The Culture of Conscience

Article Published in Leadership Excellence Essentials, October 2014, vol.10 No.31.

How will your business thrive in it?

Adapted excerpt from THE CONSCIENCE ECONOMY: How a Mass Movement for Good Is Great for Business (Bibliomotion; October 28, 2014) by Steven Overman.

Our interconnectedness has heightened our awareness of the impact we—and the businesses from which we buy, for which we work and in which we invest—have on humanity and our planet. This in turn intensifies the demand for positive agency and meaning, not only in what we do but in all the decisions we make. It’s a clear meta-trend, a mass movement for good, that’s been gaining momentum for forty years.

And now, the movement is reaching its tipping point. Broad awareness of social injustices and environmental risks, concurrent with emerging technology innovations, has given rise to new rules, expectations, behaviors, participants and structures. And the conflux of forces that are redefining how we live, interact, work and play are giving rise to a new global culture. This emergent culture—the Culture of Conscience—is all around us; indeed, we already inhabit it.

A Culture of Conscience is taking hold so broadly that some might dismiss it as too ubiquitous to characterize as a sociologically momentous event. But with it comes new priorities and accountabilities that are steadily transforming the way we work, live, prosper and measure success. The consequences are not confined to one or two business sectors; every business, large and small, will be affected by it. It’s an epochal cultural shift. The question is, how will your business thrive in it?

The values and assumptions that are fueling a new wave of business innovation are highly distinct from the system that preceded them. The next generation of leaders and managers, those young people who have grown up with high-speed connectivity as a basic utility, and with access to and the ability to manipulate media as a basic assumption, already believe it’s possible to catalyze broad and positive change, both as individuals and through their engagement with business. They readily assume the responsibility of their own power to change the world with the casual effortlessness of riding a bicycle.

One of the most indicative aspects of this new culture is the Conscience Culture players, but there is such a wide-ranging and continuously expanding cast of players that it would be impossible to commit a complete list to print. However, they do all have one thing in common—a mission for good.

Social Enterprises and Incubators

A hybrid of for-profit commerce and social-impact agenda, it’s been estimated that social enterprises already contribute upward of $200 billion to the U.S. economy. One of the first and most famous social enterprises was the restaurant Fifteen, founded by celebrity chef Jamie Oliver. It’s not only a successful restaurant, it’s famous for its apprentice program, which trains young people who, in Oliver’s words, “have faced enormous challenges in their lives,” helping them enter society with both professional skills and dignity. The restaurant donates all of its profits to charity while enhancing the Jamie Oliver brand emblazoned across his for-profit businesses. But the model does generate profit and has inspired a new generation of people to imagine and build enterprises that have positive social impact at their core. Social enterprise harnesses the passion and energy of entrepreneurship as a force for good.

Certification Associations

“Green” products—from chocolate to detergent—promote the notion that by buying them, we are minimizing harm to people and the environment. Fair Trade certification—in which companies are audited by Fair Trade USA and earn the right to use the Fair Trade Certified label—has been one of the more successful of these models. It’s widely recognized and well branded, and the term has become part of the general lexicon for many people. But even the Fair Trade model, though in my opinion a laudable advance, is an economically imperfect system, as it arguably manipulates pricing albeit for a humane purpose. Carbon offsetting, the ability to “offset” your “carbon footprint” by funding programs that, through a carefully thought-out calculation, claim to put things right again, sends a good message, but does offsetting really solve the root cause of the problem it highlights?

Goodness Marketplaces

Goodness marketplaces, both online and real world, aggregate conscientiously sourced and created products and experiences. Etsy started the online trend and continues to be among the most visible brands, although a 2013 update of its guidelines, downplaying “handmade” products and focusing instead on “unique” products has resulted in an exodus of many of its original vendors. These revised definitions and subsequent terms of service have enabled mass producers of cheap imports, many from Asia, to promote their goods on the site (which are, as you’d imagine, priced considerably lower than the artisanal products upon which Etsy built its initial brand). The controversy is instructive, as it has created opportunities for emerging online marketplaces and communities like Zibbet, Dogoodbuy.us and Fashioning Change.

Goodness marketplaces also include physical retailers committed to selling conscientious goods and services, from farmers markets and small-scale retailers to Whole Foods (I can’t resist noting the irony of their seeming monopoly on the goodness category) to the School of Life. The latter is both an actual storefront in London and an online community that sells learning experiences. These experiences include field trips with experts and Sunday morning “sermons,” which are decidedly secular TED Talk–style lectures from thinkers, artists and philosophers.

Democratizing Enablers

Domains of human endeavor that were once inaccessible or reserved only for the elite are becoming available to all. Crowdfunding and microfinancing are modalities for providing direct fiscal support to entrepreneurs as well as causes that we personally believe in. They’re evidence of this desire to enact something, to impact directly rather than relying on secondary or tertiary impact. Out of this desire comes the “frugal tech” movement, with its mission to provide the benefits of computing with extremely low-cost materials. Among the movement’s successes is Raspberry Pi—developed by the nonprofit Raspberry Pi Foundation—a low-cost single-board computer that empowers children to learn computer programming. Meanwhile, online communities like iFixit are harbingers of an increasing desire to collectively and individually repair and extend the usefulness of the things we already own.

Built-In Philanthropy

This arena includes what are currently called “one-for-one businesses,” like TOMS Shoes and One Water. You buy a bottle of water and you concurrently give a bottle of water. In the case of One Water, some of the purchase price funds the renovation of a village water pump in sub-Saharan Africa. It’s an easy model for consumers to understand, although TOMS Shoes—which provides a pair of shoes for the poor for every pair you buy, found itself criticized for not addressing the root cause of poverty. The company promptly adjusted its model with TOMS Glasses, which supports and funds vision care in disadvantaged communities rather than providing a straight product-for-product donation.

These models aren’t easy to sustain, particularly in the FMCG (fast-moving consumer goods) category. One Water has struggled to get footing in supermarkets because mass retailers that carry FMCG products force margin down so low that it’s next to impossible to make a profit while delivering the social benefit. But people will pay for brand prestige, and context is everything. Starbucks carries One Water because of the premium and conscientious message it sends about the Starbucks brand.

Other emergent in-built philanthropy models are experimenting with incentives that facilitate automated micro-donations to social or environmental causes. For example, Mogl, a restaurant loyalty app in California, automatically donates a percentage of your restaurant bill to feeding people. You collect “meals donated” instead of points, so that the amount that you give is a new kind of “loyalty” currency. It’s an effortless incentive to use the service and eat out more—and it’s a differentiator for the service provider and the participating restaurants, as well as a braggable for the person using it.

Impact Investing and Socially Responsible Investing Vehicles

Impact investing is both a philosophical approach to investing and a fast-growing category of financial instruments. Unlike socially responsible investing (SRI), which uses a negative screen to avoid certain investments, this type of investing deploys a proactive approach, a positive screening process, to solve social and environmental problems. Both types are growing, and if you surf the financial and investment press, you’ll quickly see that both are buzzy, even if some of the parameters to describe them are fuzzy.

Here’s what catches my eye, though: although they don’t always deliver a competitive return, these vehicles continue to attract investment, suggesting that some investors value more than personal gain. Research by JP Morgan and the Global Impact Investment Network showed that investor groups had planned to commit $9 billion to this asset class in 2013. In India alone, the impacting investing category has been estimated to be growing by 30 percent annually. According to an article in the Financial Times, it’s difficult to measure the size of the category, but one estimate suggests that impact investing could attract upward of $1 trillion over the next ten years. Socially responsible investing leads the trend; by 2012, more than $3.7 trillion was invested in this category in the U.S. alone, and the growth continues.

In traditional investing, decision factors boiled down to a simple binary truth: “either you make money or you don’t.” In the Conscience Economy, it’s “you make money and make a difference, or you make more money and pass on the real costs to others.” This is an evolution worth watching because it signals a motivational shift among a particularly rigorous and demanding sector of people. Huge gains are not the only investment motivator, which suggests that in the future there might be different kinds of profit. Emotional profit and time profit, for example. It’s been called the next revolution in finance, following on the heels of venture capital as a major driver of innovation and economic transformation.

Media

Trade publications like CSRwire and Business Ethics, aimed at CSR professionals and sustainability specialists, have proliferated for more than a decade. More recently, new consumer lifestyle media properties like GOOD, SHFT and Upworthy appeal to a young cohort driven by a passion for making a positive difference in the world. TED Talks have become a widely respected forum for Conscience Culture ideas to get airplay. But mainstream media brands regularly report on increasingly conscientious business and social phenomena, too. Not a day goes by when I don’t spot something in the news, in the media or online that expresses a Conscience Culture point of view, whether it’s a story about renewable energy, genetic engineering, food safety and security, social entrepreneurship, ethical (or unethical) business practices, conscientious consumerism, diversity in the boardroom, dilemmas of sensor technology and privacy or debates on financial reform.

Role Models

Visionary business leaders and entertainment celebrities personify the status aspirations and lifestyles of the new culture. Although philanthropy as an overt demonstration of wealth goes back generations, there is a renewed glamour associated with making a real difference in the world. Many of our most admired role models now augment their glamour and success by using it to advocate for and support social good. Whether establishing major foundations, building schools, adopting a virtual Benetton advertisement of diverse children into their families, becoming U.N. Goodwill Ambassadors or speaking out on topical human rights and environmental issues, the world’s most visible and famous people are no longer mere paragons of success, wealth and sex appeal.

Actors Jane Fonda and Paul Newman may have been the forebears of this new kind of fame. Steve Jobs brought rock star status to visionary tech leadership. Today, new entrepreneurs like Lauren Bush Lauren and Blake Mycoskie are heroes among a generation of socially motivated entrepreneurs as they each build ventures that seek to convert consumers into cause-oriented donors and community participants. Edward Snowden, divisive among some, is an iconic voice for those concerned about what’s happening with our online data. Even Pope Francis has impressed a new generation of nonreligious people with his media savvy and his leaning toward inclusivity. Perhaps more than ever before, status and celebrity are enmeshed with a call to change the world for the better.

Professional Services and Consultancies

A broad range of specialized professional services have been evolving for over a decade. Most were purpose-built to bring professional strategy support, management advice, business reengineering expertise, financial analysis and marketing communication support to nonprofit organizations. The expertise is beginning to move in the other direction; knowledge gained in the public and nonprofit sectors is increasingly applicable to for-profit businesses.

This category of service providers includes CSR strategy agencies, design firms, sustainability consultancies, social impact practices within the big management consultancies and environmental and cause marketing agencies.

Obviously, any business needs to be relevant in the wider culture in which it exists. This means operating in sync within the cultural value system, meeting and exceeding cultural expectations and being one of its players. The most robust businesses are those that not only function within the culture but drive it forward, so what type of player will your business be?

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