5 Questions to Guide Your Conscious Business Model
How a Doughnut Economics framework can help you create a business that blends purpose with profit
In 2019, close to 200 chief executives — including industry leaders at Apple, Pepsi, and Walmart — came together to issue a statement as the Business Roundtable, redefining the “purpose of a corporation.” The message? Enterprises can no longer focus solely on delivering returns to their shareholders, and instead need to be conscious businesses responsible for their impacts on employees, suppliers, and the environment.
These are great words, in theory. But today’s capitalist business world, in many ways, doesn’t support or reward businesses that don’t focus solely on growth. That makes it difficult to craft a conscious business model to guide your socially conscious business' value creation.
Fortunately, business leaders spearheading the conscious business movement are working hard to build new business models that prioritize people, suppliers, and the environment alongside traditional value creation. And one framework that has emerged as a promising guide is economist and author Kate Raworth's Doughnut Economics model.
Doughnut Economics: Providing a New Model for Conscious Capitalism
Doughnut Economics proposes a new economic mindset that focuses on meeting all of humanity's needs: not only generating wealth for a select few, but meeting the basic human needs of all. To change a world where people are consuming natural resources at a rate 1.75 times faster than the planet can regenerate them, Doughnut Economics proposes a new, conscious capitalism that meets everyone's basic human needs without overshooting our ecological ceiling. The result? A regenerative and distributive economy that doesn't leave anyone behind.
The conscious way: companies' business operations should fall within the "safe and just" doughnut of the Doughnut Economics model—meeting humanity's basic social foundation without overshooting our ecological ceiling.
"Doughtnut Economics is an incredible conceptual framework to understand how to meet the interrelated human and planetary limits and needs for a regenerative future — to deliver community thriving, economic dignity, climate justice and even joy, for all," says Angela Wallace, founder of the Angela Wallace Impact Agency.
As a conscious leader, that means building a company that replaces the goal of "endlessly growing" with an approach that ensures thriving for all. Conscious leaders should replace the usual growth bell curve with a doughnut model, and ensure that all of their business activities fall within the doughnut.
Five Questions to Guide Your Conscious Business Design
One central question Doughnut Economics asks, according to the Doughnut Economics Action Lab, is: "What would make it possible for an organization to become regenerative and distributive so that it helps bring humanity into the Doughnut?"
There are five key traits that business leaders should look at when building out their conscious companies, according to enterprise design theorist Marjorie Kelly: purpose, networks, governance, ownership, and finance.
Use the guiding questions below to start your inquiry into how you can integrate Doughnut Economics principles into your company's purpose and business model.
1. What is my company's purpose?
Sure, you want to generate revenue. But what other positive impacts does your company strive to achieve? Do you want to transform the way educators teach? Bring sustainable design to daily essentials? Give refugees a chance to earn a regular income?
Think of this as merging your company's higher purpose with its business goals. Cooperative Home Care Associates, for instance, is a B Corp-certified company in the South Bronx that provides high-quality care for lower-income elders and individuals living with disabilities. Its mission is to make quality home care affordable while also hiring 600 low-income and unemployed women a year. And their purpose has driven strong revenue, as well — they currently report revenues of $65 million a year, according to Fifty by Fifty.
2. What do my company's networks look like?
Your company's networks include all of the people that come to interact with your business: its customers, employees, suppliers, contractors, and partners. When looking at your networks, ask yourself if they are aligned with your organization's conscious culture. Do you share the same purpose? Do you hold similar values? Do all of your networks work towards generating positive value for people and planet?
Make sure you're proactively seeking out suppliers, partners, and employees that align with the conscious leadership you're trying to instill in your enterprise. One conscious company — women’s clothing brand Eileen Fisher — does this by partnering with carefully selected suppliers, transparently sharing its supply chain, and buying back and reselling clothes from its value-aligned customers.
3. How is my company governed?
What does your organization's governance look like? Your company's decision-makers will, ultimately, determine the organization's path. Whether we're talking about founders, directors, or managers, these stakeholders should be diverse and empowered to share their viewpoints.
Cooperate Home Care Associates also provide a shining example of how this can be done. Its employees are part of a union, have a labor management committee, and hold eight of the company’s 14 board seats. When decisions are made, they’re largely made by the employees who will be directly affected by them.
4. Who owns my company?
Company ownership might be made up of you and a co-founder, investors, or your employees. Who owns the land your company operates on, the assets you create (such as data or knowledge), and the revenue generated?
Employee ownership is quickly emerging as a great way to build community wealth. South Mountain Company, a design-and-build firm based in Martha’s Vineyard, is 100% employee-owned — a decision that founder John Abrams says has transformed the company.
“The people who are making business decisions bear the consequences (and the rewards) of those decisions—and they truly have the power to set the course of the business,” Abrams told Fifty by Fifty. “That causes a tremendous level of engagement.”
5. How is my organization financed?
Finally, it’s critical to look at how your organization is financed. If a firm has invested in your company, what are they looking for in return? How do they define success? And how does that definition then impact how you operate your company?
Traditional venture capitalist financing has demanded that companies grow returns as quickly as possible. However, impact investment firms now exist that look for slower, steady growth, along with returns for employees and the environment. Patagonia’s Tin Shed Ventures, for instance, will only invest in startups creating “solutions to the environmental crisis.” They don’t take a controlling stake in their portfolio companies, nor do they require a seat on the board of directors. Financial returns are important — but Tin Shed Ventures “place environmental and social returns on equal footing.”
Expand Your Conscious Company’s Impact
Doughnut Economics’ framework isn’t one that should be used by companies looking for a public-facing certification or stamp of approval, as that’s not currently allowed by the Doughnut team — and for good reason.
“The Doughnut team is determined to avoid the abuse and misuse of these approaches and concepts to 'greenwash' or 'purpose-wash' businesses,” Wallace explains. “For the time being, however, companies are permitted to bring the Doughnut into their internal operations and strategies without any public-facing promotion.”
For now, the Doughnut framework provides an excellent launch point for companies looking to expand their impact and find new ways to build their purpose into their company’s processes. To get extra support in understanding how the Doughnut framework and conscious business methods could create change at your company, reach out for a free consultation with Angela Wallace.
© Angela Wallace Impact Agency
Authored with content co-conspirator Kenza Moller: professional story-telling for impact-oriented companies, agencies and thought leaders.
