It’s a great time to be in India. Sure, it’s monsoon season, and heavy rains mean higher risk of malaria and bacterial illness, loads of traffic, and an inability to predict when it’s safe to dash out for an errand without being drenched. So what’s got an FSGer like me so excited?
To start, it’s opening the paper and reading a speech ITC Chairman YC Deveshwar gave to shareholders on July 29th, deftly explaining that creating meaningful value requires focusing on both economic and social benefits of the company’s products and services. Of course, it was also exciting to see FSG’s thinking on Creating Shared Value (CSV) mentioned in his speech. A couple key remarks:
- “Unfortunately corporates are often viewed through a very narrow lens that concentrates only on its ability to extend financial support to socially relevant projects. This approach ignores the immense transformational capacity of business in innovating business models that can synergistically deliver economic and social value simultaneously. As a result, on issues of corporate social responsibility, there is a disproportionate focus on outlays rather than on outcomes.”
- “Global research by renowned experts such as Prof Michael Porter and Mark Kramer of Harvard have established that societal value creation delivered through a strategic business context is more meaningful and scalable. The focus of strategic CSR is on outcomes that enhance the business context and simultaneously add value to the social dimension. A focus on outcomes spurs proactive innovation to deliver meaningful social interventions optimizing resources and capacities at hand.”
It’s also attending sessions like a recent event hosted by the Harvard Business School Club of India, with a panel discussion on “Higher Ambition: How Great Leaders Create Economic and Social Value.” The all-star panel was moderated by Paul Beckett, South Asia Bureau Chief of the Wall Street Journal, and included several accomplished business and thought leaders:
- Anu Aga, former Chairperson, Thermax Ltd., and Member, National Advisory Council
- Anand Mahindra (MBA 1981), Vice Chairman & Managing Director, Mahindra & Mahindra Ltd.
- Narayana Murthy, Chairman, Infosys Technologies Ltd.
- Nitin Nohria, Dean, Harvard Business School
- Flemming Norrgren, Co-Author, Higher Ambition
- Sir Ratan Tata (AMP 75, 1971), Chairman, Tata Industries Ltd.
- Ravi Venkatesan (MBA 1992), former Chairman, Microsoft India Private Ltd.
It was tremendous to hear titans of industry talking about the importance of corporate leadership in driving social change (and of course, it was also exciting to hear references to FSG’s article on creating shared value from earlier this year). Though the panel agreed business has a role to play in development of a better India, there were moments when the path forward didn’t seem quite clear. Much of the conversation focused on how to comply with local laws, treat employees fairly, reduce environmental damage, and avoid use of corrupt practices. Though such practices are certainly a good thing, the discussion raised the question of whether simply not doing bad is actually doing good enough, particularly here in India where social problems are so vast and “inclusive growth” is a frequent topic of conversation. It was terrific to hear several panelists, including Anand Mahindra, step up to say that businesses need to actively do more by leveraging assets from their core businesses to create real change in India. Panelists such as Narayana Murthy noted that “If you want to build a $10 million enterprise, you can take shortcuts. But if you want to build a $1 billion enterprise, you have to build it in the right way.” But several questions remained – how do companies make a transition from the old way of doing business? How can leaders create a mindset shift that encourages all employees to focus on both economic and social value?
Lastly, it’s exciting that we’ll soon be releasing a paper we hope will contribute to increased dialogue on these questions. Next month, FSG will publish research demonstrating that shared value is indeed being created here in India. In the paper, we aim to show that market-based solutions are not just possible, but are being implemented by innovative companies across several industries. Our hope is that these efforts will move beyond social enterprises and Small/Medium Enterprises that, while nimble, don’t yet have the scale to create widespread change. And we hope that readers, including companies, civil society, government and other stakeholders, will start to think about what they can do to encourage and enable the creation of shared value. Stay tuned for the release!
India may be a new home, but it’s already lodged a permanent place in my heart. And that’s why I’m excited – I hope that if leaders from Indian industry, government and NGOs come together to partner in creating meaningful value, India can begin to free itself from the tightening grip that poverty, ill health and lack of education have placed around the throat of the country’s growth.
It would be great to hear from you – are you in India? Have you been participating in the dialogue around inclusive growth and the role business can play in addressing the nation’s challenges and creating meaningful development? How have you seen companies shift toward creating shared value, and what can FSG continue to do to support the conversation?