by Richard Welford rwelford@csr-asia.comThe Shared Value workshop at the CSR Asia Summit, held on 17-18 September in Bangkok was well attended. Working alongside Chad Bolick of FSG, we put on a “double-act” to engage an audience of over 100 people. The lively exchanges included contributions from companies that had already started to put in place Shared Value initiatives and other companies keen to develop the concept within their own organisation. There was a great deal of enthusiasm in the room to begin to consider ways in which we can address social needs through commercially viable business opportunities.Reflecting on the workshop and the interactions with a number of different perspectives allows me to make some observations about Shared Value which, I hope, will be valuable to the development of the concept.
1. The language of Shared Value is compelling. I would certainly agree with many in the workshop who saw Shared Value as a useful way to engage with senior management. After all, the language of sustainability and CSR has often not engaged Boardrooms and although meaningful to CSR managers, it does not always get the support from above that it deserves. Being able to talk about profitable business opportunities that can simultaneously address social needs is a hard sell to ignore.
2. Yet, there is still cynicism to be overcome. There are those who see the underlying profit motive in the Shared Value concept as inconsistent with addressing societal needs. But I disagree. If you really can address social needs through commercially viable businesses opportunities, this has to be win-win. Moreover, demonstrating that needs can be addressed in a profitable way will always make initiatives scalable. After all, who would not want to make more profits?
3. However, we need to be clear about what Share value is not. It is certainly not about sharing the value that has already been created – that is philanthropy. And whilst there is nothing wrong with philanthropy is should not get rebranded as Shared Value, which is unfortunately happening in some businesses. Shared Value is a deliberate attempt to address social needs through new, innovative and commercially viable opportunities.
4. Neither is it good enough to refer to positive externalities associated with doing business as Shared Value. If we did that then every company that created a single job could claim Shared Value. If we have a positive impact on society simply by doing business then that is great, but it is not Shared Value. In the workshop, we discussed the idea that Shared Value must be purposeful. It is important that we deliberately set out to solve social needs through business activity to claim Shared Value.
5. We need more case studies and examples of what works (and sometimes of what does not work). Most of the great examples of Shared Value come from businesses which are close to consumers (albeit often relatively poor ones). We have many examples from food and beverages, pharmaceuticals and financial services but what does Shared Value mean in the context of B2B operations?
6. Innovation is key and this became quite a theme throughout the CSR Asia Summit. But in terms of Shared Value, we need to find innovative ways to address social needs through redesigning good and services, exploring inclusive value chains and creating local clusters of economic activity. One B2B opportunity that is apparent is connected to supporting small business development and entrepreneurship in a particular location to create a cluster of economic growth.
7. If we are going to be innovative then we need to encourage creativity in organisations that engage with Shared Value. An important aspect of creativity is allowing people to experiment and allowing them to make mistakes. We do not have all the answers to Shared Value and therefore developing a business environment where creativity can thrive is very important.
8. Measurement is important and, as ever, if you cannot measure it you probably cannot manage it. Yet, the metrics around Shared Value are still underdeveloped and we need to be able to focus on impacts for society and for business. Measuring impacts at a community level are notoriously difficult but we may also need slightly difficult metrics for business too. Profit is a good start but what if I could have made a little more profit by not meeting social needs. How do we account for that?
9. Many NGOs in the workshop were also excited about the Shared Value concept and saw opportunities to engage with business. Whilst I think it is wise for businesses to take the lead on Shared Value, to ensure that projects sit well with commercial activities in the community, the NGO sector could play a valuable part in helping to design and implement projects. As ever, partnerships are often key to success.
10. There is a need for more research on the success factors (and failure factors) associated with Shared Value. This is particularly important in Asia where Shared Value is less developed but where enthusiasm is mounting. There are lessons from elsewhere, but it was recognised in the workshop that whilst Asia is different, there are huge opportunities for shared Value in a region where significant social needs still need to be addressed.
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