Conscious Capitalism and the New Bottom Line

In my experience, the phrase most often mentioned during a business conversation is “the bottom line”, as that is where a corporation’s success is ultimately measured by the banking industry and Wall Street.  Calculating this bottom line, in the classical sense, is fairly straight forward.  Income – Expense = Profit.  Based on the notion of capitalism, whereby goods and services are exchanged within an open market, the objective is to earn a profit by selling something for more than it costs, and justifying that markup based on adding value.
This may occur though a manufacturing process, such as assembling a car from a multitude of parts, by applying skilled labor, such a doctor performing an operation, or by utilizing intellectual assets, such as when a bond trader negotiates a deal.  But in all cases, the traditional bottom line consists of adding up all the costs – people, materials, overhead – and adding a margin to arrive at a profitable sales price.
As beautiful as this system is, the problem with classical capitalism is its inherent lack of consciousness.
To be conscious means to be awake, mindful… A conscious business fosters peace and happiness in the individual, respect and solidarity in the community, and mission accomplishment in the organization. – Fred Kofman, from Conscious Business
Concepts such as peace and happiness don’t appear as a line item on a company’s balance sheet or P&L statement.  Another missing component is respect; for the employees, the community or environment.  Some would say that these elements are accounted for by the fact that adopting them naturally creates a more positive working environment that will lead to greater productivity and, in the end, higher profit.
But the reality is that many corporations live by the spreadsheet, which as we all know is bereft of any sense of moral duty or compassion.  Dumping toxic waste into a nearby stream is clearly cheaper than the cost of neutralizing the waste through proper disposal, employing children in a third world country produces a similar positive effect on the bottom line, and allowing pollution created by burning fossil fuels to enter the earth’s atmosphere is far more profitable than employing technology that traps it.
The ultimate purpose of business is not, or should not be, simply to make money.  Nor is it simply a system of making and selling things.  The promise of business is to increase the general well-being of humankind through service, a creative invention, and ethical philosophy. – Paul Hawken from The Ecology of Commerce
So as much as we may want conscious capitalism to thrive and be adopted by corporations around the world, the reality is that such mindfulness often carries a price on the front end, and the majority of us don’t understand the benefits to be gained on the back end.  In the cases cited above, toxic waste that pollutes our water supply will ultimately result in increased health care costs, as will releasing pollution from burning fossil fuels into the air we breathe.  These are clear examples of externalized costs.
The cost of child labor, or any adverse working condition, can be harder to quantify.  It may manifest itself in a physical way, such as children in the diamond industry whose eyesight is compromised, but often times the effects are psychological in nature and occur over longer periods of time in ways that forever alter the lives of those affected.  How do you value a loss of capability, or loss of happiness?
In recent years two approaches have seen widespread adoption in the effort to bring a greater sense of consciousness to the business world: Triple Bottom Line (TBL) and Corporate Social Responsibility (CSR).  Both of these topics will be covered in upcoming articles.
First Steps
How you approach the topic of conscious capitalism is largely related to the type of business you run, or your decision making power if you happen to work in a corporation.  In either case, the most important tasks are to ask questions (Is this practice ethical?, Is this process sustainable?) and to understand how your business systems actually operate.
Do some research and find out what other companies are doing.  While you may not be working in such a large company, this CNN Money article identified “10 Green Giants” that are making a conscious effort to improve their daily operations while respecting the world around them.
http://money.cnn.com/galleries/2007/fortune/0703/gallery.green_giants.fortune/index.html
Or check out The World’s Most Ethical Companies, an annual award from the Ethisphere Institute:
http://www.ethisphere.com/wme/
You may, or may not, agree with the companies that were chosen, but the point is to dig in and discover the wide range of best practices that are designed to generate profits while also respecting the planet