Michael E. Porter is the Bishop William Lawrence University Professor at Harvard University. He is a frequent contributor to Harvard Business Review and a six-time McKinsey Award winner.
Mark R. Kramer cofounded FSG, a global social impact consulting firm, with Professor Porter and is its managing director. He is also a senior fellow of the CSR initiative at Harvard’s Kennedy School of Government.
The Idea in Brief
The concept of shared value—which focuses on the connections between societal and economic progress—has the power to unleash the next wave of global growth.
An increasing number of companies known for their hard-nosed approach to business—such as Google, IBM, Intel, Johnson & Johnson, Nestlé, Unilever, and Wal-Mart—have begun to embark on important shared value initiatives. But our understanding of the potential of shared value is just beginning.
There are three key ways that companies can create shared value opportunities:
• By reconceiving products and markets
• By redefining productivity in the value chain
• By enabling local cluster development
Every firm should look at decisions and opportunities through the lens of shared value. This will lead to new approaches that generate greater innovation and growth for companies—and also greater benefits for society.