Conscious Capitalism shows a path to sustained success in business by connecting to a higher purpose and integrating all stakeholders while developing conscious leaders and a conscious culture. The Greater Rochester Chapter of Conscious Capitalism aims to cultivate Firms of Endearment in Upstate New York to increase engagement, serve the community and jumpstart the economy!
3. The "master of business
administration" degree reflects
that the educational emphasis is
on managing finances and
administrating processes.
But good management also
requires a focus on people,
something that many companies
currently lack. In far too many
businesses, employees with
the longest tenure or who
have the greatest subject
matter expertise are moved
into management, regardless
of whether they have an
aptitude for managing people.
A WORLDWIDE CRISIS
4. ONLINE SURVEY
IN 26 COUNTRIES
INFORMED
PUBLICS
• 5 years in 20+ markets
• 500 respondents in U.S.
and China & 200 in other
countries
• 8 years in 10+ markets
• Ages 25-64
• 31,000+ respondents
GENERAL
POPULATIO
N
• 1000 respondents per
country surveyed
• Ages 18+
• 2 years of data
• College-educated
• In top 25% of household
income per age group in
each country
• Report significant media
consumption and
engagement in business
news and public policy
MARKET COMPARISONS
Developed: US, UK,
France, Germany and
Japan
Emerged: Brazil, Mexico,
Russia, India and China
EU SELECT COUNTRIES:
UK, France, Germany, Italy,
Spain, Netherlands,
Sweden, Ireland, and
Poland
• 13 years of data
EDELMAN STUDY
AN EXPLORATION OF TRUST
5. Edelman Trust Barometer reveals FIVE PERFORMANCE CLUSTERS:
(listed here in rank order of importance)
1. ENGAGEMENT
LISTENS TO CUSTOMER NEEDS AND FEEDBACK
4. PURPOSE
TREATS EMPLOYEES WELL
WORKS TO PROTECT AND IMPROVE THE ENVIRONMENT
PLACES CUSTOMERS AHEAD OF PROFITS
ADDRESSES SOCIETY’S NEEDS IN ITS EVERYDAY BUSINESS
COMMUNICATES FREQUENTLY & HONESTLY ON THE STATE OF ITS
BUSINESS
2. INTEGRITY
CREATES PROGRAMS THAT POSITIVELY IMPACT THE
LOCAL COMMUNITY
PARTNERS WITH NGOs, GOVERNMENT AND 3RD PARTIES
TO ADDRESS SOCIETAL NEEDS
HAS ETHICAL BUSINESS PRACTICES
TAKES RESPONSIBLE ACTIONS TO ADDRESS AN ISSUE OR CRISIS
HAS TRANSPARENT AND OPEN BUSINESS PRACTICES
3. PRODUCTS & SERVICES
5. OPERATIONS
HAS HIGHLY-REGARDED AND WIDELY ADMIRED TOP LEADER
RANKS ON A GLOBAL LIST OF TOP COMPANIES
OFFERS HIGH QUALITY PRODUCTS OR SERVICES
DELIVERS CONSISTENT FINANCIAL RETURNS TO INVESTORS
IS AN INNOVATOR OF NEW PRODUCTS, SERVICES OR IDEAS
THE FOUNDATION OF LOYALTY
6. TREATS EMPLOYEES WELL
LISTENS TO CUSTOMER NEEDS AND FEEDBACK
PLACES CUSTOMERS AHEAD OF PROFITS
HAS TRANSPARENT AND OPEN BUSINESS PRACTICES
COMMUNICATES FREQUENTLY AND HONESTLY ON THE STATE OF ITS
BUSINESS
60%
14%
55%
11%
55%
13%
53%
12%
OFFERS HIGH QUALITY PRODUCTS OR SERVICES
TAKES RESPONSIBLE ACTIONS TO ADDRESS AN ISSUE OR A CRISIS
ADDRESSES SOCIETY'S NEEDS IN ITS EVERYDAY BUSINESS
CREATES PROGRAMS THAT POSITIVELY IMPACT THE LOCAL
COMMUNITY IN WHICH THE COMPANY OPERATES
HAS HIGHLY-REGARDED AND WIDELY ADMIRED TOP LEADERSHIP
DELIVERS CONSISTENT FINANCIAL RETURNS TO INVESTORS
49%
13%
47%
15%
46%
12%
41%
13%
40%
13%
IS AN INNOVATOR OF NEW PRODUCTS, SERVICES OR IDEAS
RANKS ON A GLOBAL LIST OF TOP COMPANIES, SUCH AS BEST
COMPANIES TO WORK FOR OR MOST ADMIRED COMPANIES
PARTNERS WITH NGOS, GOVERNMENT AND THIRD PARTIES TO
ADDRESS SOCIETAL ISSUES
52%
29%
HAS ETHICAL BUSINESS PRACTICES
WORKS TO PROTECT AND IMPROVE THE ENVIRONMENT
56%
19%
37%
22%
31%
13%
30%
10%
15%
13%
29%
27%
EDELMAN STUDY
TRUST BUILDING ATTRIBUTES
EXPECTATION VS. PERFORMANCE
7. LOW TRUST IN ETHICS AND MORALITY OF LEADERS
Global public trusts business leaders to do the following:
BUSINESS LEADERS
26%
SOLVE SOCIAL OR SOCIETAL
ISSUES
20%
19%
18%
CORRECT ISSUES WITHIN
INDUSTRIES THAT ARE
EXPERIENCING PROBLEMS
MAKE ETHICAL AND MORAL
DECISIONS
TELL YOU THE
TRUTH, REGARDLESS OF HOW
COMPLEX OR UNPOPULAR IT IS
EDELMAN STUDY
A CRISIS IN LEADERSHIP
8. WHAT DO YOU THINK IS THE BIGGEST CAUSE OF THESE SCANDALS? – GLOBAL
(ASKED OF RESPONDENTS WHO ARE FAMILIAR WITH BANKING/FINANCIAL SERVICES SCANDALS OVER PAST YEAR –
56% GLOBALLY)
LACK OF REGULATION
CORPORATE CULTURE DRIVEN BY
COMPENSATION/BONUSES
20%
BANKS ARE TOO LARGE
23%
59% of causes of
scandals are internal
and within business’
control
13%
25%
6%
CHANGES IN THE ECONOMY
11%
CORPORATE
CORRUPTION
CONFLICTS OF INTEREST
EDELMAN STUDY
TRUST DEFICIT IN BANKS
LINKED TO CULTURE
10. 92% of millennials believe that business should
be measured by more than just profit and
should focus on a societal purpose
*Deloitte 2011 Millennials Survey
MACRO
TRENDS
11. ―Darwin talked about ‗survival of the fittest,‘
not ‗survival of the winner.‘ Among human
beings, the ―fittest are not necessarily those
who subdue, conquer and control others. In
the long run, the fittest tend to be those who
know how to cooperate.‖
MACRO
TRENDS
12. More than 80 percent of the executives
responding said they would cut expenditures on
R&D and marketing to ensure that they met their
quarterly earnings targets—even if they believed
that the cuts were destroying long-term value.
SHORT-TERM
FOCUS
13. 1347 – The first corporation was created
as a not-for profit entity
1600 – Queen Elizabeth creates the East
India Company
–Corporations are chartered by the
state
for public purposes (building
hospitals,
bridges, roads, universities)
–Charters could be revoked if
corporations failed to fulfill their public
purpose
1844 – The modern form of corporations
traces its origins to an 1844 act in Britain
that allowed them to define their own
purpose rather than serve a societal
purpose
1870 – Large companies commonly
operate company towns
EVOLUTION OF
CORPORATIONS
14. Consciousness Age
Cultural capital is the new
frontier of competitive
Cultural Capital
advantage. Richard BarrettInformation / Knowledge Age
Intellectual Capital
Industrial Age
Quality of Product
Agricultural Age
Manpower
1800
1900
2000
MACRO
TRENDS
18. ―We need red blood cells to
live, but the purpose of life is
more than to make red blood
cells.‖
Ed Freeman
HIGHER PURPOSE
19. Make and serve the freshest, most delicious coffee
and donuts quickly and courteously in modern, well
merchandised stores.
vs.
To inspire and nurture the human spirit – one
person, one cup and one neighborhood at a
time.
HIGHER PURPOSE
20. ―When you tug at a single thing
in nature, you find it attached to
the rest of the world.‖ –John
Muir
Responsible for full
lifetime of products.
Four-step process for
suppliers to
sustainably obtain
wood.
C.A.F.E. Practices
(Coffee and Farmer Equity)
$.10/lb of sales
STAKEHOLDER
ORIENTATION
FINDING THE WIN-WIN-WIN
21. ―Leaders have to grow for the
business to grow‖
-John Mackey, CEO, Whole
Foods
-Servant leaders
-Focus on ―we‖ rather than ―me‖
-Cultivate a values-driven culture
-Embody the higher purpose
CONSCIOUS
LEADERSHIP
22. ―Culture eats strategy for lunch.‖
-Peter Drucker
10% Time
Culture Committee – ―doing
whatever it takes to
create, enhance, and enrich the
special Southwest sprit and
culture that has made it such a
wonderful family.‖
Pays employees 40%
more than Sam‘s
Club, but maintains
higher profit per
employee
―Cultural Capital is the new frontier of competitive advantage.‖
–Richard Barrett
CONSCIOUS
CULTURE
23. Retail Average Training
Time?
7 hours
Container Store Training
Time?
Year 1: 235 hours
Every year after: 160 hours
Product Knowledge:
Assembly, Operation, Recom
mendations
Payoff:
-Turnover below 10%
(Retail average 40-70%)
-Increased sales/employee
-Increased productivity
TRAINING AND
DEVELOPMENT
26. In a physical system, entropy provides a
measure of the amount of energy that
cannot be used to do work.
Richard Barrett, a thought leader in
measuring and developing corporate
values, has adopted the term entropy to
name the relative amount of ―energy” that
is not being used to achieved company
goals.
Thus entropy is an indicator of an
organization‗s ability to perform.
“IF YOU CAN
MEASURE IT, YOU
CAN MANAGE IT!”
27. Cultural
Entropy
Staff
Engagement
Tier 1 (Best)
5%
89 %
Tier 2
8%
76 %
Tier 3
15 %
55 %
Tier 4 (Worst)
21 %
40 %
This research of 163 organisations in Australia was carried out by Hewitt
Associates and Barrett Values Centre in 2008.
CULTURALMEASURE” FOR
ENTROPY
A “LEAD
ENGAGEMENT
28. Entropy Level
3 Year Revenue Growth %
<10 %
32.87%
10 % – 19 %
24.90%
20 % – 29 %
11.39%
>29 %
11.07%
CULTURAL MEASURE” FOR
ENTROPY
A “LEAD
REVENUE GROWTH
29. Makes it possible to
translate qualitative data
into quantitative data
Provides a baseline
measurement instrument
for monitoring changes in
the organisational culture
Provides a method for
measuring cultural capital
MEASURING
CULTURE
30. "Which values best describe who you
actually are / not who you would like to
be?―
Personal Values
Current Culture Values
"Which values best describe the current
culture of your organization?―
Desired Culture Values
"Which values would you like to represent
your organization's future culture?"
“CROWDSOURCE”
YOUR VALUES
34. Service
Personal
Health
Making a Difference
Financial Stability
Security
Internal Cohesion
Transformation
Organizational
Profit
Self-Esteem
Shareholder value
Employee health/safety
Relationship
Job security
Survival
Control…Exploitation
SURVIVAL
CONSCIOUSNESS
37. Service
Personal
Courage
Making a Difference
Personal growth
Adventure
Internal Cohesion
Transformation
Organizational
Innovation
Self-Esteem
Diversity
Teamwork
Relationship
Accountability
Risk-taking
Survival
Employee participation
TRANSFORMATION
39. Service
Personal
Mentoring
Making a Difference
Volunteer work
Empathy
Internal Cohesion
Transformation
Organizational
Employee fulfilment
Self-Esteem
Leadership development
Customer collaboration
Relationship
Strategic alliances
Community involvement
Survival
Environmental awareness
COLLABORATION