Shared Value is one of those topics that seems to polarise. The concept was first enunciated by Professor Michael Porter and Mark Kramer in 2011, and generates plenty of energy and debate in both the corporate and social sectors. Some see it as the future of capitalism, while others see it as merely a fad.
In the spirit of this debate, a colleague recently posed a question – what is the difference between ‘smart business’ and ‘Shared Value’? After all, businesses are successful when they fulfil a need or desire of society, so is this really new? When a pharmaceutical company produces a life-saving drug, isn’t this Shared Value?
My response – ‘Shared Value’ as a practice is not new, but its explicit identification as a concept is powerful. Through creating Shared Value, businesses can address social disadvantage and inequality, while becoming more competitive, sustainable and profitable. If done effectively, this is a classic ‘win-win’ scenario for communities and shareholders.
It is this two-pronged approach that distinguishes it from Corporate Social Responsibility. It is more than a set of activities to maintain a license to operate or ‘give back’ to the community; it is a way to identify new business opportunities or new approaches to resolving existing challenges. Certainly, many corporations are already creating Shared Value, but by putting a name to it, we have a common language that can be a catalyst for change.
It isn’t a panacea. It can be misused. It isn’t necessarily ‘new’. But that does not mean we should dismiss it. As leaders in the social sector, it is our role to contribute to this debate and challenge ourselves to find innovative ways to address systemic social issues. Shared Value is one tool that we have at our disposal, and we should embrace it wholeheartedly.
What do you think, is Shared Value worth the hype?