The concept of Creating Shared Value has been met with great enthusiasm and support. Witness the success of our Shared Value Summit and coverage in the New York Times Business Section just a week ago.
But, to be honest, it has also been met by confusion, skepticism and debate. For example, a debate, which included commentary from FSG’s own Mark Kramer, ensued in July, based on a post to the Philanthropcapitalism blog by Matthew Bishop. Just last week, Aman Singh posted to a blog on CSRWire in which she contrasted shared value to corporate social responsibility (CSR), from the perspective of mainstream media. Her post highlights the ongoing debate over CSR’s feasibility. In it Singh points out “…Porter start[ed] a flurry of debates, white papers and panels…” referring to the publication of “Creating Shared Value” by Porter and Kramer in The Harvard Business Review.
Creating Shared Value is obviously complex, but as a “lay person” here at FSG, perhaps I over simplify the issue. I recently came across an article in the Boston Globe that put a different spin on how one might think about Shared Value.
Typically the idea or debate concerning Creating Shared Value starts in the board room and makes its way to philanthropy. But in the case highlighted in this article the approach was turned inside out.
According to this pithy article, a group of nuns, the Benebikira sisters, led by one Sister Augusta found themselves in dire straits. Faced with a multitude of growing social problems in their native Rwanda, they expanded their ‘mission” to include for-profit business development. That’s is to say, they sought ways to be self-funded, while simultaneously bringing about positive social change. They are in the process of creating profitable businesses that also directly address and serve Rwanda’s social issues.
Sister Augusta came to understand that building an organization that can turn a profit not only helped to fund her charitable work, but was also integral to her charitable work. In her case, she just needed to think a bit more like a business person. Her focus is still first and foremost on her charity mission, but she has broadened her sight, and thinks creatively on how, as a business person, she can do more to advance her social mission. Her approach was a mirror image of creating shared value.
Creating shared value asks business people to think a bit more like a nun. Primary focus remains on business goals and objectives (i.e profit and shareholder value), but sight is broadened to think creatively about how the business can be simultaneously served by addressing social issues.
Perhaps Sister Augusts’ story is not a complete equivalent to creating shared value, but for me anyway, it offers an interesting reflective look at the basic concept. Charity and business do not and should not be seen as mutually exclusive, but potentially symbiotic and strategically tied. As Porter put it “[Shared value is] a more sophisticated form of capitalism,” in which “the ability to address societal issues is integral to profit maximization instead of treated as outside the profit model.”
Recall that the title to Porter’s and Kramer’s article that kicked off this debate included the phrase “Unleash a Wave of Innovation and Growth.” Therein lies the challenge. Whether CEO or “NUN”, the challenge lies in thinking creatively, and being innovative. While for me, CSV is a simple concept,( i.e. it “simply” looks at the connections between societal and economic progress) it is nonetheless NOT “business as usual.”