In the eyes of many, capitalism is the nemesis of social good. Even as many of the world’s richest people take actions that should bring this story to an end, such as the founding of The Giving Pledge, the narrative prevails.
“Bill Gates became a philanthropist only after leaving his role as founder and CEO of Microsoft.”
“Buffett’s only donating his money because of his late wife, who was never part of his business.”
So long as there is inequity, people will look for someone or something on which to put the blame. But here’s the thing: there is no one great cause. Reinventing the value of business will not solve every problem.
Of course, that doesn’t mean businesses shouldn’t seek the opportunity to be part of the solution.
In the video above, Harvard Business School’s Michael Porter discusses a concept that provides companies with just that opportunity.
The Creation of Shared Value (CSV) is the notion of redefining capitalism in order to foster innovation and growth in the name of social good. It stands in contrast to a more traditional concept, Corporate Social Responsibility (CSR), because it is developed around the pairing of social and economical value rather than seeing them as separate.
While Porter discusses the implementation of CSV in corporations, the concept applies just as effectively to businesses of all sizes.
It operates on three levels:
- The reconception of products and markets that address social issues in order to grow revenue.
- The redefining of productivity in the value chain to improve efficiency and reduce cost.
- The enabling of local cluster development to activate growth in the supply chain.
CSV is a critical step in the evolution of what Stanford Business Professor Robert A. Burgelman calls a business ‘built to become’; a business that develops longevity through the combination of both value and values.
This is the future of business, and will be integral to relevancy, and profit maximisation.