Creating Shared Value : The business of development & 3 things YOU can do !


Understanding businesses today

Part 1

Long time ago, there was a tortoise and a hare who had an argument about who the faster runner was. They finally decided to take on one another for a race.

As the race started, the hare sprinted ahead briskly for some time. Realizing that it will take some time for the tortoise to catch up with him, he decided to seek shelter from the sun under a tree before continuing the race. As he sat under the tree, he gradually fell asleep. The tortoise, crawling at a steady pace, eventually overtook him and won the race. The hare woke up and realized that his complacency cost him the trophy.

Moral: By the 1970, the industry and government was working on their own agenda and businesses felt that being slow but steady would get them to win the race.

Part 2

The hare realized that he was over confident, complacent and took things too easily. He decided to have a re-match with the tortoise. The tortoise accepted his challenge.

This time, the hare ran with all his might and didn’t stop until he crossed the finish line.

Moral: Fast and consistent will always beat the slow and steady. By 1980’s business were realizing the need to be faster and agile, India saw a splurge of global interventions that was to make Indian businesses work faster.

But the story doesn’t end here.

 Part 3

This time, it was the tortoise that did the soul searching and he realized that if the hare didn’t stop, there is no way he will beat him. He thought hard and decided on a different course and he challenged the hare to another re-match. The hare, of course, agreed.

With the lessons learnt from his earlier failure in mind, the hare kept on running once the race started and didn’t stop until the route leads him to the bank of a river. He was taken by surprise and he did not know what to do, since he could not swim. There were no bridges in sight and no one to ask for directions. As he was cracking his head, thinking of ways to cross the river, the tortoise strolled slowly along, dived into the river, swam across it and ultimately, finished the race before the hare.

Moral: Know your strengths and take on your competitors in areas of your core competency. Do you remember how all of sudden all doctors were specialists by 1990, It just wasn’t the doctors, but all businesses.

While the governments were busy with their bureaucratic tantrums, the industry learnt to discover its strengths and live through a quickly globalizing fast-paced market. By the 1990’s, everyone was specializing, everybody who was doing everything was now picking battles that appealed to their personal strength.

The business and government were both becoming technically savvy but at different levels.

The story still hasn’t ended.

Part 4

With the hare and the tortoise spending so much time together racing, they have learnt to live together, they have also developed mutual respect for one another as they realized that they are both different and they have different strengths. They decided to race again, but this time, as a team.

As the race started, the hare carried the tortoise and they sped to the river bank. There, they switched positions and the tortoise ferried the hare across the river. On the opposite bank, the hare again carried the tortoise and they crossed the finishing line together. They completed the race in a record time that both of them can never achieve if they were to do it alone. They also felt a greater sense of satisfaction than they’d felt earlier.

Moral: After the year 2000, it has been increasingly the sense of partnership governing most successes in businesses and otherwise. We a seen a remarkably higher number of government and industry partnerships. A higher number on mutual decisions that benefit most and most importantly a say in the policy making. While it has its glitches but for good cause people do come together.

Driving CSV for the future – Impacting the bottom line

In all this slowly has emerged a third partner, society, it elects the government and is a supplier to businesses. A very interesting position to be at.  Society is now at the driving seat towards the future and it only will decide the fate of government and and business in the years to come.

Simply put, growth of the nation depends on the education and decision making abilities of the society which in turn will govern the sustenance of industry. It is multi-dependent situation to be in and everyone has something at stake. One can’t function without the others any  more.

That is what makes this era, the era of Creating Shared Value between society and business.

Enough with the background. I know this sounds good for people with Moolah to match. But Not Everyone – right ?

Nestle is doing a good job with their bit in helping the society and in the process helping themselves.  Read more about how they are creating shared value at http://www.nestle.com/CSV.

But is the Nestle story enough to convince the SME’s to give a hand with CSV?

Here are three things you can do as an SME with the reasons why :

1. It’s a give and take world : As a business if you want to take people’s money, it’s just not going to work any more. People are smarter and penny-wise. Look at what can you give back to the immediate society.

Example: You are a small business owner who manufactures candles. Maybe you can look at starting at candle making school for local population and take their material at a good price. That’s much cheaper than hiring people and drives considerably more commitment.

You are getting a finished product with a better margin as a business and people are becoming entrepreneurs in return. That’s CSV.

2. Give enough and you will get it back – compounded :What you do for the society drives as leverage. Sounds almost Utopian? It’s not.

Example: Fab India – What started as a small venture led to employment of thousands of people. recession and inflation came and went , unions were set up and dissolved – They never really had a strike that impacted their output. While all their neighbors did. Guess why – Because their workers stood up for them in difficult times. That’s what you get when you give with an open heart.

3. Take only what you need: While most people (SME business Owners) work on the philosophy of ‘Take what you can!’ ; ‘ Take only what you need’ may be the change in attitude the society is looking for. CSV is not an annual investment or tax benefit, its not CSR, donation or charity. It about you as a business being an enabler for the society.

Example: What can a small NGO do which has absolutely limited budgets ? There is one story that I know of; a small kid introduced to his first camera in an orphanage. Today he is one of the best photographers in India. Google up – Vicky Roy – INK Fellow.

In a simpler sense, all I am saying is spread hope.

To summarize – three things all SME’s can do to create shared value :

1. Find common ground where you can get what you want from the society directly while helping them become employed.

2. Build social credibility to drive social commitment to your business.

3. Spread hope that allows people to believe in the possibilities.

Other than Nestle, another organization that makes me want  to work with CSV is Maruti – when they came to India in 1982, they did not have any vendors or suppliers. So they found people and enabled them with the technology, learning and skills required to be their suppliers. In some cases even the investment needed.

Today those vendors are multi-million dollar companies.

So take a step – go the extra mile – create shared value!

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