Wealth creation before wealth distribution

Cliff Venzon, reporter for Manila-based newspaper Business World, came up to me for a short interview after my SCOPE presentation at the Asian Forum on Corporate Social Responsibility (AFCSR) in Manila, October 18 to 19. The next day I found myself gaining some media mileage in the local newspaper.

The three underlying "SCOPE" principles I stated--first, harness companies' expertise in wealth creation; second, work in the interest of the company; and third, create mutually beneficial partnerships--to Cliff and his readers, needed additional explanation.

Cliff is not the only one who raises an eyebrow, especially in times of outspoken public unrest towards the corporate world, when I speak of serving company's self-interest and increasing corporate wealth.

Occupying Wall Street was a topic often raised during the two-day conference. Cliff anchored his article on this undefined and random gathering of a handfull of people in various locations around the world. I personally think it's like comparing apples and oranges. Company's engagement in alleviating poverty in developing countries by furthering economic growth and bursting stock market bubbles can't be discussed in one breath.

This is where I draw the line between "creating" and "non-creating" industries. A company producing a product is engaged value creation. The finance sector and stock market, juggling numbers based on perceived values and people's emotions, creates nothing but bubbles (which sooner or later burst).

In the context of poverty alleviation, companies are asked to give a share of their created value to people who, for one reason or the other, are not participating in value creation (for example the farmer who lacks proper knowledge, technology, or market access). But how long can a company invest its profits into causes which are not contributing to value creation? Not long. This is the typical unsustained one shot dole out concept inherent in charity, which I call the Robin Hood principle (taking from the ones who have and giving it to the ones who don't have).

Before wealth can be distributed, it has to be created. Therfore, my job is to enable the farmer or small scale producer to become an economically active member of society. So he can earn from what he creates and sustain himself eventually.

My experience implementing the SCOPE program for the past five years throughout the Philippines have taught me the following:

The people who are experts in wealth creation are business men. Therefore, I tap their expertise to help me identify a sustainable business model for my communities.

For the bussines man to share his expertise, time, and resources with me and my small scale producer groups, there has to be something in it for him. I work in his self-interest by solving a supply problem along his value chain - my foot in his door.

For the trade-link to be sustainable it has to be economically viable and at the same time socially empowering. That's what I call a mutually beneficial partnership.

These three truths turned into the three underlying SCOPE principles. And guess what?! They work!