Philippe Joannis (Founder, 5fois5): “Purpose before profit: this inversion of priorities is the key to conscious capitalism”

Founder of French Consultancy 5fois5, specialists in providing training and advice to company directors on conscious leadership, Philippe Joannis decodes the levers of conscious capitalism: the main one being the need for a business to reposition its quest for profit as a means to an end, not an end in itself, in order to achieve a larger, more collective goal.

Founder of French Consultancy 5fois5, specialists in providing training and advice to company directors on conscious leadership, Philippe Joannis decodes the levers of conscious capitalism: the main one being the need for a business to reposition its quest for profit as a means to an end, not an end in itself, in order to achieve a larger, more collective goal.


 

Leaders League. In your work Plaidoyer Pour Une Enterprise Consciente (the case for the conscious company); you call for a reinvention of the narrative, moving away from generating profit and returns for investors. Why?

 

Philippe Joannis. The narrative around conscious capitalism is well established; yet we mustn’t forget that even capitalism has allowed a section of humanity to get out of extreme poverty and has improved a number of indicators of quality of life around the world. That said, its practice has not been without social and environmental collateral damage. When the conscious capitalism movement emerged a dozen years ago in the United States the rate of trust in directors and multinationals was extremely low, in the region of 15%...which led to a debate on what the role of companies should be.

 

Conscious capitalism is based on the ideal of a company being more aware. What exactly does that involve?

 

A conscious company is one that mixes and manages multiple perspectives and which is able to incorporate the interests of all stakeholders. It’s equipped with a broader ‘complete’ conscious from which flows a different style of organization, designed to take into account factors beyond a company’s traditional concerns, such as consumers and the planet. I would say that a conscious company is connected the rest of the world, aware that it forms part of a whole. This is the opposite of the traditional approach which was entirely centered around making money and excluding all those on the outside.

 

To your mind, does this also mean inverting certain priorities, such as the traditional one of placing profit before purpose?

 

Indeed, this is an essential step: the conscious company does not have to renounce its desire for profit, but profit must become the means through which a greater ambition is realized. The conscious company places purpose before profit. This inversion of priorities is the key to conscious capitalism.

 

For companies implementing this transformation is no small undertaking. What makes it worth the effort?

 

Because living in denial about where capitalism is today will lead to one crisis after another: ecological, social, financial etc. Last November 1,500 French scientists signed an environmental protection appeal. A few months’ later heads of 400 businesses responded in kind with their ‘Dare for Tomorrow’ manifesto, in favor of ecological transition.

 

What role does the director of a company play in this necessary transformation?

 

The guy at the top, faced with the imperative to consider the interests of all stakeholders, has a real moral and organizational responsibility. They must practice conscious leadership, which means renouncing the culture of the all-powerful leader, while demanding the same level of performance from themselves, which is put at the service of the collective. A different company culture can be established.

 

What distinction would you make between conscious capitalism and corporate social responsibility?

 

While conscious capitalism entails a fundamental rethink of the purpose of a company and a new vision of what it must be to itself and others, CSR is content to impose an array of supplementary constraints in order to frame existing practices and supposed dangers. Each follows a very different logic.       

 

Interview by Caroline Castets

(Translation: Simon McGeady)

Read the full Special Report: Conscious Capitalism

What is the role of a company? Two schools of thought, two rival philosophies, have vied for supremacy for over twenty years now. Is it to put the interests of shareholders above all else, as Nobel prize-winning economist Milton Freedman declared? Or is it, in addition to the shareholders, to serve other stakeholders such as staff, clients, suppliers and beyond?
Summary Nicolas Notat (President of Vigeo-Riris): “Staff and shareholders are two constituent parts of value creation” Jean-Luc Petithuguenin (Founder, Paprec): “Profit is the oxygen of a company, but it's only a means and not an end” “Nurturing well-being in the workplace and provoking the curiosity of the individual is vital to economic performance” “A reasonable level of profit is important to guarantee the continuous distribution of capital” “If a company is driven by short term profit, it’s doomed” Serge Papin (CEO, Système U): “The director must turn his company into a place of reconciliation for the different stakeholders” “It’s impossible to be profitable in the long-term while ‘massacring’ stakeholders” Stanislas Guerini (French parliamentarian): “Reimagine businesses by removing the twin barriers which oppose capital and work” Making Capitalism More Moral

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