triple bottom line

Michelle Veasey, NHBSR Executive Director

 

Creating Shared Value (CSV) seems like a very idealistic approach at first glance.  Is it realistic to think that a business can realize growth and people_puzzle.jpgopportunity while addressing societal needs?  There are several companies who think so.

Let’s take a step back – what does it mean to Create Shared Value anyway?  The term is commonly attributed to Michael Porter and Mark Kramer, authors of "Creating Shared Value: Redefining Capitalism and the Role of the Corporation in Society"1.  CSV recognizes the interdependence of a business’ sustainability with the health of its community and society at large.  In its purest sense, CSV builds innovative approaches to not only create profit and opportunity for a company, and in the process, address societal needs. 

Porter and Kramer identify three ways that companies can innovate and create shared value:  reimagine your market and product offerings, redefine productivity in your value chain, and/or “enable local cluster development” (e.g. supporting programs that meet the educational requirements of your business, affordable housing for your employees, supporting suppliers that pay their employees a fair wage, etc.)  A link to their article can be found below.

Triple Pundit recently published a great example of CSV in an article about the “Give Back Box”, a program created by the founder of StyleUpGirl.com, Monika Wiela.  She passed a homeless man on her way to work in Chicago holding a sign requesting a pair of shoes.  She was frustrated that she could only provide women’s shoes from her warehouse.  Wiela continued to search for ideas and was struck with the opportunity empty shipping boxes provided. 

What if customers could ship back boxes filled with charitable donations?  Give Back Box was born.  Now she, Overstock.com and Newegg.com include shipping labels addressed to secondhand charitable organizations in their product shipments.  (Anyone can ship donations in any retailer’s box by printing a shipping label at GiveBackBox.com.)  With over 30 million tons of cardboard used every year, Give Back Box creates shared value, providing a great opportunity for reuse and addressing declining charitable donations of clothing and household items.

NHBSR’s Just One Thing stories have uncovered examples in New Hampshire too!

Tom Strickland wanted to find a way to help nonprofits in his community, but with a small company, he had to find a way to do it without undermining the productivity of his limited staff.  Sequoya Technologies Group created Sequoya Seeds, a program allowing paying customers to select a nonprofit in the Monadnock region to receive technical services equal to 5 percent of the customer’s bill.  The impact has been significant, for several Monadnock area nonprofits and Sequoya.  The nonprofits have been able to increase their technological capabilities and/or reduce operating expenses.  The program automatically sizes itself to the revenue stream, never outpacing capability and has resulted in new business for Sequoya.

Monadnock Paper Mill used to send 95%, or over 1,200 tons per year, of its short-paper fiber (a by-product of manufacturing) to the landfill.  Several years ago, through product substitution, MPM was able to change this by-product into a nutrient rich, safe material which is perfect for use as compost, soil amendment and animal bedding.  In 2006, a local farm lost all of its farmland to flooding and the cost of replacing the soil was prohibitive.  MPM’ s short-paper fiber met a local need and sheep are once again grazing on lush farmland.  Now, 100% of this by-product is reused to enhance farming throughout the state and MPM has reduced its landfill costs.

These are great examples of rethinking business processes to create shared value.  A need in the community is met with a creative business solution. 

Where could you leverage your business to create shared value?  Share your ideas below, submit your stories to our Just One Thing campaign or read the Just One Thing storyboard!

1 Creating Shared Value: Redefining Capitalism and the Role of the Corporation in Society by Michael Porter and Mark Kramer can be downloaded for free from the Shared Value Initiative.

By Jay Friedlander, College of the Atlantic and 2013 NHBSR Conference Keynote Speaker

A perspective that matches your potential

We are surrounded by the constant churning of enterprises rising and being destroyed. In the midst of such competitive turmoil, a fresh perspective is critical to thriving and identifying new avenues of growth.  Unfortunately, many of the strategic models used by businesses today fail to connectspiderweb.jpg
sustainability and strategy, putting blinders on management. This prevents enterprises from reaching their potential and opens them up to being eclipsed by their competitors.  The context of business is ever changing and it is time for the models to catch up.  In over a decade of working in and with sustainable companies and teaching sustainable enterprise, I have found the need for a model that reveals a new perspective, one that makes sustainability strategic. Using such a model and gaining fresh insights uncovers opportunities and unlocks innovation. The model, called a Value Web, is a framework that examines business holistically. Applying it surrounds an enterprise with an interlocking and self-reinforcing web of value, generating wins for stakeholders across all of the activities of a business. In doing so, the Value Web™ offers companies a route to a continuously improving sustainable competitive advantage.

Creative destruction is changing the competitive context
The economy marches on evolving through the agricultural, industrial, as well as the information and service ages assigning the former titans of
industry to the dustbin of history. Either change or fall prey to this cycle of creative destruction. This failure to adapt has meant that only one
company listed in 1896, when the Dow Jones Industrial Average was conceived and when commodities and agriculture reigned supreme, has
been forward-looking enough to survive – General Electric. This constant turnover has been ongoing and is only speeding up. For example, in the
last five years nearly a third of the components, nine of 30 companies, have been replaced. While the Dow tracks what is happening amongst the
largest companies in the United States, the pace of change is similar for businesses large and small.

We are entering an age where sustainable companies will reign supreme. Reams of evidence from books like Conscious Capitalism to Harvard Business Review articles and academic studies tracking stock market performance exist to say that we are in an age where sustainably focused companies are outperforming their peers. They are finding new opportunities and unlocking innovation by asking new questions and approaching business from a different perspective.

Is your company operating with blinders on?
So, how do these phenomenally successful companies come undone? In a word: perspective. A slew of companies listed on the Dow followed the path of former Dow component Eastman Kodak and that of technology companies like Blackberry. They become entrenched in what made them
successful without keeping an eye on the change coming down the road. By using the models and frameworks of the past, these companies were
operating with a limited field of vision and as a result were blindsided by more forward-thinking competitors. This begs a personal question: is your
company going to be passed by? How do you find new opportunities for the next economic age and avoid becoming irrelevant?

Making people, profits and planet strategic
Considering people, profits and planet (3P) and making prosperity for all stakeholders a priority is often quoted and used with varying degrees of
success. Some efforts are intentional, others lip service and some happy accidents. Ideally, considering 3P drives managers and executives to
create a virtuous cycle whereby each action reinforces the other. Some of the results sought by pursuing this goal are highlighted below in figure 1.

Figure 1: Benefits from pursuing 3P practices. 
triangle_0.pngHowever, as much as 3P is touted, its impact could be strengthened by applying it to all of the activities of a company, from materials acquisition
and production to marketing and sales. This is key to making sustainability strategic. To maximize the impact for all stakeholders, each of these
activities must be passed through the 3P screen. Explicitly making waste or, more accurately, unsold production part of analysis also assists
companies in identifying new sources of value. Finally, companies should also reimagine their business by closing the loop and making unsold
production an input. (Figure 2)

Figure 2: People, Profits and Planet at Every Activity

web_and_3p_combined_2_0.png

The Value Web offers a sustainable competitive advantage
This new model helps companies look at each aspect of their operation, uncovering latent value and spurring creativity. Furthermore, because the
interwoven parts are more difficult to copy, the Value Web (Figure 3) creates competitive barriers. Since the expectations of each stakeholder
group are constantly evolving, the Value Web is regenerative. It highlights potential opportunities to refresh and revive as the company seeks to
satisfy new stakeholder desires. As a result, this creates an atmosphere of continuous improvement, which is key to avoiding obsolescence.

 

Figure 3: The Value Web
value_web_0.pngLook no further than Triple Pundit to see copious examples of companies spinning their new web of value. As you read the stories and think about
your own company, ask yourself which activities are changing and if this is a piecemeal or systemic approach. It’s a question that competition will
answer soon enough.

To learn more about how to apply the Value Web to your business, register for the Corporate Sustainability Leadership Program at UNH on April 2nd - 4th.  Jay will be teaching a session on methodology.

(This blog was originally published in Triple Pundit.)

 

 

Professor Jay Friedlander is the Sharpe-McNally Chair of Green and Socially Responsible Business at College of the Atlantic (COA) in Bar
Harbor, Maine. COA has been repeatedly cited as a leader in sustainability and Jay’s work has been covered in Fast Company, Princeton Review, CNN, Chronicle of Higher Education, Christian Science Monitor and Money amongst other media. Jay has been a frequent presenter at conferences in the United States, as well as New Zealand, Australia, and the European Union on sustainability, enterprise and innovation. Jay can be reached
at jfriedlander@coa.edu.

NHBSR 2018 Conference