Blog 5 - Rippen Liu

The Future of Strategy

I strongly resonate with the concept of shared value, especially when I read this line: "Shared value, then, is not about personal values. Nor is it about “sharing” the value already created by firms—a redistribution approach. Instead, it is about expanding the total pool of economic and social value.". This is a beautifully composed definition of what the concept really is. Shared value is far broader and farsighted than just "showing gestures" by donating a small amount of money or resources to show kindness, which by no means is wrong, but the effect is very limited. 

A great example is Adidas with its line of "Parleys". Normally, an easy way of dealing with ocean plastics is to donate money to some organizations to show gestures, or even spend money yourself to collect the plastics and then hand off to someone else. These are good gestures, but never tackle the problem from the root. What Adidas did with Parleys is that they are innovating a way to reuse the plastic materials to make the shoes! Will this save costs? The R&D involved is far more than just keeping making shoes the existing ways. However, as the initiative kept developing, the "Parley" line actually became really popular among the consumers. In the end, everyone involved is better off: Adidas is paid off with the revenues that come with it, consumers are happy with the products, everyone is happy for the devoted and ongoing efforts in eradicating ocean plastics. 

Personally, I have read a great book on very similar concepts when I was around 18. The book is called Built to Last, and it had a profound impact on my perspective toward businesses in general. In the book it explores why some corporations could last for several decades while the majority just crumble within years, even a few decades. One critical criterion realized is that these "built-to-last" corporations always have higher "sense of purpose" other than just making money. And that sense of purpose always brings value to society, although that might mean some moves do not make sense in terms of business. One example is a medical company that has spent billions on a vaccine that was to aim to cure disease in a developing country, which has been plagued by the disease for so long. The medical company eventually decided to give it to everyone, for free. Does that make any sense in business perspective? No. But it is this sense of bigger goods that kept this company grow larger and stronger.

These perspectives help shape my view on doing business, and life in general. There needs to be a sense of purpose that one is serving, higher than just the profits up front. It doesn't always make sense right away, or even for years, but the mindset of "contributing for overall goods" always pay off. After all, this is a society of humans.