Former Medtronic CEO Bill George, who is now a professor and best-selling author on leadership, regularly writes about business and society through his blog series on “Leadership Kudos and Gaffes.” George’s Leadership Kudos this week went to FSG co-founders Michael Porter and Mark Kramer’s January/February 2011 HBR article on Creating Shared Value.
George writes that CSV “represents a turning point in the relationship of business to society.” According to George, this turning point is driven by businesses realizing the potential of operating “insync with society” to deliver shareholder value that extends beyond traditional short-term profit motives.
As we’ve seen in our work at FSG, companies must identify the proper balance between short-term and long-term shareholder value when making the case internally for CSV. This topic of short-term and long-term value creation was a common theme during FSG’s CSV Leadership Summit held earlier this month in Boston with 40 global corporations as well as senior government and NGO leaders.
During opening remarks at the CSV Summit, Porter and Kramer both touched on the importance of re-thinking of the role of business in driving social value. For CSV to become the “next evolution of capitalism,” as Porter noted at the CSV Summit, there must be a shift among companies in seeing CSV as a new way to drive profits and create shareholder value. While business and society were formerly thought of as “competing world views,” Kramer told CSV Summit attendees that CSV provides a new framework for thinking about how business and society intersect to achieve scale and drive for increased impact.
We will provide more thoughts on the CSV Summit in the coming weeks, including plans for a new community of practice where additional research will be most helpful for companies at various stages of the CSV journey. In the meantime, I welcome your comments on how you’re seeing companies effectively balance short-term returns with longer term results of CSV.