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Unit 2: Customer Value

Business at its Best is organized around five implementation imperatives for planning, managing Notes
and scaling a sustainable value creation strategy. These imperatives are:
1. Recognize the Opportunity: Analyze the root causes of existing core business challenges
to uncover underlying societal problems that, if addressed, may lead to new sources of
competitive advantage.

2. Recalibrate Your Radar: Pinpoint the optimal role the company can play in helping to
address those issues by expanding internal and external networks to tap into trends.
Improve the company’s ability to screen ideas based on need, uniqueness, strategic fit, and
core competencies.
3. Research, Develop, Repeat: Plan and manage sustainable value creation initiatives as R&D
projects and subject them to the same rigor as any corporate initiative, accommodating an
iterative development cycle and being prepared to learn from setbacks.

4. Rewire the Organization: When bringing a project to scale, embed new governance
structures, communications, incentives, and metrics across the organization to sustain
new behaviours and attitudes.
5. Reinforce the Value: CEOs will need to assume leadership to ensure the entire company
remains focused and motivated, and its stakeholders committed. This requires courageous
conversations with employees, consumers, investors, and partners.

Creating Shared Value (CSV)

Creating Shared Value is a business concept first introduced in Harvard Business Review article
Strategy & Society: the Link between Competitive Advantage and Corporate Social Responsibility. The
concept was further expanded in the January 2011 follow-up piece entitled “Creating Shared
Value: Redefining Capitalism and the Role of the Corporation in Society”. Written by Michael
E. Porter, a leading authority on competitive strategy and head of the Institute for Strategy and
Competitiveness at Harvard Business School, and Mark R. Kramer, Kennedy School at Harvard
University and co-founder of FSG, the article provides insights and relevant examples of
companies that have developed deep links between their business strategies and corporate
social responsibility (CSR).
The central premise behind creating shared value is that the competitiveness of a company and
the health of the communities around it are mutually dependent. Recognizing and capitalizing
on these connections between societal and economic progress has the power to unleash the next
wave of global growth and to redefine capitalism.
Mechanism

Companies can create shared value opportunities in three ways:
 Reconceiving products and markets: Companies can meet social needs while better serving
existing markets, accessing new ones, or lowering costs through innovation.

 Redefining productivity in the value chain: Companies can improve the quality, quantity,
cost, and reliability of inputs and distribution while they simultaneously act as a steward
for essential natural resources and drive economic and social development.
 Enabling local cluster development: Companies do not operate in isolation from their
surroundings. To compete and thrive, for example, they need reliable local suppliers, a
functioning infrastructure of roads and telecommunications, access to talent, and an effective
and predictable legal system.

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