Creating Shared Value – What Does it Really Mean?
Written by Deborah Rozman, President and CEO of Quantum Intech, Inc. (dba HeartMath Inc.) Wednesday, 25 May 2011 14:24
Successful collaborations are built upon shared values of respect, care, integrity and heart-connection between people. This is true whether the collaboration is between shareholder and CEO, managers and teams, or between companies. Corporate Social Responsibility (CSR) is not just heady ideas and metrics; it's about heartfelt connections that empower, and somehow we need to capture that in our metrics.
In their controversial article, “The Big Idea: Creating Shared Value” (Harvard Business Review Jan–Feb 2011), Michael E. Porter and Mark R. Kramer state that businesses still "continue to view value creation narrowly, optimizing short-term financial performance in a bubble while missing the most important customer needs and ignoring the broader principle of shared value, which involves creating economic value in a way that also creates value for society by addressing its needs and challenges.” They go on to say, “Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success.” Their article has engendered controversy because many believe that CSR embraces that same definition of “shared value.”
We agree with an important distinction that Porter and Kramer are highlighting when they say “realizing it [shared value] will require leaders and managers to develop new skills and knowledge — such as a far deeper appreciation of societal needs, a greater understanding of the true bases of company productivity, and the ability to collaborate across profit/nonprofit boundaries."
In our for profit/nonprofit collaboration between the Institute of HeartMath research and educational 501(c)3 organization and Quantum Intech Inc.( dba HeartMath Inc.), we have studied and implemented shared value practices since 1991.Shared Value is more than a score card of social and environmental performance, transparency in governance, local purchasing practices and beneficial impact. Shared value is based on shared values.
Our research at HeartMath found that to create heart-connection in a sustainable, meaningful way requires learning to be responsible for your own internal, mental and emotional energies. Internal energy management is as important as external energy management for CSR. Most of the blocks to connecting with one's own heart or with the hearts of others are constructed with judgment, anger, blame, jealousy, selfish ambition, greed, comparisons and other energy-draining attitudes and behaviors that create stress and dysfunction. Whether vented or repressed, these energetic blocks impede sharing value and economic return.
I have met wonderful caring and sharing people at the SoCap conferences, in our own funders at RSF and Calvert, and, through their introductions, other caring people in the conscious capital world. It's heartening to feel resonance with investors who are committed to changing the way the world works with money and understand that internal energy self-management is critical to that. They recognize there is a shift in consciousness going on and feel they are here to facilitate that. It's reassuring to see collaborations emerging where socially conscious companies share best practices and facilitate each other's missions. They are demonstrating a shift from competition to collaboration, and increasing each other's value as a result.
At HeartMath, we are providing research-based tools and technology for internal energy management to increase shared value and economic value for all stakeholders. Quantum Intech (HeartMath Inc) has been profitable for the past six years and received a score of 119 (of 200) on the B Impact Rating System from B-Lab, the certifier of Benefit Corporations (B Corps). We received $1.1M in growth capital from the RSF Mezzanine Fund, L.P. (a part of RSF Social Finance) and the Calvert Social Investment Fund Equity Portfolio (part of Calvert's Special Equities investment program) and are raising an additional $2M to scale our scientifically validated internal energy management programs and technologies.
“With HeartMath® tools, I can take a step-by-step methodological approach to my own psycho-spiritual-biological health and see how that relates to the broader community and societal health. For quite a long time now, Quantum Intech has been speaking in terms of biological health to spiritual health to community health in a disciplined way—I can't think of any other organizations that are looking at health in such a holistic, far-reaching way. And I feel the world consciousness is more ready for it now than perhaps at any time in our history.”
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