What Is a “Conscious Business?” (as Defined by a Conscious CEO)
In this post, you’re going to learn exactly what is a “Conscious Business.” You’ll also learn what a conscious business is not.
And to do so, we’re going to hear from Meghan French Dunbar, a leader in the space of purpose-driven business.
Meghan is the former CEO of Conscious Company Media, which was the nation’s leading media company dedicated to purpose-driven businesses and social enterprises.
And now she’s the co-founder of a new impact-driven venture called Womxn Led, which is an international community bringing womxn business leaders together to grow and thrive.
Let’s dive in.
What Is the Meaning of “Conscious Business?”
Conscious Business: A Definition
💬 Meghan French Dunbar
@MeghanFrenchDunbar
There are all sorts of people who talk about this stuff, but there’s no agreed-upon definition.
So this is my own personal definition: a conscious business is a business that:
- Is led by a conscious leader
- Takes all stakeholders into account
- And has a higher purpose beyond profit
What is Conscious Leadership?
💬 Meghan French Dunbar
@MeghanFrenchDunbar
There are a lot of companies out there that have a sustainability department and they’re doing great things.
But leaders at the top aren’t bought in, they aren’t aware of their actions, and they aren’t actually acting as conscious business leaders. There are plenty of examples out there that I’m sure people are aware of.
The conscious leader is someone who actually walks the talk, who has determined values and actually lives by them as someone who is conscious and aware of their actions on a daily basis, and who has the ability to respond thoughtfully rather than react.
These were the kinds of ways in which we defined “conscious leadership” at Conscious Company Media, and these are the capacities possessed by the best conscious leaders that I ever came across.
This would be people like Justin Rosenstein of Asana; Eileen Fisher of Eileen Fisher; Kevin Rutherford of Nuun: all people who exhibit fantastic leadership.
📝 Cory's Note
As Meghan points out here, there are significant differences between Corporate Social Responsibility (CSR) and authentically purpose-driven businesses and business leaders.
And while there isn’t any hard and fast defining line, it’s important to go through the exercise of sorting through what is what.
TOne way of doing so is to look at the leadership. Learn more about who they are, what their origin story was for getting into business, and how they see the relationship between their business’s operation and success and the welfare of people and the planet. Meghan provides some excellent examples here—other leaders that I’d comfortably add into the conversation: Giancarlo Marcaccini with Yogi Tea, Corey Kohn with Dojo4, or Madeleine Shaw.
Stakeholder Business Model
💬 Meghan French Dunbar
@MeghanFrenchDunbar
This is a big, BIG issue.
Most businesses on the face of the earth have subscribed to the idea of shareholder supremacy.
This has even gotten to the point where people have said…
We have a fiduciary obligation, we have a legal obligation that we have to maximize profits for our shareholders.
And as a result of that, businesses have gotten away with murder. This is the reason why we have companies that pollute rivers and do terrible things to their workers.
It’s because they’re saying they actually have a legal obligation to maximize the profit for their shareholders (at the cost of everything else). This has been replaced in the last 30 or so years with the idea of a stakeholder. A stakeholder is anyone or anything that your company’s actions affect.
📝 Cory's Note
Meghan here is referring to the concept of “Shareholder Primacy.”
In this style of capitalism, the core purpose of a business is to produce profits or returns for its shareholders or investors.
This is contrasted with a newer, more equitable approach to business called “Stakeholder Capitalism.”
Stakeholder Capitalism is a system of capitalism where businesses are expected to serve and consider all stakeholders, not just shareholders in their decision-making.
This could also be known as “triple bottom line” businesses, businesses that put their profits on par with their social and environmental impacts.
Stakeholders (as Meghan will say more about) include employees, customers, the environment, local communities, and more, along with the investors and shareholders.
Meghan’s mention of the “fiduciary obligation” and the “legal obligation…to maximize profits for our shareholders” has become popularized within the business world by a quote from economist Milton Friedman:
“There is one and only one social responsibility of business–to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”
💬 Meghan French Dunbar
@MeghanFrenchDunbar
A stakeholder would be:
- Your employees (they’re number one)
- Your customers
- The community that you operate in
- The environment
And yes, your shareholders—your investors—are also stakeholders.
To understand the stakeholders affected by your business or organization you can make stakeholder maps and ask, “Who/what are all of the people and entities that our company’s actions directly affect?”
A conscious leader takes all stakeholders into account. And a conscious business really needs to be looking at its effect on every single stakeholder that the company contacts and attempt to have a positive impact on those stakeholders. Period.
📝 Cory's Note
There are useful tools and resources to help businesses better understand the stakeholders that they affect.
While not explicitly a Stakeholder Map as Meghan was describing it, the B Impact Assessment is an incredibly robust tool provided by B Lab, the nonprofit behind the B Corporation Certification.
When completed, the assessment offers a business a look at its impact on its community, customers, employees, and the environment.
Conscious Business = Purpose > Profit
💬 Meghan French Dunbar
@MeghanFrenchDunbar
This is where we talk about the why behind the business.
Patagonia is the conscious business poster child. It says this explicitly in its purpose statement:
“Build the best product. Cause no unnecessary harm. Use business to inspire and implement solutions to the environmental crisis.”
That’s in their stated purpose!
And yes, they do make money as a result of their purpose.
But your purpose as a company cannot just be to make money. It must be something much bigger than that, a higher purpose beyond profit.
📝 Cory’s Note
This final point is key from Meghan. Really, it’s what tops off the whole definition of a “conscious business.”
I think this is best explained with another example.
Let’s take Dean’s Beans, founded by Dean Cycon. mission of Dean’s Beans is simple:
“…use specialty coffee as a vehicle for positive change.”
When founding Dean’s Beans in 1993, Dean had the idea that he’d create change in the coffee industry through showing that an ethical, fair, and just coffee business could be sustainable, incredibly impactful, and profitable.
He knew that a coffee business could be run fairly for all stakeholders involved while remaining profitable and highly successful by traditional business standards.
The businesses success was, and continues to be, a vehicle for achieving more.
Coffee farmers are paid fairly and are able to invest in their own businesses and communities. Dean’s Beans becomes a model, showing that profitable and ethical business practices can coexist. The “big players” can no longer say it can’t be done.
Meghan French Dunbar
@MeghanFrenchDunbar
Those are the three key components of what we look at when we’re talking about conscious business.
Again, a conscious business:
- Is led by a conscious leader
- Takes all stakeholders into account
- Has a higher purpose beyond profit
That’s what I came up with after talking to over 1,000 business leaders in my time at Conscious Company.
Misconceptions or Misunderstandings about Conscious Business
Meghan French Dunbar
@MeghanFrenchDunbar
The number one thing that I see the most often is that, if a company has a sustainability department or a CSR (Corporate Social Responsibility) department, it is then, in fact, a conscious business.
I think of the way that we just described a conscious business as a holistic lens. Every facet of the company isn’t “conscious” when we’re only talking about sustainability or a CSR department.
I think of the way that we just described a conscious business as a holistic lens. Every facet of the company isn’t “conscious” when we’re only talking about sustainability or a CSR department.
That is more just like a business with sustainability tacked onto the side.
Yes, they can do wonderful things. I’m not poo-pooing sustainability departments. They’re fantastic. I know wonderful people who run incredible sustainability departments and CSR departments.
But it doesn’t mean that the company itself is a conscious business.
You can be doing incredible things for the environment and treating your employees like crap. You can have a wonderful kind of diversity, equity, and inclusion initiatives and then maximize profit to the extent that you’re having negative externalities all over the place and doing terrible things to the environment.
I mean, there are all these kinds of trade-offs that you can make with sustainability departments. Monsanto has a sustainability department. Halliburton has a sustainability department. Those are not conscious businesses in my opinion.
📝 Cory's Note
We caught this earlier, but it’s worth mentioning again.
CSR (Corporate Social Responsibility) and truly mission-driven businesses are not the same thing.
While businesses with CSR departments and positions can fall under Meghan’s “conscious business” definition, it certainly shouldn’t be assumed.
In the most critical form of this, author Anand Giridharadas calls this “doing well by doing good.”
Companies use their CSR and impact-related initiatives to create the appearance of being a responsible or positive community member while on the other end causing significant destruction through their business practices or influence.”
For a deep dive on this, check out Giridharadas’ excellent book, Winners Take All
Conscious Businesses Out in the World
What’s a company that you think models what it means to be a “conscious business?”
Let me know with a comment below.
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This interview was edited and condensed for clarity, and originally hosted on the Social Entrepreneurship & Innovation Podcast.
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