This month, Harvard Business Review’s cover article is titled, “The Big Idea: Creating Shared Value”. This is a great article. The concept of Shared Value is on the right track and trying to define a needed new paradigm, but it has to reach further to accomplish the bigger objective of stewardship of the land, environment and community.
The real issue is scarcity of resources, environmental and social consideration. We live on a fixed ball in space and need to think about the implications of everything we do holistically and systemically. This of course is very hard to do on a global scale, so then we must push to approach it from as large scale as possible, yet with a local view as possible.
BioLogical Capital, a Denver-based company, for instance looks at the issue from land sizes from 20 thousand acre to greater than 100 thousand acres it will manage. They become the steward of the land; to own and optimize with the community for all services and businesses that can co-exist with the natural habitat. Without this vision for man, nature and the total environment; people will suffer in long term.
So how do you shift this framework to a more global perspective? If you think in as big of scale as possible (space and land); can you optimize the solution for the biggest benefit for the environment and the people while building sustainable businesses. Here is the catch; if each business is self optimized, then by definition whole is not. Enter Regulation to control manage and set rules and standards, which is brought up in the article, yet as mentioned, this never solves this problem, although it tries. So how is this problem solvable? What Porter is trying to do is give a path to a better outcome. To take the best Capitalism has and marry this with the notions of real costs and consequences for people and environment; and in addition, you must take a very long term view. To use a simple example; if you produce food, but your minor toxic run-off that is creeping into the water table is killing your customers over decades; you will eventually put yourself out of business. This piece is the beginning of a bigger framework that needs to be built for the planet and people to succeed.