Shared Value, Shared Success: The Interdependence of Communities and Businesses
We are all working hard for prosperity. What are innovative ways entrepreneurs, public servants, business and non-profit executives can work together to solve issues that face us? How can government policies and approaches support business innovation to provide community and environmental benefits beyond traditional definitions of “social responsibility”? Does everyone benefit when organizations shift from short-term to long-term strategies? What are key ways to ensure success? These are questions our clients wrestle with daily.
A prosperous economy is created when the total pool of economic and social value is expanded. Recent award winning work of Harvard Business School luminary Michael E. Porter and his colleague Mark R. Kramer attests to the changing roles corporations, governments, and non-profits will play in the new economy. Their spirited call for business practices that place long-term societal needs first is all the more powerful considering their classical economic backgrounds. Under a new paradigm of collective responsibility, collaboration between businesses and communities is essential. When the two address public issues together, economy and society prosper.
Porter and Kramer define their new model according to one principle: shared value. Shared value produces economic value and adds value to society by solving problems and alleviating needs. Shared value benefits businesses and improves the economic conditions of communities. Shared value differs from corporate philanthropic and social responsibility programs in that it is the essence of a firm’s business. Shared value means being unafraid to meet the challenges of society. When these challenges are met, it stimulates innovation and growth, making progress for all. http://hbr.org/2011/01/the-big-idea-creating-shared-value