Michael Porter: Why business can be good at solving social problems
This has been one of my favorite TED Talks in pulling together the various factors that currently plague society, and simplifying it into digestible form. The speaker, Michael Porter, is considered a management guru and likely anyone who has taken any formal business classes has heard his name. His biggest claim to fame is the establishment of what is now referred to as the Porter’s Five Forces model. It is essentially a tool for assessing the various external factors that will effect your business. In his talk, Porter basically extents his analytical framework into the social realm. What are some of the biggest problems facing the planet today, and how can we solve them?
Corporations Have the Power To Do Good
According to Porter, the solutions lie in harnessing the power of business. The welfare of our societies and the natural environment need not be at odds with businesses’ pursuit of profits (see Sustainability is Profitable). Despite certain opinions, the desire for profitability is not inherently evil or detrimental to society! Although some corporations have certainly done some despicable things to both society and the environment in the name of profits, it a result of their egregious practices, not the nature of profitability.
On the contrary, achieving and maintaining profitability is how corporations ensure their own sustainability. Consequently, businesses obviously want to be both profitable and sustainable. If not initially in the environmental sense of the word, but rather through the notion that corporations need to apply sustainable business practices to perpetuate their operations and their profits. It is within their interests.
A Force to Be Leveraged
As described by Porter, industry has the scale and expertise to effectively address many of the social ills confronting us at present. Considering that the previously mentioned attributes are needed to help alleviate the current global woes, then it becomes obvious that such strengths be applied towards the development of sustainable solutions.
Undoubtedly, business leaders need to adopt a creative and proactive mindset when evaluating sustainability. However, environmentalists can also exhibit a similar cooperative mindset through attempting to work with industry. Clearly, when examining industrial operations, there exist some pretty bad actors. These nefarious companies, or illicit corporate practices, have contributed to the exasperation of contemporary social problems. Porter is not coming to the defense of industrial practices.
Rather, in advocating for optimism, Porter is reminding us of a business fundamental. Businesses are indeed motivated by profits. He is suggesting we use this motivation to focus on social and environmental problems. If we can harness this force then we can use it in our collective favour. Doing good has proven to be more profitable in the long run! As a result, this understanding can be applied towards leveraging the brilliant minds of business towards resolving our social problems. Watch on if you’re interested, I highly recommend it.