In a report last year by Michael E. Porter and Mark R. Kramer at Harvard Business Review, the debate about ‘Corporate Social Responsibility’ being outdated by ‘Creating Shared Value’ began.

If you look at both concepts it’s hard not to see them as both being relevant and appropriate for organisations. After all it’s about ‘doing well by doing good’ – right?

‘The central premise behind creating shared value is that the competitiveness of a company and the health of the communities around it are mutually dependent. Recognising and capitalising on these connections between societal and economic progress has the power to unleash the next wave of global growth and to redefine capitalism.’ Michael Porter & Mark Kramer, Creating Shared Value.

But isn’t CSR about philanthropy and sustainability, things that can help the communities surrounding businesses?

According to Kotter and Kramer’s report, many CSR programs typically focus on the reputation of the business and having an agenda determined by personal preferences of employees or external reporting. Whereas if you look at CSV, it is based on creating joint value for both company and community, working to company specific and internally generated agendas.

The evolution really shows organisational core beliefs need to start from the heart of organisations, which can realign the entire company and its focus or budget.

There is also the physical connection with the community that is amplified with CSV. Having a business thriving in a community hub is a positive factor – it provides a supportive environment and a demand for products/services it provides. And on the other hand, the community can reap in the jobs opportunities the business provides. It’s a win-win!

You can even see sections on websites such as Nestlé, titled as ‘creating shared value’ which not so long ago may have read ‘corporate social responsibility.’

‘A growing number of companies known for their hard-nosed approach to business – such as GE, Google, IBM, Intel, Johnson & Johnson, Nestlé, Unilever, and Wal-Mart – have already embarked on important efforts to create shared value by reconceiving the intersection between society and corporate performance.’ Michael Porter & Mark Kramer, Creating Shared Value.

CSV is fundamentally different from the CSR initiatives five to 10 years ago. It is no longer enough to have a “nice” CSR program – Creating Shared Value puts this the central point of an organisation’s whole strategy.

It is here to stay and will only get bigger and better.

annie.french@apricotconsulting.us