‘Shared Value’ has got to be better than ‘Corporate Social Responsibility’

I’ve read Andrew Hill’s column in today’s FT three times now and I’m still not sure whether he thinks this new thing called ‘shared value’ is good or bad. 

I had not heard the term before this morning and I’m naturally sceptical about anything which sounds like another new gimmick, but if you read beyond the label I do think this has merit.

In fact, it gives greater meaning to the point I tried to make in an earlier post (‘make yourself useful’) about a TLG pamphlet covering the same topic.

Basically, what the main protagonists of this approach argue is this: ‘shared value’ means finding ways to run your business which will ensure you achieve your core purpose, make a profit and contribute to society all at the same time.

The reason why I think it has merit is because it is not a ‘bolt-on’ do-good kind of thing; it’s about using the central purpose and goal of the organisation to drive change.  And, as the TLG pamphlet and associated Populus research showed, doing this improves an organisation’s corporate reputation and all other associated benefits because it is action which is authentic.       

Andrew Hill refers to a Harvard Business Review article by Michael Porter and Mark Kramer (authors of this neologism [am adding link to Wikipedia on neologism only because I don't mind admitting I had to look it up myself…].   I’m not a subscriber to HBR, but the short intro available for free gives enough of a gist of what follows.  I particularly like this quote:

“Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success. It is not on the margin of what companies do but at the center.”

Of course any effort to get involved in local communities or to improve the environment is a good thing and shouldn’t be discouraged.  But I’ve never been convinced about the long-term benefits of corporate activity carried out under the heading ‘corporate social responsibility’ because too often it lacks meaning and feels like a PR stunt (and at it’s worse, something to make companies and/or their execs feel better rather than to actually achieve anything useful). 

Far better if that contribution to society is hard-wired into corporate strategy and is central to delivering the purpose of the organisation:  that’s what makes it real.

I agree with Andrew Hill’s conclusion:  “More companies are learning to reap commercial benefits from strategies that have a wider social value. That’s great. But the basic job of coaxing capitalism in the right direction is the same as it always has been: find ways to harness society’s needs to companies’ self-interest and hope the two stay together.”

But the ‘shared value’ approach has got to be better than corporate social responsibility for everyone’s benefit, surely?