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Creating Shared Value

When Michael Porter, strategy guru known for his five forces of competitive advantage comes to the view that creating shared value (CSV) is the key to the survival of business, I pay attention. When you think about it, the concept is not only ethical and about doing the right thing, it is also a very sustainable business strategy. Porter’s article, written with Mark Kramer, appeared in the Jan-Feb 2011 issue of HBR and deserves to be read by any thinking entrepreneur or manager.

Selfish competition can be such a waste of resources. Selfless cooperation is not always inimical to commercial success. Indeed ‘working with’ makes better business sense that ‘working against’. Business is a form of social organization. It is just that it has a particularly economic goal. The achievement of economic goals require working within an environment that helps, rather than hinders.

Social harms that flow from mindless behaviors have a strong tendency to come back and bite business in the bottom, creating unwanted cost as well as aggravation. Contributing to social good, on the other hand, is very likely to be of material benefit too. It is not a matter of being nice, but rather understanding the mutual advantage of contributing to the creation of a just and fair society.

Following a strategy of creating shared value is likely to require the firm to re-examine its business model.Looking at a business model requires an examination of customers, what they are offered and within what infrastructure, in order for the business to be financially viable.

Nestlé is one corporation that has dived into CSV and their image of how it sits in the sustainability continuum is depicted in the pyramid on the left.

PLEASE NOTE: There is tons of useful stuff on Startup Owl, a site that’s been going for a dozen years. So keep browsing, but know that the founder, Will, now devotes most of his time and energy to his new website that you should definitely visit:

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