In today's business landscape, companies are often caught in a vicious circle where they prioritize short-term financial performance over long-term success and social progress. This narrow focus on optimizing profits has led to a disconnection between business success and societal well-being. However, by adopting a shared value approach, firms can reconnect company success with social progress.

According to Michael Porter of Harvard Business School and Mark Kramer, managing director of FSG, companies can achieve this by reconceiving products and markets, redefining productivity in the value chain, and building supportive industry clusters at their locations. This requires a fundamental shift in perspective, where business leaders recognize that creating 'shared value' is not only good for society but also essential for their own long-term success.

The current vicious circle, where companies prioritize profits over people and the planet, has resulted in widespread distrust of business. Government officials have responded by implementing policies that undermine competitiveness and stifle economic growth. As a result, companies are perceived as prospering at the expense of their communities, contributing to social, environmental, and economic problems.

By adopting a shared value approach, businesses can break free from this vicious circle and create sustainable value for both themselves and society. This requires a deep understanding of the needs and challenges facing customers, suppliers, and communities, as well as a willingness to address these issues through innovative products, services, and business models.

In conclusion, the vicious circle of short-term thinking and narrow focus on profits must be broken if businesses are to succeed in the long term. By adopting a shared value approach, firms can reconnect company success with social progress, create sustainable value for both themselves and society, and ultimately thrive in a rapidly changing world.

Vicious circle mc