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Applying a social lens.

August 25, 2012

To create shared value, you must first find the many interfaces an organisation has with people.

Most companies are becoming pretty good at measuring employee impact. But what of the many suppliers, community members, industry stakeholders, consumers and myriad other people the business relates with?

Each has the potential to assist the business in becoming more efficient, productive, safer or smarter – to find points of competitive differentiation – as long as value is genuinely being created for them.

So how do you find these points of shared value creation?

Firstly, company leadership has to make it central to the company’s purpose. To acknowledge that social outcomes will lead to financial outcomes.

Secondly, apply a ‘social lens’  to each aspect of the business which interfaces with people external to it.

  • products
  • people (e.g. customer service, sales and in-field operations staff)
  • assets
  • processes/transactions
  • communication

Look for opportunities to recast relationships with stakeholders, customers (and employees) to get deeper insight and question existing arrangements. Decide which social impact metrics can quantify opportunities and risks, and provide visibility over progress should change be implemented.

An example I often use is the supplier-contractor relationship. Where a service level agreement or contract specifications exist, they are used to control supply of services and are generally set up by the purchaser without input from the supplier. The relationship is based on a set of performance metrics determined in advance of contract commencement.

Consider that, given the opportunity, the supplier my have an idea on how its business can offer a better service if only the specifications, the SLA, was changed. This kind of relationship is why alliance contracting has potential although it is still developing as a model.

We all know the feeling of being frustrated by another company’s processes. We should never assume our company does not also frustrate people upon which it relies.

Applying a social lens, also educates managers and staff that responsibility for social impact is shared across the business. It is not the responsibility of the corporate communications or human resources teams. In fact, it is operations staff who are more likely to find opportunities to cut costs and improve services by assessing social impact. Many are already trained to be aware of environmental impact.

Image credit: Fir0002/Flagstaffotos, Wikimedia Commons