Our current business model is broken, but “conscious capitalism” may help us fix it, according to entrepreneur and creative director Craig Davis.
Davis, who will be speaking at Green Cities 2015 in Melbourne on 17 March, has been at the forefront of the global advertising industry for 20 years, developing advertising campaigns for some of the world’s biggest brands, launching iconic products and leading cultural change programs.
He argues that our current business model – based on 19th century ideology of businesses as money-making machines – no longer works in the 21st century.
“While business was once solely about profit, in our increasingly transparent world, and in a world where people want to make a positive contribution, this no longer works. Operating just to make money simply short-changes people – whether that’s staff, suppliers or the customer,” he says.
Today, our complex supply chains are less like machines and more like ecosystems – and Davis says recognising our interconnectedness brings with it a new way of thinking and working. The move from hierarchies to networks is inescapable.
People increasingly want to know that the products and services they purchase are ethical, sustainable and provide the producers with a fair price – whether that’s a carton of milk in the supermarket or a t-shirt made in a factory in China.
As we’ve seen in other industries, exploitation of workers, environmental vandalism or unethical treatment of animals can send shockwaves throughout an entire supply chain.
Davis says this is partly because people are now seeing that they “buy into” products, not just “buy them”.
“People are more discerning than ever before. While in the past they couldn’t see the consequences of making poor choices, today those choices are clearly visible – and they can see that we are all interconnected,” he says.
“Businesses are more obviously a system of interdependent players than ever before, and that system is more visible to anyone who is interested – you can no longer afford to have a cut-throat mentality.”
Conscious capitalists are unapologetic advocates for free markets, entrepreneurship, competition, freedom to trade, property rights and the rule of law. But as they adopt a higher purpose beyond profit maximisation, they reject the “business is war” mentality, look to create value for everyone in their orbit and create a culture of authenticity, empowerment and transparency.
“Conscious capitalism is about practising capitalism in ways that are more beneficial to more people and to the environment,” Davis says.
And there’s good evidence that it’s good for business too. Davis points to a raft of businesses – Patagonia, Zappos, Whole Foods, Google, Tata Industries, Unilever and Kingfisher to name a few – that are trying to “do well by doing good”. It’s about creating financial and social value for all stakeholders.
“Businesses in the property and construction industry need to start thinking about their supply chain and their stakeholders as part of an ecosystem. This is the first step to achieving genuine win/win partnerships, rather than just a series of tradeoffs.”
The leaders in the industry understand that supply chain engagement is essential if we are to build places that are good for people and the environment.
“Ultimately, the price of a building should be measured not just in environmental and economic terms, but in human terms too,” Davis says. On the positive side of the ledger, we should be thinking about value in human terms too. What is the value of helping people live, work and play together successfully and sustainably?
“Issues that sound ‘soft’ can have really hard consequences,” Davis says, “and it’s not about downside and risk, they can be huge net positives.”
Craig Davis will be at Green Cities 2015 from 17-19 March in Melbourne.
Romilly Madew is chief executive of the GBCA.