What can your organization accomplish by creating shared value? It can help change the world – while making more money. But growing business and solving social problems can’t be solo endeavors, says Mark Kramer, who created the theory and practice of Creating Shared Value with Michael E. Porter. It takes a village, or more specifically, an ecosystem driven by collective impact.
“Societal conditions may curtail markets and restrict the productivity of suppliers and distributors. Government policies present their own limitations, and cultural norms also influence demand,” explains Kramer in the October issue of Harvard Business Review. “These conditions are beyond the control of any company. To advance shared value efforts, therefore, businesses must foster and participate in multisector coalitions – and for that they need a new framework.”
That framework centers on the principles of collective impact, a concept Kramer introduced in 2011. There are five elements that must be in place for collective impact to succeed:
- A common agenda
- A shared measurement system
- Mutually reinforcing activities
- Constant communication
- Dedicated “backbone” support
While simple to describe, these elements are immensely challenging to implement, cautions Kramer. But it is possible – and increasingly critical – for companies to create shared value and embrace collective impact.
Read Kramer’s article for myriad examples of these principles in action. And contact us to hear more about how your company can create an ecosystem to not only advance social progress, but also find economic opportunities your competitors miss.