On the biz school front

Posted on January 12, 2012 by Nigel Cameron

Business Week has an interesting piece that ties in OWS and CSR and B schools. The broad impact of OWS has yet to be tallied (it’s already impacted the GOP campaign, the unseen guest at every Bain/Romney discussion), but there’s no question that the negative portrayal of (some) market capitalism that has part caused and been promoted by the movement articulates precisely with aspects of the CSR agenda.

There are more fundamental reasons to integrate very serious thinking about CSR (and “shared value”) into business education, but there is no more topical one.

http://www.businessweek.com/business-schools/occupy-our-business-schools-01112012.html

On Michael Porter’s Shared Value Salvo

Posted on January 2, 2012 by Nigel Cameron

Wrote this originally on Michael Porter‘s Shared Value article for my U.S. Chamber of Commerce column. Values and value go beyond the “CSR” agenda and intersect in ways that are going to get more and more interesting.

Michael Porter’s salvo: one of our greatest business gurus redefines capitalism. Perhaps.

There’s been a lot of talk about the “new CSR” – corporate social responsibility as something other than philanthropic giveaways with an eye on looking good. Which may be an unfair way to characterize corporate engagement in social good over the years – from Rowntree to Hershey to Tata – but the split between gross generosity after the fact (Carnegie will always be the best/worst example) and marginal generosity during, has been almost universal. We recently discussed this in the context of Gates and Buffet. The business of business, has gone the mantra, is to be successful as business. What owners of capital do with their profits is up to them.

The shift to a more holistic model has been underlined dramatically by Porter’s intervention. Those who have not labored through MBAs need to realize who this guy is. There’s probably no-one on the business school circuit who has been respected quite so much, for his brilliance and detailed-minded laying the foundations for clear-minded, strategic, business thinking.

Porter is in no way talking about sprinkling money around to good causes to burnish brand. He is after a whole new understanding of capitalism, in which “shared value” lies at the heart of value creation, and aligns innovation and the community’s good as well as profits. It all seems too good to be true, and the critics (cynics? perhaps, perhaps not) have been out in force. Even that beacon of balance The Economist found itself slyly quoting an off-the-record comment from Larry Summers at Davos: “Does he really believe this s***?”

Well, anyone who is aware of what’s what in 2011 knows that paradigms are being shattered all around us. One of the characteristics of a paradigm shift is that a lot of people – including generally the smartest, wisest, most respected – are sure it will not change. Someone comes along and challenges their view, and is derided all round. Until suddenly change has come. Then the outlier who sounded crazy becomes leader of the new pack, and everyone claims that’s what they were really thinking all along.

That having been said, this is pretty strong stuff. Listen to the Great Man: The concept of shared value recognizes that societal needs . . . not just conventional economic needs, define markets.” And more: this is not about redistribution of value – sharing what the firm has created – but “it is about expanding the total pool of economic and social value.” Porter brings this back to his approach to creating value: “Strategy theory holds that to be successful, a company must create a distinctive value proposition that meets the needs of a chosen set of consumers. The firm gains competitive advantage from how it configures the value chain . . . .” He argues that in recent decades companies have narrowed their vision of how to create value, and seen value as quite separate from the good of the community except insofar as consumers need to like the brand. At the same, time, visionary approaches have moved the other way. Fair Trade. Wells Fargo’s efforts to help consumers budget and cut debt. GE’s Ecoimagination lines. And innovation has been spurred in the process.

What to make of all this?

Three things are very clear. First, straws are blowing in a wind of change. How fast is it blowing? We do not know. It is unlikely to be the case that within X years, suddenly, social good will be the driving force of capitalism, the need for much of the government and private philanthropy will fall away, and we shall be close to heaven on earth. But a trend is a trend. Kudos to Porter for jumping ahead of the curve.

Second, as I have been arguing elsewhere, the speed of change and the impacts of emerging technologies are becoming more dramatic by the day – which means that the values of society are more and more important as new products and services are developed. Values create markets. The more revolutionary products become, the more important it will be for them to sync with the values of their prospective buyers. And, in parallel, with their risk tolerance: regulatory regimes themselves are ultimately the result of the values of the community.

Third, Porter has picked a great time to focus the issue in this way. There is widespread unease, inside and outside the business and finance communities, at the tendency of capitalism to focus on the short-term and to disjoin long-term good (even in simple economic terms) and short-term incentive (banks may or may not be too big to fail; why can’t bankers fail?).

So the stakes have been raised – both on the CSR end of this debate and on the future of capitalism itself.

Let him have the last word: “The principle of shared value creation cuts across the traditional divide between the responsibility of business and those of government or civil society.”

Creating Shared Value, Harvard Business Review, Jan-Feb 2011.

The UEA Climate Mess

Posted on July 8, 2010 by Nigel Cameron

News that the third committee looking into the scandal that lately enveloped the UK’s lead climate center at the University of East Anglia (UEA) has finally delivered its report, and while clearing the top scientist involve of dishonesty chastised him for much else, raises all kinds of issues.

As is widely recognized, the hacking of a large number of emails from UEA handed an advantage to those critical of the position of the International Panel on Climate Change (as had several other discrete events, especially the exposure of the scary Himalayan glacier scenario as some kind of muddled error based on a popular publication) – in the crucial run-up to the Copenhagen summit. While it is hard to establish cause and effect, the failure of the summit to achieve what many had hoped for and expected was certainly not helped by the errors – and the whiff of hubris that lay behind them.

The point here is that the climate change debate runs from science and technology through social values and civil society to governments and the global community; it’s a phenomenon which offers a highly unusual case study. What led to the tipping point turning particular views among many science experts into a global movement is hard to explain. Many factors came together. By the same token, what led the movement to tip backwards at Copenhagen is also obscure. We can identify factors; it is hard to suggest causality.

What is of interest is the manner in which technical views (contested by some serious experts, but widely held) turned into a global crusade and then suddenly, when the key global policy event was convened, faltered. Without prejudice to the significance of this set of issues, there are many more with global moment that have barely reached the consciousness of a small, indeed tiny, minority. Yet they could. It may be they are of vast consequence; it may be they are not. But they would take on consequence if they experienced the kind of viral spread that climate change has. For example, what about the impact of humanoid robotics on employment? In x years’ time, it could be profound, essentially extinguishing either (the optimistic view) the need for menial, repetitive, unskilled labor; or (perhaps more realistically) the job opportunities of billions of unskilled and not well-educated persons. Or what about disastrous damage from asteroid or comet collisions? Or the escape or malicious manufacture of a dangerous pathogen? Or . . . . There is a very long list, much of which is tabulated in the illuminating short book by Martin (Lord) Rees, currently president of the UK’s Royal Society and a leading astrophysicist, Our Final Century. (American readers note: the silly title stateside is Our Final Hour. Rees is making an argument about the 21st century.)

Point is: the crossover from informed smart S and T opinion to, as it were, the public domain, is not a simple, logical progression. It occurs (cf. Thomas Kuhn and his evergreen prescience) in a jump. Just like the question, why did Europe decide to say no thank you to GMO food? The interface of heavy science research and widespread public sentiment is no easy thing to predict or manage. Next week I shall be at a conference of the U.S. National Nanotechnology Initiative on “stakeholder” attitudes to nano and the NNI’s latest strategic plan. People in general know and care little about these things. Then, all of a sudden, they care a good deal, whether they know or not.

Whatever other lessons we learn, the road from An Inconvenient Truth to Copenhagen went by way of some seriously short-sighted decision-making at the University of East Anglia. That may or may not have been where the wheels came loose. But as the 21st century presses ahead, the risk implications of public and political disinterest in science and emerging technologies get only greater.