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.

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