The key to reforming capitalism lies in creating shared value by harnessing the power of business to solve social problems. Paradoxically, in these difficult economic times, the business opportunities hidden in our urgent social problems offer the greatest potential for profit and growth most businesses will ever face. But there is a trick to discovering these opportunities: It takes a CEO who can see through walls to find them.

Every business operates within a set of constraints that effectively wall off opportunities. Its products and services were designed for a specific market, closing off other markets with different needs. Its supplies are procured from the cheapest global bidder, just as its competitors are. Manufacturing and logistics follow established conventions. The prices of natural resources and commodity crops fluctuate subject to external conditions that the company doesn't control. The availability of skilled employees depends on an educational system independent of the company. All these limitations are taken as given — outside the walls of the company's core business strategy — walls that most CEOs cannot see through....

 

 

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