Values driven Value


I’m working on an idea that if for profit businesses are all about delivering value, then not for profit enterprises are about delivering on values. In 2012 and beyond we may see more of these two elements combining to bring about the values driven business. Money driven social enterprise if you will.

Consumers are looking for businesses that have sustainable business practices, that are ‘gentle’ on the environment, that utilise local resources rather than outsourcing everything overseas and are activity contributing to the positive health of community through their core business.

Since their invention, companies have focused on creating shareholder value as their primary objective. Consumers however are looking to those companies in an attempt to measure their shared values to see if they are the sorts of company their want to do business with. Shareholders too are looking at businesses to see if they ‘fit’ not just if they’ll fly financially. It’s not all about the mighty dollar any more.

For too long commercial organisations have tried to show how much they ‘care’ about the community by creating corporate social responsibility programmes (CSR) with the aim of offsetting some of their less positive activities (such as digging large holes in the ground, cutting down trees. filling our air with smog etc) or to emphasise their efforts to contribute to their community by promoting their charitable giving or the volunteering efforts of their staff. All of these things run along side their actual raison d’être. In the worst cases, these programmes are often add-ons and little more than lip service for some organisations. It’s something corporations have to be seen to be doing in order to be seen as good corporate citizens.

However the world is changing and consumers are asking for something more. It is not enough that businesses make good on their less popular actions by offsetting with ‘good works’. Consumers are looking for companies to change their business models so that their core business actions change. Make money but do it without destroying the planet and without destroying ‘my’ local community in particular.

In the past non-profit organisations were the ones which, by focusing on what is important to their constituents and stakeholders: their values, attempted to address the social imbalances of the world by helping to provide clean water, housing, medicine to the poorest of communities, protecting endangered species. At the same time, in part due to their use of the public purse, they are required to be come more efficient, more business like. Commercial businesses are behaving in their practices more like for-profits and in turn, commercial organisations are re-examining their modus operandi to determine what really matters and the way they make money; in effect becoming more like non-profits. What we’ll see is a merging of these two into a hybrid for-profit, for purpose organisation that is in the business of making money while at the same time attempting to address the key social issues of our time: poverty, health, inequality, education. Is this what is meant by social entrepreneurship?

More on this later. Comments?

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