Readers of this column understand how the role of business itself is morphing. Technology has met customer preference and disrupted many categories. Think of Airbnb, Lyft and Uber, as well as UberEats. Look at the unimaginable growth of Apple and Amazon. Examine, too the function of innovation as a formal discipline and the rise of Conscious Capitalism.
Here is what we are learning. Corporations that have consumer-driven innovation programs outperform their competition that relies on an outdated model of RND to generate new value. Companies focused myopically on short-term value and a single profit motive only do less well than companies who embrace the emerging paradigm of Conscious Capitalism. According to a 10-year study, these Firms of Endearment ( book about the study) outperform their peer companies eight-to-one while making a positive social and planetary impact in the world. Patagonia, Ben and Jerry’s, and Middleby Corporation are examples of such companies.
This human-centered approach to commerce and its empowering dynamism in both the field of Innovation and the construct of Conscious Capitalism make them different dimensions of the same profound shift. Business is changing, for the better. Instead of the sole goal of making money, it now wants to make money while creating significance and social value.
Those in the innovation field intuitively know that the main four tenets of Conscious Capitalism inspire their output more than corporate dictates for “more quick wins.” In truth, they will tell you that by doing innovation sincerely the transformation that takes places within an organization—and the change management that ensues as a result—provides an inspiring purpose that it may have lacked under the previous model of value creation.
A higher purpose is also the first tenet of Conscious Capitalism. Speaking from our collective experience at the Studio, we are hesitant to take on a new innovation client if they are unwilling to tether their innovation strategy to a higher purpose. The reason is clear—it motivates the efforts and serves as a point of genuine pride helping to tap the highest potential of each professional involved in the effort.
The second tenet is rethinking the shareholder orientation to include all types of shareholders; not only investors, but also suppliers, the community, the employees, etc. While some companies may not stretch to this lofty goal in their corporate governance, once we do the Empathy and Co-Creation work there are always several conceptual solutions that incorporate a mode of giving back to the community as part of the total value it creates.
The third tenet is conscious culture—and nothing makes a culture more conscious than setting up innovation. Like a flashlight in the darkest corners of the organization, innovation uncovers every orthodoxy and demands a conscious response.
Lastly, the four tenet of Conscious Capitalism is conscious leadership. Take my word for it: no true innovation will launch if you have executives who just give lip service to the effort. Innovation is a litmus test of conscious leadership.