Shared Value – Social Value

Nowadays everybody is “innovative”, everybody claims to deliver creative added value for its customers and creativity seems to come with such efficiency that the only question remaining is why products and services are still lacking much of the innovative spirit everybody seems to possess. One interesting hint in this direction comes from an article from Michael Porter and Mark Kramer on “Creating Shared Value“. The idea of shared or social value is not new – Schumpeter wrote already in an essay of 1908:

That it is society as a whole which sets values on things can be true in different senses … it is only so long as an individual is isolated that the total as well as the marginal utilities of all commodities he may possess depend exclusively on him. All utilities are changed when he lives within society, because of the possibility of barter which then arises. This possibility alters at once the individual’s appreciation of his goods. It has an effect on their values similar to the discovery of new ways of using them. Our individual will now put a new value on his goods because of what he can get for them in the market; and this new value depends on how much other people want them. This fact may be said to show a direct social influence on each individual’s utility curves.

However, Porter and Kramer take the idea to a new level by bringing together individual and collective benefit while leaving behind an overcome, consumerist view of capitalism in which the only societal purpose of business was to make profit. In their beautiful article they show how and where the interests of companies and their surrounding communities meet and can be fostered to the benefit of both. So, why is this relevant for us? Because it shows us a new and much broader perspective on how we can be really innovative: It is not all about lowering the price or changing the color of a product. We have to dig deeper and ask questions such as

1) Does the product really fulfill the customers’ needs? Companies that are well “connected” with their social surroundings and understand societal needs have a cutting edge in developing products that are also fulfilling customers’ needs in a better and more sustainable way.

2) Does it really take so much resources, energy, logistics and distribution effort to provide the product to the right customers? Companies that understand themselves as social networks including their local suppliers often get more output out of less input – just by unlocking the value coming from strong social value chains.

3) Does the company really harness the full potential of building local support clusters across industries and institutions? Companies that understand to use these advantageous connections are able to be more innovative in a more sustainable way.

Our main approach as Evonovation would be, to use our evolutionary knowledge about basic human needs to help companies identify the most pressing and unfulfilled customer needs (see point 1) – while at the same time reconnecting with their social surrounding in an evolutionarily informed manner. When this reconnection has been successful – points 2 and 3 will follow organically.


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