I know I promised I'd blog about Day 2 at the Babson Ebyrepreneurship Forum 2011,but it's been three days since and when I think about it, there's really only Michael Porter's keynote that I think is worth writing about. You can find everything else on the Internet.
There was a time when the saying was "if it's good for the company, it must be good for the society" - case in example how Ford uplifted entire cities where they set shop. But somewhere along the way, we lost track and have come so far from it that the polar opposite is now true - "if it's good for the company, I better beware of what it may mean to me and society ad a whole. So the great business leaders started to improve their social facade by giving back in the form of charity. Although a good start, society quickly realized that this was nothing but a wad of cash thrown in front of it to keep it's mouth shut.
So the smart business folks (I am not isolating functions) went on to develop something called Corporate Social Responsibility (CSR). Corporate Social Responsibility came at an opportune time and allowed organizations to build tremendous social value through giving-back programs like "employee volunteering". However, the failure comes about in the fact that a business is made for "shareholder profit maximization" and "giving-back" programs are ultimately an expense on the income statement.
So what next? Porter et al say the answer lies in defining the purpose of your enterprise with the greater good in mind. He calls this "Creating Shared Value" (CSV). When improving the pulse of the society also gets into the purpose of the enterprise, the enterprise automatically starts working towards societal good, without having to do things outside it's domain.
For companies, it means that social value can actually be more tangible and make it to the income statement as goodwill or another line item to contribute to the bottom line. It's only such thinking that can save organizations from the image of this great green monster that society has started viewing them as.
There was a time when the saying was "if it's good for the company, it must be good for the society" - case in example how Ford uplifted entire cities where they set shop. But somewhere along the way, we lost track and have come so far from it that the polar opposite is now true - "if it's good for the company, I better beware of what it may mean to me and society ad a whole. So the great business leaders started to improve their social facade by giving back in the form of charity. Although a good start, society quickly realized that this was nothing but a wad of cash thrown in front of it to keep it's mouth shut.
So the smart business folks (I am not isolating functions) went on to develop something called Corporate Social Responsibility (CSR). Corporate Social Responsibility came at an opportune time and allowed organizations to build tremendous social value through giving-back programs like "employee volunteering". However, the failure comes about in the fact that a business is made for "shareholder profit maximization" and "giving-back" programs are ultimately an expense on the income statement.
So what next? Porter et al say the answer lies in defining the purpose of your enterprise with the greater good in mind. He calls this "Creating Shared Value" (CSV). When improving the pulse of the society also gets into the purpose of the enterprise, the enterprise automatically starts working towards societal good, without having to do things outside it's domain.
For companies, it means that social value can actually be more tangible and make it to the income statement as goodwill or another line item to contribute to the bottom line. It's only such thinking that can save organizations from the image of this great green monster that society has started viewing them as.
No comments:
Post a Comment