Creating Shared Value - I have lately been fascinated by FSG Concept beyond Shared Value which is beyond CSR. It is the right way to go.
I strive to do more reading about it- so pointers to further in-depth references are most welcome.
On June 30 i have been invited as a Panelist for CSR Roundtable in Kampala, Uganda. I am keen to upraise my collegues on ‘Creating Shared Value’. There will be many Corporates, NGOs - Local and International and Government entities
I recently retired as Director of Communications, Central Bank of Uganda and Immediate Past President of the Public Relations Association of Uganda (PRAU). I am still on the Governing/Executive Board of Prau. I am Board Member of the Private Sector Foundation Uganda, the Apex Body for promoting, Advocacy and Lobbying for the Private Sector effective role
Juma Yusuf K. Walusimbi .(JavaScript must be enabled to view this email address)
P.o. Box5844 Kampala
+256752733818
In both their most recent article, “The Big Idea: Creating Shared Value,” and now in this forum, Michael Porter and Mark Kramer join a large, global community of business and thought leaders who have concluded both companies and non-governmental organizations are best served by focusing on maximizing value—not just economic value for shareholders, but rather value as a natural blend of economic, social and environmental performance.
While certainly a “big idea” this vision of value is not a new one. The authors’ ideas and experience working with some of the world’s leading companies confirms, affirms and extends research by a number of people, including C. K. Prahalad, Lynne Payne, Stuart Hart and, of course, my own work on “blended value” which was initiated in 2000 at Harvard Business School, where I had the benefit of presenting it for feedback from a number of colleagues including Porter and Kramer. The concept of blended value was then further developed through significant research at Stanford Business School in 2003, and subsequently at the Said School of Business at Oxford University.
Porter and Kramer help advance this decade long process of advocacy with their good work as consultants to CEOs applying these ideas within their firms. And their well written and thoughtfully framed article smoothly complements the large body of writing on blended value that already exists. After a decade of research, writing and public speaking at countless gatherings, such as the World Economic Forum, I am delighted with the fact that such significant advisers to the business community have come to embrace these ideas. It demonstrates the time has come for a “value vision” to take center stage in our discussions regarding not only the future of business, but the nature of capitalism itself. In the wake of the recent business and financial crisis, perhaps more leaders are open to a new form of capitalism focused on a broader understanding of value maximization, whether called “blended value” or “shared value,” that better benefits us all.
At our company we are seeing a significant surge in demand for effective information systems that plan for and measure long-term impact using structured data and are encouraged by the willingness of NGOs, funders government and businesses alike to look at convergent solutions.
It is this approach and attitude that is going to deliver innovation to solving complex problems and do so with scale.
A fascinating discussion. I work for an organisation that supports social entrepreneurs in the UK. I’ve been blogging for some time on the idea of Shared Value Supply Chains - that big businesses can achieve many of the ‘Shared Value’ goals discussed above through contracting social businesses (that inherently create social value through sustainable business models) in their supply chains. This ensures that the big businesses remain focused on their core business proposition - the social value is left for the supplier to deliver. And it’s for the social entrepreneurs to sell in to the contractor the financial value of the social value they create - in order to win the business vs other competitors in the supply chain.
We’re a social enterprise which originated in the US and introduced a self sustaining model to the Uk in 2004. In our 2006 strategy paper, Microeconomic Development and Social Enterprise in Ukraine, we describe capitalism with a social purpose as we practice it today and as it was described in 1996 as a theoretical concept:
“Enterprise is any organizational activity aimed at a specific output or outcome. Once the output or outcome – the primary objective – is clear, an organization operating to fulfill the objective is by definition an enterprise. Business is the most prominent example of enterprise. A business plan, or organizational map, provides a reference regarding how an organizational scheme will operate to produce a specific outcome: provision of products or services in a way to create profit. Profit in turn is measured numerically in terms of monetary gains, the “bottom line.”
This is the function of classic capitalism, which has proven to be the most powerful economic engine ever devised.
An inherent assumption about capitalism is that profit is defined only in terms of monetary gain. This assumption is virtually unquestioned in most of the world. However, it is not a valid assumption. Business enterprise, capitalism, must be measured in terms of monetary profit. That rule is not arguable. A business enterprise must make monetary profit, or it will merely cease to exist. That is an absolute requirement. But it does not follow that this must necessarily be the final bottom line and the sole aim of the enterprise. How this profit is used is another question. It is commonly assumed that profit will enrich enterprise owners and investors, which in turn gives them incentive to participate financially in the enterprise to start with.
That, however, is not the only possible outcome for use of profits. Profits can be directly applied to help resolve a broad range of social problems: poverty relief, improving childcare, seeding scientific research for nationwide economic advancement, improving communications infrastructure and accessibility, for examples – the target objectives of this particular project plan. The same financial discipline required of any conventional for-profit business can be applied to projects with the primary aim of improving socioeconomic conditions. Profitability provides money needed to be self-sustaining for the purpose of achieving social and economic objectives such as benefit of a nation’s poorest, neediest people. In which case, the enterprise is a social enterprise. “
COMMENTS
BY Juma Yusuf Walusimbi
ON May 26, 2011 06:24 AM
Creating Shared Value - I have lately been fascinated by FSG Concept beyond Shared Value which is beyond CSR. It is the right way to go.
I strive to do more reading about it- so pointers to further in-depth references are most welcome.
On June 30 i have been invited as a Panelist for CSR Roundtable in Kampala, Uganda. I am keen to upraise my collegues on ‘Creating Shared Value’. There will be many Corporates, NGOs - Local and International and Government entities
I recently retired as Director of Communications, Central Bank of Uganda and Immediate Past President of the Public Relations Association of Uganda (PRAU). I am still on the Governing/Executive Board of Prau. I am Board Member of the Private Sector Foundation Uganda, the Apex Body for promoting, Advocacy and Lobbying for the Private Sector effective role
Juma Yusuf K. Walusimbi
.(JavaScript must be enabled to view this email address)
P.o. Box5844 Kampala
+256752733818
BY Jed Emerson
ON June 17, 2011 06:52 AM
In both their most recent article, “The Big Idea: Creating Shared Value,” and now in this forum, Michael Porter and Mark Kramer join a large, global community of business and thought leaders who have concluded both companies and non-governmental organizations are best served by focusing on maximizing value—not just economic value for shareholders, but rather value as a natural blend of economic, social and environmental performance.
While certainly a “big idea” this vision of value is not a new one. The authors’ ideas and experience working with some of the world’s leading companies confirms, affirms and extends research by a number of people, including C. K. Prahalad, Lynne Payne, Stuart Hart and, of course, my own work on “blended value” which was initiated in 2000 at Harvard Business School, where I had the benefit of presenting it for feedback from a number of colleagues including Porter and Kramer. The concept of blended value was then further developed through significant research at Stanford Business School in 2003, and subsequently at the Said School of Business at Oxford University.
Porter and Kramer help advance this decade long process of advocacy with their good work as consultants to CEOs applying these ideas within their firms. And their well written and thoughtfully framed article smoothly complements the large body of writing on blended value that already exists. After a decade of research, writing and public speaking at countless gatherings, such as the World Economic Forum, I am delighted with the fact that such significant advisers to the business community have come to embrace these ideas. It demonstrates the time has come for a “value vision” to take center stage in our discussions regarding not only the future of business, but the nature of capitalism itself. In the wake of the recent business and financial crisis, perhaps more leaders are open to a new form of capitalism focused on a broader understanding of value maximization, whether called “blended value” or “shared value,” that better benefits us all.
Sincerely,
Jed Emerson
BY Taylor Ohlsen
ON June 17, 2011 03:13 PM
At our company we are seeing a significant surge in demand for effective information systems that plan for and measure long-term impact using structured data and are encouraged by the willingness of NGOs, funders government and businesses alike to look at convergent solutions.
It is this approach and attitude that is going to deliver innovation to solving complex problems and do so with scale.
BY Dan Lehner, UnLtd
ON June 26, 2011 02:34 PM
A fascinating discussion. I work for an organisation that supports social entrepreneurs in the UK. I’ve been blogging for some time on the idea of Shared Value Supply Chains - that big businesses can achieve many of the ‘Shared Value’ goals discussed above through contracting social businesses (that inherently create social value through sustainable business models) in their supply chains. This ensures that the big businesses remain focused on their core business proposition - the social value is left for the supplier to deliver. And it’s for the social entrepreneurs to sell in to the contractor the financial value of the social value they create - in order to win the business vs other competitors in the supply chain.
Plenty more at http://shared-value-supply-chains.posterous.com/ if you’re interested - I’d love to hear from you.
BY Jeff Mowatt
ON August 5, 2011 04:20 AM
We’re a social enterprise which originated in the US and introduced a self sustaining model to the Uk in 2004. In our 2006 strategy paper, Microeconomic Development and Social Enterprise in Ukraine, we describe capitalism with a social purpose as we practice it today and as it was described in 1996 as a theoretical concept:
“Enterprise is any organizational activity aimed at a specific output or outcome. Once the output or outcome – the primary objective – is clear, an organization operating to fulfill the objective is by definition an enterprise. Business is the most prominent example of enterprise. A business plan, or organizational map, provides a reference regarding how an organizational scheme will operate to produce a specific outcome: provision of products or services in a way to create profit. Profit in turn is measured numerically in terms of monetary gains, the “bottom line.”
This is the function of classic capitalism, which has proven to be the most powerful economic engine ever devised.
An inherent assumption about capitalism is that profit is defined only in terms of monetary gain. This assumption is virtually unquestioned in most of the world. However, it is not a valid assumption. Business enterprise, capitalism, must be measured in terms of monetary profit. That rule is not arguable. A business enterprise must make monetary profit, or it will merely cease to exist. That is an absolute requirement. But it does not follow that this must necessarily be the final bottom line and the sole aim of the enterprise. How this profit is used is another question. It is commonly assumed that profit will enrich enterprise owners and investors, which in turn gives them incentive to participate financially in the enterprise to start with.
That, however, is not the only possible outcome for use of profits. Profits can be directly applied to help resolve a broad range of social problems: poverty relief, improving childcare, seeding scientific research for nationwide economic advancement, improving communications infrastructure and accessibility, for examples – the target objectives of this particular project plan. The same financial discipline required of any conventional for-profit business can be applied to projects with the primary aim of improving socioeconomic conditions. Profitability provides money needed to be self-sustaining for the purpose of achieving social and economic objectives such as benefit of a nation’s poorest, neediest people. In which case, the enterprise is a social enterprise. “
http://en.for-ua.com/analytics/2007/08/09/110003.html