Originally published on the Aspen Ideas Festival website
Bobbi Silten is Managing Director of the Shared Value Initiative, a global platform for leaders seeking to address societal challenges through business solutions. A longtime practitioner of leading social change through business, Silten previously spent 12 years at Gap Inc., most recently as executive vice president of global talent and sustainability. She will be moderating the panel A Corporate Purpose is Not Enough in the 2019 program track Defining Economic Progress.
We talked with her about the rise of corporate purpose and the role that shared value plays in delivering on its potential.
The idea of purpose in business is trending. From where you sit, why is the trend important and timely?
The idea of companies having a purpose isn’t new. In fact, most businesses start with a purpose in mind — a problem to be solved or a consumer need addressed. Some of these problems or needs were grounded in social good, but many were not. It doesn’t mean those origins aren’t genuine or valid, but I believe they need to be re-examined in a time when the meaning of corporate purpose must catch up with the realities of the 21st century.
The world has never been richer, but never more unequal with the top 10 percent of adults holding 85 percent of the global wealth. The world is out of balance and we’re seeing this imbalance present itself in our public discourse, elections, and growing resentment and suspicion of those with power and resources who seem to be writing the rules of the game.
The United Nation’s Sustainable Development Goals clearly lay out the opportunities for social and environmental change and emphasize the importance that the private sector will play in the achievement of the SDGs by 2030. With all the disparities in wealth, barriers to opportunities for stability and prosperity for so many, and climate change testing the resilience of communities and governments, corporate purpose needs to take on a more substantive meaning that integrates societal benefits and helps meet the needs of our time.
While declaring a corporate purpose is a good first step, how do companies actually deliver on it?
Having a corporate purpose that serves more than shareholders and includes community, customers, employees and the business is critical, but alone it is insufficient. Purpose matters when you put it into practice and deliver positive outcomes for society and business.
A purpose-led company has a portfolio of strategies, policies, programs and practices that help it fulfill its purpose potential. One practice that I believe is the most powerful way to deliver on the promise of purpose is shared value. For those of you who are not familiar with the term, shared value is a business discipline that, according to its authors Michael E. Porter and Mark Kramer, “enhances the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates. Shared value creation focuses on identifying and expanding the connections between societal and economic progress.”
Unlike other forms of purpose-driven efforts, such as philanthropy or volunteering, shared value leverages a company’s core business which allows it to scale and multiply its impact on society. And because it’s tied to the core business and profit, it is more likely to be sustained and is less vulnerable to budget cuts. While some companies can fulfill a purpose without deploying shared value, I believe the potential of that purpose will likely not be ambitious and its long-term viability will remain in question. In the worst case, purpose becomes a tagline that has little substance and no meaningful impact to business or society. Purpose without ambition and a path to societal and business benefit is worse than not having declared a purpose at all.
How can shared value efforts contribute to economic progress that lifts and improves outcomes for everyone?
There is a growing number of companies that are engaging in shared value practices that directly or indirectly contribute to economic progress and inclusion. One direct contributor is the growth of workforce development efforts. There are many examples of corporate shared value programs that are building talent pipelines by providing a range of support to a talent pool that has historically been overlooked and under-valued such as re-entry workers, individuals with disabilities, and opportunity youth (16-24 year-olds neither in school or work). Support can include job readiness training, soft skills development, access to support services, tuition assistance and pathways to full-time employment. Many of these workforce programs are operating at significant scale creating employment pathways for tens of thousands of people. There is still more work to be done in this arena regarding wages and benefits as well as schedule predictability and stability. However, as more companies engage in shared value workforce efforts and experience a better way to build a talent pipeline, the goal is to see these practices evolve to more effectively embrace overlooked talent and support an inclusive economy.
Another shared value example of a direct contributor to improving economic outcomes is the work being done in the area of financial inclusion. According to The Global Findex Database 2017 (published every three years), 1.7 million adults globally are unbanked, with no access to an account through a financial institution or mobile money provider. While this number has declined since the last database was published, there are still a significant number of people without access to the formal financial system. This lack of access can impact an individual’s ability to receive money, make payments, save, borrow, and manage risk. The unbanked live primarily in developing countries and the lack of access to financial services can impact earning potential, starting and growing businesses, keeping money safe, and transferring remittances to family members in distant locations. Financial services can also help people save and plan for the future. Financial services companies see the opportunity to address this societal challenge and they are working with NGOs and governments to design strategies and products that address this market and foster greater inclusion.
You spent over three decades working in business with your last 12 years as a shared value practitioner and now you lead the Shared Value Initiative. What advice do you have for young people entering the workforce who want to change the way business is done?
When I entered the workforce in the early 80’s ideas such as CSR, impact investing, social enterprises, and shared value either weren’t mainstream or invented yet. If you wanted to create social impact you either went to work for a nonprofit or volunteered in your spare time. Since I had a lot of student loan debt, I made the choice to enter the private sector but never lost my commitment to society and eventually steered my career in that direction.
Today’s graduates have options with a range of career paths that integrate business and society. The advice I have is that given the powerful role that business plays in affecting social and environmental outcomes, engaging with the core business is critical if we want to move the dial on these issues. Whether a graduate follows a career path in the private, public, or social sector, I believe the best way to change the way business is done is to show business leaders, employees, and shareholders that there is a better way, a smarter way, to achieve both business and societal outcomes. It may not be a path that is easier in the beginning, but it will likely be a path that provides more viable, enduring, and holistic success and growth for business and communities. The idea of shared value embraces this thinking in an effort to create a more equitable, healthier and sustainable place to live, thrive, and do business.