In my incessant research on sustainability and CSR, the latest trend started by none other than Mickael Porter in his Harvard Business Review article and his copyrighted term « Creating Shared Value » is certainly it.
In my own practice, I’ve encoutered this notion again and again. Not the short term monetary value but the long term societal value creation. Environmentaly some would say « to have a net positive impact on biodiversity », other would go for a positive carbon footprint (or negative depending on how you see things). What I’m considering at the moment is how can we calculate our « Net Positive Impact on Society »? An article I once read asked: « where are the values in value chains »?
Here are a few statements to further our reflexion on the subject:
Know thou environment
I’ve often been asked to share my thoughts on the strategic management of sustainability initiatives. Before presenting the many amazing tools that can be used to do so, I take the time to explain the paradigm shift in management. Historically, enterprises where managed as black boxes in which you would inject an input, money, and through transformation, you would get outputs, usually more money and, oftentimes, a lot of refuse. Nowadays, enterprises should be though of as living entities trying to survive in a complicated environment. Thus managers need to know their environment to grow, to protect themselves and to improve on their environment so their output, still money, grows on a long term basis. You can also read my post on disruptive innovation.
This seems like a pretty standard statement but I can tell you that it’s often more complicated than your environment. I often ask managers of different functions what their corporate strategy is in their field, and I’m talking here of a global communication, HR, environment, safety, communication, etc. strategies. More often than not, the answer is a blank stare or something made up on the spot by that person (by that, I’m mean that it exists only in their head). For the wise, they answer with something thoughtful. I then ask, how does your strategy create value with the strategies of the other departments of your organisation? More blank stares and a very few have thought about it.
When I say, know your environment in a Shakespearian way, it’s because most of us THINK that we know our business but lets not fool ourselves. So gear up, dig deep and start to know your business. It’s the first building block to sustainability.
Learn to know others
If you thought knowing yourself would be enough, you haven’t heard the term « stakeholder relations » yet. To put it simply and build on the ecosystem metaphor, you need to know which animal is going to help you, those that are sometimes useful, those that you have to be wary of and those that are gonna eat you if you’re not careful. But first, identify the ones who make an existance in your ecosystem. Too often do we waste time working on entities outside of our environment.
Learn to think in a « everybody wins » way
That’s one of the hardest statement since it doesn’t require getting information but actually learning a new way of thinking. The good thing about it is that if you achieve this, you’ll feel GREAT since you’ll be doing good and people will be grateful. Instead of the « what’s in it for me », you have to think « what’s in it for us ». It goes toward long term prosperity and risk management. In our current culture, if you externalize your costs environementaly, socially or economically, you’ll eventually have to pay this back, either in the media, in a lawsuit, or by shareholders fleing your brand. These liabilities need to be managed. Creating win-win environments is a proven method.
Manage this value creation
When I said that changing the way you think was hard, managing this new perspective is even harder. Why you ask? Well, the main difficulty is that NOT EVERYONE THINK IN A VALUE CREATION WAY. A lot of corporations and managers still strive on the « what’s in it for me method », not caring about the liabilities they create and thus, having the Sword of Damocles dangling over their heads without knowing it. Change management is key for sustainability management. Learning to deal with managers who don’t understand the way you think is key to innovation in this field.
To keep this simple, one way to manage value creation is in my Strategic map of societal responsibility.