It’s rare to find a corporate responsibility professional these days who isn’t familiar with shared value. Most can speak with authority about the latest shared value case studies, frameworks and methodologies.
And yet, outside of the corporate responsibility world, far fewer have heard (or care) about shared value. This is particularly true for corporate leaders: people responsible for making decisions about how a business is run.
A consistent pattern emerges when I work with companies: there is a stark contrast between the energy and enthusiasm of corporate responsibility professionals that understand shared value, and the lack of understanding or apathy of the decision-makers with the power to make it happen. There are precious exceptions where forward thinking people within business have embraced the concept, but these examples are rare.
Most often, corporate responsibility professionals interested in shared value are frustrated by the idea that their company’s assets sit idle, when they could be better utilised to create positive social change. They know how important it is to engage closely with their business colleagues to change this, but motivating them to act remains a challenge.
Overcoming this inertia is critical. For a shared value program to succeed, it must be owned, supported, and delivered by those with access to the resources to make it happen.
Shared value is, at its core, a competitive business strategy. When executed effectively, it improves the competitive positioning of a business by creating value in areas that its competitors are not. It also creates positive social outcomes at scale. In my experience, decision-makers within business are usually more compelled by the former notion than the latter.
Therefore, those who want shared value to succeed must be expert in delivering this message in a way that secures the commitment of their business. It’s not enough to be enthusiastic about shared value… they need to be effective advocates for it.
During my time at FSG, I worked with some outstanding shared value advocates, and came to recognise several habits that made them so effective:
They secure leadership support
Without exception, the most successful shared value advocates win the support of their company leaders. They convince their board, CEO, and senior executives across the business to recognise shared value as a worthy tool for corporate strategy. They do more than secure “in principle” support. They help their leaders to understand that investment in shared value is about more than doing good; it is about doing good, profitably. They have proven the case at the highest levels that finding new business in solving social problems is a unique opportunity for differentiation, and a powerful tool for strategic planning.
They build the business case
Effective shared value advocates meticulously articulate business value. What revenue will this program generate? What margin increase would we anticipate? What is the financial return on investment? They conduct rigorous analysis, and clearly link improved social outcomes to hard business measures. They create financial models. Perhaps most importantly, they describe this value using the language that resonates with their business colleagues.
They are specific about anticipated returns
Shared value proposals often fail because they lack specificity. People talk in broad terms about social investment being “good” for business, and business programs being “good” for society. This sounds nice, but doesn’t garner support of investors and decision-makers. The most effective shared value advocates are precise. They delineate between different types of business value. They talk about tangible financial returns first, then less tangible (but no-less valuable) returns – improvements in stakeholder relationships, reduction in risk, or improved trust in the community – second.
They acknowledge limits
While passionate supporters of shared value, they build credibility within the business by acknowledging where shared value doesn’t apply. From a business perspective, shared value is one tool among many that a company can use to increase competitiveness. Successful shared value advocates know this, and don’t try to force every commercial opportunity into a shared value frame. They are savvy, opportunistic and persistent; but not dogmatic. If the shared value business case doesn’t stack up, they acknowledge it and make way for a different approach that will. They recognise that pointing out the limits of shared value is a powerful way to secure confidence when the right opportunity arrives.
They live within the business
Successful shared value advocates situate themselves deeply within their business. They work actively to secure a seat at every strategic planning session, and develop deep relationships with key decision-makers. They become intimately familiar with the strategic priorities (and risks) of the business, and factor them into their work. When talking about shared value opportunities, they adopt the language that is relevant to the business. Some of the best shared value advocates may never use the phrase at all.
Some companies already recognise the importance of effective shared value advocates and are setting them up for success. They are beginning to recruit people with deep knowledge and expertise in social theory and relevant experience working within a business. Position descriptions use words like business integration, innovation, entrepreneurship, and business development. Their roles are not positioned as an adjunct to the business, but rather deeply embedded within it.
Shared value has come a long way in the last five years thanks to the corporate responsibility professionals who have done so much to define, develop, and apply the concept. But in my view, the next phase for the shared value story will be the most exciting, as more business leaders become convinced by their advocacy.
Exploratory shared value pilots will begin to mature and deliver results. Confidence in social investment will grow as business returns materialise. Companies will become more creative and daring as they see the potential to increase returns by tackling tougher social challenges.
And as this happens, solving social problems for profit will become more than a tool for effective corporate responsibility practitioners. It will become a mainstay in the corporate strategy playbook. CEO’s will insist that social “opportunities” have been considered during the strategic planning process. Business leaders will turn to their corporate responsibility colleagues for advice on social investments and non-profit partnerships, not just because it is the right thing to do, but because their knowledge in this space is a source of tremendous value to the business.
For some companies, this is already a reality, but for most it is still on the horizon. Effective shared value advocates will be critical to achieve this transition.