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In Search of Value

December 12, 2005

Jed Emerson ’81, a man of many hats, challenges long-held
assumptions with his Blended Value Proposition.

by Eric Larson

Jed Emerson ’81 has fished for salmon, led an organization for homeless youth, and played in a rock band called Fire Hydrant. He has held faculty appointments at Harvard and Stanford business schools, worked with community-based ministries for the Presbyterian Church, and strapped on snowshoes to look for lost skiers in the Rockies.


But perhaps more than anything these days, the multifaceted Emerson, 45, is the missionary for an idea, one that challenges traditional notions of how human activity is organized and what results it can produce. It’s a notion that has landed him in the pages of Money magazine and Fast Company, while simultaneously earning him invitations to speak to international gatherings of nonprofit and business leaders alike.


Before his parents retired, Emerson’s father was a Presbyterian pastor, and his mother was a clinical social worker who specialized in women’s issues. The family tended to live in big cities such as New York, Denver, and San Francisco. James Edward Emerson, the family’s youngest child, learned early on how to use his parents’ esteem for public service to his advantage. In the seventh grade he became a peer tutor in Spanish Harlem, mainly as a way “to get out of the house and into the city,” he admits. As a young teen, he joined public protests of the Vietnam War. His parents didn’t object to his wanderings.


“They were very open to the idea that you have to find your own way,” recalls Emerson, whose older sister is a part-time special education teacher, while his older brother works in finance.


Emerson was completing his junior year of high school in Denmark on a Rotary Club exchange when his mother sent him a letter telling him he should start thinking about colleges. Emerson settled on Lewis & Clark, “a good small school in Oregon” that enabled him to explore a new part of the country—but still allowed him to attend rock concerts in San Francisco.


Before Lewis & Clark College awarded Emerson a bachelor’s degree, it gave him a name. As a first-year student, Emerson—who had always answered to Ed—shared his floor in Platt-Howard with another Ed. To distinguish the two, others began referring to Emerson as J. Ed, which soon morphed into Jed—a cowboy name to match Emerson’s Colorado cowboy persona of hat and boots. The group of counterculture frosh referred to themselves as “Death Row” and, when they weren’t partying, they engaged in all-night political and philosophical discussions. A few of them formed a band with “a name that had no meaning”; Fire Hydrant performed its bluesy-rock shows for free, “so no one could complain if they didn’t like the music!” Meanwhile, Emerson did volunteer work and took classes that allowed him to write philosophical treatises on ways to change society. “It was part of the whole path I was on,” Emerson reminisces. “The social environment at Lewis & Clark was great in giving me confidence to stand up and advance ideas that were not the norm.”


After spending a postgraduation summer on an Alaskan salmon boat, Emerson enrolled in the University of Denver and earned a graduate degree in social work. He found a job with the Presbyterian Church in its New York City headquarters in the Office of Social Welfare and Justice, putting together consultation groups for churches that wanted to expand services to the poor. But the work was too many steps removed from the people being helped, and he became discouraged. “I realized I was too young to become a church bureaucrat. I wanted to be directly engaged in change. I wanted to run something myself.”


Emerson found his leadership opportunity in 1985 in the form of Larkin Street Youth Center of San Francisco, a massive effort to help hundreds of street youth overcome their complex spectrum of problems, from drug abuse to mental illness. At 26, he was not only the charity’s founding director but also one of the youngest in such a post anywhere. “I was exactly the kind of person you would want to run it,” says Jed. “I hadn’t been beaten up by the world yet.” The center worked to build on the youths’ strengths and talents. His efforts won national acclaim and attention.


But the experience also taught Emerson how personality-driven politics and turf battles between charities can get in the way of helping people. “Crisis intervention with street kids gave me an impatience with useless process and ego bullshit,” recalls the straight-talking Emerson. Recognized by the Roberts Foundation of San Francisco as someone who would tell it like it is, Emerson made the jump to the funding side and spent the next 12 years as founding director of the foundation’s Social Enterprise Fund.


Along the way, he observed that the process by which charities solicited money was “driven by politics, perception, and persuasion—none of which has anything to do with whether you’re accomplishing something at the street level.” In his work at the foundation, Emerson strove to help nonprofits create clearer measures of success and failure. “As a funder, I really became obsessed with the idea of outcomes, impact, and performance.” The paradigm shift was partly out of necessity: The new philanthropic wealth of the 1980s was in the hands of businesspeople who demanded bottom-line evidence of success.


So Emerson began to think like an investor, and he asked the question, What would it look like to calculate the social return on investments? In the 1990s he began to post his musings on the fund’s Web site,, and others began to take notice. In 2000, based on his writings at the foundation, Emerson received a faculty appointment at Harvard Business School, where he discussed his blended for-profit and nonprofit concepts with some of the nation’s brightest business minds.


Though the appointment was rewarding, commuting regularly between Boston and San Francisco became tiresome. Emerson was able to return to San Francisco full time by negotiating a nonteaching job with Stanford University and a non-grant-making position at the William and Flora Hewlett Foundation, where he recently concluded a three-year appointment as a senior fellow. The result: “I’ve had the luxury of spending the past years developing this idea of blended value.”


Ah, yes. It’s this idea—the Blended Value Proposition—that Emerson is most widely known for: All organizations, whether or not their leaders choose to realize it, create economic, social, and environmental impacts and value. For example, leaders of a state pension fund—though tempted to invest in high-yield companies irrespective of their tendency to pollute and have a negative effect on their pensioners—may invest instead in environmentally friendly companies, knowing that seniors want to enjoy clean air and the outdoors. It’s a principle based not so much on altruism as enlightened self-interest, or as Emerson paraphrases, “We have an interest in financial return for our investors, so we don’t invest in companies that kill our shareholders.”


Stephanie Robertson met Emerson two years ago while she was a faculty member of the London Business School and Emerson was there to speak at a conference on corporate social responsibility.


“I think the blended value idea is hugely important,” says Robertson, who is now director of SIMPACT, a Calgary-based organization that measures social return on investment for corporations. “It encourages organizations that have traditionally thought of themselves as ‘social’ to take credit for the value of their work in the wider economy. Conversely, companies that have only focused on the value of the products that they’ve made in the past will start to value their social and environmental impact.”


She sees Emerson as a potent emissary for the blended value message. “Jed has an ability to articulate big ideas for general consumption,” says Robertson. “His inquiring mind has made a huge contribution with regard to valuing what is important.”


Unlike both his parents, Emerson has no Ph.D. (though he earned an M.B.A. on weekends in 1996) and has only published his blended value concept in a single professional journal. Instead, he continues to post most of his work on his Web site, Nonetheless, over the past 15 years of Web publishing, Emerson’s work has been seen as valuable by a good number of folks in both the for-profit and nonprofit sectors.


One result is increased efforts by charities to leverage greater long-term impact of their assets. For example, one foundation that was making grants to nonprofits working to minimize the negative effects of hog farming in the Midwest was simultaneously investing an equal amount with a pork producer in the Southeast. Rather than divest itself of the company’s stock, the foundation used its financial leverage with the corporation to further its own goals.


Observes Emerson, “When people think more broadly about value, they become phenomenally more creative. It opens up a whole new set of possibilities. Historically we haven’t exploited them.” By way of another example, if the affordable-housing industry had realized its economic power two decades ago, Emerson argues, it might have been able to leverage that clout to negotiate lower prices for timber that was harvested on a sustainable-yield basis rather than clear-cut.


But Emerson’s work is not just for nonprofit organizations. He simultaneously argues that corporations have begun looking more seriously at the social effects of their activities. In some cases, it’s out of necessity, as when an American company vying to compete abroad must convince a host country that its business will result in a better life for the locals. “If you go to do business in a Third World country, chances are very good that the nation’s president got his M.B.A. at Harvard or some other leading university. These nations increasingly demand that companies add more than financial value to emerging markets. Firms that understand this business model are going to generate greater returns for investors than those that don’t.”


The challenge for Emerson and the Blended Value proposition will be to find ways of measuring all the blended impacts—the biggest criticism of the concept so far. But he’s optimistic such measurements will evolve. In the meantime, he’ll continue to speak about his pet idea, something he’s done a lot of lately. In a single month recently, Emerson traveled to London, Geneva, Hawaii, and South Africa for speaking engagements. “I’m glad to be a part of this whole scene, but it can be draining.”


In a move to simplify his life, Emerson sold his house in San Francisco in summer 2004 and moved to Grand Lake, Colorado, where his family owned a winter cottage in the 1970s, just a stone’s throw from the western entrance of Rocky Mountain National Park. There he has become a member of the search-and-rescue squad of Grand County. “It’s a great way to get to know people, because nobody cares who you are as long as you can strap someone onto a litter and help get them out of the back country.”


Recently, Emerson accepted a new position as senior fellow with Generation Investment Management, an investment fund that is being launched by Al Gore, former vice president, and David Blood, formerly of Goldman Sachs. The fund will enable clients to invest in companies taking a responsible stance on major global issues, such as climate change. It’s a great fit with Emerson’s interests.


Jed still often wears the trademark cowboy boots and hat that his peers remember from college. But he quit smoking Marlboros seven years ago when he had to face up to the blatant contradiction in his life: He was beginning to preach the overall value or harm that companies can bring to society and meanwhile supporting an industry that arguably does more harm than good. But he’s replaced his smoking habit with an even more mythic lifestyle move. “I’m taking riding lessons now,” says Emerson, who is also picking up his guitar again, even if it’s only his two rescued German shepherds, Pearl and Rasta, who are there to hear him practice.


Says Emerson, who has managed to blend together in his life the values of work and home, “It’s all about coming full circle.”


Eric Larson is a freelance writer in North Carolina and an administrator at the Cherokee Center for Family Services, in the Nation of the Eastern Band of Cherokee Indians.

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