Hacking Happiness: Why Your Personal Data Counts and How Tracking It Can Change the World (2015)
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Be a Provider
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SHARED VALUE
Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success. It is not on the margin of what companies do but at the center.1
MICHAEL E. PORTER AND MARK R. KRAMER
MICHAEL PORTER is the Bishop William Lawrence University Professor at Harvard Business School and the most cited author in business and economics from the Harvard Business Review. Within corporate circles he is generally recognized as the father of the modern strategy field.
For many people in the business world, this concept of shared value doesn’t compute. Survival depends only on increasing quarterly profits. It’s essential to have a good product or service to increase revenue, but helping others is left to people in public relations or corporate social responsibility. People may feel good about their companies giving to needy causes, but philanthropy or charity aren’t respected with regard to the bottom line.
But shared value isn’t about charity. Shared value, as the name implies, means identifying all the key stakeholders in a value chain for a business and seeing how everyone can benefit. There doesn’t need to be a moral imperative to help others. Identifying how everyone can benefit means you sustain your business longer than competitors who focus only on short-term gains.
A case study of shared value success comes from specialized coffee company Nespresso, one of Nestlé’s fastest-growing divisions. The company has enjoyed an annual growth of 30 percent since 2000, largely based on its dedication to working with coffee farmers to grow the brand.2 Most coffee farmers around the world work in impoverished rural areas and suffer from low productivity or quality of product due to their circumstances. Realizing that the core of their business depended on reliable sourcing, Nespresso made a business decision based on procurement needs: Establish local facilities near farmers to pay premiums for coffee beans while also providing education and equipment needed to produce higher-quality and more sustainable crop yields. The initiative was hugely successful and is now globally recognized as a case study to emulate with regard to maintaining a happy and healthy supply chain.
It’s easy to read this case study and think Nespresso was offering a form of philanthropy to its coffee growers by providing training and equipment that was able to increase farmers’ salaries. That’s not the case. Working with farmers was a core business decision not based on charity. While the company may have taken some short-term losses to purchase new equipment and provide training, long-term profits increased dramatically. Farmers were able to produce a higher-quality product, and that meant Nespresso outsold competitors. Greater levels of production offset salary increases, plus farmer loyalty meant attrition rates dropped. Shared value means higher profits in the long term. Employee loyalty also engenders a higher level of company morale, but it’s not a primary goal. Shared value provides a tangible economic benefit to an organization, not just philanthropic goodwill.
I wrote an article for Mashable called “Social Responsibility: It’s Not Just for Brands Anymore” where I compared the trend of shared value in the enterprise to accountability-based influence shaping people’s behavior. It’s reprinted here to show you how Hacking H(app)iness on a personal level means understanding and embracing the idea of shared value for your life.
SOCIAL RESPONSIBILITY: IT’S NOT JUST FOR BRANDS ANYMORE
It’s 2015 and you’re trying to get into an exclusive SoHo club. You fidget while the bouncer holds his smartphone to your face. From behind the red velvet rope, he takes a step back, his face morphing into a mask of disgust.
“You haven’t done jack for anyone else in over a week?” His voice is loud enough that others in the line point their devices at you as well. “No way you’re getting in here. This club is for people who give a damn about things other than themselves.”
Your face burns with embarrassment as everyone calculates the accountability-based influence (ABI) score branded on your forehead like a virtual scarlet letter. Your lack of involvement means you’ve been ostracized by the “in-cloud.”
What if your action-based reputation preceded you digitally? In one sense, brands have lived with this type of situation since the late sixties, with the advent of corporate social responsibility [CSR]. Today, social media’s focus on transparency has changed the attitudes of consumers and employees regarding the modern corporation. People won’t buy products from or work for organizations that aren’t actively trying to change the world for good.
At what point will this lens of morality be turned on individuals, where a variation of CSR is more personal? Although, to some extent, we’re already judged on our actions, we may soon be measured by the accountability metrics applied to organizations. Individuals need to understand how their actions will, quite literally, speak louder than their words.
The good news is that CSR is evolving as brands incorporate social good into their everyday business activities. Those lessons, largely based on the concept of shared value described below, provide a roadmap for individuals: how they can increase their personal value, or accountability-based influence score, while living a life that benefits the greater good.
Shared Value—Corporate Social Responsibility Permeates the Enterprise
“The idea in its purest form is that you reorient your business model around the fact that there’s an intersection between where your company is trying to go and what’s best for society,” notes Margaret Coady, director of the Committee Encouraging Corporate Philanthropy. “[CSR] is not a department or a job title—it’s a strategy for a firm to be successful over the next few decades.”
This model of sustainable value creation, similar to Michael Porter’s idea of shared value, moves CSR out of the realm of pure philanthropy and refocuses the notion of value based on overarching business strategy. For example, Coady cites that Western Union has created policy round tables that discuss immigration reform. At first, this seems odd for a company focused largely on wiring money. But, as Coady points out, many of Western Union’s customers are successful immigrants who wire money home to their families. “[While immigration reform] may be a controversial issue for a company to engage in, it’s central to the core customer of Western Union. It’s a social issue that’s also a business issue.”
In other words, the stuff you do that helps the world will help your bottom line. That same logic applies to individuals. As online influence metrics evolve, you’ll be able to increase your ABI score as you pursue everyday career and lifestyle actions—all while making the world a better place.
Supportive Accountability—Weight Watchers Members “Lose for Good”
“The [Lose for Good] campaign actually started as an idea from a local leader,” explains Cheryl Callan, chief marketing officer for Weight Watchers. “She was looking for ways to inspire members and told them to stack up piles of food equivalent to the weight they lost. It may not feel like that big of a deal when you’ve lost ten pounds, but when you see the food stacked up that you didn’t eat, it’s very motivating.” When members then brought the food to local pantries, they got to see how their efforts directly help others.
Since the campaign launched in 2008, Weight Watchers members and online subscribers have lost almost twelve million pounds. The brand has donated nearly three million dollars to charitable partners that provide children and families with access to nutritious food. The campaign was “not just the CEO who had a cause and somebody wrote a check,” notes Callan. By correlating the success of members losing weight to the good they could affect, Weight Watchers utilized shared value as a core business strategy.
For members, the Weight Watchers accountability model meant supporting others while encouraging more personal success.
Digital Checks and Balances—LinkedIn’s “Volunteer Experience and Causes”
“What happens when someone ticks off ten causes they don’t care about?” According to Nicole Williams, connection director at LinkedIn, the social community compensates using its system of checks and balances . . . “So if you say you’re involved and you’re not, people will call you out. Influence almost holds you accountable.”
A problem for many people is the notion of touting or flaunting their volunteer experiences, who may find it cheesy and insincere. Williams urges those people to reconsider. “The more you put out there, the more that people will want to volunteer as well.”
New research from LinkedIn shows that one out of every five hiring managers in the U.S. hired a candidate because of her volunteer work experience. Giving back can be the determining factor between two similar candidates.
A person can volunteer for organizations that reflect their overall passions as a way to get experience for a future career. “Volunteering used to only be about give, give, give,” says Williams. “Now it’s more cyclical—people are thinking about where they can contribute that’s also in the best interest of their careers, so they don’t get burned out.”
Checks and balances aren’t just about accountability. LinkedIn demonstrates the idea of shared value for an individual, a model for users to leverage their volunteerism for the greater good and for their own personal good.
Constructive Competition—Recyclebank and Rewards
“Influence needs to shape up and be better defined,” says Samantha Skey, chief revenue officer for Recyclebank, an organization that rewards their 3.3 million members for taking environmental action with deals from more than three thousand businesses.
“How much does online influence impact real-world action?” asks Skey. “Is the credibility someone earns for social action online a true representation of what they do in the real world? Correlating action to intent is something we’re working on measuring.”
Recyclebank measures using its “Eco-IQ” score, which identifies and helps change mainstream awareness around various environmental issues. Eco-IQ lets Recyclebank en-gage with a mainstream audience that may not otherwise address sustainability from an angle of environmental concern. Eco-IQ encourages peer recognition for affecting positive change in one’s everyday lifestyle. “We’re starting to see interest from individuals in promoting their own actions and the good they’re doing, because they enjoy the pat on the back that comes from being an ‘Ambassador of Green.’”
Some might fear that the reward incentive clouds a person’s genuine motives. But in the case of Recyclebank, the “friends justify the means”—the message needs to reach the masses, and celebratory dynamics work better than threats. Evolving your Eco-IQ in public means shared value for everyone involved.
Positive Profiling—The Evolution of “Klout Style”
“If you work for a certain cause, it’s easy for us to see the rest of your identity. So people would notice the difference between a guy who volunteered once versus someone who is really passionate . . . on an ongoing basis,” says Joe Fernandez, founder of Klout.
Fernandez said there weren’t immediate plans for a “Klout for Good” score per se, but the service’s existing “Klout Style” feature has the potential to include a social good metric. For instance, two people have Klout scores of fifty. One influences primarily via sharing links, so Klout calls him a curator. The other user influences via talking, so she’s a conversationalist. “I can definitely see expanding that to identify the type of person who is super responsible and cares about the greater good.”
In this way, people perceived by the social community as bringing positive change could more overtly receive shared value of their own. Therefore, the notion of “social access” described above may not be as hypothetical as it seems.
Evolved Capitalism: IBM and the Inevitability of Shared Value
“You can’t construct a carefully shaped public image which is out of synch with who you actually are,” says Mike Wing, VP of IBM’s strategic and executive communication [department]. Seen as the father of IBM’s Smarter Planet campaign, Wing is an expert on the “Internet of Things” and posits about the future of influence, when social good will become hyper-digital and location-based.
“Data ubiquity and potential transparency will take the qualities of what people are seeing in social media several powers higher,” he predicts, “and we will increasingly be making judgments based more on behavior than self-presentation.”
The prediction may seem dystopian, but it’s simply an evolution of our current digital existence. And as Wing points out, the bigger picture for the digital revolution will see emerging markets participating in the global arena. The two to three billion people who are now digitally connected is indicative of the fact that we’ve moved from a fat-tail world to a long-tail world.
In other words, the evolution of CSR via shared value is more than inevitable—it’s almost passé. “CSR is a function of a previous paradigm,” notes Wing. “In this context, there’s no sensible way you can talk about . . . the distinction between pure wealth creation and pure philanthropy.”
Accountability-Based Influence as the CSR Metric for Individuals
While a person’s actions can be perceived in a myriad of ways, various metrics from multiple sources aggregate that person’s digital persona. The projects described above provide shared value for individuals and the world around them as participants increase their accountability-based influence. By encouraging the notion of ABI as a metric, people will increase their positive actions.
The moral imperative to do good has been directed to-ward corporations. Why not adopt their evolved idea of shared value and change the world, for good?3
From Takers to Givers
Give and Take: A Revolutionary Approach to Success provides an intriguing example of how the idea of shared value applies to interpersonal relationships. The book was written by Adam Grant, the youngest tenured professor at Wharton University, who describes how in professional interactions most people operate as either takers, matchers, or givers. Takers brazenly seek their own gain, while givers sacrifice their needs, many times to their own professional detriment. The majority of employees are matchers, people who feel it’s important to maintain an equilibrium with colleagues in terms of social capital.
I interviewed Grant to discuss how his work reflected a shared-value mind-set. He pointed out that “productivity and profitability don’t have to come at the expense of supporting other people. You can succeed in ways that lift people up as opposed to cutting them down.”4 I asked him to elaborate on this idea, having succumbed to my giver personality where others have taken advantage of my nature at work.
People think being helpful and being generous means never advocating for your own interests. Givers often will sacrifice all of their time for others, making sure they’re always available. It’s obvious that this type of behavior pushed to the extreme isn’t sustainable. You can’t succeed if you never advocate for your own interests. How to deal with this situation is to pick an interest that aligns with that of a colleague—then your time spent advocating on an issue helps advance your shared goals.5
I also asked Grant about the future of Hacking H(app)iness at work. I wondered how digital tools and affective sensors would apply to the giver/taker/matcher model. In response to the idea that our meetings in the future may have digital facilitators that will indicate when someone has dominated a conversation, Grant noted that “in those situations a lot of people experience something social psychologist James Pennebaker calls ‘the Joy of Talking.’ Most of us find that communicating our thoughts to others is a purely enjoyable learning experience and it’s hard to give other people the floor.”
It can be difficult to realize when we’re being takers and dominating a conversation. Digital tools will be helpful reminders in the future to let others contribute to conversations where they might normally remain reticent. The unique ideas provided by people who normally remain silent will increase a company’s bottom line. Shared value for interpersonal relationships will create as much benefit as it does for a company’s physical supply chain.
The Balance of Well-Being
Intrinsic happiness isn’t based on a momentary increase of mood. It comes from spending time with family, or practicing a craft that takes time to develop, like learning an instrument. Shared value functions in a similar fashion. While short-term gains bring temporary satisfaction, they can’t sustain an organization over the long haul. Part of Hacking H(app)iness is understanding when established mind-sets aren’t working so you can begin benefiting from new ideas that will bring great profit to your life.