Creating Shared Value

Michael Porter, a professor at Harvard Business School, recently wrote a fantastic article in Harvard Business Review on Shared Value. Ever since the financial crisis of 2008, corporate social responsibility has been a "hot topic," if you will. More companies look to how they can appear more socially responsible to the general public without compromising their fiscal responsibilities. While many have achieved good in their respective communities whether it be reducing their energy usage or ethical sourcing of their products, CSR has led to some phenomena such as "greenwashing." Greenwashing is when companies manipulate public perpeption of their business to appear more environmentally friendly than they actually are. Thus, shared value is a concept where the intersection between society and the corporate realm is highlighted and the notion of capitalism is broadened from its current connotation and denotation to meet society's needs. Thus, the purpose of a corporation is now to create shared value, rather than simple profit. Shared value pushes companies to incorporate social responsibility into their business model to complement their fiscal responsibility. Companies such as Google, Johnson & Johnson, and IBM have embraced this to ride the new wave of capitalism as the corporate sector accomodates the changes in expectation following the financial crisis.

So, now you might say, "Gee, this is an interesting point about business and social responsibility, but how does this pertain to leadership?" First of all, many people go on to become business leaders. Thus, understanding these concepts and applying it to their approach to business is important in innovating ways to benefit the very society or community that they are targeting for their products and services. Whatever kind of leader you become, it is important to remember that there are numerous constituents who are impacted by each and every decision you make. It is not feasible to please everyone, but you must keep in mind that you have the power to change someone's life. With that power, of course, comes the responsibility to use it to make someone's life a little better. Turn every frown (that you can) upside down!