Note 297 to the Blended Value Map states the following: "The project team leader would also like to express his thanks to Fela, Gillian Welch, and Marilyn Manson for providing the musical inspiration required for the completion of a document of this size. Should the reader be unfamiliar with these artists, you are urged to explore your aural Self..." Antics like this have led a lot of people to believe that Jed Emerson is a kook. And they might be right. But as far as kooks go, he is incredibly level-headed. And exceedingly logical. Add to this the street cred he gained during his years as a social worker handing out condoms and needles to teen prostitutes and addicts in San Francisco and his current position on the faculty of Stanford's Graduate School of Business, and you've got a pretty powerful force. One powerful enough to turn the heads of the global business elite at last year's World Economic Forum in Davos.

"We tend to categorize value as economic or social," says Emerson. "You either work for a nonprofit that creates social value or you work for a for-profit that creates economic value. But in fact, for-profits generate social value: They create jobs, they contribute taxes that help build local communities, and their products can improve people's lives. And nonprofits create economic value: They represent 7% of the national GDP, they create jobs, and they consume goods and services." This notion is pretty straight forward, but as Emerson points out, we've kind of missed the boat on this one.

Just think for a minute about your image of the typical nonprofit worker, and compare that image to that of your average corporate middle manager. My guess is they're pretty different. For one thing, their clothes don't match. And for another, their genders are probably different. Only one of them knows how to use Microsoft Excel. But the other one makes up for that with her really big heart and patient listening skills. This is exactly what Emerson is talking about when he points out the ways in which our society divides and categorizes value. You're either turning a profit or you're filling bowls at the soup kitchen.

Over the last decade or so, all this has started to change. We have seen the increasing 'professionalization' of the nonprofit sector and the appearance of social enterprise programs at the nation's top business schools. Terms like corporate social responsibility, effective philanthropy, and social investing have started to make inroads toward the mainstream. But this isn't enough for Emerson. What he's after is something more fundamental, more radical. To Emerson, work is work, no matter where you do it, and the value that your labor creates is holistic and indivisible. The only question is which part of the value equation - the economic, the social, or the environmental - you choose to accentuate. And if Emerson has his way, even that question will someday be rendered meaningless, as every enterprise will focus on maximizing all three parts of this value equation into one blended whole.

What will make the whole thing workable is that organizations will be able to quantify and present their social and environmental value in much the same way we currently calculate the returns on our financial investments. "Blended value is a way of trying to measure the whole picture," he says. And by "the whole picture," Emerson really means the whole picture: what is cleaner air worth? How much does society benefit from inner city youth accessing broader educational opportunities? Does investing in more stable family structures provide adequate returns? Once again, his vision is broad to the point of minor insanity, but he explains himself with total, rational confidence: "People assume that econometrics was handed down from the hand of God to Alan Greenspan. And that's not really the way it worked. That interpretation of value has evolved over the past 50 years. With all due respect, we've really only been grappling seriously with measuring the environmental impact of a company, for example, for 5 or 10 years. I think it's natural to think that we might need another 5 to 50 to figure it out."

In the blended value world, the buddy-buddy relationship between the Nature Conservancy and Georgia Pacific, for example, doesn't smell of sleazy backroom dealing between the world's largest paper company and the closest thing that the nonprofit sector has to a global corporation. Rather, it prefigures the shape of things to come.

Founded in 1951, the Nature Conservancy grew steadily but modestly over its first 40 years of existence. In January of 1990, the Conservancy brought on former McKinsey & Co. partner Jim Sawhill as its chief executive. Sawhill ran the Conservancy for a decade, over which time he tripled the number of people on staff, quintupled annual revenues (to more than $900 million), tripled total assets (to $2.3 billion), and more than doubled membership. He also oversaw the implementation of new metrics that would more fully articulate the organization's success in pursuing its mission. Rather than simply measuring the amount of money raised and the area of land protected - what Conservancy veterans called the "bucks and acres" approach to performance measurement - the Conservancy now directly and scientifically measures the impact that each of their preserves has on protecting regional and global biodiversity.

Sawhill's tenure also included partnerships with corporations like Georgia Pacific, a brief foray into drilling for natural gas, and the addition of several oil and chemical company executives to its board. The Wildlife Protection Network gleefully maintains a record of these transgressions (as reported by the Washington Post) on its website. The bottom line is that by 2003, corporate giving to the Conservancy totaled $225 million, almost on par with individual giving. At this point, the Conservancy's finances make it look more a like big time political campaign than they do a grass roots environmental organization.

Yet this marriage of the for-profit and nonprofit, of the corporate and the grassroots is exactly what is implied by Emerson's vision of blended value. And maybe that's not as bad a thing as Wildlife Protection and the Washington Post seem to believe. For all the jargon and accounting complexity that go along with Emerson's Blended Value Proposition, what he is fundamentally seeking is greater simplicity. When Emerson looks at a firm he sees one cohesive engine producing social, economic and environmental value. When he looks at an entire economy, he sees the same thing: people working together to make life more livable. This process goes awry, though, when we lose track of the word "livable," and the thing that leads certain firms (and certain whole economies) to accentuate one piece of the value equation over the others is the artificial barrier we have constructed between the value types. By breaking down this barrier - by recognizing the holistic value created by all firms - we can help our economy to function more elegantly. Rather than having the Nature Conservancy try to undo as many of Georgia Pacific's actions as it possibly can, Emerson would have them work together to maximize the total value of their collective labor by equally weighting their social, environmental and economic value production. Given the appropriate metrics, a market-based society will be able to judge which organizations are contributing the most to a "livable" world and will be able to direct investment resources accordingly.

This vision recognizes a fundamental reality of the current economic moment: the vast majority of human productive activity is global in scope, and the organizations primarily controlling this activity are super-national corporations. Likewise, many of today's most pressing problems are global in scale and origin: air pollution happens across borders; starvation is a function not simply of domestic under production but global mis-distribution; global poverty exists in the face of tremendous local wealth. In order to successfully address these problems, change-makers must engage those who command the largest, best organized portion of the global labor force - senior management at the world's largest corporations. Continuing to shout past them, no matter how convincing your argument, will not yield results.

It is a little surprising at first that a social-worker-turned-college-professor would listen to Marilyn Manson while composing his own manifesto. Yet the persona that Manson reveals during his interview in Bowling for Columbine is a perfect compliment to Emerson's own efforts. Yeah, Manson's got two different color eyes and he carries a leather whip, but the words that come out of his mouth are logical, insightful, and straight to the point. He is an oasis of tranquility in an otherwise violent and distorted social argument. Emerson, when he's not teaching, spends his days at his secluded cabin in the Rockies, practicing his mountain rescue skills and, apparently, listening to death metal. Despite a set of personal interests hardly typical of today's academic/economist types, he has captured the ear of the world's most powerful business executives and its most earnest nonprofit leaders.

« Previous Next »