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Shared Value: Arming Business for an Economic Reset

July 6, 2020

The economic recovery from COVID-19 may not be easy; but shared value strategies can make that recovery not only possible, but also sustainable. 

This was the key take-away message from the final panel discussion at the 2020 Shared Value Summit Asia Pacific, which brought together more than 500 global business leaders under the theme The Climate for Change. Moderated by Chair of the Shared Value Project Peter Yates AM, the panel explored future possibilities for shared value as a mechanism for social impact. He was joined by former Chairman of the ACCC Professor Allan Fels AO, SuperFriend CEO Margo Lydon, AIA Australia and New Zealand CEO Damien Mu

Reflecting the collective view of the panel, Mu asserted: “The future absolutely is about shared value, and there is no other option; because for once, we’re seeing globally and nationally the alignment of communities and business having to come together and fight a common issue.”

Yates noted that companies are starting to take this on board, with shared value evolving as a  “business model,” rather than just an idea or a movement. He explained shared value as “a model for change that permits the core of the company to take responsibility for addressing and solving social problem”.

Professor Fels suggested that social problems increasingly require attention from business. Referring to the balance between short-term cost pressures and long-term social impact, he said: “The underlying calculus of shared value has changed. On one side, the cost pressures [remain]. On the other however, community needs are currently greater, and they’re different. And so the whole equation has changed.

“In this social crisis, a contribution to keeping jobs there and to ensuring there’s a good recovery lies more heavily with business than usual.”

Lydon suggested that individual businesses should realistically and resourcefully assess what they can contribute to our recovery. “We need business leaders to help prioritise their business focus, and to innovate and co-create through the lens of what we can control, what we can be doing,” she said. 

She also advocated for the importance of shared value in the current climate: “[Shared value] is innovation; it’s the ability to increase profitability through productivity; a way of reducing costs without necessarily cost-cutting jobs. This presents a great opportunity for business to lead us through [our recovery] using a co-design mindset. To me, that is the core of shared value; to make economically sustainable decisions that also have a heart.”

Mental health was raised as an area where shared value initiatives could have significant socio-economic impact. Professor Fels said: “Business has an important role to play. Companies themselves can benefit in many ways from a better mental health system, and the mental health system can benefit from business dealing better with mental health.”

Lydon related these insights back the work of SuperFriend, as well as to the crises at hand. “The shared value approach that we take is really about asking, ‘What’s possible?’ How do we collectively co-design and create cultures of care; where we’ve got very strong economically sustainable business models, but we’ve also got businesses where people can go to work for themselves, be their best selves and go home with enough energy at the end of the day? Those are the businesses that are going to get us through this pandemic,” she said.

In summary, Fels said: “The long-term is not separate from the short-term. We are in a unique situation where there is a social crisis, where we all must work together and contribute to solving it. And that really means some of our various short-term objectives have to be sacrificed in order to ensure the community comes out of this okay.”