In the past this blog has waxed lyrical about shared value…. the concept of creating positive outcomes from business that benefit all stakeholders. With this ultimately delivering stronger, more sustainable value for shareholders. Shared value and similar concepts have been championed by Michael Porter and Mark Kramer, as well as Omair Haque. Now Valerie Bockstette has added to this work with the concept of the trampoline approach to value creation in business..
Too often companies approach their engagement with social and environmental issues with a safety net mentality: reacting to vocal stakeholders, minimizing risk, doing the bare minimum to comply with standards…
This approach is nowhere near enough to tackle the pressing problems we all face… Indeed, I see some of our most vexing societal problems as opportunities for the private sector. They can only be seized through a different approach…
A trampoline approach is one that is focused on value creation, not the mitigation of value destruction. An approach that turns societal challenges into new markets. Safety nets prevent things from falling; they are responsive and defensive. But trampolines propel things forward.
This is certainly what I have witnessed from my time spent in India with many social entrepreneurs. These innovators are seeing market failures (i.e. social and environmental issues) as massive opportunities. A chance to flex their creative muscle.
In the article, Bockstette, goes on to provide a set of self-relfective questions companies should consider when they think to themselves “are we prepared for the future economy… How will out products, corporate culture and reputation stand up?” .
What are the key societal issues in my company’s context? If you’re a car company like Audi, you are worried about access to renewable energy. If you’re a healthcare technology provider like GE, you’re worried about the healthcare sector at home and abroad. Or, if you’re an F&B company like Nestlé, you’re worried about the practices in your supply chain.
Which of these are impeding growth (or representing untapped markets)? In Audi’s case, it is the inability to capture daily excesses in renewable energy. In GE’s case, it is the quality, cost, and access issues plaguing healthcare, and for Nestlé, it is excess water use in agricultural production.
How can I — and capable partners from all sectors — actively solve the problem? For Audi, it is engineering an energy storage solution in cooperation with multi-sectoral partners. For GE, it is the multifaceted healthymagination campaign. And for Nestlé, it is working with agronomists to help hundreds of thousands of smallholder farmers improve their farming practices.
Fundamentally, for pragmatic organisations, the trampoline approach is about being pro-active rather than reactive. Spotting opportunities to create shared value before competitors or new entrants do.