Wednesday, April 27, 2016

Sharing Lots of Value in Little Space

Though the anti-neoliberal cynic in me took issue with some of the framing of the shared value article (“We can help people—all we have to do is make investments into increasing the productive capacity of the worker, then the worker will have money with which to buy things, and we will have even more money than we already do!”), what I found most compelling about the concept is that it involves scaling up in localities to sort of narrow the breadth of the business at large. Whereas the cynic in me saw environmental ethics and the need for sustainability repackaged as corporatism and dollar signs, the Strategy Development student in me saw the continuation of a theme that has run a through-line throughout the course: organizations need to pare things down.

Whether we are talking about value statements, strategy statements, blue oceans, or shared value, organizations focus too much energy on covering lots of ground, and can effectively spread themselves thin—whether in pursuit of market share or high profit margins. Meanwhile, the most successful organizations seem not to be born out of the goal to construct large piles of cash, but rather the goal to find a good, unique idea, do it, focus on it, hone it, and do it well. The rest is just noise.

Tying this into shared value, I think one of the biggest areas of opportunity for the theory of shared value—given the gravity with which the topic is treated (“how to reinvent capitalism” “capitalism is under siege”)—is marrying it to sustainable development, and the environmental activist community. Specifically, companies looking to create shared value might consider how they can do so within the framework of renewable development—renewable energy, after all, comes from installations like solar panels and wind farms, the excess energy from which can be resold to outside communities and thus act as a vehicle for in-community investment in certain contexts. Moreover, investing in renewables on a local level can help cut down on the need for fossil fuels—the transportation and extraction of which, it goes without saying, are energy-intensive and harmful to communities and industries.

Likewise, instituting worker co-ops, a popular idea within sustainability communities, could be a good way to promote shared value and both a literal, and figurative, sense of ownership of a company. It seems to me this is an important point around which corporate proponents of shared value and activist proponents of sustainable, communal living might coalesce. What is more, there are at least a few examples of success using a co-op model where corporations have been able to empower workers and consumers, while concerning themselves with their bottom lines—see, for example, REI.

It might be because I recently read the book This Changes Everything: Capitalism Vs. the Climate by Naomi Klein (sort of the antithesis of business school), but, doing this week’s reading, my senses were particularly attuned to finding ways in which the goals of corporate strategy and environmentalist community development might align. And while I might scoff (in my own way) at the bottom line of profit, I think there is more to dig up than first meets the eye. 

By paring strategies down and focusing on sustainability, there may be a path forward to corporate growth and community development that pleases most everyone.

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