Creating Magic Through Shared Value

Shared value is more than philanthropy. It’s more than corporate social responsibility. Listen to Michael Porter talk about shared value, and you’ll hear talk of magic, writes Travis Noland for Triple Pundit.

A famed Harvard business strategist, Porter says profitable business is the only infinite means for creating societal value, and the most powerful force for addressing the most critical challenges we face.

“Porter has coined the term “shared value” to define a concept by which companies become more competitive while simultaneously alleviating social problems in communities where they operate,” writes Noland.

“Shared value is about tackling societal problems with a capitalist business model… When we can get the activity into the capitalism bucket, we create magic because we can scale!”

Noland reports on the evolution of shared value, noting that historically, companies interacted with society through philanthropy. Philanthropy grew to include corporate social responsibility (CSR). Porter describes corporate philanthropy and CSR as fundamental building blocks for shared value but “shared value is different because it has the magical property of scalability.”

The greatest distinction between shared value and CSR, says Porter, is that shared value is not on the margin of what companies do but at the center. It is important to understand these distinctions because doing so enables us to consider more intelligently the ways businesses can create value for society.