Why are more and more companies adopting human leadership? Because adding this aspect to their way of doing business gives them a competitive advantage.
Once upon a time, there was a generation of business leaders who thought only of turning a profit. They set in motion an entire apparatus with the sole purpose of obtaining ever better financial returns. For them, being successful meant accumulating wealth, regardless of the human dimension of the business: their workers, their suppliers, their customers, or their company’s vision and purpose. “Doing” was more important than “being”.
Specialists agree that these leaders had failed to develop as people and lead conscientiously and wisely. “To be successful in business, you need to deal with human beings, who are conscious beings,” says Fred Kofman, Google’s leadership development advisor and director of the Conscious Leadership Center of Tec de Monterrey, in his book Conscious Business.
That generation has not entirely disappeared from the business world. But in recent years, their opposite has come into the spotlight. These are leaders who have understood that success is the result of integrity, responsibility, honesty, empathy, trust and serving others.
In their book, Conscious Capitalism: Liberating the Heroic Spirit of Business, John Mackey, founder of the Whole Foods Market chain, and Raj Sisodia, professor of Global Business at Babson College, claim that this is a new way of thinking about business, to make it more aware of its mission and impact on its surroundings.
They’re part of a transformative group with a clear purpose, who do not just organize or act mechanically, but are committed, favor the personal and professional growth of their workers, add value, do business that contributes to society and do not react instinctively or are obsessed with controlling their employees. These people break the usual stereotypes and inspire others to achieve goals.
Norman Wolfe, chairman and CEO of the consulting firm Quantum Leaders, defines it not as a new beginning but as the next step in the evolutionary process of individuals, organizations, and society. There are many management theory specialists, such as the US business consultant Jim Collins, who affirm that this type of purposeful and conscious leadership is one of the main aspects distinguishing a company from its competitors.
“This leadership is based on our common human capacity to be aware, to realize, to feel, to empathize, to connect with each other, not just a physical exchange of energy and matter,” explains Kofman.
It’s a growing trend. According to Andrés Fabre, founding member of the Mexico chapter of the Conscious Capitalism organization, more and more companies in Mexico and worldwide are adopting this culture.
Leaders like Sundar Pichai, CEO of Google; Jeff Weiner, CEO of Linkedin; Jack Ma, CEO of Alibaba Group, and Bill Gates, co-founder of Microsoft, are part of it.
“Fortunately, we’re pleased to see an increase in this awareness in Mexico,” says Fabre. “The goal in the Mexico chapter is to affect 1,000 companies. We’ve already reached more than 1,800 individuals and almost 40 companies are starting the transformation processes through different actions, courses and consultations.”
It’s a significant growth, but according to Kofman, it would be an exaggeration to speak of a new era of leadership. “There have always been all types. There were very conscientious and empathetic people in the 90s and there are authoritarian people today,” he says. “The fact is that now, in the past and in the future, conscious leadership is key to human flourishing.”
And it’s also a fundamental element to help solve the urgent problems of each generation. In the current generation, for example, specialists agree that the focus should be on being conscious of people and caring for the environment. Moreover, assuming this kind of leadership translates into positive results for business.
“True conscious leadership generates more profitability than the previous way of working, not less,” emphasizes the director of the Tec de Monterrey Conscious Leadership Center.
What are the characteristics of a leader with purpose? How do you develop them? How long does it take to put them in practice? How do you communicate them to team members? Specialists agree that as soon as the subject is mentioned, these questions follow one after another. Although they may vary, there is one question that people always ask: Why do it?
The benefits are mutual for the company and its environment. These benefits range from attracting the best talent and having happy employees to achieving better returns on investment and being more attractive to customers. Generally speaking, this culture has a real competitive advantage in the business world.
“Companies do better in all aspects. For example, their employees are more satisfied, their collaborators are much more productive, they have access to much cheaper capital at better prices, and they have more customers,” says Fabre.
Global figures from the Conscious Capitalism organization indicate that companies belonging to the movement register 147% more earnings per share on average than those that don’t practice this culture. In addition, 53% of workers say that having a job where they can make a positive impact is important to their happiness.
The effect is also reflected in other internal aspects. Inspired and purposeful employees generate productivity of 225%, while dissatisfied workers achieve 71%. Retention also increases: a 2017 global survey reveals that employees who find meaning in their work are 2.8 times more likely to remain in the organization they work for.
In the past three years, Conscious Capitalism also identified that 42% of companies that did not have a purpose lost income, while 85% of those who did showed positive growth.
Although Rocío Díaz, Director General of the Mexico chapter of Conscious Capitalism, warns that the financial results of this type of initiative are long term, this has not discouraged leaders who have already begun the philosophical transition in their organizations. “The group of leaders we’re working with do it because they believe in it and know that their companies will do well, but they do it more out of conviction and a belief in their hearts,” maintains the specialist.
The Conscious Business Center identifies 12 essential steps a leader should follow in the transition process form unconscious to conscious business.