After reading Michael Porter and Mark Kramer’s “Creating Shared Value” in HBR this month, at first I was a little confused as to why they were introducing this term “shared value” as if it were new. After all, customer relationship management (or customer strategy) has been focused on customer needs for a long time, and listening to and responding well to customer needs certainly produces shared value for both company (in terms of profits, both long term and short term) and customer (in terms of getting what they really want/need). [Not all customer strategy businesses are value-driven, but when I talk about CRM below I’ll be referring to those who value customers in a holistic way and not just as a means to corporate profit.] And corporate social responsibility (CSR) and/or business social impact aren’t new ideas either. These adjacent (but not congruent) concepts are inherent in what for me was the key sentence of the article: “Businesses acting as businesses, not as charitable donors, are the most powerful force for addressing the pressing issues we face.” In fact, many CSR bloggers are bristling at the implication that Porter’s term “shared value” is somehow different or better than the true aims of CSR: doing well by doing good (see here), and that what’s good for society is good for business (and here). Is shared value just true CSR rebranded? After all, the article seems to advocate moving traditional CSR efforts from the periphery to the very strategic center of businesses. But at the same time, Michael Porter clarified in an online comment, “I would caution against the idea that creating shared value replaces past management thinking. Instead, it is additive. Let us not create a false dichotomy between shared value and the core economic principles of competition, but harness the connection.” This likely helped more company-centric practitioners breathe a sigh of relief – and helped clarify one deep difference between these three concepts.
Although customer strategy (CRM), corporate social responsibility, and shared value all pursue the creation of value through businesses acting as businesses, the difference seems to be in who defines value in the first place. In (value-driven) customer strategy, the customer defines the good and the valuable. In corporate social responsibility, the government and civil society define the good and the valuable. And according to the shared value perspective, the company defines the good and valuable, through its business proposition, strategy, and end results. They may get input from stakeholders and the community at large, but ultimately, if the business really is acting as a business, it will decide what creates value and what it will pursue – and its results will speak for themselves.
Should this bother us? Not necessarily. Seeing that a shared value perspective puts the company back in the driver’s seat of defining value may reassure some of its detractors. I still think all these terms and perspectives are trying to get at the same general result: creating long-term value for customers and for the world as a whole, and leveraging the competitive thrust of business to do good. But for shared value, CSR, and CRM practitioners to self-identify as pursuing the same end and begin pursuing specific results together (which will need to happen for a true business revolution), I don’t think it’s a matter of branding, or who owns what term, or even logistics per se. No one person came up with this idea, and the current concept of shared value depends greatly on similar-minded practitioners in earlier contexts (particularly customer strategy folks, in my opinion). For shared value, CSR, and customer strategy companies to collaborate meaningfully, we will have to bring this hidden philosophical issue to the forefront and openly debate it. Even if we all agree that we’re primarily seeking “results,” we need to pinpoint who defines value in the first place to even know what results we’re seeking.
If you’re like me, you’ve probably heard a lot about how freelancing is becoming the fastest growing business sector – that as software and business processes are moving to the cloud, so is hiring (see this Christian Science Monitor article qualifying our impressions of freelance growth).
This got me thinking about the freelance business model in general. Now that the cloud has unhinged us from the office, should free-agent hiring be the new business model? Companies can handpick talent for specific projects, talent collaborates, and then when the project’s done, said talent looks for the next project that makes the most of their particular skills. Surely this is much more efficient – less overhead for the company in paying employee taxes and benefits, and more enjoyment for the worker as he or she handpicks the work?
Being an independent contractor has certainly been a boon for me and my family. But although freelancing definitely has its benefits for certain contexts, I don’t think it’s the new ideal business model across the board. Here’s why:
1. Efficiency. Although freelancing may seem more efficient for the firm and the independent contractor, the independent contractor doesn’t just do project work, as every solopreneur knows. Once you own your business, YOU are the HR department, the marketing department, the accounting department, and the CEO. Some people enjoy this small-scale variety and being in charge of each aspect, and the independence is worth it. But certainly the corporate model, with its economy of scale, gets work done more efficiently in a measurable sense. And worldwide commerce benefits from this efficiency.
2. Many people prefer the camaraderie of a company. As the CSM article pointed out, freelancing has surged recently because more people are out of a job and need to find some way to make ends meet. If those jobs opened up tomorrow, many would likely choose to return.
That said, here’s why freelancing has been the best choice for me:
1. It’s good for our family. We have two sons, ages 5 and 7, whom we want to raise well. And we’re pretty convinced that having plenty of direct parental contact is needed for children to grow up feeling secure, loved, and capable of being independent when the time comes. Working at home allows me to do that. But that said – one parent raising children while the other is absent at work isn’t necessarily the ideal either. Which leads me to #2…
2. It’s a temporary solution to a larger societal problem regarding “work” and gender. If one parent stays at home with the kids and the other works at an office full-time, for example, and the stay-at-home parent is ambitious at all, this will lead to a lot of resentment, either open or hidden. (Can you tell I’ve been there, done that?) I believe that men and women work best together because they were made to do so – and this isn’t undermined just by the “separate spheres for men and women” ideal of 19th century romanticism (of which remnants still remain in American culture), but also by the separate spheres of work and home. Both professionally and personally, in my experience, men’s gifts are activated best when with other women, and vice versa. Moms parent best when they parent with dads; women work best when they work with men; women lead best when they lead with men – when men and women value each other equally, of course. And vice versa all around. To return to the original point: until society moves more fully away from “work and home as separate spheres,” freelancing provides some creative solutions in the meantime. My husband and I nurture several income-producing streams from home, which allows us to parent together more, work together more, and make a larger contribution to the world alongside others. Frankly, it’s been the only way to invest in all our disparate interests!
Before the Industrial Revolution in the U.S., work and home were joined in one economy in the form of the family homestead. But it was hard work! The Industrial Revolution created a higher standard of living – through the separation of work and home. And at the beginning, a new cultural romantic ideal of women at home and men at work helped everyone accept this split more easily. But it didn’t last long. Certainly when women began joining men in this now-separate sphere of “work,” women finally got back some feelings of empowerment and achievement, but for parents, emptying the home of women AND men hasn’t been the ideal solution either. Child labor laws mean we can’t send the children to work too! Surely a better solution is to integrate work and home more so that those who are parents of young children – a very temporary time – can be home together more often. Otherwise children will always inherently be a burden – their needs will always be competing against the office’s needs. Our identities as parent and careerperson will always be competing, instead of complementary. And in the day-to-day stress, we’ll forget that children, the potential adults in our care, will grow up to become working adults and will shape the future of the world. Companies who strive to create long-term value care about how children are raised – not just in terms of current employee morale, but in terms of their economic future: children are the future work force. How did your childhood and quality of home life impact your adult life? Doing their part in helping their employees raise children well is simply an investment in their long-term assets.
The ability to work remotely through virtual communication can help us reintroduce sustainability into our business models. Successful corporations – usually appearing on “the best places to work” lists – are already finding creative ways to integrate employees’ personal and work lives. But for the rest of us, in the meantime, freelancing provides yet another healthy alternative.