What is the Created Shared Value?
March 6 2020
Local and global market competition and increasing unpredictability of the markets drives companies to look for new routes for reaching clients. Increasing the quality or setting prices at socially acceptable levels doesn’t cut it anymore. A modern client wants to know how the product is made and from which country materials are from. An employee wants to be graciously paid but also wants to work in a preferred way, and with respect to their hunger for professional development. Can all of these needs be accommodated at the same time?
Yes but it’s not an easy task. Capitalism made us believe that running a company means mostly indefinite growth – acquiring capital, increasing numbers of employees, numbers of products on the market, return on investment. Employees? Sometimes treated like „pairs of hand and legs”, as once Henry Ford put it. He was the one complaining about „hiring the entire man, while he wanted to only hire hands”. He proudly enumerated that his factory is full of human body parts. On the automated assembly line and around it, 670 activities could be done by people without legs, 2637 with one leg, 2 without hands, 715 with one hand, 10 blind. Ford was the successor of Frederick Taylor, a controversial entrepreneur, and a business consulting pioneer. In the 90s of 19th century, he announced that he was able to find a scientific method for optimization for every industrial process ever found. Taylor was bringing up his experiment in Bethlehem Steel when he was hired. Taylor claimed that his method allows a group of workers to load four times a larger load of pig iron in one day of work. Taylor became so popular, that he even started consulting operations for other industrial companies in the region. The problem with this was, that his experiment has never taken place.
Frederick Taylor became a precursor of the profession of a business consultant, broadly speaking, for the new scientific field – management. The term ‘management’ first appeared in 1948, in New York Times article called ‘New era is seen for management’. Since then, companies race each other for the best process optimization, best financial results, best position in the starting blocks in relation to the competition. The end of this race is far over the horizon.
Or is it? At the age of 35, after years of working for various, mostly technological companies, I decided to build my own webpage and work as a self-employed. I want to shape but also to wake up leaders of the world. I want to show that many last-decade achievements like remote work, zero waste, Agile or teal organizations are still not enough. There is something more – created shared value (CSV).
Created shared value brings back dignity to us all. Not only employees but also your managers and yourself as a leader. Created shared value shows and tells how short-sighted it is to ruin our natural habitat on this planet, necessary for us but also for our economy and companies in it. Without forests there is no polygraphy business, without water there is no industry at all. With plastic in our oceans and bellies we might be millionaires but short-lived millionaires
Created shared value is far more than what corporate social responsibility (CSR) has to offer – it’s putting an emphasis on economic responsibility. Some leaders and heads of marketing create corporate social responsibility strategies and make various efforts, mostly for public relations purposes. It’s a matter of prestige and one other way to attract talents. It’s not the way to do things.
Created share value is not making these efforts valuable, it replaces them. It’s making slogans come true, it shows, that you can do more and in a very practical sense. It bets or results and real change. It shows, that there is no future without IDEAlists, as the Open Eyes Economy Summit in Poland says.
Corporate social responsibility has to be replaced with created shared value. This idea, formed in 2011 on the pages of Harvard Business Review by Professor Michael Porter and Mark Kramer shows how deeply you can transform your own business but also the world around you. Created shared value brings real benefits for business:
- A proof that your company acts without empty words
- A display of giving fish instead of a fishing rod. Instead of giving money for various social initiatives, the company itself is one, big social initiative. Driven by commercial principles but with a 100% match for social interest. What’s important – it doesn’t matter if it’s a local or global cause. Today everything is a global cause
- The company (theoretically, of course) doesn’t need a marketing department – what it does and how it does it, making money, is marketing itself.
For me, the created shared value is one big organism of interconnected elements:
- Responsible production processes and at least neutral environmental impact
- Responsibility for good relations with employees and opportunities for their professional development
- Decent pay, at the very least giving the chance of being a middle-class member
- Assuring safe working conditions
- Creation or participation in the local business and social initiatives, development and sustaining bonds with local communities
- Law compliance – on the local, national and global level
- Customer-Centric Selling as a method of cooperation with the client during the sales process
- Design Thinking as a foundation for responsible and useful for the client product design
- Mass personalization is a phenomenal way to reach the client and sell him tailored products
I promote a responsible approach to your own employees, other market players, and Earth, our common home. If you are still skeptical about the created shared value philosophy, read an article about office space as an element of sustainable growth.