Jed bridges the divide
Article for Radar, October-November 2003
Jed Emerson: Silo-Buster
Does BVP spell the end of the triple bottom line? Meet the man behind the Blended Value Proposition.
Colour me slow: I finally got around to seeing The Rolling Stones live just forty years after they went on the road. But I already had a sense of what it feels like to be Jagger and Richards, fronting the World's Greatest Rock'n'Roll Band. How? Well, earlier in 2003, I was half of a Mick'n'Keith-style gig at the London Business School, trading philosophical riffs with Jed Emerson. In front of a couple of hundred MBA students and business people we prowled the stage, debating the future of corporate social responsibility and sustainability.
Sadly, only one of us had played with a real rock band: Jed. But behind the theatricals, we probed real issues, including whether the triple bottom line has had its day. It's now a decade since I coined the term and, while it has helped make the sustainability agenda more acceptable to business people, I had sensed for some time that our language needed to change again.
That's why I now focus on the '4Bs' of integration: Balance sheets (e.g. accountability, accounting, reporting, assurance), Boards (corporate governance), Brands (ongoing conversations with investors, consumers and investors) and Business models (the DNA of wealth creation and destruction). Jed, however, has his own 'B', which potentially trumps mine. This is his blended value proposition, or for acronym fetishists BVP. And we'll hear a lot more about BVP, since it's at the heart of the Blended Value Map which Jed and his colleagues Sheila Bonini and Kim Brehm have just published .
Like The Stones, Jed has had a long and chequered career. He may now be increasingly respectable as a Senior Fellow with the Hewlett Foundation, but - as Money Magazine put it - the man sometimes looks like a surfer who has wandered into the boardroom. He does mountain rescue in the Rockies and started out doing social work in some of the toughest neighbourhoods of San Francisco. But he has also made a series of crucial connections. So, for example, from 1996 to 2000 he was Executive Director of the Roberts Enterprise Development Fund, started by George R. Roberts, Founding Partner of corporate raiders Kohlberg Kravis Roberts & Co. That's where he worked with social entrepreneurs like Rick Aubrey of Rubicon, businesses that were trying to produce early forms of blended value.
So what is blended value?
"Traditionally," Jed says, "value has been understood as either economic value or social value. This has given rise to the notion that for-profit firms create economic value and nonprofit firms create social value." A linked notion is that "investments of capital are either market-rate or charitable gifts - and that firms operating to create both social and economic value are 'double bottom-line' companies, while those that are mainstream are 'single bottom-line' companies. This historic understanding of value is fundamentally wrong," he insists, "and has led to a host of social and environmental problems since, in truth, value is non-divisible."
All firms create Blended Value, Jed says. "The only issue up for debate is the degree to which they maximize the component elements of value, best tracked through the use of a Triple Bottom-Line framework."
Ah, so maybe the triple bottom line isn't a dead duck quite yet. But is BVP itself the 'Next Big Thing'? Certainly it has powerful champions: the project is backed by Stanford University's Center for Social Innovation and by the Hewlett, Packard, Omidyar and Surdna Foundations. They should be congratulated for their vision, even if it's clear that the vision evolved as the project went along.
"The initial idea for attempting to map the universe of players engaged in the pursuit of economic, social and environmental value came after six weeks of seemingly endless travel in the United States and Europe," Jed recalls. The team talked to people at the heart of corporate social responsibility, social enterprise, investing, research and advocacy. And it became clear that the boom in CSR, corporate responsibility, human rights, sustainable development and the like has created a proliferation of silos, in the worlds of activism, government, business and investment.
Many people the team spoke to appeared to be "grappling with very similar issues and challenges, but from within their own 'silo' of orientation (whether social investing, philanthropy, social enterprise or so forth…), and were largely unaware of other initiatives just 'over the wall'." This obviously is a major issue, since, as Jed puts it: "Collectively 'we' actually know much more than any 'one' of us has the bandwidth to appreciate, which led to the idea that by gathering a core representation of existing organizational and intellectual capital across all four silos of activity one might better inform specific efforts within each silo."
Like Israelites before Jericho, the team wondered how the silo walls might be brought down. Step 1, they agreed, would be the Map. Once under way, they often had to make subjective decisions on what - and who - should be in or out. To help decide, they convened "cluster conversations" in Seattle, San Francisco's Bay Area, Utah, Washington, D.C., New York City and London.
Not everyone will like the result. As I say in my foreword to the final report, maps - and the linked processes of mapping and projection - are political, often profoundly so. Political in that they shape our priorities on the allocation of scarce resources. So the Map will have real political and financial repercussions. Like it or not, the next decade will see fierce consolidation of social change initiatives - coupled, paradoxically, with an explosive spawning of new concepts, tools, business models, partnerships, support networks and financing mechanisms.
The process will be massively disruptive for those working single-mindedly
in their silos. Jed Emerson and his colleagues talk of blended value, but
they are mindset re-engineers, their Map potentially a Weapon of Mass Disruption.
If it words, updating it - a crucial task - will be an even more Herculean
task. But at least I may get another opportunity to brush up my stage act.