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story on reinventing capitalism - creating shared value
(CSV). They see the issue as follows: "Capitalism is an
unparalleled vehicle for meeting human needs, improving
efficiency, creating jobs, and building wealth. But a narrow
conception of capitalism has prevented business from
harnessing its full potential to meet society's broader
challenges. The opportunities have been there all
along, but have been overlooked. Businesses acting
as businesses, not as charitable donors, are the
most powerful force for addressing the pressing
issues we face. The moment for a new
conception of capitalism is now; society's
needs are large and growing, while
customers, employees, and a new
generation of young people are asking
business to step up" 4 .
Porter and Kramer site the work of Cisco, a
global innovation company, and their
Networking Academy as an example. The
Networking Academy was established to
meet a business need - the lack of
administrators trained on Cisco's products.
Cisco then established over 10,000
academies in over 165 countries that trained
over four million students. The outcomes: 70
percent of those trainees now have a better job,
increased responsibility and/or increased income
as a result of taking this training. The quintessential
win-win outcome. Cisco gets their business need met
and the trainees benefit through better social and
economic outcomes.
The alternate approach
Thinking this way is also critical if you are concerned about
engaging young talent. Talk to anyone in their twenties and
you will find they are very articulate about their desire to
work for a company with a clearly outlined approach to
corporate social responsibility. It is simply an issue of
employee recruitment and retention. For example, many
established businesses accept that to retain talent the
business needs to be engaging in human resource policies
that promote social participation through volunteering and
some even give their employees time off to volunteer. This
may sound like a "nice to do" but in fact, what we see is that
employee loyalty increases 5 . And with such a mobile work
force, retaining top talent is something we should all be
concerned about.
Our corporate structures have not kept up with this
demand either so we are seeing a demand for new
corporate structures that reflect this desire to achieve
double or triple (environmental) bottom lines. For
example, the UK now has Community Interest Companies
(CICs). These are described as follows: "Community
Interest Companies (CICS) are limited companies, with
special additional features, created for the use of people
who want to conduct a business or other activity for
community benefit, and not purely for private advantage.
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