By: Phil Preston | CEO at the Collaborative Advantage | May 29th, 2013

I’m sitting in my hotel room, looking out a heavy clouds on the Boston horizon, at the end of four days of intensive work discussing shared value implementation with companies and practitioners from all around the world, including Colombia, India, Philippines, Canada, Czech Republic, Brazil, Australia, Italy, Hong Kong, Singapore, US, UK, Costa Rica, Mexico, Korea, Japan and Chile.

We rubbed shoulders with the likes of Harvard’s Professor Michael Porter, Mark Kramer of FSG and the Chairman of Nestle, Peter Brabeck-Letmathe, and that’s just the tip of the iceberg. This is a pivotal moment in the development of this field – you may like to refer to or this article of mine that Porter re-tweeted last year, if the topic is quite new to you.

It’s hard to summarise everything we learned, but here’s three big take-aways for the business, government and the NGO sectors:

1. Meaning

For a business to have real purpose and be resilient to future shocks, it helps to identify it’s role in improving society. This approach underpins sustained profitability; if profitability is the primary short-term goal, then there is a risk that the business model fails overnight.

Nestle adopted “shared value” as a formal strategic initiative in 2006; however Chairman Peter Brabeck-Letmathe remarked that shared value is now the strategy. It has transformed from being a food and beverage company to one that seeks to improve nutrition, access to water and develop rural economies. Nike was once a footwear company, it now sees itself as a health and well-being player. Thermo-Fisher saw itself as a scientific company, it now sees its role as building a healthier and safer world.

On my table at the global summit, four companies talk about their evolution in the way that they define their purpose. They were all at different stages – for different reasons – and still had some way to go, but the point is that they were all conscious of the need to bring clarity.

2. Measurement

How do we measure if and when shared value is created? There are two sets of indicators that need to be present: those that prove business value and those that evidence social value. This is not always easy and sometimes proxy measurements are required.

Novo Nordisk sells diabetes-related products and has a strong presence in China. It estimates that it has improved patient life years of those who use its products and services by 80%, while increasing its market share from below 40% to 63% in the second largest insulin market in the world. The strategy was underpinned by extensive physician training and patient education.

We will hear a lot more about measurement in years to come and the Shared Value Initiative provides a community of practice to develop expertise and serve as a repository for case studies.

3. Momentum

The global summit started two years ago and the first meeting was a small collective of North American businesses. This year, 225 places were filled and many were turned away. The companies in the room were very large, significant and mostly multi-national players. But not just that, we saw great representation from the NGO, development agency and government sectors. If you want to dispel any myths about the quality of management in the non-business sectors, tap into what Judith Rodin of the Rockefeller Foundation, Neal Keny-Guyer of Mercy Corps or Peter Singer from Grand Challenges Canada are doing and saying in this space. By the end of it, our heads were spinning.

It has become a truly global, cross-sector conversation. Where NGOs were once adversaries of business, they are now becoming partners. This is not because they have traded their values or mission, it is because they have come to the realisation that philanthropy is not enough; if we want to make real change in the world, the power of business is required in order to do what it does best: bring resources, innovation and scale to the real needs in our society.

Where to from here?

Implementing shared value is a process of internal challenge and discovery. As yet there is no prescriptive rule book, but there are principles and processes that we can use to evaluate the core assets, needs and challenges of any business, find where the key social intersection points exist and create strategies that drive financial results for business and positive impact for society.

All I can say is that I love being a part of the evolution of this discipline.

Phil Preston is a former investment manager who is now a speaker, facilitator and innovation practitioner who recently joined the Shared Value Initiative as an Affiliated Professional Services member. He can be contacted on