Recomendados
Más contenido relacionado
La actualidad más candente
La actualidad más candente (20)
Destacado
Destacado (20)
Similar a Csv 102012 Final
Similar a Csv 102012 Final (20)
Csv 102012 Final
- 1. Creating Shared Value Sharing Michael Porter and others October 20, 2012 Source: Michael Porter, Creating Shared Value – Redefining Capitalism and the Role of Corporation in Society FSG CSV Leadership Summit June 9, 2011 This document intends to share author’s learning, ideas and personal reflection on the topic. If you intend to quote or replicate any part of this presentation, acknowledgement of this document and other authors cited in this document as your sources would be greatly appreciated 1
- 2. Healthy business needs a healthy community • Only business can create Prosperity • Healthy business needs a healthy community • There is a growing awareness of major societal challenges • Government and NGOs lack sufficient resources and capabilities to fully meet these challenges • Legitimacy of businesses are falling and have fallen Source: World Business Forum New York 2012 – Session given by Michael Porter 2
- 3. Creating shared value is NOT CSR / CR Corporate Creating Philanthropy Responsibility Shared Value (CSR) Small impact Good citizenship, Integrate social and ethical, sustainability environmental improvement into economic value creation Source: World Business Forum New York 2012 – Session given by Michael Porter 3
- 4. The principles of shared value • “Shared value creation cuts across the traditional divide between the responsibilities of business and those of government or civil society. From society’s perspective, it does not matter what types of organizations created the value. What matters is that benefits are delivered by those organizations—or combinations of organizations—that are best positioned to achieve the most impact for the least cost.” – PORTER, M E and KRAMER, M R (2011) 'CREATING SHARED VALUE'. Harvard Business Review, 89 (1/2): 62-77. 4
- 5. “Not all profit is equal. Profits involving a social purpose represent a higher form of capitalism, one that creates a positive cycle of company and community prosperity” PORTER and KRAMER, M R (2011) 'CREATING SHARED VALUE'. Harvard Business Review, 89 (1/2): 62-77. 5
- 6. According to Michael Porter…There are three levels of shared value 1. Reconceiving customer needs, products and markets 2. Redefining productivity in the value chain 3. Enabling local cluster development Source: Michael Porter, Creating Shared Value – Redefining Capitalism and the Role of Corporation in Society FSG CSV Leadership Summit June 9, 2011 6
- 7. 1. Reconceiving products and markets • Around unresolved customer problems / concerns, not traditional products • Not just meeting consumer needs but improving lives • Customer groups that are poorly served or overlooked – often seen as unattractive groups • Start with no pre-conceived constraints about product attribution, channel configuration or economic model of the business Source: Michael Porter, Creating Shared Value – Redefining Capitalism and the Role of Corporation in Society FSG CSV Leadership Summit June 9, 2011 7
- 8. 2. Redefining productivity in the value chain Slide copied from Source: Michael Porter, Creating Shared Value – Redefining Capitalism and the Role of Corporation in Society FSG CSV Leadership Summit June 9, 2011 8
- 9. 3. Shared value through local cluster development • Strong local clusters with capable local suppliers and institutions improves company productivity • Companies / institutions working together collaborative can stimulate more significant improvements or progression • Local cluster development can strengthen the link between a company’s success and the community success Source: Michael Porter, Creating Shared Value – Redefining Capitalism and the Role of Corporation in Society FSG CSV Leadership Summit June 9, 2011 9
- 10. Unilever’s Water Purification • Safe drinking water is a problem in India • Everyone tried – no scalable solution • Produces safe water at a cost of ½ cent per litre • Does not need electric power • Portable • Switches off automatically when replaceable processor is depleted • Innovation comes – collaborating with external / internal resources • Leverage 100 Unilever scientists worldwide • Unilever brought in supply chain and retail distribution expertise • NGOs for access to schools and consumers http://www.youtube.com/watch?v=zmVJhf6rqlc New products and markets 10
- 11. Nestlé’s CSV – diary sector in Pakistan Nestlé - sources milk locally, tests the quality of the milk, and by using cooling stations and collection points, Nestlé has helped to prevent adulteration and unhygienic milk handling. By offering higher quality milk, Nestlé has responded to growing consumers’ expectations. It has also fortified its products with iron to help to prevent anemia. • Consumers – value exceeded price, pay much cheaper than competitors’ milk • Suppliers – local sourcing from 150,000 local farmers (each farmer sells approximately the milk from 1 buffalo) • Industry – success of Nestlé in the milk district, draws in local competition, increases efficiency, lower price premium etc • Employees – created over 2000 jobs with better wages, training, and Sheikupura milk processing factory is ISO certified – safer work environment • Communities - Over 80K jobs created total (direct and indirect), pay local taxes • Shareholders – higher return from better shareprice improvement (28 % return) 2003 – 2008 Productivity in Value chain http://www.nestle.com/csv/CreatingSharedValueCaseStudies/AllCaseStudies/Pages/CSV- dairy-Pakistan.aspx 11
- 12. Shared value created when all parties win Source: yahoo finance 12
- 14. Nestlé Unilever plc General Mills 10 yr CAGR 28% in share 10 yr CAGR 9.7% in 10 yr CAGR 9.1% in price appreciation share price appreciation share price appreciation Source: google finance 14
- 15. CSV is a paradigm shift for businesses in how they perceive market opportunities, determine investments, and build capabilities… 15 Chart copied from Source: Porter and Kramer, Harvard Business Review, 2011
- 16. Shared value creates strategic positioning Source: www.wholefoodsmarket.com 16
- 17. Whole Foods vs The Kroger WFM 311 Stores KR - 2435 supermarkets 10 yr CAGR 15.8% in share 10 yr CAGR 6.2% in share price appreciation price appreciation 17 Source: yahoo finance
- 18. Maximize purpose, maximize profits? Source: yahoo finance 18
- 19. John Mackey Co‐Founder & Co-‐‐CEO Whole Foods Market on the topic of Conscious Capitalism https://www.wholefoodsmarket.com/sites/default/fi les/media/Global/Company%20Info/PDFs/UBS_C onference_NYC_October2012.pdf 19
- 20. What is Conscious Capitalism Slide copied from: https://www.wholefoodsmarket.com/sites/default/files/media/Global/Company%20Info/PDFs/UBS_Conf erence_NYC_October2012.pdf 20
- 21. Conscious business is beyond CSR Slide copied from: https://www.wholefoodsmarket.com/sites/default/files/media/Global/Company%20Info/PDFs/UBS_Conf 21 erence_NYC_October2012.pdf
- 22. Final words from Porter – my takeaways • Shared value enables a more holistic and creative approaches to economic value creation • Shared value thinking will spur innovation, productivity improvement and economic growth • Businesses are not charities, and can be a very powerful force for tackling many issues facing our society • Businesses need to transform their thinking beyond how their current business model is formed • Shared value allows businesses to rethink and redefine their purpose beyond profit maximization Source: Michael Porter, Creating Shared Value – Redefining Capitalism and the Role of Corporation in Society FSG CSV Leadership Summit June 9, 2011 22
Notas del editor
- Hello everyone!! Thanks for coming to this strategy lunch session, not sure if you have any specific expectation and why you would even consider showing up, but since I have podium, I will talk and share with you why I want to do this. I do find some strategic topics extremely fascinating and so fascinating to the point that I have to present and share my them. Do feel free to interject, there is a question at the end for further discussion at the end. I went to a business conference and Michael Porter spoke. Porter is a renowned professor at Harvard. For many of you, you must be familiar with some of his research work such as Porter’s 5 Forces that describes the various market forces and his book competitive advantage of nations. He has yet again come up with another strategy concept called Creating Shared Value which is the topic of discussion today. Porter essentially opened his session by saying the above -
- Creating shared value is not corporate social responsibility or CR, it is according to Porter, beyond CSR. CSV is not about being a good citizen, but rather when companies build strategies, these strategies need to integrate and incorporate social and environmental aspects. Some academics believe by isolating CSR / Philanthropy and call them out separately, fail to see the picture of really what business needs to consider when they develop their strategy and refine their business model.
- Skim
- This spurs also self sustaining economic growth when certain poorly served customer groups are better served as a result.I have some interesting examples afterwards.
- Supply chain efficiency, lower environmental impact, access to innovationEnabling local clusters mean through your value chain and product and service development, you are the catalyst to build a local sustainable business eco-system. The most obvious one is Silicon Valley. London, Ontario – before was automotive, now is life sciences The industry is rooted in the diverse areas of research and expertise developed at such institutions as the Robarts Research Institute (Canada's largest privately-funded medical research facility), CSTAR - The Canadian Surgical Technologies and Advanced Robotics Centre, Lawson Health Research Institute, the National Research Council of Canada and the London Regional Cancer Centre.
- NestleOct 21, 2012 65.95Oct 21, 20025.5310 yr CAGR 0.281294515UnileverOct 21, 2012 37.15Oct 21, 2002 14.510 yr CAGR0.098649296General MillsOct 21, 2012 39.99Oct 21, 2002 16.810 yr CAGR 0.090596783
- Wholefoods is another great example of shared value creation.I shopped at Wholefoods once and I was intrigued by the service level, so friendly, so happy, eager to chat. I love people when they bother to entertain my kids during check out. I mildly complained as to why my chit was so expensive, she said this beats buying from Walmart. She said she used to work at Walmart and so did a few of her colleauges. She said people that work at Walmart are bad people, but they are being treated like human being. They are the same people.
- WFM = 96.65 Oct 21 2012; 22.21 Oct 21 2002.CAGR = 15.84%KR = 25.12 Oct 21 2012; 13.61 Oct 21 2002CAGR = 6.21%
- From the Walmartexeample, I found a great presentation done by John MacKey Co-Founder and Co-CEO of WholeFoods
- I see this as very similar to Porter’s SVC
- Most important thing I want to highlight here are:Higher purposeReconciles caring and profitability through higher synergies Holistic ecosystem of business as a complex adaptive systemRequires genuine transformation – not just lipservice
- Transform thinking and approaches to create economic growthBusinesses are not charitable giversMay be we need to revisit our value chain and identify our long-term approach, but first they often ask what is our purpose