As Hong Kong battles to prevent a next wave of COVID-19, some companies continue to focus on near-term survival while others begin to shift from crisis recovery to building resiliency to adapt to the new normal. SVIHK advisor Philo Alto discusses how building resiliency via Shared Value approaches can align companies’ activities with, rather than extract from, the natural world and tackle the climate crisis.
Social distancing norms through 2022. De-densification of physical workplaces. Disruption of old business models and emergence of new paradigms, activities, and players. As companies begin to emerge from managing crises to adapting to the new COVID-19 normal, it has become clear that business as usual is no longer fit for purpose.
Our hubris in treating the natural world as an input factor for the market economy has been humbled by the current pandemic shock. And in these unprecedented times, Shared Value thinking is even more relevant and timely today. It helps recalibrate our understanding of humanity’s place in the natural world from a game-changing species that is assumed to be superior to all other species. To one that acknowledges its unique ability as a species to either wreak havoc on, or take on its stewardship obligation to, the natural world.
In the new COVID-19 world, adoption of Shared Value approaches will likely accelerate in both the C-suite and operational levels . It helps foster mindset shifts in adopting a more holistic approach that reprice the cost of capital to account for the social and environmental impacts in creating end-products and services. Shared Value also applies to supply chain processes and interactions with employees, suppliers, and the broader communities within which they live, work and play.
On an individual level, absent changes to our social norms, health habits, and consumption behaviours, our activities have already tipped the earth past its ecological balance. To be sure, these are normal climatic shifts when measured from the earth’s geological timeline spanning millions of years. However, from a human evolutionary standpoint, climate changes including increased frequency and severity of extreme weather events disrupt the economic, social and geopolitical underpinnings of our activities, threatening our way of life in the years and generations to come.
So how can companies frame their Shared Value challenges and opportunities today to adapt and thrive in the next normal?
“Getting back to (old) normal” is over. There is no longer an “old” normal to get back to and we can no longer treat the natural world as an extractive resource.
Social distancing as a catalyst for change in the new normal. As we further understand the epidemiology around COVID-19 and their public health implications, getting companies back to full operational cadence will require a fundamental adaptation of business models in the new normal. These include a need for broader stakeholder collaboration, more agile technology adoption, and greater virtual vis-a-vis face-to-face communication and workplaces.
Thinking Global. Acting Local. This catchphrase will have a renewed meaning in today’s new normal amidst political and scientific support for travel restrictions, lockdowns and the like in the fight against the pandemic. At the same time, the virus itself is non-partisan and knows no national borders. Therefore any approaches to restart economic activities would require greater global coordination and sharing of resources and information.
With our collective sense of urgency, we probably have today the best chance to apply Shared Value approaches to companies’ business models that also contribute to community-wide impacts beyond the bottom line. And at no time in recent history have the societal and human costs of conducting business-as-usual become so high that paradigm shifts are no longer just possible – but needed.
Reframing the market economy via Shared Value. As I have written in my opinion piece on philanthropy, the perils of unfettered growth of capitalism and globalization have accentuated wealth inequality and laid bare their disproportionate impacts on the vulnerable and low-income communities.
In the short-term, companies can be well-served in these disruptive times by identifying and focusing those most affected amongst their stakeholders. In the longer-term, companies must also take a harder and honest look at their unique strengths. These include pivoting away from extractive processes in their business models at the expense of the natural world or vulnerable groups while scaling those strengths that enhance the planet’s sustainability and resiliency.
Revisiting the purpose of capitalism. It is also imperative for us to rethink the purpose of capitalism, its achievements and limitations, and its tendency to take for granted the natural world in the pursuit for financial returns. Jed Emerson of the Blended Value Group has eloquently written on this topic in his book, The Purpose of Capital, which I reviewed in the Alliance magazine.
Repurposing your company’s mission and value proposition in the new normal. The current pandemic shock has irreversibly transformed the world. As companies, governments, social sector stakeholders, and individuals alike begin to recover from the unfolding human tragedies the world over, it is never too early for companies to implement Shared Value approaches to building resiliency while fighting this pandemic threat of our times.