From rising inequality to climate change, smart business models are helping share the load of finding sustainable solutions to today’s complex social challenges, leading innovators say.
Customers and employees increasingly expect companies to make a positive impact on the community as well as the bottom line. When they meet these two needs simultaneously, they hit on a winning business plan. This plan comes to life through the concept of Shared Value.
Shared Value had its genesis in a 2011 Harvard business paper (“Creating Shared Value”) which argues that companies can increase profits by innovatively rethinking their products, markets and services to address societal issues and achieve economic success. The paper’s co-author, leading US business scholar Mark Kramer, Managing Director of social impact advisory firm FSG, was in Melbourne recently to discuss how Australia could benefit from embracing the concept.
“Businesses are in a great position to change the world and do it in a way that strengthens their profitability,” Kramer told participants at the Shared Value Forum event hosted by National Australia Bank (NAB). “When you measure the social impact and the financial return, you find ways to increase value back to both society and business. When you do it incidentally, you don’t get the full benefit.”
Sasha Courville, NAB’s Head of Social Innovation and a London School of Economics alumni set up the Fairtrade labelling system in Australia and New Zealand and champions Shared Value as a driver for sustainable social change. She says while there are important roles for government, philanthropy and civil society in tackling complex challenges, the most effective way to unlock value at scale is through the power of business.