Newsletter – July 2012

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  • Newsletter – July 2012

The Sustainable Nature of Conscious Business

In the traditional economic rationalist model of doing business the primary business imperative is all about competition and win-lose strategies. The idea is that the market sorts itself out into winners and losers who may go out of business. Economic theory promotes the idea that markets should be left alone to find their own natural balance.

 In fact governments understand that market monopolies, duopolies and cartels of power can distort markets. Experience shows that larger powerful companies can undermine smaller competitors and leave suppliers vulnerable to manipulation and threat by these typically large national and multi-national operators.

In response most federal governments enact some form of Anti-Competitive legislation and often discharge that watchdog function through a dedicated body such as the Australian Competition and Consumer Commission (ACCC). This is a recognition that most free markets are not self-regulating as one might hope.

In Australia we have watched over time as the petroleum industry has changed its retailing mechanisms away from dedicated owner-operator sites and towards industry owned sites or sites owned by such national food chains as Coles or Woolworths.

The establishment of 3rd party channels to sell fuel whereby an incentive is given (shopping dockets), increases the “share of wallet” that large national food retailers such as Coles and Woolworths extract weekly from the average consumer. A key strategy of these two retailers is to increase over time their share of the repeat food, beverage and lifestyle purchases that the average family unit makes cyclically.

The emerging market concentration of petrol retailing sites in the hands of a few operators can create monopolistic effects over time. As an example one may see corporate operators start to dictate profit margins in terms of fuel price once they reach a tipping point of market penetration.

Prices could theoretically increase over time if the dominant players decided not to compete as vigorously as might occur where more players existed in the market. Legislation is used as a key measure by governments to attempt to prevent this occurring.

The ACCC has recently spoken out about the same sort of trend appearing to emerge in the Australian liquor retailing industry. For some time both Coles and Woolworths have been buying up liquor retail sites and small businesses whilst also targeting hotels and also opening whole new chains of liquor stores (e.g. Dan Murphys).

The ACCC is now concerned by the documented allegations of bullying by major supermarkets that are appearing from suppliers to the liquor industry. This follows similar claims against the same supermarket chains by small suppliers in other industries such as milk, fruit, vegetables, bread, toilet paper and washing powder.

In all these supplier industries there are claims that pressure brought to bear by large chains has seen suppliers only able to successfully sell their products at near cost price or even at a loss. This unsustainable position has allegedly driven suppliers across many of these industries out of business.

Secondly there are claims that supermarket “home brands” are replacing local suppliers’ space and position on supermarket shelves. This again is a position that allegedly drives some suppliers out of business as they cannot compete on price or are not able to secure contracts to even sell their goods anymore through these chains.

Overall there is evidence emerging of a small concentration of national companies emerging with a large share of the average consumer basket of goods that are typically purchased on a weekly basis. The negative impact on consumers may eventually appear as loss of diversity of product choice as more “home brands” dominate shelves, whilst the economic health of the nation is impacted as more and more small retailer and supplier businesses go to the wall.

This is not going to produce a productive or diverse society of creative potential in the longer term. History has shown that any market dominance or monopoly power tends to produce suppression of opposition whilst prices to consumers rise over time even while choices of products diminish.

The Conscious Business movement now emerging across the world was in part born as a backlash against this ultimately destructive type of outcome for all stakeholders in society apart from the few dominant businesses in the market concerned. We have seen similar behaviour in banking, finance industries, derivatives, superannuation and retailing.

The Conscious Business paradigm is centred on a set of human values and principles that are more than “profit derived” as the sole justification for being in business. All stakeholders are seen as equally important in the world of Conscious Business. Shareholders are certainly a key focus, but not the sole focus in this world. Doing good is good for business.

The Conscious Business lives it values through its staff and its chosen business activities. The maxim “do no harm” is a key tenet of such businesses. Any short term economic thinking or business activity that undermines someone else, or that has negative community outcomes is avoided. Values are not trodden on for the pursuit of profit.

A conscious business is aware of the “footprint” it creates in the communities and the market economies in which it enters and competes. In a unitary view of life the Conscious Business realises it does have an impact, it does not operate outside the community or markets in which it occupies, and it practices engagement and ethical positive legacy creation in the communities it serves in.

The “value proposition” now has an added dimension in such a business. In traditional economic terms the value proposition was the real or imagined set of positives, features or benefits that accrued to the sale of a particular good or service for that customer. It was a proposition that existed in the vacuum only of what existed in that moment between business and customer.

In a Conscious Business the “value proposition” is also additionally the set of values that one uses to filter through the potential new ideas, business opportunities and decisions that get made by everyone at all levels of the business.

By this everyone energises the company brand by living true to its stated values. Everyone makes decisions aligned to values. Economic profit maximisation is not the sole driver of decisions. Each business action is a proposition of action aligned to values.

In many traditional companies there are mission and values statements adorning boardroom walls, and faithfully printed up in shareholder reports each year. The main users of these motherhood statements are often spin doctors who are paid to create images and beliefs that somehow the company is truly embodied in these values.

When one looks one finds they are in fact hiding behind this marketing camouflage to hide their agenda of domination and “any means to the profit end”. The truth for many businesses of this type is they pay lip service to all such values except the one “make maximum profits for shareholders”.

In contrast the Conscious Businesses strive to bring alive their stated values every day with every stakeholder with whom they interact or employ. People start to notice such values that are lived in this way and enjoy the refreshing change from the old cynical mainstream pretence.

When a business adopts ethical values it starts to become its brand experience. The stakeholders notice the business is authentic to its values. This increases trust in that business and people start to want to work for that business, do business with it, supply it, or be in partnership or service with it.

Everyone wins and the level of conscious engagement increases over time. The fostering of authentic conversations, dialogue and feedback based on trust enable issues to be dealt with, new thinking and creativity to emerge, and collaboration starts to result.

Once the Conscious Business is in constant and honest dialogue with its stakeholders you notice how this becomes systemic. You start to view your customers, suppliers, partners and associates as family or part of your tribe. You become loyal and protective as a result. Costs go down as staff turnover falls, and staff work to higher levels of satisfaction and productivity.

The resulting business system that emerges understands that the health of our business extends to the health of our customers, suppliers and other stakeholders. The Conscious Business then does not seek to rip them off, drive them out of business, or manipulate them in some form of win-lose arrangement. Everyone understands that we want all parties to be successful but still competitive.

Normally everyone in a Conscious Business System embraces sustainability as an emergent value of their mature relationship. Excellence and quality become aspects of this sustainable culture fostered ultimately by leaders who have higher levels of consciousness that can view complex business systems as living entities involved in complex interdependent dynamics.

Such leaders are rare as they intuitively carry both a rational economic left brain intelligence in harmony with a right brain consciousness informed by values, spiritual and emotional intelligence mindsets. Such leaders are systemic, unitary, in outlook, and can simultaneously hold conflicting rational, emotional and problematic states in view as they seek the sustainable outcome.

The world has shown firstly through the GFC, and now through the ongoing symptom of the Euro crisis that we are not living in a sustainable world in financial, business, or environmental contexts. The system is broken and cannot be fixed by our chosen leaders who cannot or will not see beyond their own self interests.

In this changing world one can imagine a split emerging in the business environments of countries like Australia. One can imagine the emergence of a few top down monopolistic companies who are able to get away with building win-lose models of business on large scales where our weak governments have poor legislation or lack of will to challenge their power.

The other side of the divide will increasingly see the new bottom up Conscious Business model emerge where sustainable business models built on human values replaces economic rationalism. This trend is a natural systemic reaction and adjustment that occurs when any system is out of integrity or is failing.

All systems tend to produce re-balancing impulses when dysfunctional. The GFC and the years since has been an indictment of the destructive effects of self regulation or no regulation of business which acts in a moral vacuum. The whole system will either crash as many predict or will evolve a new mechanism to re-balance the system.

The world cannot sustainable move forward under these old paradigms. The previous ages of mankind have all heard from wise and spiritual sages that renewal and wisdom emerge from the trauma and mistakes of each Age of our evolution.

The era of Conscious Business is now dawning upon us in the wake of the crisis of our era. The era of greed and the unrestrained profit focus via morally bankrupt business practices is now seen as wrong and the basis for this crisis by many respected commentators. It is just that no one seems to have new solutions to old problems.

Now is the time to challenge ourselves about what sort of society we want. The business as usual philosophy can only create more inequality and abuse of power by a select few against the many. We owe it to ourselves, our children and to our communities to bring energy and momentum to the Conscious Business way of being and doing in business. I hope to see you there!!

Enjoy your month consciously!!

Richard Boyd

Director, Conscious Business Australia

About Us

Conscious Business Australia is uniquely positioned to assist you in your business journey towards the new economy. We transcend traditional old economy business and leadership coaching and consulting models by bringing to bear our innovative and leading edge Conscious Business Methodology.

Our unique combination of skills, insight, experience and methodologies enable us to stand apart from the tired old coaching and consulting “experiences” that still dominate the business world using old economy constructs and principles.

Come across and try the Conscious Business Australia “experience” which is built on the intersection of psychology, neuroscience, design, project management, marketing, channel design, and digital and physical product design/innovation/imitation philosophies. Have a look at our website for more information, for a much more detailed version of newsletter articles, and for further articles and notifications of other courses and events that we run on a regular basis.

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