Phil Preston, a community engagement strategist and member of the Shared Value Project, outlines five ways to help kick-start your shared value strategy creation process. Phil highlights how shared value differs from traditional corporate social responsibility, and provides specific shared value entry points and Australian examples in order to help you pinpoint what could provide the greatest opportunities.
The shared value concept – business helping society and increasing financial returns at the same time – is very attractive and gaining traction with business leaders. However, when starting from scratch, it can be hard to know how to go about it.
Traditional corporate social responsibility (CSR) practices have focused on preserving a company’s licence to operate, whereas shared value is about value creation. CSR is more about managing stakeholders, whereas shared value provides a new lens for business innovation.
This is not to say that stakeholder management isn’t important, the point is that we shouldn’t mix apples with oranges: the two practices are complementary and the approach to each is quite different.
To help you kick-start your strategy creation process, I’ve outlined five different entry points:
1. Purpose: Re-examine your mission and express it in terms of societal benefit
General insurer, IAG, expresses its purpose as “to help people manage risk and recover from the hardship of unexpected loss,” which is a powerful way of thinking and more meaningful than “to be the outstanding competitor in our chosen markets…” Clarity of purpose provides a platform for new opportunities and builds resilience into the business model.
2. Positioning: Integrate your unique assets and strengths into your strategies
Property developer, Stockland, includes social infrastructure, such as schools, in its new residential releases. It understands how customers value these features. Learning how to identify and develop your assets, such as intellectual property, is the key to sustaining the advantages that you create.
3. Products: Harness social trends for product and market development
The aging membership base of motoring group, NRMA, led to the development of an online tool to help members maintain or improve their quality of life. It helps them cut through an overload of information in areas such as aged care advice, travel and volunteering opportunities. Tapping into social trends assists product innovation.
4. Productivity: Identify social factors constraining your business
Johnson & Johnson ran a quit smoking campaign that reduced its employee smoking rate by two thirds and led to lower health care costs and productivity gains. It calculated a return of $2.71 per dollar invested. Nestlé assisted farmers with seed technology and price-certain contracts to establish cheaper, local oat production in Australia, instead of relying solely on imports. Examining social factors in your workforce and supply chain can pay off.
5. Problems: A new lens for addressing business problems
Australian retailer, Battery World, has established a household battery-recycling program to help differentiate its offering from competitors. It has created a new channel to market and improved the value proposition for its customers. Applying a community or social lens can lead to business model and performance improvements.
The benefits of shared value strategies are coming to the fore. To start your own explorations, focus on the one or two approaches that are most relevant to your present circumstances. Start collecting and facilitating views from employees and other stakeholders, with the ultimate aim of improving society and the returns to your business.
Which of these approaches provides the greatest opportunity for you?
Phil Preston is a community engagement strategist and member of the Shared Value Project. He is based in Sydney and can be contacted via email@example.com or followed on Twitter (@PhilPrestonTwit)
Image cred: Phil Preston