Michael Porter: Why Business Can Be Good at Solving Social Problems
A Clear Message
This is one of my favourite TED Talks. It succeeds in pulling together the various factors that are currently impacting society and simplifying it into digestible form. The speaker, Michael Porter, is considered a management guru. Likely, anyone who has taken any formal business classes has already heard his name or read one of his articles.
Porter’s biggest claim to fame is his expertise in business strategy and the establishment of what is now referred to as Porter’s Five Forces model. It’s essentially a tool for assessing the various external factors that will affect your business. In his talk, Porter extends his analytical framework to 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 Help
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! That’s not to say corporations haven’t done some despicable things in the name of profits. But such vile actions were likely the result of egregious and unethical practices, rather than the nature of profitability. Generating profit isn’t the antithesis of sustainability.
On the contrary, achieving and maintaining profitability is how corporations can actually ensure their own sustainability. It should come across as good business sense to wish to be both profitable and sustainable. If not initially in the environmental sense of the word. Sustainability is a mindset and a practice. It’s evident that corporations will 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 problems we face. When you consider this, it’s clear that they’re needed to help alleviate our current global issues. This applies to the climate crisis of course! As such, it becomes increasingly obvious that business & industry are needed in the development of sustainable solutions.
Because of this, business leaders will need to adopt a creative and proactive approach when implementing & evaluating sustainability. To that effect, environmentalists can also exhibit a similar mindset as they recognize the need to collaborate. Given the gravity of the climate crisis, scientists, governments, industry, and the public at large must all find common ground to cooperate where they can.
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 isn’t coming to the defence of such industrial practices. Rather, he attempts to highlight some basic principles of business in order to explain why this doesn’t have to be.
In advocating for optimism, Porter points out that most companies aren’t inherently good or bad. They’re just looking to make money. They are, after all, highly motivated by profit. As a result, Porter suggests that we use this motivation to focus on social and environmental problems.
If we can harness this force, then we can use it towards achieving our shared goals. Doing good has proven to be more profitable in the long run. As a result of this understanding, corporate power can be leveraged for social good. Through effective alignment, we can direct the best business minds toward tackling the climate crisis. It’s an inspiring proposition!