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Andreas Souvaliotis

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How to Make a Profit While Profiting the World

Posted: 24/04/2013 14:30

Michael Porter, the brilliant Harvard academic, spoke about our chronic inability to solve the world's most critical social challenges by relying on our historical "good vs. bad" behaviour models -- models which are built on the naive assumption that moral pressure can suppress human instincts. He showed us how sacrifice, compromise and charitable giving, which have always been promoted as the perfect antidotes to corporate and consumer greed, never really achieved any meaningful impact on our world, simply because they consistently only appealed to a narrow slice of the population. He argued, quite convincingly, that instead of fighting human greed, which happens to be one of our most basic instincts, we need to find creative ways to harness it and put it to use for the good of the world. He ultimately defined the "shared value model", which completely intertwines social and financial returns instead of placing them at opposite ends of a spectrum. Under Porter's model, profit is no longer vilified -- because properly defined profit can actually drive social value, instead of taking away from it. And, most importantly, profit can actually help give scale to some of the critical solutions to our world's most pressing issues.

Six years ago I founded a for-profit social venture in Canada which, entirely unintentionally, blossomed into one of the clearest examples of Porter's model. Having grown up in the consumer loyalty and incentives space, I decided to build the world's first "eco points" program for consumers across my country -- rewarding Canadians with loyalty points each time they made an environmentally responsible decision (from buying locally grown food to commuting by public transit to conserving electricity, and so on). Our program quickly exploded. Energy utilities, public transit authorities, waste management organisations, grocers and home improvement chains were all clamouring to participate in one way or another. Rewarding millions of consumers for responsible decisions was, in fact, a win-win-win-win proposition for all four key constituents in our newly invented eco-system: Consumers were happy to earn extra points; retailers or government agencies achieved their sustainability and eco-branding objectives much more efficiently; we made money by selling points to all these retailers or government agencies; and of course the environmental benefit was also very measurable, through the cumulative impact of those millions of better choices by Canadians.

Our success in nudging the behaviour of the masses in favour of the environment ultimately triggered a great surprise and an even greater opportunity for us: health authorities began to call, asking why we couldn't also harness the power of loyalty rewards to encourage healthier lifestyle choices among Canadians? Admittedly, we were a tiny bit embarrassed not to have thought about this on our own first, but we were thrilled to be embarking on an even more ambitious (and even more fiscally rewarding) journey. We launched the world's first healthy eating incentive, rewarding consumers across an entire province when they made healthier choices at the grocery stores; we launched the world's first national exercise incentive; we launched the world's first national online health survey incentive; and, truly, the possibilities and the business opportunities were endless, while the impact on the health of our fellow citizens was immediately and clearly measurable.

At a speech in London yesterday, my co-founders and I announced that the United Kingdom will become the second nation in the world where we will operate these types of responsible-behaviour incentive programmes. This country is just as 'hooked' on loyalty rewards (points) as Canada -- and therefore the opportunities to have an impact on consumer behaviour significantly and very efficiently are as obvious here as they were in my country six years ago, when we got started. Michael Porter's model is no longer just theory to us -- we have proven that harnessing the natural instinct of humans to want more, whether it's more points for consumers or more revenues for a social venture like ours, can generate remarkable benefits for society. We look forward to changing Britain!

 
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