Shared Value: from vicious circle to virtuous cycle


Economic Growth Isn't Working

Image by tonyhall via Flickr

Apart from the kudos of being a Harvard Professor, Michael E Porter is much sought after by some of the biggest Corporates on the planet. He “knows” and, in this article, he spells it out.

Hallelujah!!!

But is anyone in UK actually listening!?

…diminished trust in business leads political leaders to set policies that undermine competitiveness and sap economic growth. Business is caught in a vicious circle.

A big part of the problem lies with companies themselves, which remain trapped in an outdated approach to value creation that has emerged over the past few decades. They continue to view value creation narrowly, optimizing short-term financial performance in a bubble while missing the most important customer needs and ignoring the broader influences that determine their longer-term success. How else could companies overlook the well-being of their customers, the depletion of natural resources vital to their businesses, the viability of key suppliers, or the economic distress of the communities in which they produce and sell? How else could companies think that simply shifting activities to locations with ever lower wages was a sustainable “solution” to competitive challenges? Government and civil society have often exacerbated the problem by attempting to address social weaknesses at the expense of business. The presumed trade-offs between economic efficiency and social progress have been institutionalized in decades of policy choices.

Companies must take the lead in bringing business and society back together. The recognition is there among sophisticated business and thought leaders, and promising elements of a new model are emerging. Yet we still lack an overall framework for guiding these efforts, and most companies remain stuck in a “social responsibility” mind-set in which societal issues are at the periphery, not the core.

Creating Shared Value

Revisited: RBS Bonuses, Bullying & (more) BS


I had a sick – disgusted – feeling in the pit of my stomach when I read these statements:

Banking: Stephen Hester, chief executive at RBS, yesterday told the Commons public accounts committee that he was “low paid” compared to people in equivalent jobs. (Scotsman page 11).

At the same meeting Eric Daniels, former chief executive of Lloyds, angered MPs by suggesting that the banking crisis was good for the UK.

It did bring to mind an old blog item that does still make me smile…

RBS Bonuses, Bullying & (more) BS BBC News – Royal Bank of Scotland announces £3.6bn of losses In the style of “Points of View”: Why oh why oh why are we subjected to numerous column inches, hours of discussion, Select committee interviews, general politicking and bullsh*t on what are patently SYMPTOMS!? It is all just further evidence that it is the CULTURE that needs to change before anything else of any real significance or permanence will occur. As far as RBS is concerned, it … Read More

via Get “fit for randomness” [with Ontonix UK]

CEO’s recognising BENEFITS of sustainability


CEOs See Sustainability Issues as Critical for Future Business Successrecycle istock_000008722438xsmall

CEO’s seem to spend a lot of time participating in surveys. This may not come as a surprise to some!

Perhaps, talking about sustainability is part of their therapy to help deal with the “trauma” associated with contemplating consultancy-sponsored questions relating to the, apparently, numerous strains of a growing complexity pandemic!? I DO wonder how many [CEO’s or consultants] have recognised the relationship between the two? Irrespective we should ALL be grateful that both are now on the agenda.

The vast majority of CEOs believe that sustainability issues will be critical to the future success of their business, and they want investors to more accurately value sustainability in their long-term investments, according to a new survey by Accenture and the UN Global Compact.

The survey involved 766 CEOs and top executives, including face-to-face interviews with over 50 of the world’s foremost business executives.

This new research found that:

  • 93 percent of the CEOs polled believe that sustainability issues will be critical to the future success of their business.
  • 86 percent want investors to better price sustainability issues into valuations.
  • CEOs are addressing sustainability issues in new ways.  For instance, 58 percent of survey respondents cited the consumer among their most important stakeholders, even above employees (45 percent) and governments (39 percent).
  • 91 percent of those polled said that their company would be employing new technologies and innovation to help meet sustainability goals over the next five years.
  • Partnerships and collaboration are increasingly important. 78 percent of survey respondents feel that companies should engage in industry collaborations and multi-stakeholder partnerships to address sustainability goals.

In 2006, the UN launched the Principles for Responsible Investment Initiative (PRI), a $20 trillion effort developed to persuade mainstream investors to better integrate environmental, social and governance (ESG) issues into valuations and investment processes. At a major UN Summit in New York City last week, Donald MacDonald, PRI Chairman urged investors to ‘push further’ despite recent progress.

“Time and again investors have seen how ESG issues can affect investment performance and there is now a critical mass of institutional investors who know that good management of these issues is an  important factor in for the  long-term financial success of their investments.  I expect the next decade to be an age of responsibility for capital markets,” he said. “If a company has poor corporate governance or persists with bad environmental management then it can, and should, affect the long-term valuation of the company. The truth is that’s still a relatively new concept for many investors, but there are now leaders in mainstream markets that have developed the tools and models to integrate sustainability and who can push the global capital markets beyond the tipping point on sustainability.”

The 60-page report, titled A New Era of Sustainability, is available here.

Related articles by Zemanta
Enhanced by Zemanta

RBS Bonuses, Bullying & (more) BS


BBC News – Royal Bank of Scotland announces £3.6bn of losses

In the style of “Points of View”: Why oh why oh why are we subjected to numerous column inches, hours of discussion, Select committee interviews, general politicking and bullsh*t on what are patently SYMPTOMS!?

It is all just further evidence that it is the CULTURE that needs to change before anything else of any real significance or permanence will occur.

Merciless leader Top performer

As far as RBS is concerned, it is pretty common knowledge that their “disgraced”, but unpunished and not impecunious, former leader has a track record akin to  Genghis Khan at the peak of his powers. Ok, so in keeping with modern etiquette his enemies were only put to the literal (financial) sword…whilst he is STILL a Knight of the Realm. Many of them, deemed to be ”traitors” from within his own ranks, suffered…along with their, equally innocent, families…as a direct result of their familiarity with old fashioned values – like Governance, Risk & Compliance

A great quote sprang to mind:

“IF YOU CAN’T CHANGE THE PEOPLE…CHANGE THE PEOPLE”

So Stephen Hester tells us that “…… some of our best-performing people have been leaving in their thousands”. As a taxpayer and, therefore, shareholder – for what that is worth – I am delighted to hear these greed merchants and acolytes of a disgraced and discredited regime are taking their “skills” elsewhere. PERHAPS THEN THE EMPHASIS MAY SWITCH TO DELIVERING THE TYPE OF PRODUCTS, SERVICES AND INVESTMENT STRATEGY THAT COMMENCE THE PROCESS OF REBUILDING TRUST.

START TREATING THE PEOPLE THAT YOU DO BUSINESS WITH AS STAKEHOLDERS (not idiots) AND DEMONSTRATE THAT YOU ARE SERIOUS ABOUT “CHANGE”. OTHERWISE TAKE THE KID GLOVES AND SHEEPS CLOTHING BACK TO THE FANCY DRESS SHOP. WE AIN’T BUYING IT!