Capitalism and awareness in the same phrase, it can be something that for many sounds contradictory, but for Thomas Eckschmid, founder of conscious capitalism in Latin America, is the key to a business model that not only generates social and environmental value, but also offers better financial results.
In a talk with portfolio, this expert explained how this line of thought works and why companies and nations must bet more about thinking about tomorrow, teamwork and generation of opportunities, which in competitive models in which the utility is the end to follow.
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“When one starts a business it is because he believes that he can do something better. There is the purpose, the cause of existing an organization,” said this expert, who with this phrase opens the door to a philosophy that gains ground in a context of uncertainty, low growth and need to rethink the rules of the economic game.
The four principles
Eckschmid summarizes conscious capitalism in four pillars, beginning with the purpose, which is nothing other than that “for what” guides companies beyond immediate utility. To this is added what he called as conscious leadership, understood as the commitment to care and improve the environment.
Thomas Echschmid, founder of conscious capitalism.
“The third is interdependence, the recognition that no business grows alone: it needs suppliers, customers, employees and even the neighboring community and finally, responsible culture, which shapes behaviors in favor of that common cause,” he said.
With all the above, Thomas Exschmid said that “with those four generating principles value real to society. The problem is that on the way many companies forget and end obsessed only with economic utility. ”
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From the neighbor to the planet
On the other hand, this analyst indicated that conscious capitalism is also an answer to the new nature of the competition and to better explain its point, it argues that before the fight was with the neighbor; while “today the true threat comes from anywhere on the planet.”
“In a globalized world, a decision of a distant government that goes up tariffs can immediately affect your business. That is why it makes no sense to look next to the side as an enemy: the challenge comes much further, ”he explains.
The economy demands more and more efforts and union by its various actors.
Hence its insistence on building business ecosystems that integrate companies, governments, families and even competitors; while concluding that “the only way to face uncertainty is working together. That is the invitation.”
The great argument to convince businessmen and investors is in the results, Since he recalls that the classic vision, that of Milton Friedman in the sixties, said that the only duty of a company was to generate profits for its shareholders and points out that “that is not bad, but it is incomplete. Today we know that we must generate economic utility, yes, but also social, environmental and emotional.”
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Likewise, the turn is not only ethical, it is also financial and at this point a study published with Harvard in the book ‘The practical guide of conscious capitalism’ where it says that the companies that apply these principles achieve, in a period of 15 to 20 years, results seven times higher than the average of the stock exchange.
“When you take care of your environment, employees respond with more ideas, suppliers give you better Conditions and customers prefer your brand. All that is economic energy that multiplies, ”he explains.
The economy demands more and more efforts and union by its various actors.
A model for governments
In another section of this talk with portfolio, Eckschmid does not leave the conversation only in the corporate field and believes that this philosophy can also guide governments. To illustrate it, it resorts to a metaphor, stating that “on an airplane, in case of emergency, you first put on the mask you and then help the next door.”
“Teaching is clear, before looking for prominence abroad, a country must guaranteer may their own citizens are fine. Defending others when you have vulnerable villages within your territory is irresponsible. First you have to strengthen the house, ”he warns.
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Conscious capitalism does not have a single “natural” sector, but Eckschmid recognizes that those who are closer to the consumer are those who first feel the pressure, highlighting that “the consumer is changing. He begins to buy different because he knows that his purchase decision contributes to a better future.”
That said, he cited examples of the circular economy, where companies lead networks to reuse materials instead of extracting new natural resources. It also mentions the shared economy, With models such as Uber or Rappi, which take advantage of existing assets to generate more value.
Conscious capitalism is a nascent trend in Latin America.
“In each industry there is space to apply the principles, but the closer to consumption you are, the faster the demand comes,” he summarizes.
Talk to the investor
In front of how to convince the classic investor, the one who only thinks of immediate results? For Eckschmid, the answer is to show that the long term pays more, so it remembers its experience in agriculture, highlighting that “lettuce sowings and in 90 days you have income, but sowing avocados and it takes five years to bear fruit. When they arrive, they change your income flow forever”.
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“The message is that the investor who only seeks to squeeze the present is deprived of future profits. The conscious entrepreneur is ambidieter: use a hand for the short term and the other for the length. If you stay alone with one, you are condemned to run out of business in the future,” he said.
With all the above, for Thomas Eckschmid, capitalism of the last century is exhausted and reduced to a single objective, which is economic utilityfell short in front of the current demands of consumers, investors and communities.
The economy demands more and more efforts and union by its various actors.
“Conscious capitalism, on the other hand, offers a more complete vision of companies that generate wealth, yes, but also social, environmental and emotional value. And most importantly, they are more profitable and sustainable over time,” he concluded.
Daniel Hernández Naranjo
Portfolio journalist
