactions that are the life blood of every for-profit enterprise.

Conscious Leadership

Mackey and Sisodia describe conscious leaders as “strong individuals who possess exceptional moral courage and are able to withstand constant scrutiny and criticism from those who view business in a more traditional, narrow manner. Above all, conscious leaders view themselves as trustees of the business, seeking to nurture and safeguard it for future generations, not to exploit it for the short-term gains of themselves or current stakeholders.”

This is a pretty high bar and may strike some as describing a mythical corporate superhero rather than a flesh-and-blood person. However, I think it is self-evident that business professionals can optimize their effectiveness by aspiring to become “conscious leaders.”

Conscious Culture

According to Mackey and Sisodia, a conscious culture has seven important attributes: trust, accountability, caring, transparency, integrity, loyalty and egalitarianism. Although a more expansive discussion of these attributes is beyond the scope of this column, I suspect most people would agree that companies with these qualities likely have some significant advantages over companies that lack them. As Peter Drucker once said, “Culture eats strategy for breakfast.” Leaders must focus getting their culture right in order to effectively implement any strategy.

I don’t think it is particularly surprising that companies practicing the four tenets significantly outperform both the broader stock market and Collins’ “Good to Great” companies. By consciously doing business in a manner consistent with these tenets, such firms reduce their enterprise risks, recruit and motivate the best people and earn the trust and loyalty of key stakeholders. What Mackey and Sisodia have done is provide a road map for us to follow to achieve these ends, not only maximizing profits over the long term, but giving meaning and purpose to our work.

If you are interested in learning more about conscious capitalism and how you might bring these ideas to your company, I’d recommend Mackey’s and Sisodia’s book. I also recommend that you join the Rochester chapter of Conscious Capitalism, whose website is www.meetup.com/Greater-Rochester-Chapter-of-Conscious-Capitalism.


Previous Post

Chef Begins New Era of DevOps for the Enterprise with Release of New Products

Next Post

STEELE CIS Offers Corporate Compliance Tips for 2016

Jim Nortz

Jim Nortz

Jim NortzJim Nortz is Founder & President of Axiom Compliance & Ethics Solutions LLC, a firm dedicated to driving ethical excellence by helping organizations implement effective compliance and ethics programs. Jim is a nationally recognized expert and thought leader in the field of business ethics and compliance with over a decade of experience serving multinational petrochemical, staffing, business process outsourcing, pharmaceutical and medical device corporations. Jim spent the first 17 years of his career as a criminal and civil litigator and Senior Corporate Counsel before becoming Crompton Corporation’s first Vice President, Business Ethics and Compliance in 2003. Since then, Jim has served as a compliance officer at Crompton and for five other multinational corporations, the most recent of which was as Chief Compliance Officer at Carestream Health. Jim has extensive experience in implementing world-class compliance and ethics programs sufficiently robust to withstand U.S. Department of Justice scrutiny. Jim is a frequent guest lecturer at the University of Rochester’s Simon School of Business, RIT’s Saunders School of Business, St. John Fisher College, Nazareth College and other law schools, universities and organizations around the country. Jim writes the monthly business ethics columns for the Association of Corporate Counsel Docket magazine and the Rochester Business Journal. Jim is a National Association of Corporate Directors Fellow, a member of the International Association of Independent Corporate Monitors and serves on the Board of Directors of the Rochester Chapter of Conscious Capitalism as the Board’s Secretary and Chair of the Governance and Nomination Committee. Previously, Jim served on the Board of Directors for the Ethics and Compliance Officers Association and the Board of the Rochester Area Business Ethics Foundation.

Related Posts

Fox_DOJ Speeches_f

Analysis of Recent DOJ Statements

by Corporate Compliance Insights
March 23, 2023

DOJ leaders provide insight into agency's plans. Analysis of Recent Statements DOJ Shaping the Future of Corporate Criminal Enforcement What’s...

Fox_2023 ECCP Update_f

2023 Evaluation of Corporate Compliance Programs

by Corporate Compliance Insights
March 23, 2023

Keeping up with 2023 changes to DOJ guidelines. Additions, Deletions & Changes From 2020 2023 Evaluation of Corporate Compliance Programs...

encompass update

Encompass Launches pKYC Maturity Model

by Corporate Compliance Insights
March 22, 2023

KYC automation platform Encompass has unveiled a new perpetual Know Your Customer (pKYC) maturity model designed to help banks improve...

consilio onna partnership

Consilio, Onna Seek to Streamline eDiscovery for Cloud Apps

by Corporate Compliance Insights
March 22, 2023

Legal technology provider Consilio has launched a new platform, Sightline Collect, powered by data management supplier Onna. The platform is...

Next Post
STEELE CIS Offers Corporate Compliance Tips for 2016

STEELE CIS Offers Corporate Compliance Tips for 2016

Compliance Job Interview Q&A

Jump to a Topic

AML Anti-Bribery Anti-Corruption Artificial Intelligence (AI) Automation Banking Board of Directors Board Risk Oversight Business Continuity Planning California Consumer Privacy Act (CCPA) Code of Conduct Communications Management Corporate Culture COVID-19 Cryptocurrency Culture of Ethics Cybercrime Cyber Risk Data Analytics Data Breach Data Governance DOJ Download Due Diligence Enterprise Risk Management (ERM) ESG FCPA Enforcement Actions Financial Crime Financial Crimes Enforcement Network (FinCEN) GDPR HIPAA Know Your Customer (KYC) Machine Learning Monitoring RegTech Reputation Risk Risk Assessment SEC Social Media Risk Supply Chain Technology Third Party Risk Management Tone at the Top Training Whistleblowing
No Result
View All Result

Privacy Policy

Founded in 2010, CCI is the web’s premier global independent news source for compliance, ethics, risk and information security. 

Got a news tip? Get in touch. Want a weekly round-up in your inbox? Sign up for free. No subscription fees, no paywalls. 

Follow Us

Browse Topics:

  • CCI Press
  • Compliance
  • Compliance Podcasts
  • Cybersecurity
  • Data Privacy
  • eBooks Published by CCI
  • Ethics
  • FCPA
  • Featured
  • Financial Services
  • Fraud
  • Governance
  • GRC Vendor News
  • HR Compliance
  • Internal Audit
  • Leadership and Career
  • On Demand Webinars
  • Opinion
  • Resource Library
  • Risk
  • Uncategorized
  • Videos
  • Webinars
  • Well-Being
  • Whitepapers

© 2022 Corporate Compliance Insights

No Result
View All Result
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Explore Topics
    • See All Articles
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Well-Being at Work
    • Leadership and Career
    • Opinion
  • Vendor News
  • Career Connection
  • Events
    • Calendar
    • Submit an Event
  • Library
    • Whitepapers & Reports
    • eBooks
    • CCI Press & Compliance Bookshelf
  • Podcasts
  • Videos
  • Subscribe

© 2022 Corporate Compliance Insights

Welcome to CCI. This site uses cookies. Please click OK to accept. Privacy Policy
Cookie settingsACCEPT
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT