Conscious capitalism is the next step in the IPA’s Here for Good agenda.
IPA President Tom Knox is focused on highlighting our industry’s capacity for good, and conscious capitalism is a good way of making that good fundamental.
Conscious capitalism takes the established idea of why businesses exist and turns it on its head. Businesses need to turn a profit to exist, but they should exist for some reason beyond profit.
Knox will explore Conscious capitalism and its benefits, at an event on 11th May.
So, why conscious capitalism?
It was a talk by Whole Foods CEO John Mackey at SXSW 2013, that first set Knox thinking about what Mackey calls “the heroic spirit of business” very differently.
It was a whole new angle on the relationship between businesses and the world that
Ed Freeman, a professor at the University of Virginia School of Business, and proponent of conscious capitalism, explains it like this:
“We need red blood cells to live (the same way a business needs profits to live), but the purpose of life is more than to make red blood cells (the same way the purpose of business is more than simply to generate profits).”
This approach gels very well with the growing body of research proving that consumers respond better (and give more money to) brands that demonstrate social values.
How do we know that businesses are doing good for the right reasons?
It almost doesn’t matter, at this point, whether businesses are doing good because they genuinely care, or whether they’re doing it because it’s good for their bottom line. The actual bottom line is that there is a gradual shift due to take place in the culture of capitalism.
A shift that’s hugely exciting.
Says IPA President Tom Knox: “Advertising has been instrumental in creating our modern world – fostering democracy, promoting choice and freedom. It is an inextricable part of our world and our current form of capitalism. Our world is changing – a new form of capitalism is emerging. Our industry can be as vital and essential to this new form of capitalism as it has been for the current form. This moment will be about diving into this new form of capitalism and understanding how we as an industry can harness these trends to lead our clients, have a greater impact, do good and ultimately be Here for Good.”
Says IPA Director General, Paul Bainsfair: “As the evidence suggests – and the stellar line-up of speakers on the day will no doubt attest – campaigns that adopt a purpose-led approach can help drive positive impacts as well as brand preference and sales. We are operating in a new world where advertising can play a vital role in bridging the gap between societal and corporate values.”