I’m a huge fan of Michael Porter. If you aren’t familiar with his work, I’d suggest you read this article in the Harvard Business Review:
Or watch his TED Talk:
Basically, shared value is “policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates. Shared value creation focuses on identifying and expanding the connections between societal and economic progress.”
Love it. He expands the definition to explain that “the concept rests on the premise that both economic and social progress must be addressed using value principles.” Meaning that you can’t just look at the benefits, but you must look at those benefits relative to the costs. And that as governments and NGOs begin to think more in “value” terms (not only thinking about benefits or money expended but the whole picture), “their interest in collaborating with business will inevitably grow.”
Companies must take the lead in bringing business and society back together. The recognition is there among sophisticated business and thought leaders, and promising elements of a new model are emerging. Yet we still lack an overall framework for guiding these efforts, and most companies remain stuck in a “social responsibility” mind-set in which societal issues are at the periphery, not the core.
But there are lights shining in the world to guide us, many of which are already well established.
Take Jain Irrigation Systems as an example.
This incredible company is using irrigation and other technologies to improve the lives of farmers all over the world and create sustainable agriculture in areas where previously it was believed to be impossible to grow anything. They have grown a small family owned business to a multi-national organization that deals in farm equipment, PVC pipe, seeds, fertilizers and a myriad of other products that support their core belief that agriculture is a “profession with a future”. And what’s different between them and any other farm equipment / agriculture company? They are rooted in deep values that consider the needs of the farmer and a desire to improve the lives of people involved in small scale agriculture above all else and that drives what they do. Revenues? Over $50 billion USD a year from one wheelbarrow pushed by young Bhavarlal Jain in 1963. So not a new company, either. And one that continues to innovate to meet the needs of society first, not markets first.