A quiet corporate revolution is underway: Companies are beginning to compete to change the world for the better. The drive for profit, often criticized for coming at society’s expense, is driving and enabling solutions to many of the world’s most challenging problems. The Shared Value Initiative strives to show leading companies how to create new business value by addressing social problems that intersect with their business. The Initiative looks to build a community connected with leading companies, civil society, and government organizations to accelerate knowledge sharing and facilitate ongoing conversations about the power and impact of shared value strategies. For decades many companies ignored the social and environmental consequences of their activities. They saw their main responsibility as delivering returns to shareholders and viewed their obligations to society narrowly, as “giving back” through philanthropy. After repeated corporate scandals, public pressure forced companies to accept a heightened level of “corporate social responsibility” as a cost of doing business and a way to improve their reputations. A growing number of investors also began to take note of companies’ environmental, social, and governance indicators, raising the bar on corporate conduct. But still, the main focus was on avoiding harm. The Shared value is only beginning to be measured comprehensively. Some companies remain reluctant to disclose the business impact of their social activities because they seek to appear altruistic and fear that the mere mention of profit will undermine that. Others on the list compete in controversial industries or have engaged in harmful practices in some areas even as they create social benefits in others. Shared value is not a one-dimensional filter that labels companies as either good or bad.
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With the idea of changing the world is just a good business, 400 leaders from companies, nonprofits and governments will celebrate a summit on May 10-11, 2016. All those leaders will talk about how to make the big change the world need. Here the information about the Summit. There’s a growing movement of innovative leaders coming together across sectors and industries to tackle the monumental problems we face today as a society, and they’re using the power of profit to make a big impact. They’re transforming systems and changing the world—one business strategy at a time. This is shared value. At the 2016 Shared Value Leadership Summit, join more than 400 leaders from companies, nonprofits, and governments to start innovating the real business solutions that our world urgently needs. Be inspired by senior-level speakers driving shared value approaches, test models with other practitioners, and network with new partners to truly make change happen. To know more detail about the Summit visit the fallowing link:http://sharedvalue.org/groups/shared-value-leadership-summit-2016 By Mauro Libi Crestani. There's an old saying, usually attributed to Confucius, that goes something like "Give a man a fish, and you'll feed him for a day. Teach a man to fish, and you've fed him for a lifetime." Lets take this a step further. You have a business in a particular town. Philanthropy among business leaders has been very impressive. People like Ted Turner have given away over half their fortune to good causes. Ted Turner is not alone. Ten billionaires have signed on to the Giving Pledge -- an effort started in 2010 by William Buffett and Bill and Melinda Gates -- to encourage billionaires to commit to giving away most of their money either during their lifetimes or in their wills. This money goes to great causes and does a lot of good. However as Confucius noted it is not enough. Not unless someone intends to support the poor forever. So what is a better solution to the roots of poverty. Mauro Libi. It is also a double edge sword. That company in the poor community may give away large amounts of money to charity but who would it sell its products to? If the community in which it is based does not have a large enough population that has the earning potential to be consumers then the company will not flourish. Further, Let’s say the company sells its products to a different community, who will be its labor force. If the community in which it is based does not have a potential labor force of people of educated people to do the tasks required of them. Mauro Libi. A better strategy and solution was, first articulated by Michael E. Porter of Harvard Business School and the management consultant Mark R. Kramer, it is based on the belief that companies can increase profits and enhance their businesses even as they address pressing social problems. An example of how this might work is by a share value initiative started by a company called Southwire. In Carrollton, Georgia there was a huge shortage of high school graduates , not enough for any company to be able to utilize. Southwire, a family-owned maker of wires and cables in Carrollton, Ga., tackled a shortage of high school graduates for hire by staffing a new factory entirely with students at risk of dropping out, and requiring them to stay in school to keep their jobs. Mauro Libi. The Southwire initiative, which started in 2007, worked so well that Harvard Business School wrote it up. The students stayed in school, drawn by jobs that paid more than the minimum wage. The county’s high school graduation rate jumped 10 percentage points. And Southwire made money. Within five years, the factory was adding $1.7 million to earnings. Mauro Libi. These students from Carrollton, GA no longer needed anyone’s charity. They had the education and the skills to be a productive wage earner. The Southwire company is just one more example how a company can use share value to help the community in which it resides and profit as a result. Mauro Libi. Haz clic aquí paraBy Mauro Libi Crestani. Porter and Kramer in a 1999 Harvard Business Review article questioned the very assumption that a tradeoff exists between economic efficiency and social progress. The concept is that by growing a successful business, the community should become more successful as well. This concept has a lot in common with corporate social responsibility that always existed. However, there is a major difference in thought. In the past the concept was in corporate philanthropy. It was a give back. The company made a lot of money and as a result the proper thing to do was to give charity to the communities in which it resided. These were strictly handout in which the company saw no gain in the act of giving. It was giving charity for the sake of giving. To help those less fortunate. Mauro Libi Crestani Many CEOs who became very wealthy through their company holdings gave huge amounts to charity. Pioneering American philanthropist Andrew Carnegie once set the standard for giving back: "No man can become rich without himself enriching others," he said. "The man who dies rich dies disgraced." Scores of the world's wealthiest people have taken to his philosophy, donating their riches to hundreds of causes. Paris-born, Iranian-American Pierre Omidyar is cofounder and current chairman of eBay. He donated to date 16% of his net worth to charities. In 2012, Omidyar and his wife joined the Giving Pledge initiative started by Warren Buffett and Bill Gates, promising to donate most of their wealth to charities. Mauro Libi Crestani There are many more examples of corporate philanthropy. I do not want to be misunderstood, charity is important and it helps a lot of people. But it is limited by the amount and by those who can give. It also does little to help the communities that need it most. Porter and Kramer came up with the mindset that corporation that reside within communities can have a mutual shared value. Now the community of an international company may be a global community or we can have a smaller company residing locally within a particular community. The idea that a company’s financial health and the health of the communities around it are mutually dependent. Corporate philanthropy does not take center stage in the shared value philosophy. Mauro Libi Crestani Corporate philanthropy was the idea that a business is a separate entity and it makes a profit at all cost. The community is not part of the equation. Often the community is harmed by the corporation , may be through a large retail store going in and putting the local ones out of business or by polluting its environment. Charity when given is nice but has nothing to do with the way the corporation operates, which in many times is to the harm of the community in which it depends on its profits. Mauro Libi Crestani Kramer and Porter outlined in a landmark article published in the Harvard Business Review, Creating Shared Value: How to reinvent capitalism—and unleash a wave of innovation and growth. A quote from their article: “A big part of the problem lies with companies themselves, which remain trapped in an outdated approach to value creation… They continue to view value creation narrowly, optimizing short term financial performance in a bubble while missing the most important customer needs and ignoring the broader influences that determine their longer-term successes. How else could companies overlook the well-being of their customers, the depletion of natural resources vital to their businesses, the viability of key suppliers, or the economic distress of the communities in which they produce and sell?” In conclusion: Charity is needed and there are many in need, but corporations need to look at their communities as partners in their efforts for profits. It is the loval and global communities that bring in the profits to the corporation. A corporation should be set up with the emphasis being on the mutual benefit of community and corporation and the end result should be greater profitability for all. Mauro Libi Crestani |
AutorMauro Libi Crestani is a Venezuelan businessman CEO of Grupo Libi; a group of various food companies in the country. Archives
Agosto 2016
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