Emile cambry social devcamp

Thick Versus Thin Value

Emile Cambry, [email protected]

8/28/2011

Disclaimer!

•None of these arguments are political. It’s about economics, institutions, new practices and patterns, management, and ethics

The Last Decade Has Not Created

• Net jobs

• Growing median income

• Shareholder value

• Net Wealth

What It Has Created

• Towns, countries, and Households going broke

• Banks boosting margins

• Debt fueled hyper-consumption

• Productivity spiking

• Dwindling empathy, trust, and a sense of meaning in work, life, and play

This versus Thick Value Creation

Borrowed from Umair Haque, Michael E. Porter, and Mark R. Kramer from Harvard Business School

Adam Smith

“All for ourselves and nothing for other people”

Wealth of Nations

Capitalism can do better

Capitalists have to aspire to matter

Industrial age capitalism was about extracting

EducationH

ealthcareFinance

Food

Tran

spor

tatio

nEnergy

Myths of the 21st Century

• Firms exist only to create value for owners

• Financial profits is the best representation of enduring profit

• Competitiveness arises from extracting value from competitors by beating, bashing, and crushing rivals instead of creating a thicker, more broadly shared value

Ignoring the broader influences that determine long-term success

• Depletion of natural resources

• Viability of key suppliers

• Economic distress of the communities served

• Shifting activities to locations with even lower wages

Make a better product

Make a better service

Process Innovation

Shared/thick value has the power to unleash the next wave of global growth and innovation

Three ways to create shared value opportunities:

• By preconceiving products and markets

• By redefining productivity in the value chain

• By enabling local cluster development

21st Century Thick Value Arithmetic

Social Responsibility

Social Responsibility

The Enterprise

Neo-Classical Model: max(me), ~(you)

21st Century Paradigm Shift

The Enterprise

The Enterprise

SocialResponsibility

Companies Currently Pivoting

• GE: Investing in Education, the Environment, and Disaster Relief

• Wal-Mart: Environmentally Friendly Stores• Intel• Johnson & Johnson• Nestle• Unilever• Google• Apple• Nike• Starbucks

The archetype evil company?

Real Value vs. Perceived Value

Principles Shapes Behavior: Beyond Strategy

Social Leadership

• Don’t exploit resources

• Don’t race to the bottom

• Willingness to disrupt yourself

• Focusing on everyone’s outcomes/externalities

Blurring the Profit/Nonprofit Boundary

21st Century Youth Project

Chicago International Social Change Film Festival

21st Century Entrepreneurial Institute