Last week, my firm, JS Daw & Associates, had the privilege of participating in Canada’s biggest conversation about Corporate Social Responsibility (CSR) ever – The Next Gen Forum. The goal of the Forum was to elevate CSR practices and partnerships and present the concept of Creating Shared Value. The clear highlight of the conference was seeing Michael Porter, business guru and Bishop William Lawrence University Professor at Harvard Business School, speak about the next big leap for corporate community engagement – Creating Shared Value.
Being an affiliate firm of the Shared Value Initiative and presenting on Shared Value at the conference (click here to download a copy of the presentation) JS Daw & Associates is very familiar with this concept and the strong business case for adopting this approach. We have long held the belief that the competitiveness of a company and the health of a community are intrinsically linked. That being said, the opportunity to hear Professor Porter in person, and to feel the passion he has for this work, was truly powerful. As a business school graduate, it was very exciting for me to see the name behind the ideas in my textbooks come to life.
Professor Porter explained that the Shared Value approach is part of a company’s overall community engagement portfolio, which also includes philanthropy, community investment, sustainability and strategic CSR. It is often difficult for people to distinguish between these functions and approaches. I had an ‘aha!’ moment when a participant at the forum, explained these approaches as a spectrum of value. I found this to be a very simple way of understanding the differences between these different forms of corporate community engagement:
Just as corporate community engagement has evolved and deepened over the years, so has Michael Porter’s thinking. It was great to see how all of his work from strategy to competitiveness, to social impact has been tied together in the Shared Value approach.
While hearing Michael Porter speak was a highlight, four main themes emerged from the Next-Gen Conference that I’d like to share in our blog.
1) CSR is advancing, but there is still a disconnect between CSR Thought Leaders and Senior Leadership
Michael Porter confirmed that Alberta is a leader in CSR practices. The extractives sector in our province (oil and gas) seems to have moved further along the community engagement spectrum than other industries because it is in the spotlight. However, there is still a long way to go.
There seems to be a disconnect between CSR thought leaders and the senior leadership in many companies. Most companies are currently placing their efforts on managing the image of their company through media relations, traditional corporate philanthropy and volunteering, and reporting. Some of the senior leaders we heard at the conference seemed to think this was enough. In his presentation, Michael Porter challenged this opinion by pointing out that current initiatives are only addressing visible symptoms such as negative media coverage and activist opposition. Not enough is being done to address the root causes of these issues such as poor environmental and community health, and civil strife.
Professor Porter challenged senior leaders in the audience to be ambitious and “do more”. What does this mean? Businesses expecting more social and business value from their community activities and in turn, civil society expecting more social impact from business activities. The key question is: Are we approaching these issues the right way? Business should not value receiving public relations over delivering positive social outcomes.
2) The True Role of Business in Society is to Create Genuine Wealth
Most businesses have been conditioned to narrowly define their purpose as “maximizing shareholder value.” Today, this uninspiring statement can not be the purpose of business. As Professor Porter passionately challenged: Is this what we want to be remembered for? Is this what animates us to go to the next level of business leadership? No. For most of us, maximizing shareholder value isn’t enough.
After the numerous crises the corporate sector has faced over the past decade, companies need to understand that purpose of business should be to create genuine wealth for society by meeting important social needs while generating a profit. Companies need to live up to their true purpose and role in society; the legitimacy of business as a sector in society depends on it.
3) Government has an Important Role in CSR
It is clear that we need strong, profitable businesses in order to take on the immense social, environmental and economic challenges facing us today. These challenges are so urgent and important that all sectors and individuals must take on a shared responsibility.
As we heard Minister of State Michelle Rempel explain, the current government’s goal is to sustain economic growth and have economic growth that is sustainable (which maintains our natural history). She positioned the federal government’s role as nurturing and encouraging CSR work. The government is eager to act as a catalyst for this conversation, incent innovation, and an enable any policy shifts that are required.
4) Alberta Has the Potential to Be a Shared Value Leader
Throughout the conference, we heard a lot of talk about “non-technical risk.” Simply put, non-technical risks are all the external factors that constrain business – community concerns and issues that can hold back business’ social license to operate. We learned that non-technical risk can either be framed as a threat to business, or as a great opportunity. Looking at non-technical risk through the lens of opportunity is where the Shared Value approach comes in to play. Social and environmental progress can actually create economic progress. Companies who are successful in implementing Shared Value initiatives are going to become the business leaders of the coming decades.
Since Alberta is already on the leading edge in this field, CSR has the potential to become a competitive advantage for Canada. If Alberta becomes a centre of excellence in Creating Shared Value, the potential to transfer knowledge about how we’ve created partnerships and strategies will become an information ‘export,’ and part of Alberta’s brand. At JS Daw & Associates, we are on a mission to elevate this work, and we can’t wait to see how far it can go!
Shared Value Presentation: We were proud to have our Founder; CEO Jocelyne Daw co-present a Shared Value 1010 workshop with Ellen Martin of FSG’s Shared Value Initiative. You can find the slides by clicking here.