SVP’s new CEO Sarah Downie reflects on how the crises of 2020 have expedited shared value thinking.
2020 has been a year for the history books. A show reel to expose the vulnerabilities of capitalism in its current form. And an incidental PR campaign for why business must see itself as part of the communities in which it operates.
The resounding message? We fall or flourish together. From communities’ need for essential services, employment and a thriving economy, to companies’ reliance on customers’ economic participation and employees’ health and productivity; business and society’s interconnectedness is now abundantly clear – in a way that just wasn’t as tangible before.
Against this backdrop, the reframing of corporate social progress as strategic business is taking hold. Some have called this critical shift a ‘Great Reset’, ‘the New Economy’ or a ‘New Normal’. But, within the purpose community, we just call it ‘good business’.
Shared value momentum
Shared value; the practice of solving social issues profitably, reached the Asia Pacific six years ago, with the establishment of the Shared Value Project (SVP) – of which I am the privileged CEO. Of course, this concept of aligning purpose and profit wasn’t entirely new. Once upon a time the idea that business could be successful without serving the needs of the community would have been inconceivable. But gradually, we’ve lost sight of these needs – or, more accurately, community needs have expanded and shifted – and we haven’t kept up. Instead, shareholders; rather than stakeholders more broadly, became king.
Shared value harnesses the skills, resources and innovation of a company to address social issues in a profitable, sustainable and scalable way. Through many years’ observation, and four weeks in the role of SVP CEO, I have been inspired by those who have turned this academic concept into a genuine operational strategy; with early adopters including AIA Australia, IAG and NAB. Aided by the leadership of SVP co-founder Helen Steel, these companies have taken what began as a murmur of activity and turned it into a fully-fledged movement; with bubbling momentum.
The Coronavirus must be credited (in part) with accelerating shared value thinking, because perhaps for the first time we’ve seen it embraced with both the breadth and urgency it needs to proliferate our entire ecosystem – building on a call to arms from BlackRock’s Larry Fink, the US Business Roundtable, the World Economic Forum and more. No single community, business, industry or government has had the luxury to decide if it changes to respond to the virus, or when. We discovered that we can, and we must. And now, it’s imperative that we apply these learnings to ‘slower’ crises like climate change, with the same level of priority, tenacity and investment.
Re-tooling for holistic success
For the most part, the pandemic has presented an impossible trade-off between prioritising health or the economy. Either way, one suffers [more] long-term. Shared value is designed to front-foot holistic solutions. That’s not to say it will solve every issue, but that it provides a framework to consider people and business alongside one another. And I believe that every company, every employee would choose this path over profitability in isolation; they just need the tools to connect the why to the how.
This is what has always drawn me to shared value; and what ultimately led me to join SVP – the firm belief that shared value can integrate head and heart motivations in a practical way.
The huge opportunity (and responsibility) to leverage this moment; at a time when our threshold and expectation for change is greater than ever, is not lost on me. We face an unprecedented depth of social issues, and 2021 will bring its own unique set of challenges, but I am optimistic that armed with shared value, we can meet them productively and sustainably.
Of course, this vision is only as meaningful as we allow it to be. And I look forward to working with SVP members, wider business and cross-sectoral partners to make 2021 a flagstaff to lift shared value to its full potential.